Gulf Operators Ltd. Applicant v. International Union of Operating Engineers, Local 721 v. Labour Board (Nova Scotia), 2016 NSSC 179

SUPREME COURT OF Nova Scotia Citation: Gulf Operators Ltd. v. International Union of Operating Engineers, Local 721 , 2016 NSSC 179 Date: 2016-07-21 Docket: Hfx No. 447985 Registry: Halifax Between: Gulf Operators Ltd. Applicant v. International Union of Operating Engineers, Local 721 and Labour Board (Nova Scotia) Respondents Judge: The Honourable Justice M. Heather Robertson Heard: Final Written Submissions: Decision May 16, 2016, in Halifax, Nova Scotia June 15, 2016 July 21, 2016 Counsel: Rick M. Dunlop and Michelle Black, for the applicant Gordon N. Forsyth, Q.C., for the respondent Edward A.

Gores, Q.C., and Lindsay Silliker Articled Clerk, for the respondent Robertson, J.: [ 1 ] This application is for the judicial review of the decision of the Labour Board (Nova Scotia) (“the Board”) dated February 24, 2016, which certified the International Union of Operating Engineers, Local 721 ( “the Union”) to represent a bargaining unit of operating engineers employed by Gulf Operators Ltd. (“Gulf”).

The decision of the Board in this case is the exercise of one of its core functions applying a well-established test of fundamental control over the “employees.” The Board’s decision is within a range of acceptable outcomes and the decision should not be overturned. The appeal is dismissed. My reasons follow. [ 2 ] On June 23, 2015, the Union filed application for certification seeking to be certified as the bargaining unit for Gulf’s employees engaged as operating engineers.

The Board conducted a representation vote on August 28, 2015 pursuant to s. 95(3) of the Trade Union Act , R.S.N.S. 1989, c. 475 (“the Act ”). The vote count resulted in a dismissal of the application. The Union filed a request for a hearing pursuant to s. 96(1) of the Ac t, which was held on November 30, 2015. The composition of the bargaining unit was the issue in particular the inclusion of Messrs.

Smith, Kettle and Malard, as the Union argued none of these men were employed by Gulf at the time. [ 3 ] The Board agreed with the Union in its written decision of February 24, 2016 and certified the Union, backdating the order to the date of the representation vote August 28, 2015. [ 4 ] Gulf submits that the Board’s decision does not satisfy the reasonableness standard of review for the following reasons: First, the Board concludes that the “amount of control exercised by Gulf in relation to Messrs. Smith and Kettle’s daily tasks falls short of the standard to be met,” but fails to (

i) explain or define this standard; and (ii) explain how the control that the Board did find Gulf exercised with respect to Messrs. Smith and Kettle, fell short of this undefined standard.

Second, the Board’s York Condominium factors analysis contains internally inconsistent findings, reliance or irrelevant considerations, and factual inconsistencies. Rather the Board’s factual findings and jurisprudence, which the Board did not analyze in its Decision, supports the conclusion that Gulf was the employer of Messrs. Smith and Kettle. [ 5 ] And, with respect to the order issued by the Board the applicant says: The Board’s conclusion that the certification order should be backdated to August 28, 2015 is unreasonable because: (

a) The Board does not address Gulf’s detailed submissions outlining why the Board does not possess the statutory jurisdiction to backdate the certification order. (

b) The Board, in concluding that it has jurisdiction to backdate a certification order, relies upon this Honourable Court’s decision in CanMar Contracting Ltd. v. LIUNA , Local 615 2015 NSSC 89 , but rejects the reasoning path which the Board followed in CanMar , and which was endorsed by this Honourable Court. [ 6 ] The issues before this court to determine are: 1. The standard of review; 2. The “reasonableness” of the Board’s decision in finding that two gentlemen, Messrs. Smith and Kettle, were not employees of Gulf, but were employees of a sub-contractor, Hodgson Trucking Ltd. 3.

The Board’s decision to backdate the date of certification to August 28, 2015, the date the vote was counted. Issue No. 1 – The standard of review: [ 7 ] Counsel for both parties agree the standard of review that applies to the decision is reasonableness. Issue No. 2 – The reasonableness of the Board’s decision: [ 8 ] In Casino Nova Scotia/Casino Nouvelle Ecosse v.

