3214-98-G United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local 787, Applicant v. Francis H.V.A.C. Services Ltd., Responding Party.
BEFORE: David A. McKee, Vice-Chair.
APPEARANCES: L. Steinberg and R. Harford for the applicant; G. Rontiris and B. Francis for the responding party .
DECISION OF THE BOARD: June 12, 2000
1This is an application for the referral of a grievance to arbitration pursuant to section 133 of the Labour Relations Act, 1995, S.O. 1995 ch.1 (the “Act”). The grievance arises in odd circumstances. The responding party was bound to two collective agreements with the applicant. One was its provincial collective agreement covering all work performed in the industrial commercial and institutional sector of the construction industry (the “Provincial Collective Agreement”). The second was an agreement covering non-ICI construction work, service and maintenance work (the “Other Agreement”). In 1998 certain employees brought an application to terminate bargaining rights under both collective agreements. Eventually two representation votes were held in which a majority of persons voted to terminate the applicant’s bargaining rights under both collective agreements. Because of the way the application unfolded, the decision terminating bargaining rights under the Provincial Collective Agreement was issued December 11, 1998, and the decision terminating bargaining rights under the Other Agreement was issued March 11, 1999.
2These two collective agreements normally operate in a manner which makes the distinction between the two irrelevant. Between them, they cover all of the work which falls in the refrigeration and air conditioning industry. (As is made clear in the collective agreement, this industry includes work on some heating devices, such as “piping to stoves…heating furnaces, ovens, driers, heaters, oil burners, stokers and boilers”). In argument, counsel for the responding party attempted to suggest that there might be work performed by the responding party in the refrigeration and air conditioning industry which fell under neither collective agreement. The Board rejects this argument for two reasons.
3First, the agreements appear to be crafted to cover the entire industry. Appendix “A” to the Provincial Collective Agreement states that it covers, essentially, all work falling within the industrial commercial and institutional sector of the construction industry and attempts to define that work. The Other Agreement provides in Article 5 (“Recognition”) that the employer recognizes the union as the bargaining agent for all employees in certain classifications “engaged in all of the Employer’s maintenance and/or service activities and all construction work in the Province of Ontario, other than construction work in the industrial commercial and institutional sector…”. There is nothing in the Agreement which defines “service work”, and therefore no reason to give it any meaning other than the common meaning one would attribute to the term as used in phrases such as “service calls” or “service agreements”.
4Second, the practice of this employer suggests that it understood this. There was no evidence that prior to December 11, 1998 any work was performed by the responding party outside the terms and conditions of either collective agreement. Equally, there was no suggestion that the work performed between December 11, 1998 and March 11, 1999 was anything other than typical. Indeed one of the exhibits introduced was Exhibit 7B which details repairs performed to a counter refrigerator. The Vice-Chair queried whether repairs to such a domestic appliance fell within the refrigeration and air conditioning industry. Mr. Francis, principal of the responding party, replied candidly that there was no doubt that it did. If that work is work in the refrigeration and air conditioning industry, then all of the work referred to in the other exhibits also falls within that industry.
5Normally the dovetailing of these two agreements makes the distinction between them irrelevant. All employers bound to an agreement with the applicant are bound to both collective agreements. The rates and benefits payable for journeypersons and apprentices are the same in both agreements. Thus the characterization of work is normally irrelevant to their employment. Since the responding party performs virtually no work in buildings which are not industrial commercial or institutional in nature, the difference between the two collective agreements in this employer’s operations is the difference between construction and maintenance. The only significant difference in the two agreements is the presence of “maintenance mechanics” in the Other Agreement. Even then, their duties are precisely defined in the agreement and do not correspond to a line between maintenance and construction, and in any event, none were employed during the relevant period.
6Thus, in the period between December 12, 1998 and March 11, 1999 the responding party was bound to only one collective agreement. For the first time the difference between construction and maintenance or service was relevant to the application of these agreements. The responding party’s method of classifying its work, essentially the difference between regularly scheduled maintenance and work done as a result of a call from a customer for assistance, does not necessarily define the difference between construction and maintenance.
