0461-00-R United Brotherhood of Carpenters and Joiners of America, Applicant v. Intracorp Developments Ltd., Responding Party v. Universal Workers Union, Labourers’ International Union of North America, Local 183, Intervenor.
BEFORE: Mary Ellen Cummings, Alternate Chair.
APPEARANCES: D. Watson, Walter Tracogna and Paul Daly for the applicant; Michael McFadden, B. Rudichuk, K. Porter and D. Napoli for the responding party; Mark J. Lewis and Rocco Lotito for the intervenor.
DECISION OF THE BOARD; October 27, 2000
This is an application for certification in the construction industry. The United Brotherhood of Carpenters and Joiners of America (the Carpenters) seek to represent a bargaining unit of carpenters and carpenters’ apprentices in the residential sector of the construction industry in Board area 8 employed by Intracorp Developments Ltd. (Intracorp). The application was made on May 10, 2000. In its response, Intracorp pleaded that the employees in the bargaining unit the Carpenters seek to represent are covered by a voluntary recognition agreement entered into on September 27, 1999, by Intracorp and the Universal Workers Union, Labourers’ International Union of North America, Local 183 (Local 183). Local 183 then intervened making the same claim.
The Carpenters allege that Local 183 was not entitled to enter into a voluntary recognition agreement because there were employees in the bargaining unit at the time, but Local 183 did not represent them. Essentially, the Carpenters allege that persons working as general labourers at Intracorp sites pursuant to an alleged subcontracting arrangement, were, in reality, employees of Intracorp.
The Facts
The facts are not significantly disputed. At the end of the hearing, the Carpenters submitted that Local 183 and Intracorp had not led enough evidence to meet the burden of proof, but it is important to set out that the evidence led by Intracorp and Local 183 was not contradicted.
Rocco Lotito, Local 183’ sector co-ordinator for high-rise residential, testified that he first became interested in Intracorp in May or June 1999 when he learned that it had an interest in the Pantages hotel/condominium complex. Mr. Lotito was of the view that the project could be built under the residential agreement. George Velah, a business agent for Local 183, had been involved with Intracorp around a certification in the low-rise part of the residential sector of the construction industry. In February 1999, Local 183 and Intracorp had entered into a voluntary recognition agreement in the low-rise sector as part of Minutes of Settlement related to an application for certification and unfair labour practice complaint. Mr. Lotito sought an introduction to Intracorp from Mr. Velah.
A meeting between Mr. Lotito and Jeff Usher, Intracorp’s then Vice President of High Rise Operations, was arranged Mr. Lotito testified that he wanted a collective agreement, and to be part of the Pantages project. A meeting was held in June or July of 1999 and Mr. Lotito left Mr. Usher with a copy of the independent agreement for the Metro Toronto Apartment Builders (the MTABA Collective Agreement). Mr. Usher said he would get back to Mr. Lotito. According to Mr. Lotito, Mr. Usher explained that he was getting labourers through what Mr. Lotito called a “labour pool” and wanted a period of grace to achieve a smooth transition. There were further discussions, and ultimately the parties, according to Mr. Lotito, settled on a 6 month grace period; for 6 months Intracorp could continue to get labourers from its labour pool, but in all other respects, including subcontracting , the MTABA agreement would apply. Mr. Lotito confirmed his understanding of the arrangement in a letter dated September 21, 1999. Mr. Lotito testified that Mr. Usher wanted to have the letter in hand before signing the MTABA agreement. The letter reads:
This letter is to advise you, that notwithstanding the terms and provisions of the Collective Agreement which the parties have entered into on or about the 27th day of September, 1999, Intracorp may continue to employ direct employees, who are otherwise covered by the terms and provisions of the Collective Agreement binding upon the parties (the MTABA Collective Agreement) for a period of up to six months without regard to the wage rate, and other monetary provisions of the Collective Agreement. All other terms and conditions of the Collective Agreement will apply in full as of the date of signing.
Intracorp may rely on this letter and the undertakings herein provided in any proceedings which might be brought by Local 183 under the terms of the Collective Agreement or the Ontario Labour Relations Act.
Mr. Lotito testified that the space to insert the date was left blank, until the MTABA Collective Agreement was signed. He also testified that the reference to “direct” employees was inserted at the request of Mr. Usher who was concerned that Local 183 might seek to organize Intracorp site management staff. Mr. Lotito resisted the suggestion of counsel for the Carpenters that the reference to direct employees was, in fact, a reference to the “labour pool” employees. On September 27, 1999, Intracorp signed Local 183’s MTABA collective agreement.