Nova Scotia (Labour Relations Board) , 2009 NSCA 4 , the Nova Scotia Court of Appeal explained that the reasonableness standard means that the reviewing court must be able to understand why the tribunal made its decision. [ 9 ] Beginning at para. 29 they noted: 29 In applying reasonableness, the court examines the tribunal's decision, first for process to identify a justifiable, intelligible and transparent reasoning path to the tribunal's conclusion, then second and substantively to determine whether the tribunal's conclusion lies within the range of acceptable outcomes. 30 . . .

Justification, transparency and intelligibility relate to process ( Dunsmuir , para. 47). They mean that the reviewing court can understand why the tribunal made its decision, and that the tribunal's reasons afford the raw material for the reviewing court to perform its second function of assessing whether or not the Board's conclusion inhabits the range of acceptable outcomes . Nova Scotia (Director of Assessment) v.

Wolfson, 2008 NSCA 120 , para. 36 . 31 Under the second step, the court assesses the outcome's acceptability, in respect of the facts and law, through the lens of deference to the tribunal's "expertise or field sensitivity to the imperatives or nuances of the legislative regime." This respects the legislators' decision to leave certain choices within the tribunal's ambit, constrained by the boundary of reasonableness. Dunsmuir , para. 47-49; Lake , para. 41; PANS Pension Plan , para. 63; Nova Scotia v.

Wolfson , para. 34. [ 10 ] United Food and Commercial Workers Union Canada, Local 864 and Lawtons Drug Store Ltd ., 2015 NSLB 182 at para. 74 expressed this view of providing reasons: A defining feature of reasons is an explanation of a decision. It follows, therefore, that reasons must do more than simply list evidence and state the decision reached. Effective reasons must enable the parties to determine the logic or intellectual process by which the evidence was relied upon to reach the decision.

When the Board is able to provide reasons that clarify or explain its decisions, such is a benefit to the immediate parties and the community as a whole. Parties should not be put in the position of having to resort to conjecture or speculation when seeking the rationale for a Board decision. . . . [ 11 ] In Egg Films Inc. v.

Nova Scotia (Labour Board) , 2014 NSCA 33 , Justice Fichaud at para. 26 noted that the standard of review is “neither the mechanical acclamation of the tribunal's conclusion nor a euphemism for the reviewing court to impose its own view.” [ 12 ] Counsel for the Union urges the court to remember that reasonableness is a deferential standard.

They ask the court to consider one of the core functions of the Board under the Act , i.e. to determine who is an “employee” for a certification application and whether the unit is appropriate for collective bargaining, pursuant to s. 92 of the Act : Egg Films, supra , at para. 24; C.R. Coatings & Painting Inc. v. International Union of Painters and Allied Trades, Local 1439 , 2014 NSCA 40 , at para. 22 ; Coates v. Nova Scotia (Labour Board) , 2013 NSCA 52 at para. 38 ; and Casino Nova Scotia/Casino Nouvelle Ecosse v.

Nova Scotia (Labour Relations Board) , supra. [ 13 ] Counsel for the Union suggests that Gulf’s finding fault with the Board’s decision as failing to provide a “justifiable, intelligible and transparent reasoning points to the tribunal’s conclusion” is more a case of Gulf isolating statements and findings from the Board’s decision as a whole and misconstruing the Board’s reasons that support its decision; and then asserting the findings to be thus unreasonable. [ 14 ] Counsel for the Union asks the court to read the decision as a whole and conclude that the conclusions reached are within the range of possible outcomes.

[15] Both parties rely on Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC62 for guidance in the “reasonableness analysis.” However, the counsel for the Union argue the reasons do not need to be perfect orcomprehensive. 12 It is important to emphasize the Court's endorsement of Professor Dyzenhaus's observation that the notion of deference toadministrative tribunal decision-making requires "a respectful attention to the reasons offered or which could be offered in support of adecision".

In his cited article, Professor Dyzenhaus explains how reasonableness applies to reasons as follows: "Reasonable" means here that the reasons do in fact or in principle support the conclusion reached.

