Employer switches contractors mid-job due to pace of work

No language restricting which company does which job

Employer switches contractors mid-job due to pace of work
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When a job to build a firewall ran into difficulties, the employer made the decision to switch contractors, triggering a policy grievance.

Aecon Construction Group was the main contractor at a K+S Potash Canada job site in 2016 when it sub-contracted a fire-stopping wall job to Kaefer Industrial Services, which had a collective agreement with the International Association of Heat and Frost Insulators and Allied Workers (HFIAW), Local 119.

In January 2017, Aecon decided the work wasn’t progressing well enough, so it changed the sub-contractor to the Lancaster Group of Companies, which had a collective agreement on the same site but with the Sheet Metal Workers union.

“I have heard a rumour about fire-stop work; can you confirm or deny that Aecon has taken the fire-stop away from Kaefer, and awarded it to Lancaster,” wrote Chuck Rudder, business manager for HFIAW, to Myles Bellefontaine, project manager for Kaefer.

“They have taken it away from us but who is doing the work I will have to follow up on. Considering we can’t keep up to our current work fronts, I didn’t make a great fuss about it,” replied Bellefontaine.

On Feb. 13, the union grieved the employer’s decision and requested “to be made whole, as if the work was performed by workers of Local 119,” according to the grievance letter.

It argued that the work retracted from Kaefer fell under the relevant collective agreement but when it was transferred to Lancaster, the contract was breached as the new company’s union was not the “sole collective bargaining agent for all employees falling within the jurisdiction of the union,” that was referred to in article 3 of the deal that ran from June 28, 2015 to April 30, 2017.

Aecon had the right to assign any work to any contractor and there were no restrictions on this power in the collective agreement, said the company.

The job was Kaefer’s to complete once it was assigned to it and fell under the one-job provision, said the HFIAW, which meant that the entire work had to be completed by Kaefer.

However, arbitrator William Hood disagreed and dismissed the grievance.

“Employers have the right to contract out work from members of the bargaining unit unless the right is prohibited or restricted by very specific language in the collective agreement. There is no language, let alone specific language, that prohibits or restricts management’s right to contract out the fire-stopping work to be performed by a sub-contractor that is not signatory to the collective agreement where the work is performed by union members who are not members of the insulators union.”

“With respect, I do not find the above decisions persuasive or of much assistance in determining whether the fire-stopping work must be completed by a contractor signatory to the collective agreement, or work performed by its members because the work was initially performed by a sub-contractor under the terms of the collective agreement.”

The union’s argument that once Kaefer began a job, it must complete it, was also rejected by the arbitrator.

“It would be an unreasonable interpretation to prevent the employer from its rights to assign the work to Lancaster merely because it let Kaefer and the members of the insulators’ union in the front door to initially perform the work. I do not see this any differently than if the retraction of the work was initiated by Kaefer walking off the job site and refusing or unable to continue performing the fire-stopping work. It would not seem reasonable if the fire-stopping work could be initially awarded to Lancaster or some other contractor to a different trade union, or no union, that — absent clear and explicit language in the collective agreement — the employer would be precluded from awarding the work that remained like it could have initially,” said Hood.

Reference: Aecon Construction Group and International Association of Heat and Frost Insulators and Allied Workers, Local 119. William Hood — arbitrator. Larry Seiferling for the employer. Crystal Norbeck for the employee. Sept. 6, 2019 2019 CarswellSask 456

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