Report in which the committee requests to be kept informed of development - Report No 294, June 1994

Case No 1735 (Canada) - Complaint date: 30-SEP-93 - Closed

Display in: French - Spanish

Go to:

INTRODUCTION
A. The complainants' allegations
B. The Government's reply
C. The Committee's conclusions
The Committee's recommendations
Annex I

420. In a communication dated 30 September 1993, the Building and Construction Trades Department (AFL-CIO) submitted a complaint of violations of freedom of association against the Government of Canada (Ontario). In a communication of 31 January 1994, the Canadian Federation of Labour (CFL) expressed its support for the complaint.
421. The federal Government, in a communication of 15 February 1994, transmitted the observations and information from the Government of Ontario, dated 9 February 1994.
422. Canada has ratified the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87); it has not ratified the Right to Organize and Collective Bargaining Convention, 1949 (No. 98), or the Collective Bargaining Convention, 1981 (No. 154).

A. The complainants' allegations

423. In its communication of 30 September 1993, the complainant organization alleges that the Government of Ontario violated the provisions of Convention No. 87 by enacting Bill 80, Act to amend the Labour Relations Act (hereinafter called the "Act"), which received Royal assent on 14 December 1993. According to the complainant the Act, which applies to trade unions in the building and construction industry and specifically only to its affiliated organizations, was introduced without prior consultation with the organizations concerned. The Act radically alters the relationship between the complainant's affiliated organizations and their local unions in Ontario, effectively overruling the trade unions' constitutions, replacing the will of the members with the policy of the Government. Rather than the unions dealing with internal union matters regulated by their constitutions, the Ontario Labour Relations Board, an arm of the Government, now dictates these matters without recourse to the unions' constitutions.
424. One of the most important principles established in Convention No. 87, which Canada has ratified, is that workers have the right to establish and, subject to the rules of the organization concerned, to join organizations of their own choosing without previous authorization. The ILO supervisory bodies have held that the only possible limitation to this right should aim solely at ensuring respect for democratic rights within the trade union movement (202nd Report, Case No. 947, para. 240). The Act raises both general and specific issues.
425. As regards the former, the complainant states firstly that although the Act is said to have been introduced to improve democracy in trade unions in the building sector, there is no indication of the problems that it intends to correct. As a general rule, the locals of the building trades unions are democratic institutions where local leaders are elected by the members. For historical reasons, the power in these unions rests largely with the locals: thus for instance the international president of a building trade union cannot address a meeting of a local without its consent. That kind of local independence does not exist in any of the industrial unions, which maintain vastly more control over their locals than do construction unions. If protection for locals is needed, it is more so in the realm of industrial unions. The second matter of general concern is that this legislation affects only the construction unions, although there is no justification for treating them any differently from other unions. Thirdly, the provisions of the Act in particular those relating to trusteeship violate the guarantees of freedom of association guaranteed by the Canadian Charter of rights and freedoms. Fourthly, the Act gives wide new powers to the Ontario Labour Relations Board (OLRB) in relation to matters previously within the competence of the executive boards of construction trade unions.
426. On more specific issues, the Government's position is that article 138.2 gives to locals in the building industry the same bargaining rights as in the industrial, commercial and institutional ("ICI") sector. In the ICI sector the designated bargaining agent is usually the international and a council of locals which bargains on behalf of all of that union in the ICI sector. This effectively did away with separate national agreements on industrial projects. The difficulty with this provision is that it is hard to determine just how much of the construction industry it affects. The only two sectors that have international collective agreements are pipelines and electrical power systems. In all likelihood one of the targets of this section is the maintenance agreement, but it is not at all clear that such agreements are affected. These agreements, e.g. the general presidents' agreements, are not agreements in the construction industry, and thus fall outside the scope of subsection (1).
427. The complainant argues that, if the major sectors affected by this are pipelines and electrical power, this would seem a very disruptive provision in sectors that have traditionally spent a lot of care in formulating their labour relations. These are often large and long projects and the record of local unions in dealing with them is what gave rise to the international agreements in the first place. Curbing this outside international control over such projects will not be viewed by the purchasers of such construction as a rational development. In other sectors of the industry such as roads, sewers, residential and heavy construction, most of these bargaining relationships do not involve the international union at all; it would seem that in these sectors the section will have little if any meaning.
