Labourers’ International Union of North America, Ontario Provincial District Council v. Ontario Power Generation Inc., 2000 CanLII 12593

3142-99-FC Labourers’ International Union of North America, Ontario Provincial District Council, Applicant v. Ontario Power Generation Inc., Responding Party.

BEFORE: Caroline Rowan, Vice‑Chair, and Board Members G. Pickell and A. Haward.

APPEARANCES: Lorne Richmond, D. Lefaive, J. Mulhall, and W. Gilroy for the applicant; M. Patrick Moran, Max Jackson, Barry Roberts and Doug Wilson for the responding party.

DECISION OF THE BOARD; June 20, 2000

INTRODUCTION

1. This is an application by the Labourers’ International Union of North America, Ontario Provincial District Council (the “Labourers”) pursuant to section 43 of the Labour Relations Act, 1995 (the “Act”) for a direction that a first collective agreement be settled by arbitration. The application centers around the alleged refusal of the responding party, Ontario Power Generation Inc. (“OPGI”) formerly Ontario Hydro, to negotiate any form of contracting, subcontracting and/or job security provisions in a first collective agreement between itself and the Labourers.

2. This application was filed on January 24, 2000. A response to the application was filed on February 9, 2000. The hearing in this matter took place on February 14, 15, 23, 29, March 1, April 11 and May 1 and 2, 2000. The Board heard evidence from two witnesses, Mr. Joe Mulhall (“Mr. Mulhall”), who is the chief negotiator for the applicant, and Mr. Barry Roberts (“Mr. Roberts”), who negotiates with others on behalf of OPGI.

BACKGROUND

3. This application follows two successful certification applications brought by the Labourers in or around April 1998 in the electrical power systems sector of the construction industry, involving Ontario Hydro. These applications were brought in order to acquire the bargaining rights then held by The International Brotherhood of Electrical Workers, Local 1788 (“Local 1788”) and displace Local 1788 as the bargaining agent of certain construction employees of Ontario Hydro.

4. One of these certification applications involved employees of Ontario Hydro covered by what is commonly referred to as the “Transmission Agreement” between the Electrical Power Systems Construction Association (“EPSCA”) and Local 1788. The other certification application involved employees of Ontario Hydro covered by what is commonly referred to as the “Generation Projects Agreement” between EPSCA and the International Brotherhood of Electrical Workers Electrical Power Systems Construction Council (“IBEW-EPSCCO”). The IBEW-EPSCCO is, in turn, composed of IBEW Locals 105, 115, 120, 303, 353, 402, 530, 586, 773, 804, 894, 1687, 1739 and 1788. The present first contract application relates to the bargaining rights obtained by the Labourers for the bargaining unit formerly covered by the “Generation Projects Agreement” between EPSCA and IBEW-EPSCCO.

5. The Board notes, parenthetically, that EPSCA is an employer organization formed in or about 1980 in relation to the electrical power systems sector. This sector, generally speaking, covers construction work performed in the Province of Ontario on Ontario Hydro property and under Ontario Hydro’s responsibility for the bulk power system. One of the objects of EPSCA is to represent its members in labour relation matters in the electrical power systems sector.

6. On or about January 21, 1999, the Board issued certificates to the Labourers in both of the displacement applications referred to above. These certificates were issued pursuant to the Board’s decisions in Ontario Hydro and The Electrical Power Systems Construction Association, unreported decisions dated January 21, 1999 (in Board File No. 0214-98-R and Board File No. 0216-98-R) (the “Certification Decisions”). The scope of the bargaining rights described in these certificates was, however, subsequently amended on or about September 15, 1999 by decision of the Board in Ontario Hydro and The Electrical Power Systems Construction Association, unreported decision dated September 15, 1999 (in Board File Nos. 0216-98-R and 0214-98-R) (the “Reconsideration Decision”). The amendments were made in order to correct the certificates issued so as to make clear that the Labourers had obtained bargaining rights for employees of Ontario Hydro only, and not for employees of other employers performing work on Ontario Hydro property.

7. In the intervening period between the issuance of the Certification Decisions and the Reconsideration Decision, Ontario Hydro was divided on or about April 1, 1999 into a number of separate legal entities including OPGI and Ontario Hydro Services Company (“OHSC”). As a result, employees in the bargaining unit formerly covered by the “Generation Projects Agreement” are now employed by OPGI whereas employees in the bargaining unit formerly covered by the “Transmission Agreement”, are now employed by OHSC. The Board will therefore refer herein to the responding party in the present proceeding either as “OPGI” or “Ontario Hydro” as applicable.

8. In the same intervening period prior to receipt of the Reconsideration Decision, the Labourers also commenced bargaining for a first collective agreement with Ontario Hydro, and its successors OPGI and OHSC in relation to the bargaining units formerly covered by the Generation Projects Agreement and the Transmission Agreement. On or about July 21, 1999, the Labourers concluded a memorandum of agreement with OHSC in relation to the bargaining unit formerly covered by the Transmission Agreement, which was subsequently ratified by the affected employees on or about August 16, 1999 (the “OHSC Agreement”). The OHSC Agreement included provisions dealing with contracting, subcontracting and job security. The Labourers’ bargaining rights relating to employees of OHSC were transferred at or about this time to the Canadian Union of Skilled Workers (“CUSW”).

9. In this respect, the Board notes that the parties generally referred to the applicant throughout the course of this proceeding as “CUSW” despite the fact that the bargaining rights in issue relating to employees of OPGI are still, in fact, held by the Labourers. Counsel for the applicant explained to the Board that the Labourers intend to transfer these bargaining rights to CUSW if, and when, the applicant concludes a collective agreement with OPGI, just as it did when it concluded a collective agreement with OHSC. For ease of reference, the Board will therefore refer to the applicant herein either as “the Labourers”, “CUSW” (albeit not yet technically speaking accurate) or simply as “the union.”

ISSUE

10. Section 43 of the Act requires the Board to direct the settlement of a first collective agreement by arbitration where it appears to the Board that the process of collective bargaining has been unsuccessful because of one or more of the reasons prescribed therein. Section 43(1) and (2) of the Act reads as follows:

43. (1) Where the parties are unable to effect a first collective agreement and the Minister has released a notice that it is not considered advisable to appoint a conciliation board or the Minister has released the report of a conciliation board, either party may apply to the Board to direct the settlement of a first collective agreement by arbitration.

(2) The Board shall consider and make its decision on an application under subsection (1) within 30 days of receiving the application and it shall direct the settlement of a first collective agreement by arbitration where, irrespective of whether section 17 has been contravened, it appears to the Board that the process of collective bargaining has been unsuccessful because of,

(a) the refusal of the employer to recognize the bargaining authority of the trade union;

(b) the uncompromising nature of any bargaining position adopted by the respondent without reasonable justification;

(c) the failure of the respondent to make reasonable or expeditious efforts to conclude a collective agreement; or

(d) any other reason the Board considers relevant.

The Board must therefore first consider whether or not it appears to it that the process of collective bargaining has been unsuccessful. If so, the Board must then consider whether or not that lack of success is attributable to any one or more of the reasons set out in subsections 43(2)(a) to (d) of the Act.

BRIEF OUTLINE OF THE POSITIONS OF THE PARTIES

Union’s Position

11. CUSW submits that the parties have reached impasse in collective bargaining over the issue of contracting, subcontracting and job security protections. CUSW insists on language on these issues in any collective agreement reached in order to protect their bargaining rights, which the union submits, would otherwise be illusory in view of OPGI’s stated intention “to get out of the business of construction” at any time. Collective bargaining, the applicant submits, has been unsuccessful because of OPGI’s refusal to negotiate any such protections without reasonable justification. The only explanation offered is OPGI’s desire to maintain “flexibility”, which explanation, CUSW contends, is inadequate.