Mr. Lotito testified that at the end of the 6 month grace period, Intracorp started hiring Local 183 members and fully complying with the MTABA Collective Agreement. There is no dispute among the parties that from March 28, 2000 and onwards, Local 183 referred employees to Intracorp and they performed work that falls within the bargaining unit sought by the Carpenters. The Carpenters’ application was brought on May 10, 2000. How the Carpenters came to have members on an Intracorp job site is a whole other story that need not yet be explored.
Mr. Usher is no longer with Intracorp but I heard evidence from his successor, Kevin Porter, and estimator Daniel Napoli, about Intracorp’s relationship with the entity that provided its general labourers. 1219861 Ontario Inc. c.o.b. as Construction Personnel Services (CPS) is a company that, as its name implies, provides labour for construction. Intracorp has no records indicating any contract between it and CPS. Any arrangements would have been made by Mr. Usher. Neither Mr. Porter nor Mr. Napoli knew how Intracorp first came to use CPS, but there is no suggestion that there is other than an arms length relationship.
Mr. Porter testified that when Intracorp needed labourers, it call Steve Hillchuck, the proprietor of CPS. Mr. Porter, Mr. Napoli or one of the site superintendents would call Mr. Hillchuck, and indicate the number of men they needed, when, the task or tasks to be performed and the job site. Mr. Porter testified that Intracorp never requested people by name and never got to know anyone by name. If 3 or more were requested, one would have been appointed by Mr. Hillchuck to be the foreman of the crew. If fewer than 2 were sent, Mr. Porter testified, Mr. Hillchuck tended to send his better workers. Mr. Porter said that the crew foreman or individual labourer would report to the site superintendent who would tell them what the task was, unless that had already been communicated though Mr. Hillchuck. Mr. Porter testified that the labourers from CPS had the same relationship with the site superintendent as other subcontractors on site.
The CPS labourers kept track of their hours. At the end of the day, the site superintendent would initial those timesheets. Intracorp kept no records of hours worked, nor the identity of the workers. Once a week CPS invoiced Intracorp for all hours worked. Mr. Porter said Intracorp paid $24.50 an hour to CPS. He understood that CPS paid the labourers about $14.00 or $15.00 an hour. Intracorp made no deductions for taxes or other remittances and provided no workers’ compensation coverage for the workers.
Intracorp provided all materials and equipment. The CPS workers came with a tool belt, hammer and safety harness. Mr. Porter could recall only two occasions when CPS provided a piece of equipment.
When Intracorp’s need for the workers ended, the site superintendent advised Mr. Porter who called Mr. Hillchuck. It was, presumably, Mr. Hillchuck who laid off the workers or referred them elsewhere, but in any event, it was not someone from Intracorp. Similarly, if one of the site superintendents was not happy with the quality and speed of work, Mr. Porter or the site superintendent would call Mr. Hillchuck and seek replacements. Again, no one from Intracorp dealt with the CPS workers directly. Intracorp has never issued a Record of Employment for the CPS workers. Mr. Porter was not aware of an CPS worker making a claim that Intracorp was his true employer.
Both Mr. Porter and Mr. Napoli testified that they understood from Mr. Usher that after the MTABA Collective Agreement was signed, Intracorp could use the CPS workers for a further 6 months. Mr. Napoli recalls receiving a phone call from Local 183 just before the end of the six months, reminding him of the deadline. This led Mr. Napoli to make arrangements for setting up a payroll that could track the hourly wages, and calculate the appropriate remittances, both to Local 183, and government agencies.
Mr. Porter was asked why Intracorp was willing to sign a collective agreement with Local 183. Mr. Porter testified that both he and Mr. Usher had experience with Local 183 when they each worked for different general contractors. Mr. Porter found the Local 183 members to be timely, hard-working, motivated, more highly skilled and well-trained about safety issues. Mr. Porter and Mr. Usher expected to get better quality work, performed more quickly. Mr. Porter testified that the improvement over the CPS workers was even better than he had expected.
In the course of the hearing, at the request of the Carpenters, Intracorp produced all its invoices from CPS. They showed that CPS continued on an Intracorp job site into May 2000, past the date when Intracorp was to start hiring from Local 183. Mr. Porter testified that he had been unaware of the continued use, and could not explain why it happened.
Argument and analysis
Counsel for Local 183 and Intracorp submitted that the voluntary recognition agreement was a valid pre-hire agreement. While the signing of a voluntary recognition when there are no employees in the bargaining unit is generally considered to constitute unlawful support for the union by the employer, the Board’s decision in Nicholls-Radtke & Associates Limited, [1982] OLRB Rep. July 1028 and the cases that follow it, have created an exception. The Board recognizes that in the construction industry, unemployed members have already chosen their bargaining agent before they are referred to work. It is, therefore, a bit artificial to suggest that a construction trade union wait until work has started before seeking to secure its bargaining right. Consequently, the Board held that where there are no employees in the bargaining unit at the time that the voluntary recognition agreement is entered into, and the employer has a present or future need to have work performed, and the union has available persons to perform it, the voluntary recognition agreement does not constitute unlawful support for the union, and its validity will be upheld.
