Contracted services didn't intermingle with regular transit; city had limited control
A city that contracted certain transit services to a private company is not a common employer for that company’s employees, the Alberta Labour Relations Board has ruled.
The City of Edmonton operates public transit services with buses and light rail cars throughout the city. Employees who work in the transit system are unionized, represented by Amalgamated Transit Union Local 569.
In 2017, the city approved a new transit strategy to restructure transit services without increasing the budget. In order to service areas of low ridership and more isolated areas, the city determined that an on-demand transit service with small buses could work.
City counsel looked at whether the service model for on-demand transit should be in-house or outsourced as a contracted service and determined the latter, as the small buses needed for the service couldn’t be accommodated in the city’s existing transit garages.
After a bidding process, the city awarded the on-demand transit service contract to PW Transit, a contracted transit services provider based in Edmonton and Prince George, BC, with locations across the Western provinces and Ontario. PW Transit didn’t propose to use unionized labour, but it was prepared to bargain collectively if the employees for the Edmonton on-demand transit service chose to unionize.
Contractor had own staff, policies
The service agreement between the city and PW Transit established that the city provided the routes, while PW provided and supervised staff to run the operation. The city set basic qualifications and standards of conduct, while PW provided and operated the vehicles and software for the system. They would start with a two-year pilot project.
The city had to approve “key personnel” hired for two positions for the on-demand transit service – program manager and operations co-ordinator – while PW was responsible to hire all other employees including operators, customer service personnel, dispatchers, mechanics, cleaners, and administrative support. PW was also responsible for the scheduling, performance evaluation, benefits, discipline, and termination of these employees, as well as safety and incident investigations.
Employees of the on-demand transit service were subject to PW policies and procedures, not any city standards. They wore uniforms different from city transit workers, although they had both a PW and a City of Edmonton logo. Vehicles were wrapped in similar colours to Edmonton transit vehicles, but were clearly identified as “on-demand.”
Leading up to the launch of the on-demand transit service, PW and city transit representatives met regularly and city staff participated in a one-hour orientation and training session with PW drivers. Other than that session, PW conducted its own training of on-demand operators.
The city retained the right to remove a PW employee from service if the employee displayed an “egregious” lack of skill, disobedience, or non-compliance with safety rules, but this never happened.
Common employer declaration
The union filed an application under the Alberta Labour Relations Code asking the board to declare that the city and PW constituted one common employer under the code, as they engaged in “associated or related activities under common control or direction.” With such a declaration, PW’s employees would become part of the union and subject to its collective agreement with the city.
The union argued that the service agreement between the city and PW demonstrated common control or direction, as the city effectively exercised a role in hiring and firing the on-demand transit employees, and controlled many aspects of PW’s operation in providing the service.
The union also said that the city viewed on-demand transit to be part of one transit enterprise that was seamlessly integrated into Edmonton’s transit system. A declaration of a common employer was necessary to prevent the “erosion of ATU bargaining rights through the loss of opportunity to do this work,” said the union.
The board found that the relationship between the city and PW was that the city invited PW into its workplace to provide a service in co-operation with the city’s unionized employees. However, PW’s service was “sharply restricted geographically to a relatively small number of communities” that, while interfacing a small amount at transit hubs, it didn’t intermingle with the city’s regular transit employees, the board said.
The board noted that it had been established in arbitral jurisprudence that, where a contractor’s business is confined to providing in-house services, it could be a common employer if the contractor has no outside business of its own. However, PW provided industrial and commercial transportation services to other municipalities in Alberta and Canada.
Limited control of hiring, training
The board also found that PW was fully capable and involved with directing, supervising, and discharging its statutory obligations to its employees, with its own protocols and procedures.
As for the city’s control over hiring and training, it only had a say in the hiring of two employees and training was limited to a one-hour session involving its own employees. PW controlled the rest of its operation and workforce, said the board.
The board also noted that the city’s right in the service agreement to remove unsatisfactory PW employees from the service didn’t mean it could force PW to terminate the employment of those employees. There was no common ownership, financial control, or management, said the board.
The board determined that the city had “only a modest degree of control over PW’s oerpations that is reserved to the city.” The city’s involvement in PW’s operation of the on-demand service was significant enough that PW couldn’t seriously be viewed on its own as the employer of its employees, the board said.
“Such influence and control as the city exercised in this case are consistent with its roles as principal in a legitimate subcontracting arrangement and as the owner and operator of the municipal transit system with which on-demand transit connects,” said the board in dismissing the union’s application.