12. More specifically, CUSW takes the position that the process of collective bargaining between it and OPGI has been unsuccessful because of:

(a) the refusal of OPGI to recognize its bargaining authority;

(b) the uncompromising nature of certain bargaining positions adopted by OPGI and in particular its refusal to bargain any form of contracting, subcontracting or job security protections without reasonable justification;

(c) the resulting failure of OPGI to make reasonable and expeditious efforts to conclude a collective agreement; and

(d) the actions of OPGI, which have made resort to a strike untenable, including OPGI’s bargaining positions, its continued use of the labour requirements clause in its commercial contracts, by which contractors and subcontractors are required to abide by the collective agreement between the EPSCA and the IBEW-EPSCCO using members of the International Brotherhood of Electrical Workers (the “IBEW”) to perform electrical construction work for OPGI, and OPGI’s commitment to give all of its contracted and subcontracted work to members of the IBEW.

Responding Party’s Position

13. OPGI, for its part, concedes that it has attempted to maintain through bargaining its ability to contract out work as it has historically done, in view of the number of changes it faces as an organization. OPGI, however, disputes that it has failed to offer any language in bargaining on the issue of contracting and subcontracting and further disputes that it has ensured, through EPSCA or otherwise, that all contracted or subcontracted electrical construction work be performed by the IBEW. OPGI therefore primarily disputes that collective bargaining has been unsuccessful as alleged in the application.

14. OPGI also takes the position that it has given adequate business reasons to explain why it is not prepared to provide the type of job security protection that the union is seeking. In this respect, OPGI notes that it has been moving out of the “direct hire business” in the area of construction for some time (as for example in its fossil division) and that deregulation of Ontario Hydro requires it to decrease substantially its supply of electricity. OPGI states that it is not therefore in a position to provide the type of job guarantees that the union is seeking and which, it submits, no other trade union has to date obtained through bargaining.

FACTS

15. This application was aptly described by counsel for OPGI as “a first contract application with a history”. Both parties referred to that history as being material to an understanding of the bargaining positions of the parties with respect to contracting, subcontracting and job security protections.

16. Part of that history involves the scope of the union’s bargaining rights obtained pursuant to the Certification Decisions issued in January 1999 and the scope of those rights as amended by the Reconsideration Decision issued in September 1999. Given that the parties’ negotiations commenced well before the Reconsideration Decision was received, their bargaining positions with respect to the union’s “right to”, and/or “right to bargain for” work performed by contractors and subcontractors on Ontario Hydro property must be understood in the context of the original certificate issued.

17. The “history” also includes the scope of the former bargaining rights of the “displaced union”, Local 1788, and its jurisdiction over, and/or right to perform, work done by contractors and subcontractors on Ontario Hydro property. Local 1788’s bargaining history with respect to contractor and subcontractor work on Ontario Hydro property is relevant to an understanding of whether the contracting, subcontracting and/or job security protections sought by CUSW represent protections it is seeking to obtain, or rather to maintain.

18. The Board will therefore briefly review under separate headings below:

(1) the history of the certification proceedings before the Board involving CUSW;

(2) Local 1788’s bargaining history as it relates to work performed by contractors and subcontractors; and

(3) the first contract negotiations between the parties to the present application.

(1) Certification History including Reconsideration of the Certificates Issued

19. As previously noted, CUSW was certified on or about January 21, 1999 to represent employees of Ontario Hydro (now OPGI) in respect of electrical construction work formerly covered by the Generation Projects Agreement. The Labourers were also certified at that time to represent employees of Ontario Hydro (now OHSC) in respect of electrical construction work formerly covered by the Transmission Agreement.

20. Shortly thereafter, Ontario Hydro sought reconsideration of the bargaining unit descriptions set out in the certificates issued. It did so because the Board had described the bargaining units in the Certification Decisions and in the certificates issued with reference to the recognition clause contained in the applicable EPSCA collective agreement (i.e. either the “Generation Projects Agreement” or the “Transmission Agreement”). It did so without regard to the fact that these agreements are multi-employer agreements.

21. The bargaining unit in issue in the present first contract application, which relates to the former Generation Projects Agreement, was therefore described as follows in the certificate issued on January 21, 1999:

EPSCA recognizes the Union as the exclusive bargaining agency for a bargaining unit defined in Item B engaged in:

i) all construction industry work performed for or by Ontario Hydro undertaken by Design and Construction/ENCON Services Branch on generating facilities

ii) all Major* construction industry work which is tendered/contracted for all other Divisions of Ontario Hydro, and

iii) work performed by the Design and Construction/ENCON Services Branch for any Operations Branch of Ontario Hydro where it has been determined by that Operations Branch that there does not exist internally the expertise or the current staff to do the work.

*The definition of Major described in ii) above and any issues arising out of the interpretation of Major shall be dealt with in an attached Letter of Understanding.

This work shall be performed in the Province of Ontario on Ontario Hydro property for generating facilities. This work includes the building of generating facilities, hydraulic works, including Miscellaneous Hydraulic Projects, heavy water facilities, microwave and repeater stations but excludes the building of commercial-type office facilities at urban locations remote from operating facilities and any work performed by Ontario Hydro on a Miscellaneous Hydraulic Project with its own employees. The work encompasses:

• construction of new facilities

• additions to existing facilities

• modifications

• rehabilitation

• reconstruction of existing facilities

B. The bargaining unit under this Agreement shall comprise the following classifications:

Electrical Journeyman including Foreman and Subforeman, Electrician Welder, Electrical Apprentice, Communications Electrician. If additional classifications are required, they will be negotiated as appropriate for work in the electrical power systems sector.

C. The Union recognizes EPSCA as the sole and exclusive collective bargaining agency for all of the Employers covered by this Agreement, and in all matters pertaining to the administration of this collective agreement.

D. The term EMPLOYEE shall include all the Employees of the Employers in the classifications as set out in Item B above.

E. A subforeman is an individual who exercises supervisory responsibility and may use the tools of the trade.

[emphasis added]

22. In the Reconsideration Decision, the Board found it appropriate to reconsider the Certification Decisions and the certificates issued thereunder by amending the bargaining unit descriptions in order to recognize the distinction between employees of Ontario Hydro, and employees of other employers. The Board therefore amended the bargaining unit description set out above relating to employees of Ontario Hydro formerly covered by the Generation Projects Agreement to read as follows:

Ontario Hydro recognizes the union as the exclusive bargaining agency for a bargaining unit of Ontario Hydro employees defined in item B engaged in:

i) all construction industry work performed by Ontario Hydro undertaken by design and construction/ENCON Services Branch on generating facilities;

ii) all Major* construction industry work which is tendered/contracted for all other divisions of Ontario Hydro; and,

iii) work performed by the design and construction/ENCON Services Branch for any Operations Branch of Ontario Hydro where it has been determined by that Operations Branch that there does not exist internally the expertise or the current staff to do the work.

*The definition of Major described in (ii) above or in any issues arising out of the interpretation of Major shall be dealt with in an attached Letter of Understanding.

This work shall be performed in the Province of Ontario on Ontario Hydro property for generating facilities. This work includes the building of generating facilities, hydraulic works, including Miscellaneous Hydraulic Projects, Heave Water Facilities, microwave and repeater stations but excludes the building of commercial type office facilities at urban locations remote from the operating facilities and any work performed by Ontario Hydro on Miscellaneous Hydraulic Project. The work encompasses:

• construction of new facilities

• additions to existing facilities

• modifications

• rehabilitation

• reconstruction of existing facilities

B. The bargaining unit shall comprise the following classifications: electrical journeyman including foreman and subforeman, Electrician Welder, Electrical Apprentice, Communications, Electrician. If additional classifications are required, they will be negotiated as appropriate for work in the electrical power systems sector.

A subforeman is an individual who exercises supervisory responsibility in the use of tools of the trade.

