Carpenters and Allied Workers Local 27, United Brotherhood of Carpenters and Joiners of America v. Edilcan Construction Corporation, 2000 CanLII 9035

Carpenters and Allied Workers Local 27, United Brotherhood of Carpenters and Joiners of America v. Edilcan Construction Corporation

File No.: 2477-99-R Date: July 27, 2000

Applicant: Carpenters and Allied Workers Local 27, United Brotherhood of Carpenters and Joiners of America Responding Party: Edilcan Construction Corporation Intervenor: Labourers International Union of North America, Local 183

Before: M. A. Nairn, Vice-Chair, and Board Members G. Pickell and A. Haward.

Appearances: Norm Jesin for the applicant; Carl Peterson for the responding party; Mark Lewis for the intervenor.

DECISION OF THE BOARD

1This is an application for certification in the construction industry filed on November 15, 1999. The applicant applied for its standard ICI and non-ICI sector (Board Area 8) bargaining units. By decision dated November 22, 1999 the Board directed that a vote be held. That vote was taken on November 24, 1999. The parties challenged the eligibility of certain persons to participate in that vote. The ballot box was sealed. A number of issues remain outstanding. However the parties agreed to first deal with the issue of whether or not the responding party was the employer and that matter came on for hearing.

2The parties are agreed that the work giving rise to this application was the installation of wood decking for the University of Toronto at the Munk Centre site. There is no dispute that the work falls within the ICI sector of the construction industry and is work falling within the scope of the proposed bargaining unit. The responding party (“Edilcan”) was the general contractor on site. The dispute centers around the nature of the contract for the work and therefore the proper employer of the persons whose eligibility to vote is challenged. The applicant (the “union” or “Local 27”) asserts that Edilcan is properly the employer. It is Edilcan’s position that a subcontractor was performing the work. That issue must be dealt with in the context of a review of the status of two individuals, Mr. Ross Querengessor (“Querengessor”) and Mr. Pat Zanette (“Zanette”) and in the context of the particular and somewhat unique circumstances giving rise to this issue.

3While Zanette’s status at the start of work on this project might be in issue, there can be no doubt that he was not then an employee of Edilcan. Zanette has been a carpenter for some 45 years. He has his own company, Woodmore Carpentry (“Woodmore”) which historically hired crews and took on subcontracts. He has also worked for other subcontractors including Exterior Contracting (“Exterior”), a company owned by Joe Monteiro. There is no dispute that the applicant holds bargaining rights for Exterior Carpentry. Zanette and Monteiro had worked on a project together (though their companies) in 1998 on the basis of a profit-sharing arrangement. During the course of that work, Edilcan’s estimator, Kan Sathy, called Zanette and asked him if he was interested in bidding on the Munk Centre job. Sathy knew Zanette from work that Woodmore had completed.

4Zanette obtained the drawings and specifications for the Munk Centre job. Woodmore filed a bid and Zanette successfully negotiated some changes. In the meantime, Exterior ran into financial problems. Zanette was owed money. Zanette was trying to scale down his work as a contractor because he was getting close to retirement. He approached Monteiro to have Exterior take on the Munk Centre contract. Edilcan agreed. The contract was forwarded to Monteiro with the intent that Exterior would have the subcontract for the project but that Zanette would take any profit from the job to make up for his earlier loss. Zanette was on the site as of the end of October, 1999.

5Immediately prior to the Munk Centre job, Querengessor was working for Woodmore. Prior to that he had been working for Exterior and had been referred to Woodmore by Monteiro. Zanette asked Querengessor if he was interested in working on the Munk Centre job. Querengessor quoted Zanette two hourly rates, subject to whether or not it was a union job, a matter that was then unclear to him. Querengessor began work on the site on or about November 3, 1999. He had finished at the Woodmore site within the week before. He understood that he was still working for Woodmore. No one from Edilcan interviewed or hired him. He had not worked for Edilcan before. Again, whatever doubt may arise as to Querengessor’s employer at the start of his work on site, there is no doubt that he was not then employed by Edilcan.

6On or about November 9, 1999 Paul Daly, Business Agent for Local 27 arrived on site and asked Querengessor who he was working for. He told him Zanette. Mr. Daly then asked Zanette the same question. Zanette handed him a business card for Exterior Carpentry and identified Joe Monteiro. At that point Querengessor was not clear as to who was paying the bills but assumed he would be getting Local 27 rates through Exterior Carpentry. Querengessor is a member of Local 27.

