Temp agency not employer: arbitrator

OPSEU victory a cautionary tale on ‘true employer’ issue
By Uyen Vu
|Canadian HR Reporter|Last Updated: 08/15/2007

Employers seldom consider workers hired through a temporary agency as their employees, but they’re not always right.

In a recent ruling, which should serve as a reminder of the complexities around the “true employer” issue, an arbitrator said a group of 64 temp agency workers were employees of the organization contracting the work, not the temp agency.

The ruling involved the Ontario Property Assessment Corporation (OPAC), now known as the Municipal Property Assessment Corporation. In 2001, after a restructuring created a need for more workers, the corporation turned to Pro Temps, a temporary staffing agency, to quickly engage short-term help. The Pro Temps workers, who would perform the same data entry work as that done by bargaining unit members, were paid $11 per hour, about two-thirds the $17.05-per-hour rate Pro Temps charged OPAC.

OPAC’s regular employees are members of the Ontario Public Service Employees Union (OPSEU) and are covered by a collective agreement that, unlike many, does not prohibit work from being contracted out.

It does, however, contain a recognition clause specifying that temporary employees may have different terms of employment but are part of the bargaining unit to which the collective agreement applies.

In his analysis, arbitrator Rick MacDowell referred to a seven-factor test established in the 1977 case of

Labourers’ International Union of North America, Local 183 v. York Condominium Corp

at the Ontario Labour Relations Board. The test looks at which party: exercises direction and control over employees doing the work; bears the burden of remuneration; imposes discipline; hires the employees; has the authority to dismiss them; and is perceived to be the employer of the employees. The seventh factor is whether there’s intention to create the relationship of employer-employee.

In this case, the arbitrator found Pro Temps may have hired the workers, but it did so based on the skill sets OPAC set out. And although Pro Temps had the power to dismiss or discipline workers, Pro Temps would take its cue from OPAC in this regard. “If there were routine admonitions to the agency workers about work performance or work practices, they were, so far as we know, administered by OPAC supervisors who were on the job with them,” said the arbitrator.

He further added that “it would have been a point in the employer’s favour if Pro Temps had unilaterally pulled someone off the job, and sent them somewhere else — either because Pro Temps had decided that it would be in its own interest to do so, or because one of ‘its workers’ was needed somewhere else, to fulfill some commitment to some other Pro Temps client. That is the kind of thing that is sometimes seen in other ‘subcontracting/contracting out cases.’”

The temp hires worked out of OPAC premises, used OPAC tools and obtained training from OPAC.

“The work, the work group, the work hours and the work environment were all controlled by OPAC,” the arbitrator said.

As for whether the agency workers perceived Pro Temps to be their employer, the arbitrator said although both Pro Temps and OPAC went to considerable lengths to reinforce that perception, he found that perception artificial. He found it hard to believe that if OPAC needed someone to work overtime, that it would have to contact Pro Temps, which then would have to get consent from the worker and relate that back to OPAC.

“There was no ‘on site’ supervisor from Pro Temps to keep an eye on things — and to exercise the kind of control or discipline (that) would strengthen the impression that Pro Temps was the workers’ employer,” the arbitrator said.

As for pay, the staffing agency might have done the payroll administration, but “there is very little evidence from Pro Temps that it actually shoulders any other burdens, economic or otherwise (for example, benefits) that are not fully shouldered and financed, lockstep, by OPAC.”

Laurie Chapman, the OPSEU officer handling all issues around recognition clauses and the integrity of the bargaining unit, said because the 64 temp workers now ruled to be bargaining unit members are no longer working at the organization, the union has yet to decide whether to fight for their individual entitlements flowing from this award such as benefits and differential pay.

At the Association of Canadian Search, Employment and Staffing Services, executive director Amanda Curtis said the association takes “the long-standing and generally accepted position that staffing services are the employer of record for all temporary workers.

“This is the position of the Canada Customs and Revenue Agency, the Ontario Ministry of Labour, most collective and contractual agreements and this is what we endorse and recommend.”

She added that this ruling may “have little or no impact on future rulings.”

But Chris Foulon, an employment lawyer with Toronto-based firm Israel Foulon, said this decision is in line with the jurisprudence. It may be that in this particular case, which involves a collective agreement, “an arbitrator will be extra vigilant.” But overall, employers that want to avoid similar rulings against them had better keep their control over temp workers to a minimum.

Foulon said employers should insist that the temp agency provide its own supervisor and make sure the agency rotates different workers through a given position every few weeks.

The safest route is for a client organization to simply tell the temp agency what work it needs done.

“The company says, ‘Here’s a job,’ and the temporary agency decides how it’s going to do that job, who it’s going to use. Anything that goes beyond that gets you into shades of grey,” said Foulon.

Add Comment

  • *
  • *
  • *
  • *