[emphasis added]

23. The Board also amended the bargaining unit description relating to employees of Ontario Hydro formerly covered by the Transmission Agreement to reflect the fact that CUSW obtained bargaining rights for Ontario Hydro employees only, and not for employees of other employers performing work on Ontario Hydro property.

(2) Local 1788’s bargaining history

24. Much of the relevant bargaining history involving the rights of the displaced union, Local 1788, with respect to contractor and subcontractor work is set out in earlier decisions of the Board. A succinct summary is contained in the Board’s decision in International Brotherhood of Electrical Workers, [1996] OLRB Rep. February 70 (referred to colloquially by the parties as the “Bill 80” case).

25. In that case, the Board dismissed Local 1788’s challenge to the International union’s alteration of its jurisdiction brought under section 96 of the Act. Local 1788 had originally been created to represent direct hires of Ontario Hydro only. That jurisdiction was, however, subsequently expanded through collective bargaining and then by amendment to Local 1788’s by-laws to include certain work performed by contractors and subcontractors on Ontario Hydro property. The Board, in the Bill 80 case, summarized the relevant history, as follows:

96. Local 1788 was created for the purpose of representing direct employees of Ontario Hydro, and for no other purpose. Until 1972, Local 1788 held no bargaining rights of its own, but merely administered bargaining rights held by the International for employees of Ontario Hydro. [I]n 1971, the International transferred bargaining rights limited to employees of Ontario Hydro to Local 1788. This transfer was confirmed by this Board in 1972. Local 1788 exercised and administered these bargaining rights, with respect to Ontario Hydro employees only, until 1980.

97. Prior to 1980, Ontario Hydro did virtually all of its transmission and miscellaneous hydraulic projects work using its own employees. On the evidence before the Board in this case, those Hydro employees were represented by Local 1788. On those few occasions when such work was contracted out, it was performed by members of the IBEW Local Union with geographic jurisdiction in the area in which the work was located, or the work was performed non-union. As Hydro began to contract out work, a debate began within the IBEW with respect to how to deal with this development. The result of this was that Local 1788 continued to represent only employees of Ontario Hydro and the other IBEW Local Unions represented employees of contractors of Ontario Hydro according to their geographic jurisdiction. The first Generation Projects and Transmission Agreements were negotiated with the EPSCA and came into effect in 1980. Although the words of the 1980 Transmission Agreement are somewhat ambiguous, we are satisfied that these agreements were intended to reflect this Local 1788 and Ontario Hydro vs. the other IBEW Local Unions and Hydro contractors division of jurisdiction. Between 1980 and 1986, all or virtually all transmission systems work continued to be done by Hydro using its own employees. To the extent that there was such work which was contracted out it was also performed by members of Local 1788. In the circumstances, however, including the boom in electrical power systems sector construction work during that period, we are not satisfied that the amount of contractors work performed by Local 1788 is particularly significant. During that time, Local 1788 tried unsuccessfully to have its jurisdiction amended to include work performed by contractors for Ontario Hydro (which attempt was rebuffed by the Canadian Vice-President Rose).

98. In 1986, however, Local 1788 and the EPSCA negotiated a change to the Transmission Agreement which gave Local 1788 jurisdiction over such contractors. It appears, that the International, which vets and approves all collective agreements, was asleep at the switch and did not notice this. Nevertheless, the internal debate over jurisdiction continued, with the IBEW Local Unions other than Local 1788 insisting that, they, not Local 1788, had jurisdiction over Ontario Hydro's contractors. By 1987, Woods was Canadian International Vice-President. It is apparent from his evidence that he did not understand the true nature of the jurisdictional issue and as a result erred in the position he expressed in that respect, to Local 105 for example. Local 1788 seized upon this opportunity to request a change to its jurisdiction to accord with its "practice". In our view, the change it requested, namely to give it jurisdiction over employees of contractors as well as employees of Ontario Hydro, could not be justified on the basis of "practice", because prior to 1986 it had no significant practice in that respect. However, it was consistent with the Transmission Agreement Local 1788 had managed to negotiate with the EPSCA.

99. After discussing Local 1788's request with the IBEW - EPSCCO and the other IBEW Locals, Woods took the request at face value and recommended the jurisdiction change requested, which recommendation was in effect rubber stamped by International President Barry. Although Woods is not blameless, this time it was the IBEW-EPSCCO and the other Local Unions which were asleep at the switch.

100. The other Local Unions awoke from their slumber when the boom in construction work in the electrical power systems sector ended and work shortages developed. They complained to Woods and demanded that the International intervene and resolve the dispute. Woods also received some telephone calls from contractors and the ECAO (although not the "deluge" of telephone calls he described in his letter to Barry). In any event, the true nature of the problem began to dawn on Woods; that is, that there was a dispute between Local 1788 and the other IBEW Local Unions concerning jurisdiction over Ontario Hydro's contractors, and that he had inadvertently given Local 1788 a leg up in that respect by agreeing to amend its jurisdiction as it had requested in 1989. Woods then engaged in the rather tortuous process which eventually led to the alteration of Local 1788's jurisdiction - back to what it was prior to the unwarranted change in 1989.

26. The Board in the Bill 80 case described the change to Local 1788’s jurisdiction (back to what it had originally been), as follows:

57. In short, the International orchestrated a change to Local 1788’s by-laws, and to the Generation Projects and Transmission Agreements, such that any jurisdiction with respect to contractors of Ontario Hydro which Local 1788 had achieved through practice or negotiations was removed from it and redistributed among the other thirteen IBEW construction Local Unions. Local 1788 was restricted to representing direct employees of Ontario Hydro under both the Generation Projects Agreement and the Transmission Agreement.

27. The Board in the Bill 80 case ultimately dismissed Local 1788’s complaint that the International had altered its jurisdiction without just cause. As a consequence, members of Local 1788 were again restricted to performing work done by direct hires of Ontario Hydro and had no right to any work at all in the event that Ontario Hydro decided to contract out all of the work of the bargaining unit. This restriction was particularly significant in view of the fact that Ontario Hydro had advised Local 1788 for some time of its intention “to get out of the construction business”.

28. It was precisely this threat to the job security of members of Local 1788 that precipitated the move away from the IBEW to CUSW. In the Ontario Hydro and The Electrical Power Systems Construction Association, unreported decision dated December 23, 1998 (in Board File Nos. 0214-98-R and 0216-98-R) (“Ontario Hydro and The EPSCA”), which is an interim decision of the Board dealing with CUSW’s displacement applications, the Board described the sequence of events as follows at paragraph 13 of the decision:

This is clearly another chapter of a story which began with an internal jurisdictional dispute between IBEW, Local 1788 and the IBEW and most of its other construction local unions (IBEW Local 353 being Local 1788’s sole ally at that stage). After losing that fight (see, International Brotherhood of Electrical Workers, [1996] OLRB Rep. Feb. 70). The IBEW internal struggles continued, often in litigation before the Board and in the Courts. In the result, the [officers] and employees of IBEW, Local 1788 at the time of the aforesaid “Bill 80” proceeding were ousted, and they, together with disgruntled members who supported them, began to look for a safe haven. First, they tried the Power Workers’ Union. The Power Workers’ Union welcomed them, but was unable to provide a repository for construction industry bargaining rights (see, Ontario Hydro, [1997] OLRB Rep. Feb. 82; application for judicial review dismissed [1998] OLRB Rep. Jan/Feb 136). Although some of the individuals who led the IBEW, Local 1788 dissidents stayed on with the Power Workers’ Union notwithstanding this result, others continued with their search until they found the Labourers’ (probably to the surprise of no one).

Former members of Local 1788 therefore ultimately joined CUSW following the IBEW’s decision to restrict Local 1788’s work jurisdiction to direct hires only.

