CITATION: International Union of Operating Engineers, Local 793 v. 1476247 Ontario Ltd., 2023 ONSC 3481
COURT FILE NO.: 401/22
DATE: 20230609
ONTARIO
SUPERIOR COURT OF JUSTICE
Divisional Court
Backhouse, Petersen and Schabas JJ.
BETWEEN:
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793
Applicant
– and –
1476247 ONTARIO LTD. O/A DE GRANDIS CONCRETE PUMPING and ONTARIO LABOUR RELATIONS BOARD
Respondents
Robert Gibson, Nick Ruhloff-Queiruga, Melissa Atkins Maheny and Scott Langdon, for the International Union of Operating Engineers, Local 793
James McKeown and Mark Contini, for 1476247 Ontario Ltd.
Andrea Bowker, for the Ontario Labour Relations Board
HEARD: April 25, 2023
REASONS FOR DECISION
schabas j.
Overview
[1] This is an application brought by the International Union of Operating Engineers, Local 793 (“Local 793” or the “union”), seeking judicial review of four decisions of the Ontario Labour Relations Board (the “OLRB” or the “Board”) rendered between April 12 and June 30, 2022. These decisions had the result of requiring Local 793 to enter into a collective agreement with the Respondent 1476247 Ontario Ltd. o/a De Grandis Concrete Pumping (“DCP” or the “employer”).
[2] This application raises the relatively novel situation in which an employer in the construction industry invoked s. 42 of the Labour Relations Act, 1995, S.O. 1995, c 1, Sch. A (the "Act"), requesting the Minister of Labour to order a vote by the bargaining unit on a proposed collective agreement. That vote was in favour of accepting the employer’s offer. The union then refused to sign the agreement on the basis that it would be inconsistent with a “pattern agreement” that applied to all other concrete pumping contractors, and prepared to strike. The employer then applied to the OLRB under s. 100 of the Act for an urgent order that the strike be declared illegal, which was granted in brief oral reasons following a hearing on April 12, 2022. Full reasons followed on April 25, 2022. A request for reconsideration by the union, in which it filed additional evidence, was dismissed on June 17, 2022. In light of these decisions, the Board then dismissed applications by the union under ss. 43 and 96 of the Act on June 30 and September 9, 2022, respectively.
[3] The Board, in decisions rendered by Vice-Chair M. David Ross (the “Vice-Chair”), effectively held that the failure of the union to have objected to the order requiring a vote under s. 42 was fatal to the union’s position. Further, the Vice-Chair held that in any event there was no applicable “pattern agreement” which might have justified the union not signing the collective agreement.
[4] In my view, and being mindful of the deference owed to the Board’s expertise on these matters, the decisions are unreasonable and should be set aside.
Background
[5] Local 793 is a province-wide bargaining agent for operating engineers in both the Industrial, Commercial and Institutional (“ICI”) and non-ICI sectors of the construction industry. In accordance with s. 151 of the Act, DCP is bound by the Provincial Collective Agreement between the Operating Engineers Employee Bargaining Agency and the Operating Engineers Employer Bargaining Agency effective May 1, 2019 to April 30, 2022 (the "Provincial Collective Agreement"), and any renewals thereof, as it applies to the ICI sector of the construction industry. The Provincial Collective Agreement is negotiated every three years between the union and an association of unionized pump and mobile crane employers.
[6] Unionized concrete pumping contractors in the non-ICI, or residential, construction sector in Ontario who negotiate with Local 793 also agree to apply the Provincial Collective Agreement. The Provincial Collective Agreement, the union submits, is therefore a “pattern agreement” applicable to the non-ICI construction sector.
[7] On October 28, 2021, Local 793 gave DCP notice to bargain with respect to the non-ICI sector. Local 793 had recently displaced the Christian Labour Association of Canada as the bargaining agent for certain employees of DCP. The parties were unable to reach an agreement as Local 793 insisted that DCP agree to apply the Provincial Collective Agreement, which DCP was unwilling to accept for its non-ICI work. Local 793 applied for a “No Board Report” on March 4, 2022, which would allow it to be in a strike position.
[8] On the afternoon of March 7, 2022, DCP requested the Minister to direct a vote on its proposed agreement pursuant to s. 42(1) of the Act.
[9] The following day, March 8, the Minister directed a vote on DCP’s offer, described as a final offer vote. The Board immediately scheduled the vote for March 16 and 17, 2022. No input was sought from the union by the Minister. At the Board’s request, on March 8, Local 793 signed each page of the employer’s proposal in order to confirm that it was the employer’s final offer to be voted upon. The vote was taken on March 16 and 17, 2022. The result was to accept DCP’s offer. In the meantime, on March 11, the Board issued a No Board Report, which put Local 793 in a strike position seventeen days later: Act, s. 79(2).
