Legal News

use of contracting firms language tested
June 10, 2002

A second case has addressed the interpretation and application of Article XXIII(c) of the collective agreement, common to all employers in the pulp and paper industry. That article states:

“It is not the intent of the Company to replace its regular workforce through the use of contract firms.”

In Norske Canada (Crofton Division) and PPWC, Local 2, June 5, 2002, (Munroe), the company changed the duties of its town truck driver. Originally, the town truck driver worked in mill stores delivering supplies around the mill in the mornings and then drove into the nearby town of Duncan to drop off and pick up supplies. In late 1998, the company altered the driver’s duties to exclude the “town run” and assigned the driver to deliver supplies exclusively within the mill. The intention was to free up the driver to deliver supplies to trades at their work location rather than the trades picking up supplies at mill stores. At the same time, the company enforced the FOB commitments with its suppliers so that they delivered supplies to the mill.

There was no evidence that any person had been laid off or displaced from their position. The town truck driver was still fully employed and the employee complement in mill stores had actually increased.

Arbitrator Munroe stated that at the threshold, the union must show that the intended consequence of the employer’s use of contract firms was the replacement of the workforce. The Union’s argument that a finding of replacement in the circumstances was “common sense” did not satisfy the threshold requirement. Arbitrator Munroe clearly found that the driver position was not replaced, as it remained a full shift position, monday to friday. Further, Arbitrator Munroe stated that there was nothing in the evidence which would allowing him to find any net diminution of the regular workforce as a result of the changes to the driver position. As a result, the grievance was denied.

Arbitrator Munroe commented on two additional issues. First, he accepted that there might be scope in a future case for the union’s argument that the language of Article XXIII(c) does not require an actual replacement of the regular workforce. Rather, the union could be successful if it merely showed that the company used contract firms with the intention of replacing the regular workforce. Secondly, Arbitrator Munroe declined to determine the question of whether the company’s requirement that suppliers live up to their FOB commitments comprised “the use of contract firms”.

This decision gives some guidance on the interpretation of Article XXIII(c). First, it likely limits the application of the word “replace” to a loss of position or diminution of the workforce that can be attributed to the use of contract firms. If employees affected by reorganization remain in their position, albeit with altered job duties, despite the use of contract firms, then the union will not likely be successful.

Second, this decision confirms the significance of an employer’s intention concerning the replacement of the workforce in the application of this section. This could be interpreted to allow a replacement of the workforce provided it was not intended. On the other hand, an arbitrator could find a breach where there was no actual replacement, but where the Company had nevertheless clearly intended that result.

Norske Canada was represented by Harris & Company counsel.

(Click here for link to Decision)