7During the months of December, January and February, the responding party applied the Other Agreement to some of the work performed by some of its employees, particularly in regard to the paying of employer remittances to benefit funds. It did not apply any collective agreement to the work it considered to be construction work. The applicant takes the position that all of this work was maintenance work and should have been treated as work falling within the collective agreement. The applicant claims as relief the payment of the employer contributions to the benefit funds, including health and welfare funds (to cover employees for a period long since past) and pension funds on behalf of the very employees who terminated the union’s bargaining rights. It does not allege that the wages paid were not at the correct rate, or seek damages on behalf of any individual employee,
8The parties advised the Board that they had reviewed a very large number of work orders which describe the disputed work. They had broken them down into nine “categories” and extracted certain samples from each category. They proposed to litigate the issue of whether each of the sample work orders reflected work which was construction work or maintenance/service work. They expressed the view that with this guidance they could determine whether each of the other work orders was construction or maintenance and calculate the damages arising from any non application of the collective agreement.
9It is not difficult to find general definitions of the distinction between construction and maintenance in the Board’s jurisprudence. Essentially construction work involves the addition to an existing facility, results in an increase of the production capability of a facility, or restores to a working order a system which has ceased to function or to function economically. Maintenance work sustains, maintains or preserves an operating facility or part thereof, and enables it to operate efficiently or to attain its production capacity. The first such definition was set out in The Master Insulators’ Association of Ontario Inc., [1980] OLRB Rep. October 1477 as follows:
With the exception of the work performed at the premises of Fearman and the work on a new emergency shower and minor work in a change house at Stelco, the work performed by the employers who were named in this complaint was essentially similar in nature. In our view, the work at the premises of Fearman, which involved an addition to an existing facility and involved both relocation of producing units and the expansion of existing capacity, was clearly new construction. Similarly, the work on the emergency shower and change house at Stelco was an addition for the safety and comfort of Stelco’s employees and represented new construction. This work is clearly within the industrial, commercial and institutional sector of the construction industry. The rest of the work referred to in the complaint was, for the most part, clearly work which sustained and maintained an operating facility and enabled that facility either to operate efficiently or to attain its designed or production capacity and is to be regarded as maintenance work. Maintenance work is to be distinguished from construction work which involves the addition to an existing facility or which will increase the designed or production capacity of an existing facility. However, in so far as there was work of new construction, which was purportedly done under the maintenance agreement, it was a violation of section 134a(1) of the Act.
Maintenance work performed the employers who were named in this complaint is in reality part and parcel of the production and maintenance operations of the industrial clients for whom the work is performed. These industrial clients may, and frequently do, perform their own maintenance work with their own employees who are included in their own industrial bargaining units. In the context of the work affected by this complaint “maintenance” is difficult to distinguish from “repair”. In our view, it is a question of the context of any given work and the degree of addition or subtraction of such work to an existing system or part of a system. Where the work assists in preserving the functioning of a system or part of a system, such work is maintenance work. Where the work is necessary to restore a system or part of a system which has ceased to function or function economically, such work is repair work. “Maintenance” and “repair” are not mutually exclusive concepts, and lack of adequate maintenance will surely produce a situation where repair becomes inevitable. In our view, the performance of adequate and timely maintenance forestalls or reduces the requirement for repair.
This test has been followed with no substantial variation since: see Quinard Limited, [1982] OLRB Rep. July 1059, Levert & Associates Contracting Inc., [1989] OLRB Rep. June 630, and Abitibi-Price Inc., [1986] OLRB Rep. Dec. 1613, among others.
10The real difficulty comes in the application of this test to the facts in any particular dispute. The distinction is one which is never easy to draw. This is particularly so since the context in which the work is performed is frequently determinative of the issue. In Jaddco Anderson Limited, [1998] OLRB Rep. Feb 38 the Board wrote:
11The Board in that case came to the conclusion that the dichotomy between construction and maintenance is based primarily on a factual context. It is an analysis of the factual underpinning of any given work which allows an adjudicator to decide whether the work is construction or maintenance. In certain situations replacements of components might lead to the conclusion that the work in that context is maintenance. However in another context the replacement of components when viewed in their totality might lead to a conclusion that the work is construction because when one replaces all the components he or she is in fact rebuilding the entire system or structure.