[10] On March 24, 2022, when DCP requested that the union execute the collective agreement voted on by the members, Local 793 refused to do so, advising DCP that it would not sign any agreement that provides less than what is contained in the Provincial Collective Agreement. A strike deadline passed on March 27, 2022. DCP rejected the union’s demand and on April 7, 2022, Local 793 prepared to strike. On April 8, 2022, DCP filed an urgent application to the OLRB under s. 100 of the Act to have the threatened strike declared unlawful on the ground that the union had engaged in bad faith bargaining by refusing to sign DCP’s proposed agreement following the vote approving it (the “section 100 application”).
[11] On April 11, 2022, the union responded to the employer’s application under s. 100, asserting that there was a pattern agreement which justified its refusal to sign DCP’s proposed agreement. On the same day, Local 793 also filed an application to the OLRB under s. 96 of the Act alleging that the employer’s actions were in violation of the Act and seeking the appointment of a labour relations officer to inquire into the matter (the “section 96 application”). Local 793 then engaged in strike activity on April 11 and 12, 2022 and the employer’s section 100 application came before Vice-Chair Ross of the OLRB on an urgent basis on April 12, 2022.
The Initial Decision – April 12, 2022
[12] The Vice-Chair heard submissions on DCP’s section 100 application on April 12. No evidence was called; only submissions were made by counsel. Following the hearing the Vice-Chair adjourned for one hour and then gave an oral ruling with “full written reasons” to follow.
[13] In the reported decision of the oral ruling on April 12, 2022, 1476247 Ontario Ltd. o/a De Grandis Concrete Pumping v International Union of Operating Engineers, 2022 30727 (ON LRB) (the “Initial Decision”), the Vice-Chair ruled that Local 793 had engaged in bad faith bargaining in refusing to execute a collective agreement “that was voted in favour of by its employees after a final offer vote was directed pursuant to section 42(1) of the Act.”
[14] The brief oral reasons were based on the Vice-Chair’s interpretation of s. 42(1) of the Act; in particular, that “there is a right of a trade union or an employer to object or otherwise make submissions to the Minister about why a final offer vote is inappropriate given the circumstances.” Although the Vice-Chair recognized that in the construction industry there are reasons why a trade union might object, one of which “could include that there is a pattern agreement that should be followed”, he held that “if a trade union in the construction industry wants to rely on one of these exceptions to the general rule [that the vote taken under s. 42(1) is binding], and avoid a finding of bargaining in bad faith when it does not accept the results of a final offer vote, it must make those submissions known at the outset of the section 42(1) process.” [emphasis added]
[15] The Vice-Chair found that “Local 793 did not object to the Minister directing a final offer vote pursuant to section 42(1) of the Act”, and so the finding of bad faith bargaining followed.
[16] Following the Initial Decision, the union filed an application for first contract arbitration under s. 43(1) of the Act (the “section 43 application”).
The Full Decision – April 25, 2022
[17] On April 22, 2022, the Vice-Chair released his full written reasons for his decision of April 12, 2022: 1476247 Ontario Ltd. o/a De Grandis Concrete Pumping v International Union of Operating Engineers, 2022 35028 (ON LRB) (the “Full Decision”). He noted that Local 793 had filed a request for reconsideration, but said that he had not reviewed the request in order “to avoid the potential of consciously or subconsciously drafting these reasons in a manner that is responsive to the reconsideration request but may have not been what I considered prior to issuing my oral ruling on April 12, 2022.” He stated that the union could have additional time to request reconsideration following the release of the Full Decision.
[18] The Full Decision stated the union’s position, at para. 24, that “the reason it was refusing to execute the agreement was because it has a ‘pattern collective agreement’”, and that “Local 793 relies on its assertion that every contractor bound to its provincial agreement applies it outside of the ICI sector.”
[19] After observing, at para. 28, that “instances in which the Minister exercises their discretion to order a final offer vote in the construction industry are ‘exceedingly rare’”, and noting that “none of the cases that were relied upon by either party on this issue have been decided since the turn of this century”, the Vice-Chair relied on the decision of Board Chair Adams in Canada Cement Lafarge Ltd., 1980 775 (ON LRB), in support of his finding, at para. 31, that “it is abundantly clear that a vote in favour of accepting a last offer creates a binding agreement between the employer and the trade union that is to be entered into, and the failure to enter into that agreement may constitute a violation of the statutory duty to bargain in good faith.”
