Attention Unionized Construction Employers!
If you are a unionized construction employer in Ontario, there is a possibility that big changes could be coming to your company in the opening months of 2022. For that reason, we have prepared these materials to let you know what is happening, how to prepare, as well as how to comply with the law.
Under Ontario’s Labour Relations Act, 1995, there is a two month “open period” which occurs at the end of each construction collective agreement’s term. For unionized construction employers, these two months can have a significant impact on both their operations and their workforce. This is because during the open period, employees can apply to terminate the union’s bargaining rights (otherwise known as union decertification), or another rival union can attempt to displace the current union by way of a raid (also known as displacement). The majority of collective agreements in the construction industry will expire on April 30, 2022. In these cases, the “open period” will begin on March 1, 2022.
It is vital for unionized construction employers to understand that they cannot initiate a decertification application or facilitate a rival union’s attempt to displace another union. Instead, these applications can only be made by employees in the bargaining unit or the new rival union.
However, construction employers can do far more than sit on the sidelines during these processes. They have an increasingly important role to play when decertification or displacement applications are filed. In other words, a diligent and attentive employer will make the right moves that will ultimately allow them to participate in the process and do their part in putting their company in the best position moving forward.
Before a Decertification or Displacement Application is Filed
Before an application is filed, there are certain things that unionized construction employers can and cannot do.
With certain exceptions, employers can respond to inquiries from employees, as well as comment on current terms and conditions governing their terms of employment. Employers can also make statements about their current bargaining relationship with the incumbent union. However, employers should not discuss the possibility of displacement or decertification with workers or, provide advice to employees about their rights in relation to the open period.
Furthermore, unionized construction employers are also within their legal rights to request that decertification or displacement matters not be discussed during working hours, or otherwise on the jobsite.
Finally, employers should know that they have no duty to speak with union representatives about decertification.
How Decertification and Displacement Applications are Made
Employees in the bargaining unit who wish to decertify the union will do so by serving an Application for Termination of Bargaining Rights.
Though this sounds simple enough, the determination of who is in fact an employee can become quite complicated. This is significant, because subsection 1(3)(b) of Ontario’s Labour Relations Act states that an individual who exercises managerial functions will not be considered an employee. This means that such individuals would not be allowed to bring an application for union decertification.
Traditionally, we think about managers being people who have the right to hire, fire or discipline other employees. While that is true, in reality this definition has been significantly broadened by the case law and, presents a trap for the unwary.
The Ontario Labour Relations Board (“the Labour Board”) has decided a number of cases dealing with question of whether an individual is in fact an employee, or rather someone who is managerial. For example, in Ontario Pipe Trades Council (United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry) v Marsil Mechanical Inc, 1997 CanLII 15585 (ON LRB), the Labour Board stated that working foremen will generally be considered as bargaining unit employees, unlessthey have an overall responsibility for a project, or can/do affect the employment status of other employees.
Furthermore, in Labourers’ International Union of North America v Circon Construction Corporation, Circon Design Build Corporation, 2011 CanLII 34957 (ON LRB), the Labour Board stated that an individual who acts as the “eyes and ears” of management on a project may be found to exercise managerial functions, and thus not be considered an employee in the bargaining unit. Interestingly, the Labour Board also noted that such an individual need not have the power to hire, fire, layoff or discipline other employees.
Finally, in Adrian Pennings v LIUNA Local 837, 2021 CanLII 87505 (ON LRB), the Labour Board stated that whether or not an individual is considered to be an employee will be a factual assessment. An individual does not need to have sole responsibility for a project to be considered managerial. Similarly, day-to-day overall responsibility for a project may also be a sufficient basis to conclude that an individual has overall responsibility, even in cases where ultimate authority and responsibility rests with someone else.
Thus, it is not at all uncommon for unionized construction employers to have an individual working for them who pays union dues, but who would nevertheless not be permitted to bring an application to decertify the union because they are not considered an employee. In fact, it is not surprising to see a trade union arguing that a working supervisor is an employee with a right to be included in a bargaining unit for the purposes of certification, and later in the face of a decertification application, argue that same employee is excluded by virtue of being deemed managerial- even if the employee’s job duties had not changed over the intervening period. The double standard is alive and well.
Decertification is almost always an acrimonious process where unions will claim inappropriate employer (management) involvement, even if there are no facts whatsoever to support such allegation. However, the same kind of acrimony arises where a rival trade union wishes to displace the incumbent union. The initial difference being, in such case, the rival trade union is required to serve both the employer, as well as the current union, with an Application for Certification, Construction Industry. Both processes are generally litigious, however remaining within the guidelines set by the law, construction employers should not be afraid to participate. The outcome will have significant impact upon an affected company, and it is of vital importance to be rigorously involved in that outcome- again within the parameters of the law.
After a Decertification or Displacement Application is Filed
The Ontario Labour Relations Board ensures that these processes move quickly with short timelines. For unionized construction employers, the importance of complying with these deadlines cannot be overstated, as failing to respond within the time given can adversely affect your legal rights.