That is, even if the reasons in factgiven do not seem wholly adequate to support the decision, the court must first seek to supplement them before it seeks to subvert them.For if it is right that among the reasons for deference are the appointment of the tribunal and not the court as the front line adjudicator,the tribunal's proximity to the dispute, its expertise, etc, then it is also the case that its decision should be presumed to be correct even ifits reasons are in some respects defective. [Emphasis added.] . . . 14 Read as a whole, I do not see Dunsmuir as standing for the proposition that the "adequacy" of reasons is a stand-alone basis forquashing a decision, or as advocating that a reviewing court undertake two discrete analyses - one for the reasons and a separate one forthe result (Donald J.

M. Brown and John M. Evans, Judicial Review of Administrative Action in Canada (loose-leaf), at ss.12: 5330 and12: 5510). It is a more organic exercise - the reasons must be read together with the outcome and serve the purpose of showing whetherthe result falls within a range of possible outcomes. . . . 15 In assessing whether the decision is reasonable in light of the outcome and the reasons, courts must show "respect for thedecision-making process of adjudicative bodies with regard to both the facts and the law" (Dunsmuir, at para. 48).

This means that courtsshould not substitute their own reasons, but they may, if they find it necessary, look to the record for the purpose of assessing thereasonableness of the outcome. [16] Counsel for the Union also suggest that Gulf is “treasure hunting” and “zooming in” on aspects of the Board’s reasoning tosuggest it beyond tolerable error cautions revised by Fichaud JA. in Egg Films, supra, at paras. 30 and 31: 30 Next, the judge's "treasure hunting", "zooming in", or "tracking" of the Board's reasons.

Reasonableness isn't the judge's quest fortruth with a margin of tolerable error around the judge's ideal outcome. Instead, the judge follows the tribunal's analytical path anddecides whether the tribunal's outcome is reasonable. Law Society v. Ryan, supra, at paras 50-51. That itinerary requires a "respectfulattention" to the tribunal's reasons, as Justice Abella explained in the well-known passages from Newfoundland and Labrador Nurses'Union, paras 11-17. 31 In Communications, Energy and Paperworkers Union of Canada, Local 30 v.

Irving Pulp & Paper, Ltd., 2013 SCC 34, JusticeAbella for the majority reiterated: [54] The board's decision should be approached as an organic whole, without a line-by-line treasure hunt for error (NewfoundlandNurses, at para. 14).

In the absence of finding that the decision, based on the record, is outside the range of reasonable outcomes, thedecision should not be disturbed. ... [17] I turn to the decision of the Board. [18] The Board correctly identified the issue to be decided “the composition of the bargaining unit” in para. 1 and identified the issueto be decided in para. 2: The status of the first three [Chris Smith, Ivan Kettle and Don Malard] will depend on who is determined to be their true employer. [19] The Board summarized the evidence on this issue in paras. 5-12. [20] In paras. 21 and 22, the Board set out Gulf’s arguments on the issue. 21 Counsel for the Employer argued that Chris Smith, Ivan Kettle and Don Malard are true employees of Gulf, and not HodgsonTrucking/Priority Water, and that the Board should follow its practice of ‘piercing the corporate veil’ by considering the whole of theemployment relationship in determining who has true control over the workers: Pointe-Claire (Ville) v.

S.E.P.B. Local 57 (SCC), [1997] 1 S.C.R. 1015; United Brotherhood of Carpenters and Joiners of America Local 83 v. R U Safe Inc. 2015 CarswellNS 434; LIUNA Local 615 v. Pomerleau Inc. 2007 LRB (CIP) 3045; United Brotherhood of Carpenters and Joiners of America Local 83v. Pomerleau Inc. 2006 LRB (CIP) 2006. 22 Counsel for the Employer argued that the York Condominium 1977 CarswellOnt 938 factors, applied by the Board many times,support Gulf’s position that it is the true employer of these three workers, based on the overriding factor of direction and control.

Henoted as well that if Gulf becomes unionized, because of the Construction Labour Relations Association (CLRA) collective agreement,it cannot subcontract work to non-Union companies, unless they agree to be bound by that agreement, which impacts the terms andconditions of their employment. [21] In paras. 27 and 28, the Board set out the Union’s arguments on the issue: 27 With regards to the three workers contracted to work at the Woodside site (Smith, Kettle, Malard), counsel for the Union arguedthat Gulf was not involved in hiring, that they made the decision on a daily basis whether the employees were needed and advised thecontractor(s), who decides who to send.