[20] After noting in para. 40 that s. 42(1) “provides a one-time ability for an employer to attempt to bargain directly with its employees for the purpose of attempting to avoid a labour disruption”, the Vice-Chair reiterated that Local 793’s failure to object, or “appeal”, to the Minister directing a vote, was fatal, stating at para. 45 that “[i]t does not lie in the mouth of a trade union to tell the Board what the Minister would or would not have done in these circumstances to justify its own violations of the Act.” As the Vice-Chair put it at para. 51, “if a trade union finds itself in a position where it wants to avoid concluding a collective agreement that has been accepted by its members following a vote directed pursuant to section 42(1) of the Act, it must show that it took reasonable steps to make positions and concerns known throughout the 42(1) final offer vote process before refusing to accede to the results of the vote.”
[21] Conversely, however, the Vice-Chair acknowledged, at paras. 34 and 35, that the Board has recognized situations in which a union could be justified in refusing to enter into an agreement following a vote in favour under s. 42(1) of the Act. But he excluded the existence of a pattern agreement, citing International Union of Operating Engineers, Local 793 v Associated Contracting Inc, 1999 19992 (ON LRB) (“Associated Contracting 1999”), in which the Board had stated that in a construction industry context where a pattern agreement existed, “[i]t is not obvious that the Board would require a union to execute a collective agreement” and that “[t]he best that can be said is that this issue has not arisen before the Board before, and the Board's response remains to be determined in an appropriate case.”
[22] The Vice-Chair also held, at para. 38, that there was no pattern agreement in effect here, as he defined a pattern agreement as “a specific non-ICI collective agreement that pertains to either a specific sector and/or type of work that most employers bound to the trade union sign onto”, and concluded that “an agreement to apply a provincial agreement as defined by section 151 of the Act outside of the ICI sector is not the same thing in the Board’s view as a ‘pattern agreement’ that exists and applies to specific work in a non-ICI sector.”
The Reconsideration Decision – June 17, 2022
[23] In the Reconsideration Decision dated June 17, 2022, 1476247 Ontario Ltd. o/a De Grandis Concrete Pumping v International Union of Operating Engineers, 2022 56352 (ON LRB), the Vice-Chair again rejected the union’s position. He again referred to Canada Cement Lafarge in support of his conclusion that the union was bound by the final offer vote and stated, at para. 15, that there is “nothing in the Act or the Board’s jurisprudence that applies a different analysis in the construction industry.”
[24] In para. 17 of the Reconsideration Decision the Vice-Chair stated that it was “the totality of Local 793’s actions and inactions” which led to his decision, and not merely the union’s lack of objection to the s. 42(1) vote. He stated that it was both “the complete lack of any action, including remaining silent on its position that it would succeed [sic] to the results of the final offer vote” followed by the strike action which led to his conclusion that Local 793 had bargained in bad faith.
[25] As I elaborate below, the Vice-Chair was dismissive of the evidence filed by the union to support its position that the Provincial Collective Agreement was a pattern agreement adopted by “substantially all of the unionized industry performing this work”, and he made no reference to evidence that Local 793 had made DCP aware of its position that it may not accept the result of the vote because of the concern about maintaining a pattern agreement.
The First Contract Decision and Section 96 Application– June 30 and September 9, 2022
[26] In the Reconsideration Decision, at para. 21, the Vice-Chair observed that Local 793 could have filed for first contract arbitration “in the face of a final offer vote being requested or directed” under s. 43(1) of the Act. The union had in fact done so following the release of the Initial Decision, but that application was held in abeyance pending the Reconsideration Decision. On June 30, 2022, the Vice-Chair dismissed the section 43 application on the basis of his view that “[a] first contract has been resolved by virtue of the acceptance of the section 42(1) final offer and the Board’s direction to the union to execute said collective agreement”: International Union of Operating Engineers, Local 793 v 1476247 Ontario Ltd. o/a De Grandis Concrete Pumping, 2022 62069 (ON LRB).
[27] On September 9, 2022, a differently constituted panel of the Board dismissed the union’s application under s. 96 of the Act, and an unfair labour practice application filed by DCP, on the basis that there was “no labour relations purpose for the Board to inquire into either of these applications”: 1476247 Ontario Ltd. o/a De Grandis Concrete Pumping v International Union of Operating Engineers, 2022 85704 (ON LRB).
Standard of Review
[28] It is well-accepted, and agreed between the parties, that the standard of review of the Board’s decisions is reasonableness, except with respect to issues of natural justice or procedural fairness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, para. 23. This is consistent with the long-standing jurisprudential commitment to affording decision-makers in the labour relations area the highest degree of deference: Thomas v. United Food, 2021 ONSC 3015, para 12.