29. Mr. Mulhall, who is also a former business manager and a past President of Local 1788, further confirmed in his evidence before the Board in the present proceeding that the move away from the IBEW was driven by the IBEW’s decision in this regard. More specifically, Mr. Mulhall explained that CUSW knew from the outset of these first contract negotiations that contracting, subcontracting and job security were major issues, since it was Local 1788’s inability to maintain such protections that had prompted the move away from the IBEW in the first place.

(3) The first contract negotiations between the parties

30. Shortly after the Certification Decisions issued on or about January 21, 1999, counsel for CUSW gave Ontario Hydro notice to bargain on behalf of employees in the Generation Projects and Transmission bargaining units by letter dated January 29, 1999. In his correspondence, counsel for CUSW directed representatives of Ontario Hydro to contact Mr. Joe Mulhall, who was described as an employee of CUSW and also a duly elected Interim Administrator of the Labourers newly established affiliate, CUSW. At that time, the certificates issued by the Board referred to work performed for or by Ontario Hydro on Ontario Hydro property.

31. On or about February 10, 1999, counsel for Ontario Hydro wrote to the Board requesting reconsideration of these certificates. Ontario Hydro requested an amendment to the original certificates in order to limit them by referring specifically to employees of Ontario Hydro and to work performed by Ontario Hydro on Ontario Hydro property. As previously noted, bargaining with respect to both the Generation Projects and Transmission bargaining units commenced before the request for reconsideration was ultimately granted by the Board on or about September 15, 1999.

32. In or about April 1999, CUSW became aware of the fact that bargaining between EPSCA and the IBEW-EPSCCO with respect to the expired “Generation Projects Agreement” was scheduled to resume shortly. CUSW took the position that OPGI would be in breach of the Act if EPSCA negotiated on behalf of OPGI with the IBEW-EPSCCO with respect to the Generation Projects Agreement. More specifically, counsel for CUSW advised OPGI in a letter dated April 16, 1999 that section 73.1 of the Act prohibits “… any negotiations by EPSCA on behalf of OPGI with the IBEW, which is intended to result in a collective agreement affecting any or all electrical construction work performed by or for Ontario Hydro on its property in the Province of Ontario, given our certifications by the Ontario Labour Relations Board”[emphasis added]. CUSW also took the position that “… any work assignments made pursuant to a renewal of an IBEW/EPSCA agreement would also be in breach of [OPGI and OHSC’s] statutory obligations to bargain in good faith exclusively with [CUSW],…”.

33. On or about April 21, 1999, Mr. Steve Strome, Vice-President, Labour Relations for OPGI, responded to that letter. In his response, he advised counsel for CUSW that OPGI would not be bound to the proposed IBEW/EPSCA collective agreement. He also indicated that OPGI had “… advised EPSCA that the [CUSW] holds bargaining rights for Ontario Power Generation’s Electrical Construction Trades Employees and that as a result, Ontario Power Generation will not participate in the EPSCA/IBEW negotiations. In addition, neither Ontario Power Generation nor Ontario Power Generation electrical construction employees will be covered by a collective agreement between EPSCA and the IBEW.”

34. Shortly thereafter, on or about April 23, 1999, Mr. Roberts, who acts not only as a representative of OPGI in the first contract negotiations with CUSW but also as Secretary-Treasurer of ESPCA, concluded a renewal collective agreement on behalf of EPSCA with the IBEW-EPSCCO (the “IBEW/EPSCA Agreement”). The scope of that agreement reads, in part, as follows:

Section 200 B

The terms and conditions of this Agreement will apply when contracts are awarded by Ontario Power Generation Inc. (OPGI) to Employers in contractual relations with the IBEW, or otherwise required to apply the terms of this Agreement.

Mr. Roberts suggested in evidence that the phrase “otherwise required to apply the terms of this [a]greement” refers to the labour requirements clause contained in OPGI’s tendering documents, which requires every successful bidder to apply the terms of the IBEW/EPSCA Agreement. In this regard, the Board also notes that OPGI has used this labour requirements clause in its tendering documents for many years prior to CUSW’s displacement applications.

35. Representatives of CUSW and of OPGI thereafter met on a number of occasions from and after April 1999 to bargain a first collective agreement relating to the Generation Projects bargaining unit in issue in this proceeding. Both CUSW and OPGI used the expired IBEW/EPSCA Agreement, with amendments, as a starting point in the negotiations. While CUSW suggested that OPGI’s initial proposal contained provisions inferior to those contained in the expired IBEW/EPSCA Agreement, CUSW did not seriously challenge in evidence OPGI’s explanation that its proposed amendments generally reflected similar modifications made in EPSCA’s negotiations with the other skilled trades. The parties were, in any event, successful in reaching agreement on the vast majority of provisions, but have not yet been successful in reaching agreement on the contracting, subcontracting and/or job security protections sought by CUSW.

36. The scope of the agreement initially proposed by OPGI reflects in large measure its position taken in the reconsideration request, i.e., that CUSW’s bargaining rights are restricted to employees of OPGI. The scope of the work proposed in the union’s initial proposal, on the other hand, appears to include work performed by direct hires of Ontario Hydro and by contractors and subcontractors thereof. In this respect, Mr. Mulhall conceded that the union’s initial bargaining proposal “could have been interpreted” as a complete restriction on the employer to use only CUSW members on all work on the property. Mr. Mulhall, however, indicated that he did not consider that to be a fair reflection of the union’s opening proposal.

37. On or about August 18, 1999, CUSW presented OPGI with a specific written proposal on the issue of contracting, subcontracting and job security. This proposal, Mr. Mulhall explained, was very similar to the language contained in the OHSC Agreement and reflects the union’s attempt to accommodate OPGI’s stated desire to maintain “flexibility” in the way it contracts out work. That proposal reads, in part, as follows:

SECTION 2 SCOPE OF THE AGREEMENT

200 Recognition

A. OPGI recognizes the union as the exclusive bargaining agency for a bargaining unit as defined in Item B engaged in all construction industry work performed by and for OPGI and OPGI and/or Ontario Hydro Services Company (OHSC) property *in the Province of Ontario. This work includes the building of generating stations, hydraulic works, heavy water facilities, microwave and repeater stations, transmission systems (when work is performed for OHSC) and Miscellaneous Projects. This work excludes the building of commercial-type office facilities at urban locations remote from operating facilities.

[emphasis added]

E. OPGI reserves the right to contract out work subject to the following:

1. OPGI agrees to assign all work in “operating island” of the Nuclear facilities, that falls within the scope clause of this collective agreement, to “direct hire” employees of OPGI who are members of the Union.

2. Work on OPGI property that is assigned to OHSC will be performed by members of the Union in accordance with the CUSW/OHSC Collective Agreement.

3. When contracting out work OPGI will do so in accordance with the following:

(i) Employers in contractual relations with the union, Employers having no union contractual relations, and Employers in contractual relations with unions other than IBEW, shall work under the terms and conditions of this agreement when performing work within the scope of this agreement.

(ii) Employers in contractual relations with IBEW will sign a Labour requirements Form which will stipulate the following minimum standards to which they are required to comply as a prerequisite to performing work within the scope of this collective agreement: Hours of Work, Wages, Benefits, Travel, Room and Board.

Mr. Mulhall noted that, under this proposal, OPGI has the opportunity to use CUSW contractors, IBEW contractors and non-union contractors. In addition, the proposal with respect to job security requires OPGI to use only “direct hires” in the “operating island” of the nuclear facilities. Mr. Mulhall advised that the union’s proposal in this regard reflects OPGI’s current practice in any event.

38. The Board notes that the contracting and subcontracting protections contained in the OHSC Agreement also, generally speaking, allow OHSC to contract out work provided that all contractors, other than those “with contractual relations with the IBEW,” work under the terms of the OHSC Agreement using CUSW members. Contractors “with contractual relations with the IBEW” are also similarly required to sign a Labour Requirements Form, which stipulates certain minimum conditions. Mr. Mulhall explained that this latter requirement reflects a recognition that the IBEW will negotiate different terms and conditions from those negotiated by CUSW and attempts to stabilize the wages and standards for all work done on Ontario Hydro property.