For example, an employer who fails to file a timely response to a union displacement application will not be able to participate in the proceedings. As a consequence, employers will not have the opportunity to raise concerns about which union will represent their employees, whether the employees are appropriate for the bargaining unit, and/or the geographic scope of the bargaining unit.
For these reasons, unionized construction employers must be smart, knowledgeable, and alert to what is required of them in the context of open period decertification and displacement applications.
After receiving an application, the employer only has two (2) business days to serve all of the parties with its response and file that response with the Labour Board. In the past, the Labour Board has been reluctant to extend the two-day limit. This means that employers have to be swift and diligent if they want to play an active role in these legal proceedings, both of which could have significant ramifications for their business. That reluctance continues to exist, and the Labour Board will not grant an extension of time except in the very rarest of cases.
The Labour Board then processes and assesses the application to determine whether there is sufficient support for the decertification or displacement.
In the case of a decertification application, if the evidence submitted demonstrates that 40% or more of the employees in the bargaining unit no longer wish to be represented by the trade union, a representation vote will be taken. The Labour Board usually orders that a supervised secret ballot vote be held five (5) business days after the employer had the application served on them. If more than 50% of the ballots are cast against the incumbent trade union, the Labour Board will declare that the union in question no longer represents employees in the bargaining unit.
In the case of a displacement application, there are two methods by which a raiding union can seek to displace an incumbent union. Under the vote-based method (found in section 8 of the Labour Relations Act), if the evidence submitted demonstrates that 40% or more of the employees in the bargaining unit appear to support the raiding union, the Labour Board will order that a representation vote be taken. Much like decertification applications, the Labour Board will usually order that a supervised secret ballot vote be held within five (5) business days after the employer had the application served on them. If more than 50% of the ballots are cast in favour of the raiding union, the Labour Board will certify that union as the new bargaining agent for bargaining unit employees.
Alternatively, a raiding union can also attempt to displace an incumbent union through a card-based method (found in section 128.1 of the Labour Relations Act). In standard union certification campaigns under section 128.1, if the evidence demonstrates that more than 55% of employees in the bargaining unit are members of the trade union on the date the application is filed, the Labour Board can certify the union or direct that a representation vote be taken. However, Labour Board cases suggest otherwise for union displacement campaigns. For example, in Labourers’ International Union of North America, Local 183 v The Daniels Group Inc., 2019 CanLII 97838 (ON LRB), the Labour Board stated that any displacement application filed pursuant to section 128.1 will be determined by way of a representation vote. To quote the Labour Board in this case,
No incumbent union ought to be displaced by a raiding union in the absence of the latter union defeating the former union by way of a secret ballot vote of affected employees.
Section 128.1 also states that if at least 40% but not more than 55% of the bargaining unit employees support the trade union on the application date, then a representation vote will be required. In either scenario under section 128.1, if the Labour Board orders a representation vote, a supervised secret ballot vote will usually be held five (5) business days after the day on which it was ordered. If more than 50% of the ballots cast are in favour of the raiding union, the Labour Board will certify that union as the new bargaining agent for the bargaining unit employees.
In the weeks after the vote, employers must file complete submissions and arguments with the Labour Board regarding significant issues addressed in the application. More specifically, employers should submit:
- Information documenting when employees were hired, as well as the circumstances under which they were hired (for example, whether they were hired by way of a union referral or directly by the employer);
- Information relating to how the employee is paid (for example, whether they are paid by the hour or some other means);
- Precise information relating to where each employee worked on the date the application was filed, as well as the work they performed on said day;
- Copies of various documents showing how each employee was compensated for the work they performed during the following periods of time: (i) one month prior to the application date; (ii) during the week the application date was received; and (iii) the week following the application date. Appropriate documents would include payroll records, time sheets, invoices, and other similar records.
If an employer does not file these submissions, the Board could make a decision impacting their business without any regard to their position, arguments, or concerns.
Furthermore, in the event that the Labour Board holds an expedited hearing in order to address certain issues in the applications, that hearing will take place in Toronto approximately two (2) months following the date on which the application was filed.
We Recommend that Unionized Construction Employers Intervene in Displacement and Termination Applications
Though an employer will not be a respondent to these proceedings, they will nevertheless receive a copy of the application and be required to file a list of employees performing work in the bargaining unit on the day the application was made. However, an employer who wishes to meaningfully participate and have their voice heard in the application process will want to file an Intervention no more than two days after receiving the application.
The first reason why unionized construction employers will benefit from intervening in open period displacement or termination applications is because doing so allows them to present their side of the story, as well as evidence supporting their arguments and positions. As well, an employer’s status as intervenor will provide them the opportunity to challenge the evidence and statements put forward by the other parties. In these ways, a construction employer’s intervention allows them to directly and meaningfully participate in a legal matter that will undoubtedly impact their company.