[29] Nevertheless, reasonableness is a “robust form of review” requiring decisions to be “transparent, intelligible and justified.” As Vavilov tells us, courts must consider all relevant circumstances and seek to gain an understanding of the reasoning in order to determine if a decision is reasonable. Even though a court may disagree with a decision, that does not make it unreasonable. Rather, a decision may be unreasonable if the reasoning is illogical, incoherent, circular, makes unfounded generalizations or has an absurd premise. A decision which has an “unreasonable chain of analysis” or a “fundamental gap” in the reasoning is often a mark of unreasonableness. Ignoring the text, context or purpose of a statute, or failing to consider a crucial element of a statute, recognizing that a tribunal’s interpretation of its own statute is to be given much deference, may also be an indication of unreasonableness: Vavilov, paras., 13, 15, 96-104.
[30] Findings of fact are to be given a high degree of deference; however, a decision may be found to be unreasonable if it is not supported by the facts or the tribunal misapprehended the evidence. If a tribunal departs from existing authority or longstanding practices, that may also raise concerns about reasonableness: Vavilov, paras. 111-112.
Issues
[31] Local 793 raises three issues in submitting that the decisions are unreasonable:
(a) the Board erred in law in interpreting s. 42(1) of the Act to require the union to object to a final offer vote, and therefore the union’s failure to do so was fatal to its case;
(b) the Board acted unreasonably in ordering the union to execute a pattern-breaking collective agreement, contrary to long-standing policy and jurisprudence of the Board which has consistently defended the level playing field fostered by pattern agreements in the construction industry; and
(c) the OLRB acted unreasonably, and breached the union’s right to natural justice in making the decisons within the context of an expedited process under s. 100 of the Act, which did not allow the parties to provide evidence on issues on which the Board made important findings of fact that were not supported by the evidence.
The Board erred in law in its interpretation of s. 42(1) of the Act
[32] Section 42(1) of the Act states:
42 (1) Before or after the commencement of a strike or lock-out, the employer of the employees in the affected bargaining unit may request that a vote of the employees be taken as to the acceptance or rejection of the offer of the employer last received by the trade union in respect of all matters remaining in dispute between the parties and the Minister shall, and in the construction industry the Minister may, on the terms that he or she considers necessary direct that a vote of the employees to accept or reject the offer be held and thereafter no further such request shall be made.
[33] The purpose of s. 42(1) of the Act is to provide an employer with the unilateral right to request a vote on its offer where the union leadership does not wish to take an offer to its members. It is a trigger that the employer can only use once, hence it is known as a final offer vote. In the non-construction sector the Minister shall direct the vote, but in the construction industry the Minister has discretion to do so.
[34] There is no process set out in s. 42(1) other than the requirement that the employer must request the vote. The Act does not provide for notice to the union or provide for union input or a right to object. Indeed, as this case illustrates, the Minister’s decision may be made promptly. Here, it was made within 24 hours of the request. No union input was sought and there was, effectively, no opportunity for the union to object. On the same day that the Minister made the direction, the Board scheduled the vote, also without seeking input from the union. At the request of the Board to ensure that the correct final offer was being voted on, the union signed each page of the final offer. However, this was merely an administrative act, and did not indicate the union was consenting to the process. Rather, in my view, the union’s cooperation in initialling the final offer is a further indication that the parties, and the Board, treated the Minister’s direction as, effectively, an ex parte, binding order.
[35] There is much merit, therefore, in the union’s submission summarized by the Vice-Chair at para. 25 of his Full Decision, “that it was not required to object to the request to direct a final offer vote pursuant to section 42(1) of the Act because it was inevitable that the Minister would exercise his direction [sic] to order a vote even if it objected.”
[36] The Vice-Chair did not address the text and context of s. 42(1) to support his conclusion that a union must somehow “object or otherwise make submissions to the Minister…at the outset of the section 42(1) process.” Nor did he cite any authority for this conclusion, because there is no such authority. Rather, in his Full Decision he cited Canada Cement Lafarge, a non-construction case decided in 1980, which held at para. 8 that “a vote in favour of accepting a last offer creates, in the usual case, the basis upon which a binding agreement… is to be entered into.” [emphasis added] Canada Cement Lafarge does not, however, address any process or right to object to a section 42(1) vote; to the contrary, s. 42(1) gives the employer “the right at any time during bargaining to call for a vote, which is described as “a safety valve” in the “traditional tension in bargaining.”
[37] In International Union of Operating Engineers, Local 793 v Associated Contracting Inc, 1997 15515 (ON LRB) (“Associated Contracting 1997”), which is thought to be the first case in which s. 42(1) was invoked in the construction industry, the Minister sought union input before directing a vote, but the Board was clear that “the union’s consent is unnecessary, and indeed, would be inconsistent with the policy reflected in the section.” (para. 28). The Board observed at para. 29 that “[u]nions will often (if not always) be opposed to such votes. If it were otherwise, the employer would not have resorted to the section 42 mechanism in order to get a vote on its offer.”