Counsel for Intracorp and Local 183 submitted that the only real issue is whether there were employees in the bargaining unit at the time the voluntary recognition agreement was signed. They submitted, and it was not challenged by the Carpenters, that Intracorp intended to hire Local 183 members, and Local 183 intended to supply, demonstrated both by the evidence of what they planned, and more important what actually happened; the regular referral of Local 183 members to Intracorp’s job sites at the end of the 6 month grace period.
Both Intracorp and Local 183 submitted that while it is true that the Board has regularly found employees of a personnel agency to be employees of the “client”, the Board has also acknowledged in other cases (see for example Dare Personnel, [1995] OLRB Rep. July 935) that legitimate labour-only subcontracts exist. It all depends on the facts. In this case, counsel submitted, the Board should conclude that CPS was the actual employer. It determined who would be sent to do the work; provided the supervision; tracked hours; and made all statutory deductions. CPS dealt with all questions of lay off and discipline.
Counsel for Local 183 also submitted that the “mischief” the Board is typically concerned about in such a situation is not found here. First, no employee from CPS is claiming that Intracorp is the employer; the position is being advanced by the Carpenters not because they have any interest in representing the CPS employees, but to defeat Local 183’s bargaining rights. Second, counsel urged, this is not a situation where the Board needs to be concerned about employees being swept into a bargaining unit without having a chance to vote. In other words, this proceeding fundamentally has nothing to do with the people who work for CPS and their representation preferences.
Counsel for Intracorp also focused on the lack of “mischief” in this case. He noted that when the parties entered into the MTABA Collective Agreement, the parties had months before, entered into a collective agreement for low-rise residential. They were not strangers. Further, the voluntary recognition agreement was not entered into in the shadow of an organizing campaign; the Carpenters appeared on the scene more than 8 months after the voluntary recognition agreement was signed and 6 weeks after Local 183 had started referring its members. Counsel concluded by submitting that this case had no suspicious circumstances.
With respect to the status of the CPS workers, he submitted that the uncontradicted evidence established that there was no intention to establish an employment relationship, which has become in recent years, the often used test.
Counsel for the Carpenters started with a reminder that one of the purposes of the Act is to “facilitate collective bargaining between employers and trade unions that are the freely-designated representatives of the employees [emphasis added]”. That purpose should be recalled when looking at section 66(3), which places an onus on Local 183 to prove that it was entitled to enter into the voluntary recognition agreement. Counsel noted that in Penegal Trim & Supply Ltd., (unreported Board Files 1063-97-R et. al. April 3, 2000) the Board commented on the “fragility” of voluntary recognition agreements in their first year because bargaining rights have not been acquired by way of certification, and a challenge to a voluntary recognition agreement may trigger an enquiry into the level of support for the union, not unlike that found in the certification process.
Counsel for the Carpenters submitted that Intracorp and Local 183 had not met that onus, and the Board should draw an adverse inference from the failure to call Mr. Usher and Mr. Hillchuck from CPS to give more complete evidence about the relationship between Intracorp and CPS.
Counsel also submitted that I should follow the majority of Board cases which have held that the persons nominally employed by personnel agencies are truly employed by the entity where they perform the work. Counsel cited Dare Personnel (above), Provincial Store Fixtures, [1993] O.L.R.D. No. 1075 and Esso Imperial Oil Limited, [1997] OLRB Rep. Oct. 849.
I agree that the majority of cases have found that the employment relationship exists between the employee and the “client” rather than the personnel agency, but the cases relied on by the Carpenters have vastly different facts from those before me. A brief review of the Esso case will suffice. The employees were nominally employed by Best, a personnel agency. But the Board found that Esso determined who would be “hired”, Esso exercised day to day supervision, and directly disciplined and terminated the employees. Esso also referred employees to Best and directed that they be put on its payroll. Esso determined the wages that would be paid and compensated Best for its administrative costs above and beyond the wages paid to the employees.
That decision set out the seven factors the Board has consistently relied on to determine who is the employer, as summarized in York Condominium Corporation, [1977] OLRB Rep. Oct. 645:
(1) who exercises direction and control over the employees when they are performing the work;
(2) who bears the burden of remuneration;
(3) who has the power to impose discipline;
(4) who does the hiring
(5) who has the authority to discharge
(6) who do the employees perceive to be their employer;
(7) the intention to create an employment relationship
In Esso, the Board added that all factors are relevant, but evidence of who hires, who has day to day control, and who fires have become of fundamental importance. Given the factual findings of the Board, the conclusion that Esso is the employer is not surprising.