39. In addition, OHSC agreed to sign a letter of understanding effective during the currency of the OHSC Agreement on the issue of job security. Under the terms of this letter of understanding, OHSC agrees to assign a minimum of seventy (70) per cent of the work covered by the OHSC Agreement to direct hires.

40. OPGI disagrees with CUSW’s suggestion that provisions similar to those contained in the OHSC Agreement are appropriate for the business of OPGI. In this regard, Mr. Roberts notes that OHSC and OPGI are moving in different directions. OHSC proposes to perform the majority of its construction work in-house, whereas OPGI’s operating strategy contemplates moving out of the direct hire business and ultimately to be an owner-operator of its plants. In addition, Mr. Roberts’ understanding is that, following the break up of Ontario Hydro, OHSC will continue to do all of the transmission work. OPGI, on the other hand, will no longer continue to have a virtual monopoly over the generation work and will be required to reduce substantially its supply of electricity to buyers and users over the next ten years. As such, Mr. Roberts suggests that OPGI, unlike OHSC, is not in a position to agree to any form of job guarantee for direct hires.

41. On or about September 1999, Max Jackson, who also negotiated with Mr. Roberts on behalf of OPGI, called Mr. Mulhall and suggested that the three of them set up a lunch meeting. The purpose of this meeting was to see if the parties could find a solution to the contracting, subcontracting and job security issues, which remained outstanding. Mr. Mulhall agreed.

42. At that lunch meeting, which took place in September 1999, Mr. Roberts and Mr. Jackson on behalf of OPGI made a verbal proposal on the issue of contracting and subcontracting. Under this proposal, OPGI would be required to change the labour requirements clause to provide that:

1. contractors with contractual relations with CUSW work under the terms and conditions of a CUSW agreement using CUSW members;

2. contractors with contractual relations with the IBEW work under the terms and conditions of an IBEW agreement using IBEW members; and

3. all other contractors work under the terms and conditions of either a CUSW agreement or an IBEW agreement at their option.

According to Mr. Roberts, this proposal was never reduced to writing as Mr. Mulhall gave him the impression that it was a “non-starter”. In particular, Mr. Mulhall complained, for example, that the proposal did not require non-union contractors to work under a CUSW agreement in all cases.

43. At some point during this lunch meeting, Mr. Roberts and/or Mr. Jackson questioned Mr. Mulhall regarding CUSW’s ability to supply sufficient members to perform the work. In response, Mr. Mulhall advised that CUSW had made arrangements with a labour source in Quebec to supplement its complement of qualified members. No further discussions took place concerning CUSW’s ability to supply qualified members.

44. In or around late September 1999, the parties received the Reconsideration Decision referred to previously. Thereafter, the parties met again on or about December 6, 1999 for one final bargaining session. At that time, the parties negotiated with the assistance of a conciliation officer appointed to meet with the parties. By all accounts, much of the bargaining at this session took place through the conciliation officer, rather than in face to face meetings between the parties.

45. At this final bargaining session, OPGI raised its proposal on contracting and subcontracting which it had made previously at the lunch meeting in September 1999. Mr. Roberts testified that he again tried “to get across” to the union that OPGI could change the labour requirements clause to accommodate anything to which the parties agreed. This verbal proposal was not, however, reduced to writing and was not, in any event, acceptable to CUSW. At that final bargaining session, CUSW also tabled a further proposal dealing with contracting, subcontracting and job security. The union’s proposal was also made verbally, but was subsequently reduced to writing following that last bargaining session. The material portions of that proposal reads as follows:

SECTION 2 SCOPE OF THE AGREEMENT

200 Recognition

A. OPGI recognizes the Union as the exclusive bargaining agency for a bargaining unit as defined in Item B engaged in all construction industry work performed by OPGI employees on OPGI and/or Ontario Hydro Services Company (OHSC) property* in the Province of Ontario. This work includes the building of generating stations, hydraulic works, heavy water facilities, microwave and repeater stations, transmission systems (when work is performed for OHSC) and Miscellaneous Projects. This work excludes the building of commercial-type office facilities at urban locations remote from operating facilities.

*As defined by the parties.

[emphasis added]

E. OPGI reserves the right to contract out work subject to the following:

1. Work covered by the scope of this agreement at OPGI Nuclear Facilities will not be contracted out until at least 150 “direct” hire employees are employed by OPGI at these facilities.

2. When contracting out work OPGI will do so in accordance with the following:

(i) Employers in contractual relations with the union, Employers having no union contractual relations, and Employers in contractual relations with unions other than IBEW, shall work under the terms and conditions of this agreement when performing work within the scope of this agreement.

(ii) Employers in contractual relations with IBEW will work under the terms and conditions of the EPSCA/IBEW Collective Agreement.

This proposal provides a job guarantee of 150 direct hires during the currency of the proposed collective agreement. Mr. Mulhall indicated that this number represents the union’s low estimate of the number of direct hires projected to be employed by OPGI during the term of the proposed agreement.

46. OPGI did not specifically dispute either in bargaining or at the hearing in this matter the number of direct hires projected. Instead, OPGI simply rejected such a proposal on the basis that projected work programs change and that there is therefore no guarantee that the hours currently projected will actually be worked. In addition, OPGI states that it needs the ability to get out of the direct hire business at any time and therefore that it cannot commit to any job guarantee over the life of the collective agreement.

47. With respect to contracting and subcontracting, Mr. Roberts testified that, according to his terms of reference, OPGI is not prepared to include any language in the collective agreement dealing with this issue. Mr. Roberts, however, indicated that OPGI is prepared to incorporate any language agreed to by the parties on this issue into a letter of understanding in order to make the agreement enforceable. With reference to OPGI’s verbal proposal, Mr. Roberts indicated, more specifically, that OPGI is prepared to incorporate language outlining the three options proposed as well as the required change to the labour requirements clause in a letter of understanding between the parties.

DECISION

48. The first issue to be determined in this application is whether or not it appears to the Board that the process of collective bargaining has been unsuccessful. If so, the Board must then go on to consider the reasons for that lack of success. In the circumstances of the present case, the union points to a number of actions or omissions of OPGI in support of its contention that collective bargaining between the parties has been unsuccessful. It also submits that a number of these actions or omissions are, in fact, the reasons why collective bargaining has been unsuccessful. The Board will therefore first consider whether or not collective bargaining has been unsuccessful in this case with reference to the alleged actions or omissions of OPGI. The Board will then consider, as a general matter, whether or not it appears to it that collective bargaining has been unsuccessful in this case.

OPGI’s decision to bargain with CUSW on its own behalf rather than through the EPSCA

49. The union points to OPGI’s decision to bargain on its own behalf, rather than through EPSCA, in these first contract negotiations with CUSW in support of its contention that the failure of collective bargaining was ordained from the outset. According to CUSW, OPGI’s decision to bargain on its own behalf reflects its intention from the outset never to provide CUSW with any protection on the issue of contracting, subcontracting and job security.

50. CUSW notes that OPGI’s decision to bargain on its own behalf, rather than through EPSCA, represents a difference from all other construction industry bargaining involving OPGI. Ontario Hydro’s historical practice has been to bargain through EPSCA in the construction industry such that the terms and conditions of work for employees of contractors and subcontractors and of Ontario Hydro are typically contained in the same agreement. The only exception to this involves Ontario Hydro’s collective bargaining with the International Association of Machinists and Aerospace Workers, which, CUSW argues, does not relate to the construction industry in any event.