[38] Other section 42 cases are also inconsistent with the Vice-Chair’s analysis. In Associated Contracting 1999, a decision cited by the Vice-Chair, the Board held that a vote under s. 42(1) in favour of a final offer in the construction sector is “not determinative.” At para. 33, the Board addressed a number of reasons for this, including “where a pattern agreement exists for many employers.” Consequently, in the context of a first contract application in that case, the Board was “not disposed to give much weight to the results of the final offer vote.” The Board did not address, at all, the issue of whether the union had in some way objected to the Minister prior to the vote being directed, and it can be assumed the Board was aware of what had been stated two years earlier, in para. 29 of Associated Contracting 1997, quoted in the preceding paragraph, that “unions will often (if not always) be opposed to such votes.”
[39] In Aloia Bros. Concrete Contractors Inc., 1999 20015, the Board did not suggest that a union can or should object to a vote being taken under s. 42(1) of the Act, noting only that “the section does not address the effect of such a vote.” [emphasis in original, at para. 4] The Board observed, at para. 10, that the Minister’s power to direct a vote is discretionary in the construction industry “and the exercise of that discretion has been exceedingly rare.” The Board stated, consistent with Canada Cement Lafarge, that “a positive vote by the employees casting ballots does not, in itself, either result in a collective agreement or require a trade union to execute a collective agreement on the terms proposed.” [emphasis in original] In Aloia, the employer sought and obtained direction for a final offer vote, and the union then abandoned its bargaining rights.
[40] The Vice-Chair’s reliance on Canada Cement Lafarge, a non-construction sector case, does not support such a finding either; rather, it also recognized reasons why unions, particularly in the construction sector where pattern agreements exist, might not wish to accept the results of a section 42(1) vote. And it certainly does not say that a union loses the right to reject a vote because it did not object to the vote in the first place.
[41] Indeed, in the Full Decision, the Vice-Chair seemed to recognize that there could be justifiable reasons for a union to not execute a collective agreement following a final offer vote in favour, stating at para 42:
When the Board considers whether a union has a justifiable reason for not executing the accepted final offer (a prima facie violation of section 17 of the Act) and commencing, or continuing with strike activity, it considers not only the stated reason for why the union asserts that it is justified in refusing to conclude a collective agreement but also the context surrounding that decision as it does in each instance where a party files an application with the Board alleging a breach of the duty to bargain in good faith.
[42] Furthermore, the Board’s jurisprudence does not support the Vice-Chair’s assertion in his Full Decision (at para. 51) that the union “must show that it took reasonable steps to make positions and concerns known throughout the 42(1) final offer vote process before refusing to accede to the results of the vote”, a passage which seems somewhat inconsistent with the Vice-Chair’s unambiguous conclusion in his Initial Decision that a union must object at the outset.
[43] Moreover, the evidence filed by the union in its request for reconsideration shows that the union did what the Vice-Chair seemed to require. Virgil Nose, a union supervisor, stated that he had “specifically advised Hugo De Grandis that the Union was not necessarily going to accept the results of the vote for the very reason that it would undermine the pattern agreement in place for every other Local 793 signatory contractor performing concrete pumping work.” Yet, despite this uncontradicted evidence that the union had warned DCP, in advance of the vote, that it might not accede to a vote in favour of the final offer, the Vice-Chair stated at para. 17 of the Reconsideration Decision that he relied on Local 793’s “complete lack of action, including remaining silent on its position that it would not [accede] to the results of the final offer vote.” This factual finding is unreasonable.
[44] In short, no case suggests that there is an obligation on a union to object “at the outset” to the Minister directing such a vote; the union’s opposition is assumed. Moreover, permitting a union to attempt to block such a vote would be inconsistent with the purpose of the section.
[45] Accordingly, and bearing in mind that I am reviewing a decision of an expert tribunal and its interpretation of its enabling statute, I find that there is no support for the Vice-Chair’s conclusion that a union must object to a section 42(1) vote when it is requested by an employer, and that such a conclusion is unreasonable. The wording of s. 42(1) does not support it, and the Vice-Chair has provided no intelligible justification for such a conclusion. He does not point to anything in the section, or the Act, that would support his interpretation. Nor does he address, as a practical matter, how such an objection would be made or be consistent with the purpose s. 42(1), which provides a unilateral right of the employer to call for a vote – a safety valve to use when the employer makes a final offer and wants to put pressure on the union’s leadership to accept an offer.
