How Ontario’s non-construction employer designation laid down groundwork for current debate on Bill 73

Back in 1987, as Sault Ste. Marie’s steel industry — the city’s main employer — began to flounder, the municipal government tried to bolster the local economy by creating a project for people on employment insurance. During the project, some participants joined two construction unions — the United Brotherhood of Carpenters and Joiners of America and Labourers’ International Union of North America. Their locals applied to the Ontario Labour Relations Board (OLRB), which adjudicates labour relations issues, to obtain certification as the employees’ bargaining agent.

At the time and through the next decade, a number of Ontario municipalities and other local public institutions wrestled with similar union certification efforts — as did companies in other sectors not usually associated with construction, such as retailers.

In Sault Ste. Marie, the unions were successful. That meant the municipality, now considered a construction employer and therefore bound by the provincial Labour Relations Act construction provisions, had to comply with the terms of the unions’ provincial agreements, both of which had subcontracting clauses requiring their newly-signed employer to contract only with companies affiliated with the unions for any construction projects.

The closed tendering limited the number of contractors who can bid on the work and has driven up costs, says Joe Fartesi, the city’s chief administrative officer. Other affected local government bodies had similar complaints.

In 2000, the then–Conservative provincial government revised the act to include, amongst other things, a definition of a non-construction employer — “an employer who does not work in the construction industry for which the employer expects compensation from an unrelated person.”

The changes were supposed to “allow employers who do not sell construction services, such as municipalities and school boards, to remove themselves from the construction provisions of the act,” said former minister of labour Chris Stockwell at the time. Qualifying as a non-construction employer would break the bonds of a provincial construction trade agreement and remove the trade union’s bargaining rights.

Like others, Sault Ste. Marie’s officials were eager to put the new legislation to the test. But they soon found that the OLRB “put such a highly restricted view on what constitutes a non-construction employer that we wouldn’t be successful, so we withdrew our application,” says John Luszka, the Sault’s commissioner of human resources.

Municipalities often collaborate with other government organizations, community groups and charitable organizations in projects, Luszka explains. He uses the example of improving a public park and a community group raising money to add a boat launch.

“So we go out and do that — maybe we subcontract it (the project) to somebody to put it in for us because our forces are tied up.”

That’s enough, he says, for the board to determine the municipality is taking money to make a profit and meet the terms of a construction employer.

By 2011, the OLRB had granted only three of 10 applications to decertify employers. One of the successful applicants was the Greater Essex County District School Board.

Founded in 1998, the board merged the former Essex County and Windsor boards of education. The new board was bound by six provincial trade union agreements but only in the coverage area of the former Windsor board.

In 2003, it obtained decertification of the United Brotherhood of Carpenters when the OLRB ruled it was a non-construction employer.

But the decertification did not automatically end its relationship with the other five unions, says Penny Allen, GECSB’s former superintendent of business. The school board would have to undergo the same process with the other unions.

To do so, three years of work orders — thousands of documents — had to be reviewed. “On one item only, they (the OLRB) said ‘you meet the definition,’” of a construction employer Allen recalls.

This one instance was when a staff member had been supervising the maintenance and upkeep of a building that the school board owned with other public partners. The other owners contributed to his salary. He had been supervising a construction project.

The school board no longer oversees the building and in June, on the advice of an Ontario court, applied again for union decertification. Hearings begin in the fall. Allen, who retired this year, will return to work on the case.

In the meantime, non-union contractors are unable to bid on school board work, which includes plans over the next several months to build two new high schools — projects that are each worth about $25 million, Allen estimates.

The board is funded “100 per cent by the Ontario government with taxpayers’ money,” she says.

“Those contractors are paying taxes and yet they can’t even bid on a public project. Think about that; that’s not very fair.”

Nevertheless, for more than a decade affected municipalities and school boards dealt with the issue of certification mostly in isolation. That would abruptly change when, late last year, two Region of Waterloo workers were assigned to build a garden shed on a Saturday.

Kitchener/Waterloo — ground zero for Bill 73, is the upcoming installment in this three-part series and is scheduled to run Sept. 12.

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