Gulf is not involved in setting wage rates, benefits, pay, and has not disciplined these workers. The decision as to whether they ‘work’ for Gulf is not up to gulf [sic]. When on site, they do not keep the same hours as otheremployees, though he agreed that it is standard practice on construction sites to take breaks and meals at the same time. The supervisionexercised is minimal, with Mr. Smith and Mr. Kettle being told simply where to load and where to dump. Gulf does not train any ofthem. He argued that all the evidence suggest Gulf is not the true employer, noting that there is no evidence as to who employees

regarded as the employer. He suggested that there is some evidence as to what the parties intended, in that they referred in internal documents to Hodgson Trucking and Priority Water as “subcontractors”. 28 He argued that this situation can be distinguished from LIUNA and Pomerleau (supra) where there was much more day to day control being exercised.

Ultimately, the York Condominium (supra) factors suggest that Gulf did not exercise day today control and was not the true Employer. [ 22 ] In para. 29 of its decision the Board set out its task of determining “who is the true employer” of the three men in question. [ 23 ] At para. 30 the Board stated that to achieve this they would apply the York factors, but noted: The question of who is the true Employer of certain workers does not depend on something so simple as who pays their wages.

This Board has consistently applied the factors referred to in York Condominium (supra) , [see, example R U Safe Inc. (supra) ]. Application to these factors will lead to different conclusions in different situations, depending on the nature of the work being done and on the particular situation. As expressed in LIUNA and Pomerleau (supra) , the overriding factor is accepted to be control over the workers and the work, which will be fact specific. [ 24 ] The Board went on to apply all the Yor k factors in paras. 32-40 noting its comments with respect to each of these factors. (

a) Direction and Control over the Employees Performing the Work [32] Looking first at Mr. Smith and Mr. Kettle, it is clear that when they arrive on the site in the morning, they are directed to the work they should do for the day, i.e. they are told where to load the truck and where to dump the load. They are not supervised by Hodgson Trucking. Accordingly to Mr. Beveridge they work with the rest of the crew, and this makes sense, particularly for safety purposes. Their interaction with other drivers is mostly with the ‘spotter’, usually a labourer, who assists in tight spots.

They are on the site when the rest of the crew are there, though their hours are not precisely the same. They take their breaks at the same time as other workers. The work they were doing was integrated into the overall work being done on the site. [33] This is contrasted with the work of Mr. Malard, who drove the high pressure water truck doing dust control. This task was one that Priority Water was specifically contracted to do, and the work was not done by anyone else on site. Mr. Malard did not work a full day, but only the afternoon, when the weather was appropriate.

His work was routine, in the sense that he covered the same route every day, and when he was finished, he may do the route again. The work was essentially the same every day, and he did not have specific supervision. (

b) Party bearing the burden of remuneration [34] Gulf does not pay any of these employees. The evidence is clear that Mr. Smith and Mr. Kettle fill in daily time sheets, which are approved by the supervisor/foreman on site. The contractor produces an invoice for the work, which is sent to Gulf. Gulf pays the contractor and not the individual employees. Similarly, Priority Water invoices Gulf for the work done and Gulf pay the equipment and labour costs directly to Priority, which pays the employee. Gulf has no responsibility for such things as benefits, remittances, or workers’ compensation in relation to any of these three workers. (

c) The party imposing discipline [35] Discipline has not been required in relation to these three workers. It seems, however, that if there was a problem, depending on the nature and seriousness of the transgression, Gulf may take corrective action, but would contact the contractor. If there were a serious safety issue, Gulf may remove the worker from the site, but once again, it would consult with the contractor. Gulf has no power over the relationship between the workers and the contractor. (

d) The party hiring the employees [36] Gulf does not hire the employees. With regards to Mr. Smith and Mr. Malard, the supervisors meet each afternoon to determine the work for the next day. They then call the contractor to make arrangements. Mr. Beveridge did not think that Gulf requested particular employees, though usually it was Mr. Smith and Mr. Kettle who arrived to do the dozer work, because of their familiarity with the Woodside project. [37] Mr.