[46] The Vice Chair’s conclusion is also not supported by the Board’s jurisprudence, nor has he provided reasoning which would support or explain his departure from previous decisions dealing with s. 42(1) of the Act, which identify reasons why a union might not accede to a favourable vote, regardless of whether the union objected to the vote, or not.
The Board acted unreasonably in ordering the union to execute the employer’s final offer agreement
[47] In his Initial Decision, the Vice-Chair did not address the effect of requiring the union to execute a pattern-breaking agreement. However, he was aware that this was the union’s position, and that there is case law which recognizes that the existence of a pattern agreement could be a justification for not accepting a vote approving a final offer under s. 42(1) of the Act.
[48] In his Full Decision, however, the Vice-Chair made findings on this issue which, in my view, are unreasonable. First, he did not accept that the existence of a pattern agreement, permits a union to refuse to execute a different, or pattern-breaking, collective agreement. Second, he did not accept that in this case there was a pattern agreement for the non-ICI sector which would be broken if the union was required to sign the employer’s final offer. As I discuss below, both findings are unreasonable and should be set aside.
Unreasonableness of the Board’s exclusion of pattern agreements to justify refusing to sign a final offer agreement
[49] As discussed above, in his Full Decision the Vice-Chair excluded the existence of a pattern agreement as a ground for refusing to sign a contract following a final offer vote in favour of the final offer. The Vice-Chair relied on the Board’s decisions in Canada Cement Lafarge Ltd. and Associated Contracting 1999. However, neither of these decisions goes as far as the finding made by the Vice-Chair. In Canada Cement Lafarge, which was not a construction case, Chair Adams simply said that “in the usual case” a final offer vote is binding. And in Associated Contracting 1999 the Board stated that in a construction industry context where a pattern agreement exists, “[i]t is not obvious that the Board would require a union to execute a collective agreement” and that “[t]he best that can be said is that this issue has not arisen before the Board before, and the Board's response remains to be determined in an appropriate case.”
[50] This is hardly language to support the Vice-Chair’s explicit exclusion, in para. 34 of his Full Decision, of pattern agreements as a ground to refuse to sign a final offer contract. The Vice-Chair provided no reasoning to support this exclusion beyond relying on these two decisions. He did not discuss the policy reasons favouring pattern agreements, but relied instead on the union’s failure to object to the section 42(1) vote and his conclusion, based on his own narrow definition of pattern agreements (which I discuss below), that there was no pattern agreement in this case.
[51] Somewhat inconsistently, however, the Vice-Chair stated at the end of his Full Decision, at para. 50, that “[t]his decision does not address whether the existence of a pattern agreement is a permissible reason not to submit to an accepted 42(1) final offer vote, or whether the Minister should decline to exercise its discretion to direct a section 42(1) final offer vote.” He said that “those issues are left to be determined if, and when, they arise on the facts and context of those future cases.” Thus, despite excluding the existence of a pattern agreement as a justification for not signing a final offer contract, the Vice-Chair recognized that this might, in fact, be appropriate. In my view, these issues were squarely raised in this case and the Vice-Chair’s reasons for not addressing them are inconsistent, unsupported, and unreasonable.
[52] I have already explained why the Vice-Chair’s interpretation of s. 42(1) of the Act requiring a union to object to a final offer vote at the outset is unreasonable, and it provides no support for the specific issue raised here, that the existence of a pattern agreement is a basis to refuse to accede to a vote favouring a final offer. I turn then, to the second issue, the Vice-Chair’s finding that no pattern agreement exists in this case.
Unreasonableness of the Board’s finding that no pattern agreement existed
[53] In his Full Decision, the Vice-Chair defined a pattern agreement to be a “specific non-ICI collective agreement.” This made his conclusion inevitable that the Provincial Collective Agreement, which was negotiated in the ICI sector, was not a pattern agreement applicable to the non-ICI sector. However, this limited definition of a pattern agreement is not supported by the jurisprudence, or the evidence presented by the union in this case. It is also inconsistent with the strong policy reasons favouring the role of pattern agreements in the construction industry.
[54] Due to the large number of similar contractors competing for the same work in the same areas, and using the same pool of employees dispatched by construction unions, pattern bargaining is an important way in which workers and employers are placed on a level playing field. Pattern bargaining removes wage competition between employers, ensuring that all workers performing the same job in the industry receive the same pay.
[55] The Board recognized the importance of this level playing field in the construction sector in Trudel & Sons Roofing Ltd., 2010 34149 at para. 20:
Collective bargaining in the construction industry in this province invariably involves industry-wide pattern bargaining. This is especially the case where the bargaining concerns the work of specific trade contractors which are all in collective bargaining relationships with the same union. In such circumstance, it is vital to the industry as a whole, and to each of the unionized contractors individually, that a level playing field be established and maintained and that no single unionized contractor is able to gain a competitive advantage over the others by securing a more favourable deal with the union. Essentially, collective bargaining in the construction industry, and for contractors in the residential sector in particular, is based on an explicit or implied promise, by the unions to their respective groups of companies, that all employers will get (more or less) the same deal.
