INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 2038 APPLICANT - v. -, 2023 SKKB 39

KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 39 Date: 2023 02 17 Docket: QBG-RG-01752-2021 Judicial Centre: Regina BETWEEN: INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 2038 APPLICANT - and - STUART OLSON INDUSTRIAL CONSTRUCTORS INC., STUART OLSON INC., STUART OLSON INDUSTRIAL INC., ARCLINE CONSTRUCTION LTD., TARTAN CANADA CORPORATION, STUDON INDUSTRIAL INC. and THE SASKATCHEWANLABOUR RELATIONS BOARD RESPONDENTS Counsel: Greg D. Fingas for the Applicant Steve Seiferling for Stuart Olson Industrial Constructors Inc. Thomas W.R.

Ross, K.C. and Matthew McCarthy for Stuart Olson Inc., Stuart Olson Industrial Inc., Arc Line Construction Ltd., Tartan Canada Corporation, and Studon Industrial Inc. JUDGMENT McCREARY J.A. February 17, 2023 ex officio I.

OVERVIEW [1] The applicant, International Brotherhood of Electrical Workers, Local 2038 [Union] applies for judicialreview of a June 2, 2021 decision from the Saskatchewan Labour Relations Board [Board] (International Brotherhood of ElectricalWorkers, Local 2038 v Stuart Olson Industrial Contractors Inc., (Sask LRB) [Decision]), in which the Boarddismissed the Union’s application to disqualify Phil Polsom, a nominee member of the panel hearing the matter in question [Member],on the basis of reasonable apprehension of bias.

Thereafter, the Board dismissed the Union’s primary application, concluding that therespondents were not related employers pursuant to s. 6-79 of The Saskatchewan Employment Act, SS 2013, c S-15.1 [SEA]. [2] The Union contends that the Board’s decision is invalid because the Board refused to disqualify the Memberfrom hearing the Union’s related employer application. The Union further argues that the Board’s decision to dismiss the relatedemployer application was unreasonable. [3] The issues arising before me are: (

a) Did the Member’s participation on the panel hearing the related employer application raise a reasonable apprehension of bias

(so as to render the Decision invalid)? (

b) Was the Board’s Decision unreasonable because: (

i) it found that the respondents did not operate under common control or direction; (ii) it failed to substantially decide the issue of labour relations purpose? [ 4 ] For the reasons that follow, the judicial review application is dismissed. The Board’s determination that the Member’s service on the panel did not give rise to a reasonable apprehension of bias was correct. The Board’s decision that the respondents did not operate under common control or direction was reasonable.

It was also reasonable for the Board to determine that it would not exercise its discretion to make a related employer declaration because there was no labour relations purpose to do so. II. BACKGROUND AND PARTIES [ 5 ] The Union is the certified bargaining agent in Saskatchewan for a unit of electricians employed by the respondent, Stuart Olson Industrial Constructors Inc. [Industrial Constructors]. Industrial Constructors operates as a unionized contractor primarily in Ontario, but also in Saskatchewan.

It employed workers in Saskatchewan in 2015 and 2016 and bid on work in Saskatchewan in 2019 and 2020. [ 6 ] None of the other respondents are unionized in Saskatchewan. [ 7 ] The Union filed its application for a related employer declaration after it was unable to organize employees of the respondent, Studon Industrial Inc. [Studon].

Studon performed electrical work on a construction project for Western Potash Corp. [Milestone Project], which awarded a construction services contract to Stuart Olson Prairie Construction Inc., an entity that was not named as a party in the Union’s related employer application. [ 8 ] Stuart Olson Inc. [SOI] is a public corporation that is the parent of the respondent, Stuart Olson Industrial Inc. [SOII] and two other entities that were not parties before the Board.

SOI is not registered to do business in Saskatchewan and does not operate in Saskatchewan. [ 9 ] SOII is a subsidiary of SOI and is the parent corporation of the respondents, Tartan Canada Corporation [Tartan] and Studon, as well as other entities that were not parties before the Board. SOII has been inactive as a corporation in Saskatchewan since 2017, and has been struck from the corporate registry. [ 10 ] Tartan is headquartered in Alberta and has never operated in Saskatchewan.