7Daly called Monteiro and very shortly thereafter Querengessor saw Joe Monteiro at the site and learned that Exterior Carpentry was not going to do the contract. Exterior never executed the contract document forwarded by Edilcan. There was some initial confusion and concern, and then Querengessor and Zanette talked about taking over the contract. While there was a dispute in the evidence as to who approached whom, it is more probable than not that Zanette approached Querengessor. Zanette told Querengessor he had a friend at Edilcan. According to Querengessor, Zanette did not want to let this friend down. Querengessor told Zanette that he had a company they could use to do the work.

8In the 1980’s Querengessor worked through a numbered company (“Loraq Construction”), doing piecework in the residential sector as a member of the Labourers’ International Union of North America, Local 183. From approximately 1988-95 Querengessor worked as a house builder through a different entity, Loraq Corporation.

9Zanette arranged a meeting for November 11, 1999 to discuss the possibility of Zanette and Querengessor taking on the contract. Edilcan was approached with the intent that if the terms were okay, these two would take on the contract. They met at Edilcan’s head office in Concord with Kan Sathy and G.P. DiRocco, the principal of Edilcan. Querengessor was asked about his company and whether it carried insurance and WSIB clearance. At the conclusion of the meeting, the parties were essentially agreed that Loraq Construction (“Loraq”) would take over the contract on the same terms as offered to Exterior. Edilcan wanted to get the contract back from Monteiro to ensure that it would not be liable to Exterior and Querengessor wanted to see the contract. He also wanted a weekly draw, which was agreed to at that meeting. At that meeting they discussed the work and the contract price. Following the meeting Querengessor had his father fax Sathy information on Loraq Construction. Loraq had a WSIB clearance certificate and insurance.

10Querengessor and Zanette were told that Monteiro had the contract and that Edilcan would get it back and forward it to Querengessor. At that point Querengessor did not know the terms of the contract, including the extent to which he was to supply materials. He understood the work was timber framing and some strapping of an attic in one building. He knew the contract was worth $38,000.00. He recalled discussing the drawings with DiRocco at the meeting. Mr. Querengessor testified that he could not commit to anything at that stage, as he had not seen the contract.

11Zanette did not advise Querengessor that he had bid the job on behalf of Exterior and had seen the drawings. Zanette was entirely comfortable taking over the job as he had negotiated the deal for Exterior. He did not want to use Woodmore however, whether for reasons of the union’s presence or his interest in winding down, that is unclear.

12Edilcan wanted the work to continue. At its highest the evidence discloses that Edilcan asked if the work could continue, not that it directed that it continue, nor, in the absence of evidence from Edilcan, that it expressly acknowledged that with no contract, no work was required. The most probable conclusion to draw is that all parties had some manner of vested interest in continuing the work. Edilcan’s interest was obvious as it was behind schedule, a fact known to both Zanette and Querengessor. Zanette and Querengessor were confident of Edilcan’s good faith and had every expectation that things would work out for their interest. Querengessor confirmed that he went to work on November 12 of the view that the meeting had gone well, he trusted DiRocco and believed it would get resolved. As he put it, “we were in agreement as of November 11 that it was going to work”. Both were also owed money for work already performed and if they could clear up where that payment was to come from that too would be in their interest. Querengessor testified that he saw it as an opportunity to get into commercial contracting for the first time.

13Zanette and Querengessor worked Friday, November 12, 1999. Given Querengessor’s notes made over the weekend, it seems likely that it was the Friday (rather than the following Monday) when he also talked to the Site Superintendent about the extent of the work required to be done and that he looked at the plans for the first time.

14Querengessor tried to call Monteiro over the weekend to find out more about what was going on but did not speak with him. Querengessor also did some calculations over the weekend. From those calculations Querengessor concluded that the contract was viable- that they would make their wages and hopefully some profit. As he put it, it looked like they were shooting for about $45.00/hour. His hourly rate quoted to Woodmore had been $35.00. He included in those calculations allowance for supplying certain materials in the estimated amount of $1,800.00-2,000.00. Most hardware and materials were already on site and Querengessor apparently did not know then who had supplied it. He knew they were not to supply the lumber. The contract required the supply of certain fasteners and other hardware. Zanette was aware that the contract contemplated the need for more than two carpenters to finish the job.