Malard, who operated the high pressure water truck on June 23, 2015, was not the only employee who was sent on the truck by Priority Water, but happened to be there on the day in question. He was not hired by Gulf, and Gulf seems to have had no say in whether he or another employee was sent to the site. (

e) The authority to dismiss employees [38] Gulf has no power to dismiss the employees, but as noted about it could have them leave the site if there were a serious safety or other significant issue, though it would contact the contractor. It appears that the party to exercise discipline, as such, is the contractor, though Gulf might correct minor problems. Gulf has no authority to dismiss them from their employment with the contractor. (

f) The party who is perceived by the employees to be the employer [39] There is no evidence as to who these workers perceive to be their Employer. (

g) The intention to create the relationship of employer and employee [40] There is no direct evidence on this point, though certain of the documents presented by Gulf refer to Hodgson and Priority as “subcontractors”, and there is no dispute that the work done by the three workers is paid by Gulf as part of a subcontract.

[ 25 ] The Board concluded at para. 41: [41] Overall, we find that none of these indicia illustrate a strong suggestion that Gulf exercised such control over these workers as would indicate that it was their “true employer”; neither do the factors, taken together, lead us to that conclusion. This is particularly so with Mr. Malard; however, even with Mr. Smith and Mr. Kettle, the amount of control exercised by Gulf in relation to their daily tasks falls short of the standard to be met.

The Board concludes that these workers are employees of the independent contractors and not Gulf, and that they should be excluded from the bargaining unit. [ 26 ] In the conclusion, the Board appears to recognize that Gulf exerted significant direction and control over Messrs. Smith and Kettle, in relation to their daily tasks, but that notwithstanding this it “falls short of the standard to be met.” Gulf says the Board failed to define this standard.

The Union says the standard was well understood to be a standard of “fundamental control” applying all of the York factors, and that the Board determined in light of all of these factors, Hodgson Trucking exercised fundamental control over Messrs. Smith and Kettle. [ 27 ] The Board in its decision recognizes the authorities relied upon by both parties. [ 28 ] It applied the York factors in its’ analysis as the prescribed test agreed to by the parties; also reciting R U Safe Inc., supra.

The Board did recognize the principle that “the overriding factor is accepted to be control over the workers and the work which will be fact specific” (para. 30 of its decision) as expressed in LIUNA, supra and Pomerleau, supra . [ 29 ] While not expressly referring to the standard of “fundamental control” in para. 41 of its decision, it is clear to me that this is the standard the Board applied i.e. the York test, as I reflect on the whole of their decision.

I did not find their decision internally inconsistent in that they referenced in para. 30 “not depend on something so simple as who pays their wages” then proceeded to consider the payroll being made by the subcontractor Hodgson Trucking Ltd. In my view, they were merely applying and weighing the York list of factors in the whole of their consideration. It is not my task to reweigh the evidence, but to look at the entirety of their reasoning and determine if their decision is reasonable. Their conclusion was that notwithstanding significant daily direction and control of Messrs.

Smith and Kettle, when considering all of the other York factors, they could not concluded that Gulf was the true employer. This was a fact specific inquiry in which the Board engaged and an exercise of their core function. I cannot say at the conclusion of their path of reasoning that I find their decision to be unreasonable. In my view, it is reasonable, failing within the range of acceptable outcomes.

Issue No. 3 – The Board’s decision to backdate the date of certification to August 28, 2015, the date the vote was counted. [ 30 ] Before me, counsel for the parties argued the merits of the CanMar, supra, decision, then before the Nova Scotia Court of Appeal. Upon the Nova Scotia Court of Appeal rendering its decision, counsel have made supplementary submissions to me. The Nova Scotia Court of Appeal confirmed that the Labour Board has a discretion under ss. 96(1) and 95(3) of the Act to choose an effective date for the certification order.

They found the date of application rules to be a permissible policy or practice to effectuate the objectives of the Act. [ 31 ] Pursuant to the “reasonableness” test, the Board’s choice of the certification date of August 28 th was reasonable and indeed follows the current jurisprudence on the issue.

Failure to answer every argument made by Gulf on jurisdiction does not make the Board’s decision unreasonable, especially in light of their reliance on CanMar then decided by the Nova Scotia Court of Appeal. [ 32 ] In the result, the application is dismissed. [ 33 ] I will be happy to hear submissions on costs in writing failing any agreement between the parties. Justice M. Heather Robertson