In National Elevator & Escalator Association, [1991] OLRB Rep. April 555 the Board said:
- … Whether something is repair or maintenance work will depend upon the nature and purpose of the work in question in the context of the facility or system in or to which the work is being performed. Generally, work performed on existing equipment in an existing facility for the purpose of keeping the facility or a system in it operating properly before the facility or system has ceased to do so, is appropriately characterized as maintenance work. On the other hand, work involving the addition to or replacement of equipment for the purpose of either increasing the capacity of the facility or system, or restoring the ability of a facility of system to function properly, is appropriately characterized as repair work. The amount, apparent significance, or value of the work in question may be part of the context in which the assessment is properly made but are in no way determinative of the question. Similarly, whether a facility or system is shut down while the work in question is being performed may also be relevant, but will not be determinative.
Finally, in Delta Catalytic Industrial Services Ltd., [1997] OLRB Rep. Nov. 979 the Board said:
This is too simplistic and microscopic an analysis. The nature of electrical work will inevitably mean that new hardware is installed as part of the work, whether it be wiring or electrical or electronic devices, but this does not inevitably mean that the work is "construction". In some cases, work of this nature may not be meaningfully different in concept from the installation of new piping, new iron plating or new insulation. While the raw material involved may be new, that fact alone will not necessarily be determinative. The Board still must consider the nature and purpose of the work, in the context of the particular facility, project, system, or machine in question. The replacement of an outdated electrical measuring device with an updated electronic measuring device, which may well be more efficient and enhance the measuring capability, will not necessarily be "construction" work, where that is all that is being changed, and where the nature and purpose of the system has neither changed nor has its overall capability or productivity been enhanced. The result will depend on the extent of the change and its nature and purpose. Similarly, the installation of new gauge wiring for old gauge wiring will not necessarily be "construction" work. It is the context and purpose of the work which must always be considered and not only the detail of the work that the particular trade is asked to perform.
One of the clearest examples of a definitional problem is the distinction between the replacement of a system, and the replacement of a component. Generally speaking, the replacement of a system is construction work and the replacement of a component is maintenance work; see Quinard Limited, supra. This merely begs the question of what is a system and what is a component. For example, Ontario Hydro Services Company operates a transmission system for the transmission of power in Ontario. Replacing the entire system would be construction. Replacing 90 kilometers of poles under a live transmission line is also construction (Ontario Hydro, [1994] OLRB Rep. Oct. 1404). To replace a single insulator on a single pole on a rural distribution line would clearly be the replacement of a component and therefore maintenance. What about one kilometer of line? What about one pole? One large steel transmission tower? In cases such as those, context is determinative. Thus in drawing on the Board's caselaw it is often more instructive to refer to the actual facts on which the decision is made by the Board than the formula articulated as the line between construction and maintenance.
12This is a grievance filed by the union. The onus is on the applicant to demonstrate that the responding party violated the collective agreement, i.e. that it performed work which was in fact work within the refrigeration and air conditioning industry which was not in the industrial commercial and institutional sector of the construction industry, and did not apply the terms and conditions of the collective agreement to the persons performing the work. This is of importance in the context of this decision. As will be seen below, there was on occasion a shortage of detail about the actual work or the context in which that work was performed.
13Both parties urged the Board to do the best it could to categorize the work in a definitive fashion, rather than to find that the union had failed to satisfy the evidentiary onus on it. If the Board were to do that, it was argued, the parties would be no further ahead in determining the proper characterization of the rest of the work orders already identified. The Board is sensitive to the desire of the parties to deal with this grievance in an efficient manner; indeed their handling of this matter before the Board has been exemplary. However, the distinction between construction and maintenance is a difficult one to draw at the best of times, and of potentially great consequence for many other parties in the construction industry. It is of no significance to these two parties beyond the strict boundaries of this grievance. They do not even have a continuing relationship. Accordingly, there are times when the question of onus does decide some of the questions posed by the parties.
14The only evidence we heard was from Mr. Brian Francis, the principal of the company. He identified the work orders as the business documents of the company. As such, they are admissible for the truth of their contents. Mr. Francis gave evidence and was cross-examined on the conclusions he drew from these documents. As an experienced contractor in the industry, he was a helpful, knowledgeable and forthright witness. He could not of course give direct evidence about the actual state of the equipment worked on or do more than explain what inferences might or might not be logical ones to draw about the nature of the work.
