Decision: Labour Arbitrator Has No Jurisdiction in Related Employer/Sale of Business Dispute
In a recent decision involving Bricklayers, Masons Independent Union of Canada, Local 1, Labourers’ International Union of North America, Local 183, Masonry Council of Unions of Toronto and Vicinity (collectively, the “Union”) and Artistic Masonry and/or Remnar Masonry (the “Employer”), in which our Firm represented the Employer, we raised a preliminary jurisdictional objection arguing that the arbitrator selected by the union did not have jurisdiction to determine whether Remnar and Artistic were “related employers” or whether there was a sale of business between them, within the meaning of the Labour Relations Act (the “Act”)
We vigorously objected to the Union’s position that the arbitrator had any jurisdiction to preside over a hearing with respect to Section 1(4) [Related Employer] and Section 69 [Sale of Business] of the Act. More specifically, we argued that the Ontario Labour Relations Board (the “Board”) has exclusive jurisdiction to make this kind of determination, and we succeeded.
The Act governs the law of unions and collective bargaining in Ontario.
Section 1(4) of the Act grants adjudicators the power to determine whether two or more businesses are a “common employer” for the purposes of labour relations. These rules prevent complex corporate structures from interfering with unionization and collective bargaining, by preventing the erosion of existing bargaining rights and by facilitating collective bargaining where multiple employers carry on a common activity.
Section 69 of the Act provides for the continuation of union rights where there has been a sale or transfer of a business. If employees are represented by a union, or there is a union organizing campaign, the new company (that acquires control of business assets) may become a successor employer with respect to those union issues.
In the Remnar case referred to above, the Union’s Collective Agreement included the following clause:
The Parties further agree that all provisions of Section 1 (4) and 69 of the Ontario Labour Relations Act (as they exist on the day of signing) are hereby incorporated into and form part of this Collective Agreement, with such modifications as may be necessary for an Arbitrator with the jurisdiction arising out of this Collective Agreement and/or the Expedited Arbitration System and/or the Ontario Labour Relations Act, to have all of the powers that the Board would otherwise have under the provisions of the Act.
The Union relied on this provision within the Collective Agreement to argue that an arbitrator has jurisdiction to hear matters with respect to Section 1(4) and Section 69 of the Act.
Despite the union’s arguments referring to the above clause in the Collective Agreement, the arbitrator agreed with our position and determined that he did not have jurisdiction to decide whether Artistic Masonry and Remnar Masonry were related employers, or whether there was a sale of business between them.
Arbitrator Horan agreed with the cases relied upon by Employer counsel, in particular the Ontario Divisional Court decision in Remembrance Services Inc. v. United Food and Commercial Workers International Union, Local 175 . In this decision, the Court determined that the Board had exclusive jurisdiction to make a determination with respect to Section 1(4) of the Act, because both parties were not bound to the Collective Agreement. Further, the court stated that the result of an arbitral finding of “Related Employer” would have the union representing non-unionized employees without affording those employees any opportunity to express their choice on the issue of union representation. Moreover, the court found that the Act does not create parallel powers for an arbitrator to make these kinds of decisions.
Mr. Horan stated that the common thread throughout many of the supporting cases provided by our Firm was that an arbitrator does not have jurisdiction to deal with employees of a separate legal entity that is not a party to the Collective Agreement. Further, the supporting case law confirms that the parties to a Collective Agreement have no legislative power and cannot “give” an arbitrator jurisdiction that has been reserved to the Board by statute.
The Bottom Line
Regardless of the language in a Collective Agreement, when it comes to disputes arising under Section 1(4) and Section 69 of the Act, the Board has exclusive jurisdiction to make a determination – not an arbitrator – as to whether the parties are related employers and/or whether there has been a “sale of business” within the meaning of the Act.
This presumption of exclusivity will only be rebutted if a competing statutory scheme demonstrates the legislature’s express intention to displace the Board’s exclusive jurisdiction (for example, by granting exclusive or concurrent jurisdiction over disputes of a specific nature to arbitrators).
Until the legislature deems otherwise, employers should not feel obliged to participate in an expedited arbitration process (or any arbitral process for that matter) – regarding issues surrounding Section 1(4) and Section 69 of the Act – if a determination has not been made by the Board.
At Hyde HR Law, we have the knowledge and expertise required to advise you in all areas of labour law, particularly the very specialized area of construction labour relations.
If you have any questions or concerns about construction labour law issues, please do not hesitate to contact us. We would be happy to assist.