[56] The Board went on to note, at para. 23 of Trudel & Sons Roofing Ltd., that “in the construction industry, if an employer insists that a union sign a unique collective agreement with it, which will destabilize all of the union's other bargaining rights for a particular type of work by destroying an established level playing field, the employer is quite likely to be found to be refusing to recognize the bargaining authority of the union”, which could constitute an unfair labour practice.
[57] In Aloia, cited earlier, the Board referred to the Report of the Industrial Inquiry Commission into Bargaining Patterns in the Construction Industry in Ontario, in which Commissioner D. E. Franks put it this way:
The most important characteristic of the construction industry collective agreement is that it is a "standard area" collective agreement; that is, it is the only collective agreement available to an employer from that union and covering those employees.
[58] In E.S. Fox Limited, 1993 8024, the Board considered the Provincial Collective Agreement in issue here, observing at para. 52 that even the employer acknowledged that the “province-wide collective agreement covers more than just ICI construction work.” [emphasis added] The Board cited an earlier, 1984 decision (Rumble Contracting Limited, Board File No. 1644-83-M, August 31, 1984), in which the Board stated:
The collective agreement before us is an exceedingly complicated one. It covers the whole of the province geographically. It also covers sectors in the construction industry other than the industrial, commercial and institutional sector and it deals with various classifications of employees working in various areas. It also deals with various types of employers.
[59] The Vice-Chair’s narrow definition of a pattern agreement effectively means that because the Provincial Collective Agreement is negotiated for the ICI sector as mandated by s. 151 of the Act, it cannot apply to the non-ICI sector. This conclusion appears to stem from his discussion of Associated Contracting Inc. 1999; however, that case does not support such a conclusion. Associated Contracting 1999 dealt with a dispute in the road building sector involving Local 183 of the Labourers International Union of North America (“LIUNA”), which raised the existence and application of pattern agreements in the non-ICI sector. From this, the Vice-Chair concluded, at para. 30 of the Full Decision, that “[w]hen the Board refers to a ‘pattern agreement’ it is referring to a specific non-ICI collective agreement that pertains to either a specific sector and/or type of work that most employers bound to the trade union sign onto.” This then led him to say that the Provincial Collective Agreement, which is negotiated in the ICI sector, could not be a pattern agreement for the non-ICI sector.
[60] But Associated Contracting 1999 did not address whether a statutorily mandated ICI-sector pattern agreement could also apply to the non-ICI sector, nor is there any case that precludes such a finding. Indeed, it is inconsistent with the Board’s decision in E.S. Fox Limited, which found the Provincial Collective Agreement to be a multi-sector agreement which “covers more than just ICI construction work.”
[61] The Vice-Chair’s analysis involves a leap, or “fundamental gap”, in reasoning by jumping to the conclusion that an agreement negotiated in the ICI sector cannot be a pattern agreement in the non-ICI sector. There is no reason to conclude that an ICI collective agreement cannot apply to the non-ICI sector, and the Vice-Chair does not state one. To use the words in Vavilov at para. 104, it is an “unfounded generalization.” Furthermore, his conclusion appears to fly in the face of the submissions, and evidence, presented to the Vice-Chair that this Provincial Collective Agreement is in fact used as a pattern agreement for the non-ICI sector.
[62] In its request for reconsideration, the union presented evidence that included a Declaration from the union supervisor, Virgil Nose, who stated:
The longstanding practice of concrete pumping companies that are signatory to Local 793 is that they apply a single agreement to their work regardless of sector. This pattern agreement is the Operating Engineers Provincial Collective Agreement (the "Provincial Collective Agreement"). The Provincial Collective Agreement represents the pattern agreement for the industry as Local 793 is the bargaining agent for virtually all or substantially all of the unionized industry performing this work.
[63] Mr. Nose went on to note that “every single pumping company” which has an agreement with Local 793, regardless of sector, applies the Provincial Collective Agreement. He attached a number of “Voluntary Recognition Agreements” to demonstrate that “the standard practice in the industry is to apply the Provincial Collective Agreement in the residential sector.”
[64] The other Declaration filed by the union on the request for reconsideration was from Jason Hanna, the president of the Crane Rental Association of Ontario (“CRAO”), which is a member of the designated Employer Bargaining Agency that bargains the Provincial Collective Agreement in ICI sector. He confirmed that the Provincial Collective Agreement is treated as a “pattern agreement” used in the crane rental and concrete pumping industry in agreements with Local 793, “regardless of sector.”
