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Superior Court punts injunction proceeding to the OLRB

March 30, 2022

Court defers to the jurisdiction of the Ontario Labour Relations Board in denying developer an injunction in a construction labour relations dispute

LIUNA Local 183, BMIUC Local 1, and the Masonry Council of Unions Toronto and Vicinity (MCUTV) were recently successful in defending an injunction brought by a developer upset with what it viewed as an unlawful work stoppage on two condominium projects in Toronto. The Court granted the Unions’ motion to stay the underlying action, in which the developer alleged that the Unions’ were liable for civil torts, on the basis that the action was a labour relations matter within the exclusive jurisdiction of the Ontario Labour Relations Board.

Background

The plaintiff EllisDon is the general contractor at the West Don Lands project in the Distillery District and the construction manager at the Mirvish Village project at the former Honest Ed’s site. Westbank, which intervened in the case, is the developer for the Mirvish Village project.

EllisDon is bound to a collective agreement between the Metropolitan Toronto Apartment Builders Association (MTABA) and LIUNA Local 183. Under that agreement, EllisDon is required to subcontract its masonry work on any residential projects in Toronto to a masonry contractor bound to the collective agreement between the Masonry Contractors Association of Toronto (MCAT) and the MCUTV.

Westbank is not a party to a  collective agreement with BMIUC Local 1, LIUNA Local 183 or the MCUTV.

For its West Don Lands project, EllisDon chose Limen as its masonry subcontractor and entered into a contract with Limen. At the Mirvish Village site, Westbank entered into a contract with Limen as well.

The shortage of masonry trades in Ontario and LOU 8

There is a shortage of bricklayers and associated masonry trades in Ontario, and that is particularly the case in the residential sector in Toronto. In response to this shortage, the  MCAT and the Unions agreed to Letter of Understanding #8 (LOU 8), which creates a priority system to address masonry shortages by giving priority to unionized builders over non-union builders. Under LOU 8, either party to the MCAT-MCUTV collective agreement can require an MCAT contractor (such as Limen) to delay performing work for a non-union builder and to prioritize work for a unionized builder. Penalties for non-compliance by MCAT contractors include damages of $15,000 per job site, and further damages of $1,000 per calendar day for each worker on the job site. These penalties are essentially fines which would be levied by MCUTV against an MCAT contractor who refused to prioritize work for a union builder and continued working for a non-union builder.

LOU 8 was recently at the centre of two other disputes before the Board in the Ras-Con and Baycliffe Homes disputes. In those two cases, builders argued that the invocation of LOU 8 was an unlawful strike on the part of Local 183, at the direction of its Bricklaying Sector Coordinator Cesar Rodrigues. The Board rejected the unlawful strike applications by the builders, finding that the invocation of LOU 8 by MCUTV simply led to a business decision by the employer (i.e. the masonry subcontractor) to re-direct its labour force, and that there was no unlawful strike by the unions.

Events Leading to EllisDon’s Motion for an Injunction

In November 2021, the MCUTV invoked LOU 8 with respect to EllisDon’s Mirvish Village and West Don Lands jobsites. The MCUTV did so because Local 183’s bricklaying sector coordinator had become aware that EllisDon had subcontracted jobs in London and Ottawa to masonry contractors who were not bound to the MCAT-MCUTV agreement. The MCUTV invoked LOU 8 after requesting, through Limen, that EllisDon agree in writing to use MCAT contractors across Ontario, which EllisDon refused to do.

EllisDon was not required to subcontract its London and Ottawa jobs to MCAT contractors since it is not bound to a collective agreement with Local 183 or the MCUTV in London or Ottawa. However, for the purposes of LOU 8, the MCUTV took the position that EllisDon had become a “non-union builder” within the meaning of LOU 8, as it applies in Toronto, because EllisDon was not using MCAT contractors on all its jobs in Ontario.

Following the Unions’ invocation of LOU 8, Limen’s workers left EllisDon’s job sites in Mirvish Village and the West Don Lands to work on job sites for union builders within the meaning of LOU 8 (i.e. builders who were using the Unions across Ontario).

The Motion for an Injunction

Notwithstanding they were in a similar situation to the builders in the Ras-Con and Baycliffe Homes cases, EllisDon brought a motion for an urgent injunction to attempt to get the courts to assume jurisdiction and order the Unions to cease the temporary work stoppage. EllisDon alleged that the Unions’ threats to file grievances and penalties under LOU 8 if Limen did not re-direct its forces from the Mirvish Village and West Don Lands Projects constituted inducing breach of contract and interfering with economic relations. Westbank intervened in the proceeding in support of EllisDon.

The Unions argued they had simply exercised their collective agreement rights under LOU 8 to request that the masonry contractor on the projects re-direct its forces to work for union builders, rather than continuing to work on EllisDon’s jobsites. They maintained that EllisDon was attempting to use a court proceeding to: (i) amend the MTABA-Local 183 agreement for its own individual benefit, which is contrary to the prohibition on individual bargaining for accredited sectors under the Act; and, (ii) amend the MCAT-MCUTV agreement so as to immunize itself, and no other builders, from the effects of LOU 8. They also argued that the Ontario Labour Relations Board, and not the court, had exclusive jurisdiction over the dispute.

The Court’s Decision

The Ontario Superior Court of Justice accepted the Union’s argument that the allegations made by EllisDon and Westbank against the Union were within the exclusive jurisdiction of the Board. Applying the test from the Supreme Court’s decision in Weber v Ontario Hydro, Justice Koehnen determined that the essential character of the dispute was one of labour relations which should be determined by the Board. The Court defined the core issue in the proceeding as whether the Unions were lawfully entitled, within Ontario’s labour relations regime, to require Limen to remove its bricklayers from the two condominium projects. The Court further held that the Board has extensive powers under the Labour Relations Act, 1995 to remedy intimidation and coercion, including ordering a party to cease conduct, rectify the acts complained of, and to pay damages or compensation. As such, Justice Koehnen held the Board should first have the opportunity to determine the scope of its jurisdiction.

Justice Koehen relied on a series of cases where similar allegations have been raised against unions and courts have held that these were labour relations cases belonging before the Board as opposed to being economic torts belonging in the courts. A key case Justice Koehnen relied upon was the decision in Limen v. Blair. In that case, the employer, Limen, alleged that the defendant unions and employer associations had conspired to enter into an agreement which would eliminate Limen’s competitive advantage in the industry. Justice Koehnen noted that Firestone J. dismissed Limen’s injunction claiming anti-competitive torts, holding that the essential character of the dispute was one of labour relations.

The Court further noted that in AI Enterprises, Cromwell J. for the Supreme Court cautioned against broadly interpreting economic torts in labour relations cases. Unions and employers regularly apply economic pressure on each other, it observed, and broad interpretations of economic torts would undermine statutory labour relations schemes and “interfere with fundamental rights of association and expression.”

Significance

The Court’s decision recognizes the exclusive jurisdiction of the Board, particularly in construction labour relations where the Board is acting in a doubly specialized capacity. Justice Koehnen followed previous decisions holding that the courts should not trample upon legislature’s intention to grant exclusive jurisdiction to specialized labour tribunals simply because a plaintiff has pled economic torts against unions. Rather, the Court noted that the scope of economic torts (such as inducing breach of contract or interfering with economic relations) in a labour relations context depends upon the lawfulness of the union’s conduct under the statutory labour relations scheme, a question which ought to be determined by the Board.

You can read the decision here.

Lawyers

Lorne Richmond, Louis Century, Geetha Philipupillai

Practice Areas

Construction Labour Relations