It operates primarily in Alberta. [ 11 ] Arc Line Construction Ltd. [Arc Line] is a subsidiary of Tartan and became part of the Stuart Olson group of companies when Tartan was acquired by SOII in 2018. Arc Line has a history of performing non-unionized work in Saskatchewan and elsewhere. It operated long before the Union acquired bargaining rights for Industrial Constructors. [ 12 ] Studon was acquired by SOII in 2015. It is an electrical and instrumentation services provider offering construction, maintenance and turnaround services in British Columbia, Alberta and Saskatchewan.

Studon has a long history of performing non-unionized electrical construction work in Saskatchewan and elsewhere. [ 13 ] The respondents have a corporate relationship as direct or indirect subsidiaries of SOI. SOI provides certain corporate office services to its subsidiaries. However, the respondents maintained in their sworn replies to the Union’s application that each of them is responsible for its own work and contracts, is managed separately, employs its own employees, is responsible for its own supplies, materials, assets and equipment, and has separate day-to-day activities.

The respondents took the position before the Board that while they exist within the Stuart Olson group of companies and share some common branding, they have separate identities, work experience, expertise and facilities, and that they bid on and perform separate work. The Union, on the other hand, contended that the respondents’ activities, undertakings or businesses operated under common direction and/or control. III. STANDARD OF REVIEW [ 14 ] Two separate standards of review apply to this application.

The first question – whether a reasonable apprehension of bias existed – must be reviewed on a correctness standard: Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 at paras 23 , 32 and 69–70, [2019] 4 SCR 653 [ Vavilov ]. The second question – respecting the Board’s decision to dismiss the related employer application – must be reviewed on a reasonableness standard: Vavilov at paras 32, 69–70, 101, 108, 129 and 131 . [ 15 ] At a high level, a reasonableness review is concerned with a decision-maker’s reasoning process and the outcomes of the decision.

It determines whether the decision in question is based on an internally coherent and rational chain of analysis that is defensible in relation to the relevant facts and the law. Conceptually, there are two types of fundamental flaws that tend to render a decision unreasonable. The first is a failure of rationality internal to the decision-maker’s reasoning process. The second is when the decision is untenable in some respect, given the relevant factual and legal constraints that bear on it.

See generally: Vavilov ; and, P&H Milling Group a Division of Parrish & Heimbecker, Limited Saskatoon v United Food and Commercial Workers Local 1400 , 2023 SKCA 14 at para 8 . In addition, among other factors, a reasonable decision “must ultimately comply ‘with the rationale and purview of the statutory scheme under which it is adopted’” ( Vavilov at para 108 , quoting Catalyst Paper Corp. v North Cowichan (District) , 2012 SCC 2 at para 15 , [2012] 1 SCR 5 ). IV. ANALYSIS 1. There was no reasonable apprehension of bias

[16] I agree with the Board’s conclusion that the Member’s circumstances, as established on the evidence before theBoard, did not give rise to a reasonable apprehension of bias. [17] The Board correctly stated the test to be applied on an application for recusal, citing Lalonde v UnitedBrotherhood of Carpenters and Joiners of America, Local 1985, (Sask LRB), and Jans Estate v Jans, 2020 SKCA61, 59 ETR (4th) 53.

The test asks whether a reasonable person, properly informed and viewing the circumstances realistically andpractically, could conclude that the decision-maker might be prone to bias: Committee for Justice and Liberty et al. v National EnergyBoard et al., (SCC), [1978] 1 SCR 369 at 372. The bias must be more likely than not, and there must be a real likelihoodor probability of bias: Agrium Vanscoy Potash Operations v United Steel Workers Local 7552, 2014 SKCA 79 at paras 39–43, 48 and 51,[2014] 8 WWR 629. [18] The Board determined that the evidence did not support a reasonable apprehension of bias.

The key evidence theUnion pointed to as raising a reasonable apprehension of bias was a Reply the Member swore in a separate proceeding before the Boardin which he opposed an intervenor application made by the Saskatchewan Building Trades Council [Council]. The Union is a member ofthe Council. In the Member’s Reply, he referred to the Council as a fierce competitor of his union, CLAC, Local 151 [CLAC 151].