51. With respect to these allegations, the Board firstly notes that CUSW itself provided written notice to bargain to OPGI and OHSC directly, rather than to EPSCA following its certifications by the Board. In addition, the evidence is that representatives of OPGI advised CUSW at the outset of collective bargaining that it proposed to bargain on its own behalf rather than through EPSCA. It appears that CUSW did not take issue with that decision at any time during the course of collective bargaining between the parties. In fact, the first time that any concern was raised concerning OPGI’s decision to bargain directly was after the commencement of the hearing in this matter. The Board notes that CUSW also does not appear to have taken issue with OHSC’s similar decision to bargain the OHSC Agreement with CUSW directly rather than through EPSCA.

52. Perhaps more importantly, OHSC’s decision to bargain directly appears to have presented no obstacles to successful collective bargaining between OHSC and CUSW. In particular, OHSC’s decision to bargain directly, rather than through EPSCA, did not prevent the parties to the OHSC Agreement from reaching agreement on the issue of contracting, subcontracting and job security protections. These very provisions have, in fact, been portrayed by CUSW in these proceedings as a model for what is appropriate in its negotiations with OPGI. Bargaining with the employer directly, rather than through EPSCA, does not in and of itself appear to present any obstacles to reaching a first collective agreement or to providing the union with the types of protections it is seeking.

53. Although the question raised by CUSW as to whether the EPSCA constitution allows individual members, such as OPGI and OHSC, to bargain on their own behalf is an interesting one, the Board finds that its determination ultimately has little relevance to the alleged failure of collective bargaining. For all of the foregoing reasons, the Board is not satisfied that a reasonable inference can be drawn that the “failure of collective bargaining was ordained from the moment that OPGI said that it was not bargaining through EPSCA.”

The renewal of the IBEW/EPSCA agreement

54. The union also submits that the outcome of collective bargaining was predetermined by OPGI’s actions in concluding a renewal agreement with the IBEW through EPSCA, which the union contends is Ontario Hydro’s “commercial arm”, prior to concluding a collective agreement with CUSW. According to CUSW, OPGI has thereby provided complete contracting and subcontracting protection to the displaced union, a union which no longer has any bargaining rights for employees of OPGI. In short, it is alleged that OPGI’s actions reflect its refusal to recognize CUSW’s bargaining authority.

55. OPGI, for its part, disputes that EPSCA was bargaining on behalf of OPGI when it entered into the IBEW/EPSCA Agreement. Although OPGI concedes that one of its employees, Mr. Roberts, negotiated the IBEW/EPSCA Agreement on behalf of EPSCA, it contends that he did so only in his capacity as a representative of EPSCA and not in his capacity as a representative of OPGI. OPGI does not, however, dispute that CUSW’s successful displacement of the bargaining rights previously held by Local 1788 prevents it from participating in the renewal negotiations between EPSCA and IBEW in respect of OPGI’s employees. OPGI’s position is simply that EPSCA did not bargain on its behalf and did not have authority to do so.

56. The evidence before the Board is that OPGI notified EPSCA by correspondence dated April 13, 1999 that CUSW had recently been certified as the bargaining agent representing employees of OPGI and that as such, OPGI will not be participating in negotiations between EPSCA and the IBEW. Neither EPSCA nor OPGI, however, ever specifically advised the IBEW in writing that EPSCA was not negotiating on behalf of OPGI in the renewal bargaining.

57. Counsel for CUSW, however, argues that specific written notice to the IBEW that EPSCA was not bargaining on behalf of OPGI is required pursuant to the provisions of subsection 57(2) of the Act. In the absence of such notice, the IBEW/EPSCA Agreement, he suggests, is deemed to be binding on OPGI as a member of EPSCA at the time that that agreement was reached pursuant to subsection 57(2) of the Act, which reads as follows:

(2) When an employers’ organization commences to bargain with a trade union or council of trade unions, it shall deliver to the trade union,or council of trade unions a list of the names of the employers on whose behalf it is bargaining and, in default of so doing, it shall be deemed to bargain for all members of the employers’ organization for whose employees the trade union or council of trade unions is entitled to bargain and to make a collective agreement at that time, except an employer who, either alone or through the employers’ organization, has notified the trade union or council of trade unions in writing before the agreement was entered into that the employer will not be bound by a collective agreement between the employers’ organization and the trade union or council of trade unions.

This provision, generally speaking, deems an employers’ organization to be bargaining for all members of the employers’ organization for whose employees the trade union or council of trade unions is entitled to bargain, unless notice to the contrary is provided to the trade union or council of trade unions in writing before the agreement is entered into between the employers’ organization and the trade union or council of trade unions. Counsel for CUSW therefore suggests that OPGI may, in fact, be legally bound under the terms of this deeming provision whether or not OPGI intended that result.

58. With respect to this argument, the Board notes that subsection 57(2) of the Act provides, inter alia, that an employer’s organization is otherwise deemed to bargain for its members “for whose employees the trade union or council of trade unions is entitled to bargain and make a collective agreement at that time”. The Board firstly questions whether the IBEW-EPSCCO may be said to be “entitled to bargain and make a collective agreement” on behalf of employees of OPGI within the meaning of subsection 57(2) of the Act at the relevant time. In this respect, the Board notes that CUSW successfully displaced all of the bargaining rights previously held by the IBEW, and more specifically by Local 1788, for employees of Ontario Hydro by virtue of the Certification Decisions dated January 21, 1999. Whatever remaining bargaining rights the IBEW had thereafter pursuant to the Generation Projects and Transmission Agreements, it no longer held bargaining rights for employees of Ontario Hydro.

59. The Board, in Ontario Hydro and The EPSCA decision referred to above, described the anticipated effect of a successful displacement application by CUSW on the bargaining rights of the IBEW, as follows:

26. Further, the issue of which trade unions arguably hold bargaining rights under either the Transmission Agreement or the Generation Projects Agreement is very much a red herring. First, any application for certification is first and foremost about the employees. This is why in a displacement application an incumbent trade union is identified as an interested party and participates as an intervenor, even though it is both a proper and a necessary party to the proceeding (because a successful displacement application for certification operates to extinguish congruent existing bargaining rights held by an incumbent trade union). Second, whatever bargaining rights any other IBEW Local Union might [have] under either collective agreement, IBEW, Local 1788 has long been known as the “Hydro Local” for a good reason. It alone has represented IBEW members employed by Ontario Hydro. Indeed, that is what it was chartered to do in 1952 (see, International Brotherhood of Electrical Workers, supra). Accordingly, the union which the Labourers’ District Council seeks to displace is IBEW, Local 1788. To the extent that any remaining IBEW bargaining rights are affected, they have been adequately represented. To the extent that any remaining IBEW bargaining rights will be an empty shell if these applications succeed (as the IBEW EPSCCO submits would be the case), that is what they are now. A successful displacement application for certification will not alter the substance of any such residual rights (although it may reveal them for what they are).

Following the Board’s Certifications Decisions issued in January 1999, the IBEW and more specifically Local 1788, lost all of the bargaining rights held for employees of Ontario Hydro. At the time that the IBEW/EPSCA Agreement was entered into in the summer of 1999, the IBEW-EPSCCO therefore no longer held bargaining rights for employees of OPGI.

60. In any event, the Board finds that the renewal of the IBEW/EPSCA Agreement (on OPGI’s behalf or otherwise) is only relevant in these proceedings to the extent that it either demonstrates the failure of collective bargaining in these first contract negotiations or alternatively, explains its failure. As previously noted, the issue in this application relates to whether or not it appears to the Board that there has been a failure of collective bargaining and if so, the reasons for such failure. OPGI’s alleged participation in the renewal of the IBEW/EPSCA Agreement is therefore only relevant to the extent that it relates to the alleged failure of collective bargaining between CUSW and OPGI.