In Sutton Place Hotel, [1980] OLRB Rep. Oct. 1538 at paragraph 44 the Board similarly emphasized the importance of determining who has fundamental control over the employees:
A particularly important question answerable through an evaluation of all of the factors set out in York Condominium is who exercises fundamental control over the employees. In some cases control over hiring may reflect fundamental control. In other situations, reminiscent of a hiring hall, it may not. In some cases day-to-day supervision may suggest fundamental control, in others it may not. Similarly with the payment of wages: in the factual mix of some cases the payment of wages may, along with other factors, suggest who holds the fundamental control while in other cases it may be of minor significance. No single factor listed in York Condominium inevitably points to the possession of fundamental control. The Board’s ultimate evaluation of who holds fundamental control in any particular fact situation, however, is generally the single most determinative question in identifying the employer. In a word, to find the seat of fundamental control is generally to find the employer for the purposes of The Labour Relations Act.
In the case before me, the uncontradicted evidence established that Mr. Hillchuck at CPS determined who was hired, dealt with any disciplinary issues once advised by Intracorp and decided what happened to people once Intracorp either no longer wanted them or no longer needed them. Day to day supervision was shared between the CPS foreman and Intracorp site superintendent. On the significant factors of control, CPS is the employer. CPS also bore the burden of remuneration. I am further satisfied that there was no intention to create an employment relationship with Intracorp. Of course, we do not know who the employees perceived to be their employer, because as counsel for Local 183 pointed out, this proceeding is not really about who employed them, but about a fight between the Carpenters and Local 183 over bargaining rights, whose outcome does not affect the CPS employees in an way.
I also reject the assertion of the Carpenters that Local 183 and Intracorp have not met their evidentiary burden. Between them, they called witnesses with first-hand knowledge about the relevant events. Mr. Lotito was party to the discussions leading up to the signing of the voluntary recognition agreement. Mr. Porter and Mr. Napoli had first-hand knowledge of the relationship between Intracorp and CPS, how it functioned on a day to day basis, and they had first-hand knowledge about how Local 183 came to refer members to the Intracorp sites. Those are the significant issues between the parties that Local 183 and Intracorp had to address. The evidence of those witnesses was neither shaken in cross-examination nor contradicted. I do not see any significant evidentiary lacunae.
Counsel for the Carpenters also made much of the September 21, 1999 letter from Mr. Lotito to Mr. Usher. Counsel submitted, and I agree, that a plain reading of it, suggests that Intracorp could continue to directly hire employees without complying with the MTABA Collective Agreement, but could only engage subcontractors in contractual relations with Local 183. On that basis, counsel asks me to conclude that Local 183 and Intracorp accepted that the CPS labourers were employees of Intracorp. Otherwise, the retention of CPS (which is, to be clear, not in contractual relations with Local 183) would be a breach of the collective agreement. As I said, I agree with counsel about a plain reading of the letter. But Mr. Lotito testified that is not what the parties intended. More important, the evidence of what the parties did is directly contradictory to the letter. Conduct is, in my view, more significant to ascertaining intentions. Even if I accepted the letter as showing the parties’ intentions, it would be but one piece of evidence, and not at all conclusive about whether CPS, having regard to all the circumstances, is the employer of the employees.
The Board concludes on the evidence that CPS was the employer of the general labourers referred to Intracorp. Consequently, when Local 183 and Intracorp entered into a voluntary recognition agreement on September 27, 1999, there were no employees in the bargaining unit. I further conclude (and it was not really contested) that all of the circumstances support the conclusion that Local 183 and Intracorp entered into a bona fide pre-hire agreement, which does not constitute employer support for the union. A quote from Maxi, [1998] OLRB Rep. Aug. 675 aptly captures the reasons for the Nicholls-Radtke exception:
The essence of the decision in Nicholls-Radtke seems to me to be a conclusion, entirely reasonable on the facts of that case, that employee choice was not compromised by the employer and union entering into an agreement in those circumstances. Indeed, the Board determined that the employees how would ultimately be employed by their employer had already expressed their choice of a bargaining agent by becoming members of the union and signing on at the hiring hall, before the union entered into any agreement with the employer. I agree with the conclusion of the Board that the goal of employee choice was met, and the interest of the union and its membership in obtaining work, were furthered by the voluntary recognition agreement in that case.
This is, similarly, not a circumstance in which employee choice of bargaining representative is compromised.
It follows, then, that the MTABA Collective Agreement entered into by Intracorp and Local 183 is a valid voluntary recognition agreement, and as such, is a bar to the Carpenters’ May 10, 2000 application for certification.
For these reasons, the application for certification is dismissed as untimely.
“Mary Ellen Cummings”
for the Board