TheUnion also alleged that the fact that another union, CLAC, Local 63 [CLAC 63], was the certified bargaining agent in Alberta of StuartOlson Services Ltd., and Tartan Industrial Services Ltd. – companies that were not a party to the Union’s related employer application –also raised a reasonable apprehension of bias. [19] From my review of the record, nothing in the evidence creates a reasonable apprehension of bias respecting theMember’s role in this case. My conclusion is based on the following: (

a) The Member’s statements in his sworn Reply in the unrelated matter were directed at the involvement of the Council as anintervenor in a matter that did not involve any of the parties to the Union’s related employer application; (

b) While the Union is affiliated with the Council, the two entities are separate and distinct. The Union was not a party to theintervenor application in which the Member swore a reply. There was no reasonable suggestion that the Member harbours hostilitytoward the Union because he opposed an intervenor application in a different case involving the Council; (

c) Trade union locals are separate legal entities: Fullowka v Pinkerton’s of Canada Ltd., 2010 SCC 5 at paras 113–129, [2010]1 SCR 132. The fact that CLAC 63, a separate entity from CLAC 151, had bargaining rights in Alberta for non-electrical trades is notrelevant to how the Member would deal with the Union’s related employer application in Saskatchewan. The Saskatchewan union,CLAC 151, which the Member worked for, had no claim to bargaining rights in respect of any of the respondents; and, (

d) There was no evidence that either the Member, or CLAC 151, had any interest in the related employer application or couldbenefit in any manner from the outcome of the case. [20] I also note that labour tribunals have different expectations of nominees, such as the Member, than of the boardchairs or vice-chairs. Nominees serve on the panel to provide their practical experience, expertise and specialized knowledge, and are notrequired to be strictly neutral.

It is understood and accepted that their special expertise and experience is gained by their affiliations orprior history with parties, topics and similar issues in the labour relations sphere: see, for example, Yorkton (City) v Yorkton ProfessionalFire Fighters Assn., Local 1527, 2001 SKCA 128 at paras 39–41, 207 DLR (4th) 651. [21] In this context, and upon my review of the evidence and the relevant law, the Board correctly determined that noreasonable apprehension of bias existed which required the Member to recuse himself from the panel hearing the related employerapplication. 2.

Board’s decision was reasonable [22] A four-part test is used to determine if entities are related employers.

The Board’s test, affirmed and applied byWhitmore J.A. in United Steelworkers v Comfort Cabs Ltd., 2017 SKCA 45 at para 19, 414 DLR (4th) 688, is as follows: [19] … (a) “the application must involve more than one corporation, partnership, individual or association and at least one of thoseentities must be a certified employer”; (b) “the subject entities must be ‘sufficiently related’ to a unionized employer through their involvement in associated or relatedbusinesses, undertakings or other activities”; (c) “the subject entities must be operated under ‘common control and direction’”; and (d) “the designation must serve a valid and sufficient labour relations purpose, interest or goal”. [Emphasis in original] [23] The Board’s decision to grant a related employer application is discretionary because doing so circumvents thenormal process of establishing union bargaining rights through organizing and demonstrating employee support.

However, a relatedemployer declaration is used to protect existing bargaining rights, not to expand such rights. [24] In this case, the Board determined that the evidence did not support two of the four elements of the test. First,the Board found the respondents did not operate under a sufficient degree of common control or direction. Second, it determined that,even if common control or direction had been established, it would have declined to exercise its discretion to make such a declarationbecause there was no labour relations purpose to doing so.

[25] Again, I have employed a reasonableness review in my consideration of the Board’s decision to determinewhether it is based on coherent and rational reasoning and conclusions in light of the evidence before the Board, the law, and relevantpolicy considerations. (

a) No common control or direction [26] I am not persuaded that the Board’s conclusion that the respondents did not operate under common control ordirection was unreasonable. [27] The Board began its analysis by reviewing the purpose of related employer legislation in Saskatchewan. Itconcluded that s. 6-79 of the SEA exists to preserve existing bargaining rights, not to permit unions to acquire bargaining rights (see,Decision at para 79).

The Board reviewed its own leading authorities arising from other related employer applications, including thefollowing: Amalgamated Transit Union, Local 588 v Regina (City), [1999] Sask LRBR 238 (WL); International Union of OperatingEngineers, Hoisting & Portable & Stationary, Local 870 v North American Construction Group, Inc., (Sask LRB);United Steel Workers Union, Local 1-184 v Edgewood Forest Products Inc., (Sask LRB), International Associationof Heat & Frost Insulators and Asbestos Workers, Local 119 v Cornerstone Contractors Ltd., (Sask LRB); andInternational Brotherhood of Electrical Workers, Local 529 v Merick Contractors Inc., (Sask LRB). [28] The Board noted that the themes from its own jurisprudence respecting related employer legislation included theBoard’s recognition that: (1) there are legitimate reasons for corporations to operate in an associated or related fashion; (2) relatedemployer declarations are available to prevent the transfer of work from a union to a non-unionized entity, particularly where a non-unionized business is established for the purpose of diverting work away from a union business; (3) the erosion of existing bargainingrights most often occurs through the creation of spin-offs; (4) s. 6-79 of the SEA does not stand as a blanket prohibition against corporategroups operating with union and non-unionized subsidiaries; and, (5) s. 6-79 of the SEA is intended to preserve bargaining rights, not topermit unions to acquire or expand bargaining rights. [29] The Board compared the evidence in the case before it against the facts found in its other leading relatedemployer authorities.

