Economic Development and

Workplace Democracy Act, 1998

The Corporate Services Committee recommends:

(1)the adoption of the report (April 29, 1999) from the Executive Director of Human Resources, subject to:

(i)amending Recommendation No. (1) by adding thereto after the word "law", the words "and sound labour relations principles", so that Recommendation No.(1) shall now read as follows:

"(1)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 sound labour relations principles and to provide the citizens of the City of Toronto with high quality and affordable public service;"; and

(ii)amending Recommendation No. (2) to read as follows:

"(2)the Executive Director of Human Resources be requested to seek further clarification from the Province of Ontario regarding Bill31 along the lines they have identified;"; and

(2)that the Executive Director of Human Resources be requested to submit a report to the Administration Committee on:

(i)the results of the discussions as outlined in Recommendation No. (3) embodied in the aforementioned report; and

(ii)a pre-qualification process that would ensure that contractors have a demonstrated history of compliance with health and safety standards, employment standards, the fair wage (where applicable) and respect for employees' right to join a trade union.

The Corporate Services Committee reports, for the information of Council, having requested the Executive Director of Human Resources to submit a report directly to Council for its meeting scheduled to be held on June 9, 1999, on:

(i)the accident rate for union versus non-union contract workers for the City of Toronto as well as the Workers Compensation Board claims in the past five years;

(ii)the number of employees in each category of construction trade since January 1, 1998;

(iii)the status of appeal of Ontario Labour Relations Board (OLRB) decision in relation to the Toronto Dominion Bank;

(iv)the status of application to OLRB by the City of Sault Ste Marie;

(v)the impact of an application under Bill 31 where no employee is in the category of construction trade; and

(vi)the implementation date for the new purchasing procedures.

The Corporate Services Committee submits the following report (April29, 1999) from the Executive Director of Human Resources:

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:

It is recommended that:

(1)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;

(2)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)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 Bill31, 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 and Labour Relations

392-8727

--------

Appendix "A"

Consultation List

-Toronto Independent Contractors Association

-Interior Systems Contractors Association of Ontario

-Electrical Contractors Association

-Environment Sheet Metal Association

-Ontario Masonry Contractors Association

-Mechanical Contractors Association

-Ontario Painting Contractors Association

-Canadian Federation of Independent Business

-Independent Contractors Group

-Christian Labour Association of Canada

-Ontario General Contractors Association

-Toronto Construction Association

-Toronto-Central Ontario Building and Construction Trades Council

-Labourers International Union of North America, Local 183

________

The Corporate Services Committee reports, for the information of Council, having also had before it the following communications:

(1)(Undated) from the Independent Contractors Association, forwarding a copy of a communication dated January 4, 1999, addressed to the Mayor from Mr.A.BruceMcKelvey, Chair, and Ms. Elyse Allan, President and Chief Executive Officer, The Board of Trade of Metropolitan Toronto, urging the City of Toronto to secure the access of non-unionized contractors to the City's construction work by ensuring that any agreement it reaches with the construction trades does not contain any clause which would restrict or prevent the participation of non-unionized contractors; advising that should the City not act to ensure the access of non-unionized contractors, Toronto would be the only municipality in Ontario, and with Montreal one of two in Canada, which has such restrictive bargaining relationships with the construction trades; and that the City of Toronto should act immediately to restore fairness and promote healthy competition in the municipal construction work market; and

(2)(May17, 1999) from Ms. Anne Dubas, President, Canadian Union of Public Employees, Local 79, advising that the Economic Development and Workplace Democracy Act, 1998, allows non-construction employers to decertify union agreements under specific conditions; that at the December, 1998, meeting of the Corporate Services Committee, many trade unionists expressed their surprise and disappointment at the City's interpretation of the Act and that the City would jeopardize the good labour relations that have existed for so many years; that the Corporate Services Committee recommended that discussions take place with representatives of trade unions and the construction industry; that consultations have now been held with three labour organizations and eleven contractors' associations and it would appear that all participants understand the issues but there is little agreement; that in their view there is no need for further consultation on this matter; that the Ontario Labour Relations Board has made a clear decision regarding the bargaining rights of unions and has recognized eight trades in the construction area; and stating that the City should respect the bargaining rights and maintain the agreements and should not be using the Economic Development and Workplace Democracy Act as an excuse to destroy longstanding labour relations in Toronto.

--------

The following persons appeared before the Corporate Services Committee in connection with the foregoing matter:

-Mr. Ray Pennings, Christian Labour Association of Canada, and filed a submission in regard thereto;

-Mr. Hugo Powell, Central Ontario Regional Council of Carpenters, Drywall and Allied Workers, Carpenters Local 27, United Brotherhood of Carpenters and Joiners of America;

-Mr. Joe Fashion, Local Union 353, International Brotherhood of Electrical Workers, and filed a submission in regard thereto;

-Mr. William Nicholls, District Council No. 46, International Brotherhood of Painters and Allied Trades;

-Mr. John Cartwright, Construction Trades Council;

-Mr. Bob O'Donnell, Electrical Contractors Association of Toronto;

-Mr. Joe McPhail, Sheet Metal Workers' International Association, Local Union No. 30;

-Mr. Arthur Potts, The Toronto Independent Contractors;

-Mr. Dave Clarke, United Association of Plumbers and Steam Fitters, Local 46 Toronto, accompanied by Mr. Bud McWatters, Mechanical Contractors Association of Toronto, and Mr. Paul Murray, Black and McDonald, and filed a submission in regard thereto; and

-Mr. Jim Hazel, President, Maintenance and Construction Skills Trades Council, Local 3219, United Brotherhood of Carpenters and Joiners of America, accompanied by Mr.ChrisHinkson, a former worker with the independent contractors.