15Counsel for the responding party argued that the Board should pay some attention to the responding party’s method of classifying work, i.e. that regularly scheduled service calls were maintenance or service, and that all unscheduled calls from customers were construction. He argued that it was impossible for the responding party to know, when a service call came in, what the nature of the problem might be, or what kind of work was required. While, if the parties had an on-going relationship this might well be a problem they needed to address, it does not present any real unfairness to the responding party in the context of this grievance. The work was performed by the persons who were also formerly covered by the Provincial Collective Agreement. The Board heard no evidence about what wages were paid to these persons, and the grievance does not allege a violation of the collective agreement in respect of wage rates. The only issue for the responding party was once a month to determine the nature of the work which had been performed and to remit benefits in respect of those hours. The responding party could therefore have easily performed an ex post facto analysis of the work performed for the purpose of complying with the collective agreement. The only issue for the Board, at this point, is to perform that analysis on the evidence presented at the hearing. That analysis follows. Once again, we repeat: the onus is on the applicant to prove that the work performed was not work in the construction industry.
16Exhibit 1 A customer reported a heater not working. When the technician arrived he found the customer had it running again. He checked the sequence of operations and adjusted a tube on the burner pressure switch.
17This exhibit, like several others presents an analytic difficulty not generally encountered by the Board in this type of dispute. On the one hand, the system was not operating or was in imminent danger of shutting down, and required some work to get it back up and functioning. On the other hand, the work was of a very minimal nature. One might envision a scenario in which a customer is aware only that a complex heating system is not working. The customer is aware that no one in its employ has any understanding of how the system works, decides not to touch it, and calls a service person. That service person arrives and, being familiar with the system, sees instantly that the system simply needs the operating switch turned to the “on” position, or perhaps the adjustment of a complicated thermostat. This example amounts to operating the system rather than repairing it. In this exhibit, the work is a little more diagnostic than the example given, but given the lack of any substantial work in modifying or changing the system, it appears on balance that this is not repair, and therefore not construction. The grievance is allowed with respect to this exhibit.
18Exhibit 2A The customer complained of noise in the fan. When he arrived at this location the technician discovered that the fan was not working. He concluded that the bearings were “gone”, necessitating the replacement of the motor and blower wheel in an air handling unit. The unit was a 5-ton split air conditioning/ heating unit. The purpose of the replaced items was for the delivery of air to the occupied area. There was no evidence as to how much of this system the replaced parts represented.
19Simply put, this heating system was not working. Although only a single component of the system was at fault, it needed to be repaired. This is similar to the repair work described in paragraph 22 of the National Elevator case, supra. Repair is work in the construction industry. The grievance is dismissed with respect to this exhibit.
20Exhibit 2B The boiler was leaking. The technician replaced two of the tubes and the millboard. This was not part of a regular maintenance call but the result of the customers’ concern about leakage between the water systems. The boiler was, however, operational. The replacement of the tubes did not increase the capacity of the system but restored it to its designed capacity.
21It is unlikely that the boiler consisted of only two tubes. However, the Board has no idea of the extent of the work this represents on the boiler. That is, is this the refurbishing of two components of an operating system, or is it the repair of a system that is not functioning in the manner it was designed to operate? Similar work has been found to be both construction and maintenance work by the Board, depending on the context (see Babcock and Wilcox, International Division, [1994] OLRB Rep. March 199 at paras. 6 and 21). In the absence of evidence to give the Board a proper context for the work, I can only find that the applicant has not met the onus of proving that this work represents a violation of the collective agreement. The grievance is dismissed with respect to this exhibit.
22Exhibit 2C The technician removed and replaced a heat exchanger (and connecting piping). Mr. Francis’ evidence was that when a crack is discovered in a heat exchanger it must be attended to immediately to prevent noxious gasses from entering occupied space. It is occasionally possible to repair a crack by welding it or other means of closing the gap, but generally if the leak comes from corrosion and cracking, the heat exchanger must be replaced. When asked if the heat exchanger could nonetheless continue to function even with the leak, he stated that “it can continue to operate and kill people”. The Board does not regard equipment which operates in a manner to kill people as equipment which is performing at a level within the specified design capacity of the equipment.
