April 29, 1999
To:Corporate Services Committee
From:Executive Director of Human Resources
Subject:Economic Development and Workplace Democracy Act, 1998
Purpose:
The purpose of this report is to set out the legal framework regarding the Economic
Development and Workplace Democracy Act, 1998 ("Bill 31"), and its applications to the
City of Toronto, to report on the results of those consultations with trade unions and employer
representatives of the construction industry which were undertaken with a view towards better
understanding the parties' concerns regarding the Economic Development and Workplace
Democracy Act, 1998 ("Bill 31") with the objective of ensuring fair competition with respect
to construction work performed on behalf of the City of Toronto, and to make
recommendations which will support and lead to the achievement of this objective.
Funding Sources, Financial Implications and Impact Statement:
None
Recommendations:
1. That City Council affirm its commitment to ensure that there is open and fair competition
with respect to construction work performed on behalf of the City of Toronto in a manner
consistent with its obligations in law and to provide the citizens of the City of Toronto with
high quality and affordable public services, and
2. That staff report back to Council with recommendations on possible communications to the
Government of Ontario regarding Bill 31 and its stated goal of ensuring fair and open
competition in public tendering for construction work, and
3.That staff continue to meet with construction trade unions and employer representatives of
the construction industry for the purpose of ensuring open and fair competition within the
context of the current legislation and that all possible approaches be considered in achieving
this goal including but not limited to issues that have arisen out of the City's construction
trade union affiliations.
Council Reference/Background/History:
At the Corporate Services Committee meeting of December 7, 1998, the Corporate Services
Committee adopted a recommendation that staff enter into discussion with trade unions and
with representatives of the construction industry in order to better understand their concerns
regarding Bill 31, with a view toward ensuring fair competition with respect to construction
work performed on behalf of the City of Toronto.
Comments and/or Discussion and/or Justification:
The Legal Framework:
Bill 31 amended the Labour Relations Act and established a test for employers who meet
certain criteria to be declared "non construction employers" and to be released from existing
construction trade union obligations.
The following legal preconditions must be met prior to the Ontario Labour Relations Board
issuing such a declaration.
1.The Employer must prove that they were in a bargaining relationship with a construction
union on August 24, 1998;
2.The Employer must prove that it is "not engaged in a business in the construction
industry" or must prove its only engagement in such a business is "incidental" to its "primary
business";
3.On the day the Employer makes the application to be declared a non construction
employer for any particular union affiliation, there must be no employees employed at the
Employer performing work of the affected union; and
4.The Employer must not have eliminated construction employees solely for the purposes of
the application, as this may be an unfair labour practice. Note that the Employer may,
however, reduce employees where there exist sound business reasons to do so.
The City was in a bargaining relationship with construction trade unions on August 24, 1998
and therefore meets the first precondition.
The City does not consider itself to be engaged in a business in the construction industry and,
if this is the case, any such engagement is incidental to its primary business as a municipal
government.
The City currently does employ individuals to perform work, both construction and
maintenance, which may prevent or hinder it in bringing an application at this time. In this
regard, it must be noted that the legislation does not clarify what is "construction work" and
what is maintenance and this may result in further disputes arising under the third
precondition. The Board considers "repair" to be construction work within a construction
trade union's jurisdiction and "maintenance" is considered to be distinct. In the absence of
some clarification, the Board determines in each instance whether or not an employee is
performing construction repair or non-construction maintenance.
There has not yet been a decision of the Board providing any interpretation to these provisions
and it is expected that the first significant application will proceed no earlier than the end of
July, 1999. The Labour Board has indicated that the delay is a result of its currently reduced
staffing levels. In the pending applications construction trade unions are arguing that retailers,
financial institutions and a municipal government are, in fact, engaged in a business in the
construction industry. The outcome of these decisions is likely to have a significant impact on
future applications.
Results of the Consultative Process
Extensive consultations have taken place with the construction trade unions and various
construction employers and associations representing employers over the past several months.
A listing of these groups with whom there have been direct consultations are set out in the
attached "Appendix A".
In addition, the deputations, both oral and written that were presented for the consideration of
the Corporate Services Committee at its meeting on December 7, 1998 were taken into
consideration within the context of the consultative process.
A number of options were presented and considered by the parties with a view towards
finding an approach and/or method of ensuring that there would be fair and open competition
with respect to construction work performed on behalf of the City that would be acceptable to
the parties concerned. And, while a solution has not yet been found, all of the parties now
have a much better understanding and appreciation of the issues and complexities from the
perspective of the City and the practical and legislative difficulties in attempting to find such a
solution.
In our view, the construction trade unions now fully appreciate the public concern over what
is seen by many as restrictive tendering practices for construction work within the public
sector.
Although much has been accomplished in terms of increasing the level of understanding with
respect to the issues and concerns of the parties involved, further discussions must be
undertaken in a manner that will focus on common interests and goals rather than on the
specific rights, both legal and otherwise, that the parties may currently have in order that the
City's objective of ensuring fair and open competition may be achieved.
Conclusions:
The consultative process, while creating a higher and perhaps common level of understanding
of the issues, has also served to bring to light the nature and depth of the complexities
involved in finding an acceptable solution.
At this time, while there is no clear path, either in a practical or legislative context, we are
optimistic that should these recommendations be adopted, it will create a climate within which
an acceptable solution will be found that will ensure open and fair competition regarding
construction work performed on behalf of the City in a manner consistent with the City's legal
obligations and sound labour relations principles.
Contact Name:
Harold Ball
Director, Employee & Labour Relations
392-8727
Brenda Glover
Executive Director of Human Resources
Michael R. Garrett
Chief Administrative Officer
APPENDIX "A"
Consultation List
CToronto Independent Contractors Association
CInterior Systems Contractors Association of Ontario
CElectrical Contractors Association
CEnvironment Sheet Metal Association
COntario Masonry Contractors Association
CMechanical Contractors Association
COntario Painting Contractors Association
CCanadian Federation of Independent Business
CIndependent Contractors Group
CChristian Labour Association of Canada
COntario General Contractors Association
CToronto Construction Association
CToronto-Central Ontario Building and Construction Trades Council
CLabourers International Union of North America, Local 183