Another reason why unionized construction employers will benefit from intervening in these applications is because they will be able to state their position regarding “status disputes.” This means that employers will have a say in determining who is able to vote in support or opposition of the application being made. This is important, as it ensures that the employer’s voice will be heard and considered when the following issues arise:
- A dispute about whether an individual working on the application filing date is actually an employee of the employer. If the individual is in fact an employee, they would be entitled vote. On the other hand, if the individual worked for a sub-contractor on site on the application filing date, they would not be entitled to vote.
- A dispute about whether an individual exercised managerial functions. As was stated previously in these materials, such individuals would not be considered bargaining unit employees, and would thus not be entitled to vote.
- A dispute as to whether or not an individual performed bargaining unit work for the majority of the day on which the application was filed. If they did not, then they would not be entitled to vote.
Finally, it is important for unionized construction employers to intervene in these circumstances because doing so allows them to impact procedural aspects of the application. For example, intervening will allow them to have their voice heard in relation to how the vote is conducted. This is particularly significant in the construction industry, where a single employer may have workers who are eligible to vote scattered on jobsites throughout the province. An intervening employer reserves the right to state their case in relation to where the vote should be conducted.
For the above reasons, it should be clear that construction employers and their companies stand to benefit by intervening in open period displacement or termination applications. Failure to do so may take the process out of their hands completely, and carry significant consequences impacting their company, workforce, and overall operations.
Steps that Unionized Construction Employers can Take to Prepare for the Open Period
As should be clear by now, the process that unionized construction employers must follow in relation to displacement or termination applications during the open period is complex and fast-moving. For that reason, employers should obtain expert legal advice in the area of construction labour relations so as to ensure that they remain on the right side of the law.
There are a number of active steps that employers can begin taking immediately to ensure that they are well prepared to act in the event of a displacement or termination application. Construction employers should be diligent by ensuring the following:
- Their record-keeping is clear, accurate, up to date, and easily accessible at all times. For example, the employer should ensure that their payroll is administered properly and that they have daily site records which contain accurate, detailed, and ultimately useful information pertaining to the work being performed;
- They have a list of all current construction employees;
- They have time sheets, or similar documents, which show the dates on which employees work;
- They have a list, or similar document, which records active jobsites where employees are currently working;
- They have a detailed system reminding them of important dates and timelines, as well as quality administrative support
- They have site supervisors and managers who understand the decertification and displacement processes, as well as the employer’s legal obligations in such circumstances
As well, unionized construction employers should ensure that their supervisors begin taking increasingly detailed notes as the open period gets closer. These notes should accurately document which employees are performing certain work, and the jobsite on which the work is performed.
What Unionized Construction Employers Should NOT DO
As has been stated at different times during these materials, construction employers cannot initiate the displacement and termination applications. In spite of this, incumbent unions facing the possibility that they will lose their bargaining rights will often argue that the employer did in fact initiate the applications. As a consequence, employers must be careful in how they conduct themselves.
The Labour Board defines the term “initiate” broadly. This means that a construction employer can still be found to have initiated an application, even if they did not take any actual steps to begin or support it. The OLRB has been consistent in stating that employer initiation will be found where an employer has exercised “significant or influential involvement” in instigating the application, or where the application has been “founded in the conduct of the employer.” In these cases, applications will be dismissed.
For these reasons, employers should not:
- Hire an employee specifically for the purpose of filing an application to decertify the union;
- Provide an employee or individual(s) from a rival union permission to congregate with workers during work hours, or on the jobsite, as a means of gaining support for an application;
- Provide an employee with access to the employer’s office or other meeting spaces so as to gain support for an application;
- Allow an employee to use office equipment or supplies as a means of preparing and/or filing an application;
- Discuss the possibility of displacement or decertification of the incumbent union with a worker;
- Provide advice to employees about their rights in relation to the open period;
- Make unjustifiable decisions related to hiring, termination, layoff, discipline, and compensation (including employee raises and bonuses);
- Deviate from the status quo regarding employee meetings, breaks, as well as access to employer premises and equipment; and/or
- Retain a lawyer for the purpose of representing the employees who have made an application, or give employees money to retain a lawyer for that purpose.
The Bottom Line for Unionized Construction Employers
As the open period quickly approaches, unionized construction employers should know that they have much at stake. Understandably, the Labour Board’s decertification and displacement processes can be intricate and complex, as well as fast-moving. An employer who enters the open period unprepared and lacking the necessary know-how to address the situation, puts themselves, and their company, at a significant disadvantage. More than that, such employers run the risk that important changes will be made to their operations and workforce without their input.
For all of these reasons, obtaining expert legal advice in the area of construction labour relations should be an utmost concern for construction employers. Construction labour law is unique, complicated for the inexperienced and, a liability for the unconcerned. For that reason, most labour and employment lawyers do not even practice construction labour law. At Hyde HR Law, we have the legal knowledge and expertise required to advise you in all areas of the construction industry. In fact, we have over 30 years’ experience in representing construction employers in this very specialized area of law.
If you have any questions or concerns about the topics discussed in these materials, or about the open period more generally, please contact us and we will be happy to assist.