[65] Mr. Nose and Mr. Hanna stated that permitting DCP to have a different agreement with Local 793 would undermine pattern bargaining in the industry and would give DCP a significant unfair advantage over other employers bound to Local 793 in a very competitive industry. As Mr. Hanna observed, “[s]uch an arrangement runs counter to the traditional norms and expectations of unionized employers in the construction industry.”
[66] The Vice-Chair referred to the evidence in his Reconsideration Decision. However, he simply dismissed Mr. Nose’s evidence as “no different than the submissions made by Local 793’s counsel on April 12, 2022, and were considered by the Board prior to issuing the April 12 and 25, 2022 decision.” But there is no reason to conclude that those submissions were considered, as the Vice-Chair did not address the union’s submissions on this point at all in his Initial Decision, and his narrow definition of a pattern agreement adopted in his Full Decision precluded consideration of the union’s position which he did not address.
[67] The Vice-Chair’s specific rejection of Mr. Hanna’s uncontradicted evidence is also troubling, describing it, at para. 28, as “unpersuasive, and an inappropriate attempt to challenge a Board’s final decision.” As the Vice-Chair put it:
It does not lie in the mouth of one of De Grandis’ competitors, who did not seek to participate in the process, to request the Board to disregard the collective bargaining process and bind them to the ICI agreement outside of the ICI sector because De Grandis accomplished something it was not able to do on its own.
[68] The Vice-Chair asserted that such evidence ought to have been filed at the April 12, 2022 hearing, and that the CRAO ought to have sought to accredit itself under s. 134 of the Act in order to negotiate an agreement for the residential, non-ICI sector. How this would occur in the context of an expedited section 100 application brought by an employer against a union was not explained.
[69] Mr. Hanna’s Declaration was relevant evidence presented by the union in a union application, and the Vice-Chair’s reasons for dismissing it out of hand because Mr. Hanna also happens to be the president of the CRAO is unreasonable. The support of the union’s position by an employer organization, if anything, ought to have caused the Board to pause and engage on the pattern agreement issue.
[70] Instead, without any consideration of the uncontradicted evidence that the Provincial Collective Agreement applied across the non-ICI sector, or the prior Board decisions that found this to be the case, or of the policy concerns that arise if a union is required to sign a pattern-breaking agreement, the Vice-Chair doubled-down on his narrow definition of a pattern agreement. In his Reconsideration Decision he simply repeated, at para. 33, his unreasonable finding that “[t]he Board concluded at paragraph 38 of its April 25, 2022 decision that the agreement referred to by Local 793 as a ‘pattern agreement’ was not a ‘pattern agreement’ within the meaning of how the Board viewed that term in its jurisprudence.”
[71] Accordingly, the Vice-Chair’s decision ordering the union to execute the final offer agreement on the ground that the Provincial Collective Agreement is not a pattern agreement is unreasonable and should be remitted back to the Board for reconsideration.
The breach of natural justice issue
[72] In light of my findings on the first two issues, it is not necessary to address the union’s third argument that the Board acted unreasonably and breached the union’s right to natural justice in making the decisions within the context of an expedited process under s. 100 of the Act. Nor do I have a sufficient record on which to assess what of the several procedures that were in play might have been more appropriate to deal fully with these important issues.
[73] However, to the extent it is necessary to do so, I would set aside the Board decisions dismissing the section 43 and section 96 applications, which flowed from the result of the earlier decisions. As the matter must be remitted back to the Board, it is for the Board to consider and decide what procedures to follow to address the issues raised by the parties.
Conclusion
[74] The application is allowed. The matter is remitted back to a different panel of the Board to consider whether the union should be required to sign the final offer agreement approved by vote of the members on March 16 and 17, 2022. In accordance with the agreement between the parties, DCP shall pay costs to Local 793 in the amount of $6,500. There shall be no costs for, or against, the Board.
Paul B. Schabas J.
___________________________ I agree: Backhouse J.
I agree: Petersen J.
Released: June 9, 2023
CITATION: International Union of Operating Engineers, Local 793 v. 1476247 Ontario Ltd., 2023 ONSC 3481
COURT FILE NO.: 401/22
DATE: 2023O609
ONTARIO
SUPERIOR COURT OF JUSTICE
Divisional Court
Backhouse, Petersen and Schabas JJ.
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 973
– and –
1476247 ONTARIO LTD, O/A DE GRANDIS CONCRETE PLUMBING AND ONTARIO LABOUR RELATIONS BOARD
REASONS FOR DECISION
Schabas J.
Released: June 9, 2023