61. On the evidence before it, the Board finds that OPGI’s admitted reluctance to agree to any restrictions on its ability to contract out as it sees fit or to provide any job guarantees is unrelated to any perceived constraints imposed on OPGI by the renewal of the IBEW/EPSCA Agreement. On the contrary, the evidence is that OPGI never considered itself to be bound to that agreement. According to Mr. Roberts, he entered into this renewal agreement in his capacity as a representative of EPSCA and not in his capacity as a representative of OPGI. In addition, from OPGI’s perspective as confirmed in the correspondence from Mr. Strome to both the Labourers and EPSCA, OPGI was not participating in the EPSCA bargaining with the IBEW-EPSCCO in respect of employees of OPGI. OPGI’s position in this respect has been consistent throughout. For example, the bargaining notes reveal that Mr. Roberts made clear to Mr. Mulhall at the bargaining session held on or about May 17, 1999 that the IBEW/EPSCA Agreement did not apply to direct hires of OPGI, but rather only to work contracted out.

62. Further, OPGI did not consider that the IBEW/EPSCA Agreement provided any commitment by OPGI to assign work contracted out to the IBEW. In this respect, the Board notes that Mr. Roberts also advised Mr. Mulhall at the May 17, 1999 bargaining session that the IBEW/EPSCA Agreement did not give the IBEW any right to work contracted out. It merely set the terms and conditions if they get the work. As such, from OPGI’s perspective, the renewed IBEW/EPSCA Agreement did not deprive OPGI of its ability to negotiate restrictions with CUSW concerning the assignment of work contracted out. In this respect, the Board also notes that CUSW did not identify any provision in the IBEW/EPSCA Agreement which it claimed suggested otherwise. In all of these circumstances, the Board is not persuaded that the outcome of collective bargaining between the parties on the issue of contracting, subcontracting, job security or otherwise was predetermined by the renewal of the IBEW/EPSCA Agreement.

The renewal of the IBEW/EPSCA Agreement has made resort to a strike untenable

63. The Board is also unable to agree with CUSW’s suggestion that the renewal of the IBEW/EPSCA Agreement, which according to CUSW represents an agreement with an alternative labour source, has made resort to a strike untenable. According to CUSW, resort to a strike would mean forfeiting their bargaining rights, since OPGI would simply be able to assign bargaining unit work to contractors employing members of the IBEW under the terms of the renewed IBEW/EPSCA Agreement. The fact that terms and conditions of employment for members of the IBEW have now been set pursuant to this renewal agreement has, it is argued, undermined CUSW’s ability to strike.

64. The evidence is that EPSCA and the IBEW commenced renewal bargaining in early 1998. Shortly thereafter, CUSW filed displacement applications in respect of employees of Ontario Hydro in both the Generation Projects and Transmission bargaining units. As EPSCA and IBEW needed to know what employees would be left in these bargaining units, they agreed to put their negotiations on hold pending the disposition of these displacement applications. The period in which strike action is permissible had therefore not yet been reached by the time that CUSW’s displacement applications were granted in January 1999. As such, the terms of the expired IBEW/EPSCA Agreement would continue to apply pursuant to the provisions of subsection 86(1) of the Act, which, generally speaking, requires that the employer not alter the terms and conditions of employment as set out in the expired IBEW/EPSCA Agreement until either a renewal agreement, or a period in which a strike or lockout is lawful, is reached.

65. If the IBEW and EPSCA had continued to keep their negotiations on hold pending the conclusion of the negotiations between CUSW and OPGI, the terms and conditions of the expired IBEW/EPSCA Agreement would also have simply continued in place. In these circumstances, the Board notes that CUSW would be in a similar position to the one that it currently faces following the renewal of the IBEW/EPSCA Agreement. If the IBEW/EPSCA negotiations had remained on hold, OPGI would have been able to assign the work of the bargaining unit to contractors who employ members of the IBEW pursuant to the expired but frozen IBEW/EPSCA Agreement in the event of a strike by CUSW. Following the renewal of the IBEW/EPSCA Agreement, OPGI can similarly assign bargaining unit work to contractors who employ members of the IBEW pursuant to the renewed IBEW/EPSCA Agreement in the event of a strike by CUSW.

66. In addition, the Board notes that, in the event of a strike, OPGI is not restricted to assigning bargaining unit work solely to contractors working under the terms of the renewed IBEW/EPSCA Agreement. There are numerous other options open to it. For example, OPGI can hire qualified workers directly or even use non-union contractors to perform the work. In all of the circumstances, the Board concludes that the decision not to keep the IBEW/EPSCA bargaining on hold pending the conclusion of OPGI’s bargaining with CUSW has had little effect on CUSW’s ability to exercise its economic strength.

OPGI’s use of the labour requirements clause

67. The union argues that the additional and significant factor in this case is the labour requirements clause, which requires the application of the IBEW/EPSCA Agreement in respect of all work contracted out by OPGI. According to CUSW, the labour requirements clause represents a complete union security provision for the displaced union. Collective bargaining in this case has been unsuccessful, it argues, because OPGI has chosen to assign work to the IBEW through the labour requirements clause and has thereby maintained the division of work previously imposed by the IBEW on its Local 1788. According to CUSW, OPGI’s decision in this regard is the primary way in which it refuses to recognize CUSW’s bargaining authority.

68. With respect to this allegation, the Board notes that Ontario Hydro has historically included a labour requirements clause in its commercial contracts which requires all contracted and subcontracted work to be performed by IBEW members under the applicable IBEW/EPSCA Agreement. The labour requirements clause in its current form was developed and consistently used by Ontario Hydro long before the Labourers’ displacement applications. This is therefore not a situation in which the employer has responded to a successful displacement application by stipulating in its commercial contracts a requirement that all contracted work be assigned to the displaced union.

69. CUSW, however, requested in bargaining that OPGI change the labour requirements clause prior to the conclusion of collective bargaining in order to allow contracted work to be performed by CUSW. The Board notes that CUSW also made the same request of OHSC during the course of the negotiations of the OHSC Agreement. OPGI, unlike OHSC, refused to do so prior to concluding a collective agreement with CUSW. Notwithstanding this, for reasons unknown to Mr. Roberts, OHSC has, in any event, been able to perform work for OPGI on Ontario Hydro property using CUSW members under a CUSW agreement.

70. Mr. Roberts explains OPGI’s refusal to change the clause prior to the conclusion of bargaining as simply a decision to maintain the status quo in the manner in which it has historically contracted out work during the course of bargaining. Although OPGI conceded that it could have, like OHSC, complied with CUSW’s request to change the clause immediately, the Board is unable to find that it was or is required to do so in advance of concluding a collective agreement with CUSW.

71. The Board is further not persuaded that OPGI’s current use of the labour requirements clause has rendered collective bargaining impossible as alleged. In this respect, the Board notes that OPGI has, on various occasions, during the course of collective bargaining, advised that it could change the terms of the labour requirements clause in order to conform to any agreement reached between the parties regarding contractor and subcontractor work. In addition, OPGI has expressed a willingness to do so. In this respect, the Board notes that OPGI made a bargaining proposal to the union in September 1999 and again at the final bargaining session in December 1999, which contemplates a division of work different from that previously imposed by the IBEW on its Local 1788. This proposal also requires a change to the labour requirements clause. In addition, Mr. Roberts indicated in evidence that OPGI is prepared to incorporate any agreement necessitating a change to that clause into a written letter of understanding in order to make that agreement enforceable.

72. In all of these circumstances, the Board is not persuaded that OPGI’s use of the labour requirements clause represents an impediment to successful collective bargaining.

No written proposal

73. The union, finally, points to OPGI’s failure to make any proposal in writing on the issue of contracting, subcontracting and job security as evidence that collective bargaining between the parties is at impasse. OPGI has failed to do so despite the numerous bargaining sessions between the parties and despite the fact that the union has itself tabled various alternative proposals on these issues, both orally and in writing. CUSW notes that a collective agreement has to be in writing and that, as such, the absence of a written proposal from OPGI on these issues is significant. CUSW also contends that OPGI’s suggestion that it has not reduced its verbal proposal to writing because the parties could not reach agreement is “nonsense” because “the only way you know if you can agree is if there is something in writing”.