15It appears that Querengessor was also aware of that because that weekend he called Gab Pauze to come to work on the following Wednesday. As it turned out certain beams had not arrived and there was no work for him at that point. Although at that point these actions were consistent with those of a subcontractor, Querengessor says his mind set changed on the Monday when there was still no contract.

16The application for certification was filed on Monday, November 15, 1999. There is no dispute that Querengessor and Zanette were performing carpentry work on site that day. On the Monday Querengessor spoke with Sathy and DiRocco regarding the whereabouts of a contract. Edilcan was under the impression that it had forwarded a signed contract to Monteiro and wanted to recover that document before issuing another to Loraq. Monteiro was not responding to anyone. Edilcan then discovered that the contract had been sent in blank and received sufficient assurance that it would not be liable to Exterior. So although Querengessor became increasingly concerned on the Monday, by the end of the day he again felt things were “on the right track”.

17Querengessor also spoke with Daly on Monday, November 15, 1999. He told Daly that he was in negotiations with Edilcan and that this was an opportunity to get into commercial contracting. They also discussed the certification application. At Daly’s suggestion, Querengessor gave a copy of the contract to Daly on November 16 to have it reviewed.

18Querengessor saw the contract on Tuesday, November 16, 1999. He signed it on behalf of Loraq on November 17, 1999. He received a copy signed by Edilcan on November 19, 1999. The only change to the contract from that offered to Exterior was to allow for a weekly draw as requested by Querengessor. That contract covered the whole job including the work already completed. Loraq was paid for the work already performed by a cheque received with the signed contract. The contract provided for no holdback.

19Zanette and Querengessor had agreed to split the contract 50/50 after expenses. All the funds were paid to Loraq Construction. The agreement between Zanette and Querengessor occurred some time after the meeting with Sathy although not formalized in writing until December 1999. In early 2000, Querengessor and Zanette settled up and Loraq paid Zanette’s share of the contract to Woodmore Carpentry. Loraq Construction had no other subcontracts after this job up to the date of this hearing.

20Although there may still be some dispute as to whether or not Gab Pauze was on site on the date of application, it is clear that as of Monday, November 22, 1999 Zanette’s nephew, Mr. Etts, was at work on the project as well. On Tuesday, November 23, Gab Pauze was also at work on the project. They assisted in the carpentry work for approximately two weeks and they invoiced Loraq Construction for that work. Querengessor called them in when Edilcan asked if the work could be done faster. Edilcan had no role in their selection or pay or other terms of employment.

21In the period from November 11 to November 19, 1999 there was no arrangement with respect to payment or terms for work performed. Mr. Querengessor said that on November 15 he was at the point where he had to decide whether to walk off the job or get it resolved. Any lingering concerns he had were resolved by November 16 when he saw the contract.

22The applicant argued that during this period Edilcan’s Assistant Site Superintendent, Bruno, was directing Querengessor and Zanette, as evidence of their status as Edilcan employees. While it is normal for a Site Superintendent to inspect the work of a subcontractor to ensure that it is working in accordance with the drawings, Bruno was more involved than is typical. Most of that can be explained by the fact that neither Zanette or Querengessor had worked with this particular fastening system before and that they were working on an old stone building with problems peculiar to those characteristics. Bruno was laying out the work and was working on the tools. Subsequently, Pauze and Etts complained to Querengessor regarding the chain of command and the Site Superintendent essentially told Bruno to back off. Bruno did layout for the bricklayers on the site as well.

23In addition to labour, Querengessor and Zanette provided scaffolding and hardware. They used a jackhammer and a power drill belonging to Edilcan as required. They borrowed a forklift from a subcontractor on site. They kept their own hours and hired without involvement of Edilcan. In early December there were some changes to the contract. Those changes were quoted and an addendum to the contract with a new price was agreed upon. Approximately 75% of the job was completed before Christmas. In January 2000 Loraq (for the first time) filed a statutory declaration under the Construction Lien Act. In February Querengessor completed some further work and in April he spent a day on site, leaving one day’s work left.

24It is the position of the applicant that Edilcan was the employer of both Zanette and Querengessor on the date of application. Edilcan says that neither were its employees, that the work was being performed pursuant to a subcontract with Loraq Construction. The applicant relies on the fact that no contract had been signed by Loraq as of the date of application. It relies on the extent of direction being provided by the Assistant Site Superintendent and the assertion that the contract was really for labour only. The applicant referred us to Adbo Contracting Company Ltd. [1977] O.L.R.B. Rep. April 197; Carpino Carpentry Ltd. [1991] OLRB Rep. Mar 306; Baycon Construction [1999] O.L.R.D. No. 3672 (decision dated November 15, 1999); Hamilton Carpet & Tile Inc. [1997] O.L.R. D. No. 4290 (decision dated December 18, 1997) and Stave Construction [1993] O.L.R.D. No. 4374 (decision dated November 29, 1993).