23If a system cannot be operated safely, it must be repaired. That is what was done in this case. Repair work is work in the construction industry. The grievance is dismissed with respect to this exhibit.
24Exhibit 2D This was a “no heat” call from a customer. The technician discovered that the thermocouple was defective and replaced it. This is a $15 item. It detects the presence of ignition in an ignition chamber and only permits gas to flow into the chamber if it will be ignited. In this case the thermocouple had lost the ability to detect the ignition source and had cut off gas flow.
25This exhibit presents the same problem that Exhibit 1 presents. The system is not operating, but the work required to get it to operate is trivial. The work was not planned as maintenance, but was a response to the fact that an entire system has ceased to operate. It involved the removal of an defective part and the replacement with another one. Accordingly the work is repair, trivial though it may be. The grievance is dismissed with respect to this exhibit.
26Exhibit 2E This was another “no heat” call. The difficulty was a blown glass fuse (a $3 part) which the technician replaced.
27Counsel for the applicant described this work as “beyond the pale” (although the address does appear to be in the western Ottawa area). The work is even more trivial. In some electrical systems, a trip or limit switch may be used rather than a fuse (i.e. something which requires switching to the “on” position). The current may be too great in this heater to allow a switch of this sort to be used. In any case, the purpose of a fuse is to shut down a system in order to protect it from an excess level of current. It worked as it should in this case. The next step in the proper functioning of this system is the resetting or replacing of the fuse. It is therefore, on balance, not repair work. The grievance is allowed with respect to this exhibit.
28Exhibit 2F This was a call about a noisy fan in a heating system. The technician removed the fan assembly, rebuilt it (possibly in the shop) and reinstalled it. Mr. Francis was (naturally) unable to give first hand evidence of the exact nature of the work. From the work order he concluded that the fan needed to be repaired so that it would not cease to function entirely (as in Ex. 2A), for example by having the bearings seize up on the rotor shaft (which may have been the cause of the noise). He agreed that it was “not clear that the fan was not operational or so far gone that it needed to be replaced”.
29On balance, this appears to be timely maintenance designed to prevent the system from ceasing to function. The grievance is allowed with respect to this exhibit.
30Exhibit 2G This may have involved work on two heaters. The Board finds that the technician responded to a “no-heat” call. On one heater the technician replaced a part, the ignition control, with a part obtained from another non-operating heater. He examined the other heater and started it up. However, he concluded the heater needed to be rebuilt or replaced.
31Counsel for the applicant submitted that the Board ought to draw different factual conclusions from this exhibit. At the same time he argued that there were not enough facts to be able to make an informed judgement about the nature of the work. On balance the work appears to be repair. If there is insufficient information to put the work in proper context, then the grievance must fail on the basis that the applicant has failed to discharge the onus it has. The grievance is dismissed with respect to this exhibit.
32Exhibit 3 The technician shut down an air conditioning system at a school in order to prevent accidental start up and damage during the winter and/or to prevent leakage of the coolant if the seals dried out or became cracked during the winter.
33This is clearly preventive maintenance. The grievance is allowed with respect to this exhibit.
34Exhibit 4 The customer called indicating the unit was overheating. The technician performed some diagnostic work, and adjusted the fan selection switch and thermostat on the roof unit. He also replaced two electronic modules ($367 each) on the garage heater unit. It was not possible to say why the unit was overheating.
35There is simply too little evidence to enable the Board to draw any firm conclusions about the nature of this work. What does the overheating mean? Was the system still functioning but simply giving out warning signs? Was it not operating properly at all? What do the electronic modules represent in this system? As the applicant argued so forcefully, outside the area of new construction, context is highly determinative. We have no context, and no details of the exact nature of the work. It may be that, as the applicant suggested, there is no more information to be had about this piece of work. However, the onus is on the applicant to prove that the responding party performed work in the refrigeration and air conditioning industry which was not construction work. It has failed to do so. The grievance is dismissed with respect to this exhibit.
36Exhibit 5 The technician installed a humidifier in an existing air conditioning system/furnace where none had existed before. The applicant conceded that this was construction work. The grievance is dismissed with respect to this exhibit.
37Exhibit 6A The technician removed and replaced two roof units.