While the Board found some indicia of direction and control among the respondents, including common directorsand owners, centralized administrative functions and common branding, it concluded that these factors were insufficient to conclude thatthe respondents were related employers, particularly within the labour relations aspect of the businesses. This is a reasonable conclusiongiven the evidence before the Board, which included that: (

a) SOI did not employ tradespeople and did not operate in Saskatchewan; (

b) SOII did not employ tradespeople, did not operate in Saskatchewan and had no involvement in the Milestone Project; (

c) Tartan did not employ tradespeople, did not operate in Saskatchewan, had no involvement in the Milestone Project and hadbeen inactive prior to the Union bringing the related employer application before the Board; (

d) Arc Line was not an electrical contractor and did not employ any electricians on the Milestone Project; (

e) Studon was an electrical contractor that was founded in Alberta in 1995 and had operated in Saskatchewan since 2003.Studon was the only non-unionized respondent that performed electrical work in Saskatchewan and it did perform electrical constructionwork on the Milestone Project; (

f) There was no evidence of any transfer of employees between any of the respondents in respect of the work performed byStudon on the Milestone Project. [30] I also note that the evidence did not demonstrate a link between the other respondents and IndustrialConstructors, the key unionized entity.

As the respondents point out, it is not relevant if the non-unionized respondents were undercommon direction or control because the Union only had a claim against any of the non-unionized respondents if there was commondirection or control between them and the unionized respondent, Industrial Constructors. [31] In conclusion, the Board’s decision on this point is reasonable because it is internally coherent and rational andis defensible in relation to the relevant facts and the law.

The Board cited its own leading jurisprudence which establishes the legal issuesto be considered and the weight to be placed on the relevant elements of evidence. It properly identified the relevant facts whichinformed those elements, and applied the relevant legal test to the facts to come to its determination that the respondents did not operateunder sufficiently common direction or control so as to render them related employers. In short, the Board’s analysis was reasonable, aswas its ultimate decision on the issue. (

b) The Board gave sufficient and reasonable analysis of labour relations purpose [32] The Union argues that the Board’s decision is invalid because it failed to “substantially decide” the issue oflabour relations purpose in relation to its discretionary authority to make a related employer declaration. Respectfully, I do not agree. [33] The Board did consider and decide the issue of labour relations purpose.

Throughout its reasons, it referencedthe purpose of s. 6-79 of the SEA, and specifically that s. 6-79 exists to prevent the erosion of existing bargaining rights through themischief of “double-breasting” (see para 64). [34] The Board recognized, again relying on its review of its own jurisprudence, that there must be a compellingreason to grant a related employer declaration. The Board found that there was no such compelling reason in this case.

In relation to themischief of “double-breasting”, and the erosion of existing bargaining rights, it found that the evidence of the Union’s organizing atStudon was weak and, as such, did not present a compelling reason to grant a declaration. It also highlighted several factors that werecontrary to supporting a compelling labour relations purpose, including that: the non-unionized respondents all had longstanding histories

operating non-union prior to the Union’s acquisition of bargaining rights for Industrial Constructors; the work in issue was performed by a long-standing non-union electrical contractor; there was no evidence tying Industrial Constructors to the Milestone Project; there was no apparent diversion of work from Industrial Constructors to the other respondents; and, Industrial Constructors continued to operate and bid on work in Saskatchewan.

In short, it did not find evidence to support that the Union’s existing bargaining rights were being eroded. [ 35 ] Again, the Board employed a reasonable and coherent analysis, in keeping with the relevant facts and the law. Its conclusion on this issue, as well as its ultimate decision to dismiss the Union’s application, was reasonable. V. CONCLUSION [ 36 ] In the result, the Union’s application is dismissed. As the successful parties, the two groups of respondents (Industrial Constructors, and the remaining respondents) are each entitled to one set of costs on Column II of the Tariff. J.A. M.R.

McCREARY ex officio