25In Adbo Contracting Company Ltd. supra, the Board commented:

25. The shift of emphasis is readily apparent from a reading of the definition of dependent contractor. Clearly a person need not be employed under a contract of employment to be considered as a dependent contractor, and provision of tools, vehicles, equipment, machinery is no longer a major consideration. Contractual form and the ownership of tools are no longer essential considerations. The emphasis, instead, is placed upon economic and business factors. Both the type of economic dependence that exists, and the kind of business relationship entered into, determine whether a person more closely resembles an employee than an independent contractor.

26. Economic dependence must be such that it puts the person in roughly the same economic position as an employee who must face the perils of the labour market. Mere economic vulnerability, however, is not a sufficient basis for a finding that a person is a dependent contractor, since this is a condition that may be experienced by the true entrepreneur, just as much as the individual worker. There must exist, therefore, a type of economic dependence closely analogous to that of the individual worker.

27. This first requirement of a particular type of economic dependence is closely related to the second requirement of a particular kind of business relationship. In order for a person to be considered a dependent contractor, that person must not only be economically dependent upon another person, but also must be “under an obligation to perform duties for that person” roughly analogous to that of an employee. This reference in the statutory definition requires us to look beyond the factor of economic dependence to the form of the business relationship to determine if it is roughly analogous to that of employer and employee. Such an examination, however, need not result in the identification of a particular contractual obligation, since a business relationship may exist, and continue, in the absence of any particular contractual obligation. The Board, therefore, need not confine itself to this very narrow issue but may deal with the wider issue of the nature of the business relationship.

28. That decision provides the analytical framework for a review of the facts before us. The other cases relied on by the applicant are less helpful. In Stave Construction supra, after reviewing Adbo Contracting Company Ltd.supra and Carpino Carpentry Ltd. supra, the Board noted there had been no bidding or tendering process. Work was completed at an hourly rate without negotiation. The contractor was invoiced and no deductions or holdbacks were made. None of the individuals held themselves out as contractors. They had no workers’ compensation coverage and they had not, and had no intention of starting a company when they began work. The Board found them to be dependent contractors.

26In Hamilton Carpet and Tile Inc. supra, the exercise was described as looking to the entrepreneurial activity engaged in. The facts in that case and in Baycon Construction supra, are distinguishable from those before this panel. In Camarites Construction Inc. [1999] O.L.R.D. No. 1276 (decision dated May 18, 1999) the question is put simply; is the person more like an employee than not? Of significance, that decision also discusses the nature and organizational structure of the work in the context of that particular sector of the construction industry, low-rise residential framing. The Board concluded:

31. I am satisfied that none of these three individuals were employees of Camarites for purposes of this application for certification. Pappin was a self-employed entrepreneur at all material times. He drifted from one jobsite to another, looking for and picking up bits of work here and there, and picking up and leaving behind partners and helpers as he went. He did no advertising, but that is not unusual for small operators like Pappin. He dealt with carpentry contractors, in this case specifically Camarites, on a sub-contract rather than on an employment basis. Pappin’s only obligation to Camarites was a commercial one. Coutt was in much the same position. Not only did Coutt and Pappin come and go as they pleased, they hired helpers as the considered necessary to finish the work on time. In this case, for example, not only did Pappin and Coutt hire Hartwick as a helper, they hired two other helpers for brief periods (one worked a weekend, the other worked a week and a weekend). In neither case was Camarites consulted or even informed. It is apparent that Pappin, and his partner Coutt, were in a “chance of profit/risk of loss’ situation, in the sense that like any small entrepreneur, whether they made a profit or incurred a loss depended on their expenses and ability to complete the sub-contract in a timely way. It is also clear that neither Pappin nor Coutt, either together on individually, were economically dependent on Camarites. This is not a case like OFIRA CONSTRUCTION (Board File No. 1051-81-R, July 19, 1982, unreported) where the persons in issue never worked for or sought work from anyone other than the employer. Nor is it a case like CARPINO CARPENTRY LTD., [1991] OLRB Rep. Mar. 306, where the persons supplied nothing but labour and some consumables, had no helpers, and were economically dependent on the employer.