74. The Board does not agree with the suggestion that simply because a collective agreement must be in writing that a party’s bargaining proposal must also be reduced to writing in order to be considered a genuine proposal. While a party’s failure or refusal to commit a verbal proposal to writing may, in certain circumstances, cast doubt on the success of collective bargaining or that party’s good faith, the Board is not persuaded that OPGI’s failure to do so should be so interpreted in this case.

75. OPGI’s verbal proposal on the issue of contracting and subcontracting was first made at the luncheon meeting in September 1999 and reflects an alternative to the union’s written proposal dated August 18, 1999. Both the union’s and the employer’s proposals are similar in form in that both outline the terms and conditions under which a contractor is required to operate depending on whether the contractor in question is in contractual relations with CUSW, the IBEW, or with neither. In addition, the Board notes that there is no suggestion that CUSW ever specifically asked OPGI to reduce its proposal first made at this luncheon meeting to writing or any suggestion that CUSW did not understand its contents. Further, there is no dispute that OPGI’s proposal is, in any event, unacceptable to CUSW.

76. In all of the circumstances, the Board is not persuaded that OPGI can be said to have made no proposal at all on the issue of contracting and subcontracting, as contended by the union, simply because OPGI’s proposal on these issues was not reduced to writing.

Does it appear to the board that collective bargaining has been unsuccessful?

77. The Board must still as a general matter consider whether or not it appears that the process of collective bargaining has been unsuccessful on the facts in this case. CUSW generally argues that collective bargaining has been unsuccessful because there has been no “forthcomingness” from the employer on the issue of contracting, subcontracting and job security.

78. By way of background, the Board agrees with the union’s submission that subcontracting in the construction industry represents a threat to the bargaining rights of a union and the job security of its members. This threat was characterized in H.D.Woods, Labour Policy in Canada (Second Edition) (MacMillan of Canada), as follows at p. 255:

The system of subcontracting which operates in the construction industry may also threaten the bargaining rights of a union and the work security presumed to have been acquired through a collective agreement signed by a union and a contractor. If the contractor is free to subcontract part of the work, or all of it, to others whose employees are not represented by the union, the original bargaining unit can be largely, or completely, replaced by employees represented by no union or by one other than the union which signed the original agreement. In either case what the union achieved through bargaining has been lost through the subcontracting system.

The Board also notes that a subcontracting clause in a collective agreement protects against that threat. As the Board observed in The Metropolitan Toronto Apartment Builders Association, [1978] OLRB Rep. Nov. 1022, at p. 1032:

35. In the construction industry,[…] union security appears to be more related to contractual provisions recognizing the union’s claim to particular work, i.e., the sub-contracting provisions. These provisions appear to be primarily directed at preserving a union’s work jurisdiction so that it can continue to provide work for its members. The construction union in so doing is then able to maintain its own strength as a collective entity.

36. The object of a sub-contracting clause is to preserve the work jurisdiction of the trade union which is the beneficiary of the clause.

CUSW’s efforts to obtain contracting, subcontracting and job security protection therefore represent its attempt to preserve work opportunities for its members.

79. As previously noted, however, the protections sought are ones that its predecessor, Local 1788, did not have at the time of the displacement application. Whatever protections Local 1788 had obtained prior to the International’s decision to change Local 1788’s work jurisdiction, a review of Local 1788’s bargaining history reveals that it no longer had any such protections at the time that CUSW displaced its bargaining rights. The protections sought by the union in this case may therefore be fairly characterized as ones it is seeking “to obtain” rather than “to maintain”.

80. In these first contract negotiations, the issues of job security, contracting and subcontracting have been negotiated as a package. In this respect, the Board notes that Mr. Mulhall’s evidence suggested that the question of what may be acceptable to CUSW with respect to contracting and subcontracting will depend on what, if anything, is offered on the issue of job security and vice versa. In these circumstances, the parties’ positions on these issues cannot and should not be considered in isolation.

81. The evidence before the Board with respect to the parties’ negotiations reveals that bargaining on these issues has been stalled, or at least slowed down, by the confusion surrounding the scope of the bargaining rights obtained by CUSW pursuant to the Certification Decisions issued in January 1999. As previously noted, the scope of the union’s bargaining rights incorrectly defined the bargaining unit as including all relevant construction industry work “performed for or by Ontario Hydro” and was not ultimately corrected until the parties received the Board’s Reconsideration Decision in late September 1999. Prior to that, the parties were, to some extent, embroiled in a debate about the scope of CUSW’s bargaining rights when discussing contractor work. In this respect, the Board notes that CUSW took the position that it “was the exclusive bargaining agent for all of the work on Ontario Hydro property.” The employer countered that CUSW was the bargaining agent for employees of OPGI only and not the work itself.

82. As it turned out, neither party’ position was entirely right or wrong in substance. In this respect, the Board notes that the Reconsideration Decision confirmed that CUSW does not have the right to all of the work performed “for” OPGI on OPGI property. It is the bargaining agent for employees of OPGI – not for the work itself. On the other hand, it remains correct to say that CUSW, as bargaining agent for employees of OPGI, has the right to bargain for the work of OPGI, subject to whatever other restrictions, if any, may exist. However, until the scope of the union’s bargaining rights was ultimately clarified in September 1999, the parties were, to some extent, arguing at cross-purposes regarding the scope of the union’s bargaining rights obtained pursuant to the Certification Decisions. Having regard to the evidence before it, the Board concludes that, prior to receipt by the parties of the Reconsideration Decision in late September 1999, bargaining on the issue of contracting, subcontracting and job security was slowed down by the uncertainty over the scope of the union’s bargaining rights.

83. Negotiations on these issues were not, however, at a complete standstill. In this respect, the Board notes that the union tabled a specific written proposal on these issues on or about August 18, 1999. That proposal described the scope of the union’s bargaining rights as relating to work performed “by and for” OPGI, which characterization was ultimately proven to be incorrect unless tabled as a negotiating proposal rather than as a statement of CUSW’s current rights. On the other hand, that proposal implicitly acknowledged that CUSW did not already “own” all of the work on the property in that it contemplated contractors with contractual relations with the IBEW performing work for OPGI under the IBEW/EPSCA Agreement.

84. The union’s proposal was then followed by OPGI’s verbal counter proposal made at the luncheon meeting held in September 1999. This counter proposal contemplated all direct hire work being performed by CUSW members and spelled out three scenarios under which work contracted out would be performed. That proposal was not, however, acceptable to CUSW, because it does not, for example, require all non-union contractors to employ CUSW members under a CUSW agreement and does not provide any job security protection for CUSW members.

85. The Board notes that there was only one final bargaining session held thereafter in December 1999 at which time the parties explored whether a compromise between them could be reached. This bargaining session was the only one held between the parties after the scope of the union’s bargaining rights had been corrected pursuant to the Reconsideration Decision. It is reasonable to expect that more time would be required to explore the possibility of a compromise given that the protections sought by the union are ones that it is seeking “to obtain” rather than “to maintain” and that negotiations were slowed down by the incorrect certificate originally issued to the union. The Board is also not persuaded that there has been no “forthcomingness” from OPGI on contracting and subcontracting as alleged by CUSW, since OPGI has tabled a proposal, albeit verbally and somewhat belatedly, on these issues.

86. In all of these circumstances, the Board is unable to find that “it appears to it that the process of collective bargaining has been unsuccessful” within the meaning of section 43 of the Act. In view of the Board’s finding on this issue, it is unnecessary to consider the parties’ submissions regarding the reasons for the alleged failure and the applicability of the reasons set out in subsections 43(a) through (d) of the Act.

DISPOSITION

87. For all of these reasons, this application for a direction that a first contract be settled by arbitration is hereby dismissed.

“Caroline Rowan”

for the Board