38Again, the grievance fails in respect of this exhibit on the basis of a failure on the applicant to satisfy the onus on it. The Board has no idea whether the units can be described as components or a system (or the major portion of a system). There is no context to this work at all. The grievance is dismissed with respect to this exhibit.
39Exhibit 6B Employees removed one old oil furnace and installed two new gas furnaces. Mr. Francis could only speculate as to the reasons for replacing one unit with two (convenience for separate units, etc.). The applicant conceded that this was work in the construction industry. The grievance is dismissed with respect to this exhibit.
40Exhibit 6C Employees removed a Lennox Pulse Furnace and replaced it with a new furnace. The manufacturer discovered that the design of these units was not what it expected. It offered customers a program where the existing unit could be tested at Lennox’s expense. If it was below Lennox’s standards, it would be replaced by Lennox. The test was a pressure test over a defined time period. (This is in fact what was done to this very unit in Exhibit 9). In this case Lennox had offered to replace the furnace and the customer agreed. This is the work that was done.
41To some extent the customer’s motives are irrelevant. Although the work described in Exhibit 9 indicates that the unit was a “bad” one, there is no suggestion that the furnace had ceased to operate. Would the customer have chosen this occasion to replace the furnace if Lennox had not offered to do it for free? Even if it had discovered that the unit was reaching the end of its life it is entirely possible, absent Lennox’s offer, that it would try to extract at least one more heating season from it. While the furnace is only one part of a heating “system”, it is a major portion of it and, as a unit, performs one of the basic functions of the system (i.e. it produces the heat which other parts of the system distribute). For whatever reason, the customer chose to replace that part of the system. The replacement of the furnace in a heating system with a new furnace in this context is no different from the civil work of removing and replacing dividing walls within an office area. It is construction work. The grievance is dismissed with respect to this exhibit.
42Exhibit 7A The customer reported a smell of gas. The technician tested a number of components of the system. Most were satisfactory, but he found a crack in the heat exchanger and concluded the whole heat exchanger needed to be replaced. There is no indication of any such work being done. However, Mr. Francis testified that the Gas Code under the Energy Act requires in such a situation that the fitter shut down the unit. Repairs can sometimes be effected, but if a technician has said it is to be replaced, then repairs are not to be performed.
43Whatever may have followed from the technician’s work, the only work indicated on the work order is diagnostic in nature. He or she did no work on the system other than to examine it. This work is clearly not work in the construction industry. The grievance is allowed with respect to this exhibit.
44Exhibit 7B This was the repair of a “counter fridge”. There is no indication that this was a built in unit. A repair of chattels is not work in the construction industry. The grievance is allowed with respect to this exhibit.
45Exhibit 7C This was another “no heat call”. When the technician arrived the heat was back up and he was unable to find any problems in the system.
46Once again the work was purely diagnostic. No work of any sort was done to the system other than to examine it. The grievance is allowed with respect to this exhibit.
47Exhibit 8 This involved the repair of a leak in a gas unit. Three other units were checked and found to be operating properly. Again this was a situation where the leak had to be repaired to comply with the Gas Code.
48As in Exhibit 2C the unit was not operating safely. It was necessary to repair it to bring it back to operating to the standards within which it was designed to function. Such repair is work in the construction industry. The grievance is dismissed with respect to this exhibit.
49Exhibit 9 The technician performed the pressure test which led to the replacement of a furnace described in Exhibit 6C. Mr. Francis concluded that since the test took only 3 hours this must have been a bad unit.
50The work was diagnostic only, although it did lead to the performance of construction work. Is the proper context of this work this work order alone or is it in connection with the construction work? The Board believes that it should be viewed in isolation. The work was a single item ordered at Lennox’s request. If the results had been different, Lennox would not have offered to pay for a new furnace. Even if it had, the customer might have refused if it had imminent plans for major changes to the building or to the site. The grievance is allowed with respect to this exhibit.
51The parties have requested the Board to remain seized with respect to the many other pieces of work described in the eighteen inches’ thick pile of work orders which have not yet been filed as evidence. The Board certainly hopes that the parties can decide which of them represent violations of the collective agreement and which do not, and the quantum of damages arising from the non-application of the collective agreement to the persons performing the work. In the event that they are not able to do so, the Board remains seized of this referral.
“David A. McKee”
for the Board