27Carpino Carpentry Ltd., supra, is also distinguishable. In that case the individuals were doing residential trim carpentry on a piecework basis. While many of the invoicing and equipment issues were similar, the Board noted the lack of opportunity to bargain other than the going rate, the manner in which the work was obtained and that there was no real opportunity for any profit or loss in their relationship with the responding party. The Board did note however that an assessment of whether a person was an independent contractor was to be made having regard to the context of the trade and the sector of the construction industry in which the individual is engaged. The decision concluded that essentially labour only subcontractors paid on a piecework basis have been found to be dependent contractors and therefore employees. There was also no evidence of employment of others as the three individuals worked and invoiced their work as partners.

28The facts in these cases are to be compared to the decision in Admiral Drywall Ltd. [1992] O.L.R.D. No. 2153 (decision dated June 12, 1992) where the Board concluded that there were no employees in the bargaining unit on the date of application:

23. On balance and having regard to the totality of the evidence we have determined that Mr. Ormrod was an independent contractor who in turn engaged the other three individuals in dispute. Unlike the typical “framing” carpenter pieceworker or “finish” carpenter pieceworker in the residential sector there was no on-going economic relationship between Mr. Ormrod and Admiral. Mr. Ormrod was not in a position of economic dependence as a result of such on-going economic relationship. It was Mr. Ormrod who initiated the relationship, who determined the rates that he would charge, and who determined the piecework bid he delivered to Admiral. That factor, amongst others, distinguishes the circumstances of this case from the piecework in the residential sector where the carpenter contractor sets a standard “going rate” and tells the pieceworker he can “take it or leave it” (as referred to in some of the cited decisions).

29In this case, the only positive indicia of employment by Edilcan is the fact that work was performed by these two individuals on November 15, 1999 for Edilcan’s ultimate benefit, which work was supervised by Edilcan’s Assistant Site Superintendent. Edilcan’s intention from the outset was to subcontract the work. It believed it had until November 9, 1999 when all on site realized Exterior was not going to proceed with the work. It is not particularly unusual to start a job without a signed contract. On November 11, 1999 Querengessor and Zanette approached Edilcan with the intent of taking over the contract as a subcontractor. The fact that these individuals trusted Edilcan to make good goes as much to their belief that a contract would be forthcoming as it does to any conclusion that they would be paid for work already performed. The fact that no one expected the work to be done for free says nothing of the nature of the relationship. The discussions on November 11, 1999 were in respect of a contract that covered the entire job.

30As the cases note, economic vulnerability is not same thing as economic dependence. The nature of the relationship is evident from Querengessor’s reaction on Monday, November 15 to the fact there was no contract yet. It was not to seek payment from “his employer”; his reaction was to walk off the job. However by the end of the day he was confident again. Querengessor agreed that Edilcan never gave any indication that it was prepared to put him on the payroll. He agreed that it had negotiated with him for a fixed price contract.

31While the contract was primarily for labour it cannot be equated to the kind of residential piecework arrangement relied on by the applicant. There was room for negotiating the price. More than simply hardware was supplied. While they agreed to weekly draws and no holdbacks, the fixed price contract and terms of the work allowed for the possibility of profit or loss. Other indicia of a subcontract were known to be available by November 11, 1999, including insurance and WSIB clearance. It would be artificial to merely look to the state of affairs as they existed on November 15, 1999 and attempt to make sense of them without regard to the surrounding circumstances and the parties’ intentions. Both these individuals have evidenced a willingness to undertake entrepreneurial activity in the past. While that does not speak to the nature of this arrangement, it is certainly consistent with Querengessor viewing this as an opportunity to move into commercial contracting. While Zanette may not have been interested in the job through Woodmore, he was more than willing to agree to share any profit after expenses with Loraq, for a contract price that he had negotiated in the first place.

32We find therefore that Ross Querengessor and Pat Zanette were not employed by Edilcan on the date of application. It was the position of the applicant at the hearing that Gab Pauze was also at work on the date of application. Assuming, specifically without finding, the applicant’s best case that Pauze was employed by Edilcan and at work on the date of application, there was at most only one person in the proposed bargaining unit on the date of application. Pursuant to section 9(1) of the Act, this application must therefore be dismissed.

“M. A. Nairn”

for the Board