428. In addition, the notion that there can be a council consisting of both the parent union and an affiliated local or council of locals does not make much sense. The Minister's power to amend the international's constitution raises a curious question: if, under its constitution, the international is bound to enforce that constitution but the Minister makes rules which make the international and the local equal partners in the new council, which of the two partners will be given the duty to enforce the new rules to the benefit of the members if the local and the international conspire to break the new rules? Once the Minister gets into these trade union constitution issues, it is not simply a matter of dividing powers, he must ultimately deal with policing and enforcing the new rules.
429. The complainant then points out that to understand the significance of section 138.3, it must be noted that section 138.1 defines the word "jurisdiction" as including "geographic, sectoral and work jurisdiction". Each of these three aspects of jurisdiction raises its own set of problems. The matter of geographic jurisdiction of locals is a complicated matter. First it must be remembered that the typical building trades unions were originally formed by the banding together of existing local unions. Thus it is common that local unions are protected from the establishment of new local unions by the parent body. Typically a constitution will set out rules under which new locals can be established. A more difficult problem arises from the fact that ultimately a local union is an economic entity. That is, in order to have full-time staff it must contain a sufficient membership base to be financially viable. As construction methods change, certain locals grow and others decline. One of the functions of the parent unions in recent years has been to rationalize local jurisdictions so that the locals remain viable entities. Often there is resistance in an affected local (persons to lose status and jobs). Nevertheless the parent union must act for the greater benefit of the members. If such decisions are put in the hands of the OLRB how will the Board come to a rational decision on this matter? It will have to go through the same investigations and considerations as the parent union, and it will no doubt have to deal with the same complaints that the parent union normally has to deal with.
430. The matter of sectoral jurisdiction is also complicated. Originally sectors reflected special agreements created to cope with special problems. They only arise because there are contractors who want or need these special considerations (since they are special arrangements, it can be readily seen that they are open to abuse.) The notion of sectors is not one that is universally accepted by the building trades unions; it has however been forced upon them by the structure of the Labour Relations Act in Ontario. The Act structures the ICI sector only, but this structure gives some sort of legitimacy to the other sectors which is often absurd (e.g. boilermakers in the roads sector). The matter of sectoral jurisdiction involves related employers and is not simply an internal union matter. Under these provisions the two locals can agree to refer the matter to the international and the employers have no say in the matter. However, if the matter is referred to the OLRB (and an employer can refer the matter), then the Board will be faced with making sector allocations when it finds it almost impossible now to make sector determinations.
431. The most difficult problem raised by this section relates to trade jurisdiction. Typically the trade jurisdiction for the building trades unions is set out in the various constitutions of the parent unions and is also set out in the constitution of the locals. For some trades the description is coherent in that it relates to a specific range of work. For other unions, the trade description may cover a number of distinct but related trades or classifications. Across the building trades, the jurisdictions of the various parent unions overlap. This gives rise to jurisdictional disputes between the various trades. Much of the work of the Building and Construction Trades Department over the years has been dealing with such inter-union disputes. It is important to note that such disputes usually involve employers who are bound by agreements with one or other of the competing unions. Generally the jurisdiction of the union has been dealt with by the parent union (or the executive Board of the parent union). The reason for this ultimate control over jurisdictional claims is that the conduct of one local can adversely affect other locals of the same union.
432. Potential problems raised by section 138.3 depend on the interpretation given to subsection 1. If the section is read so that no one (i.e. neither the international nor the local) can change the jurisdiction from what it was on 1 May, then an international cannot settle a jurisdictional dispute without the local's consent, regardless of the consequences on other locals of the same trade. On the other hand, if the section is interpreted as concerning only changes in jurisdiction proposed by the international, a local can change its jurisdiction after 1 May. In these circumstances a local can claim jurisdiction normally belonging to another trade and the international can do nothing about it, even though the claim may set off a war between the two international unions. Thus a rogue local could claim some other trade's jurisdiction thereby setting off a war in which the other locals in the province lose work and nobody, especially the international, can interfere. The other problem in this provision is the retroactive effect of subsection 1. What conceivable reason can there be for backdating this to 1 May 1992?
433. The purpose of section 138.4 is to prevent the two previous provisions from being used to fragment existing bargaining patterns. This protection is given to province-wide bargaining arrangements. According to the complainant, section 138.4 may work to alleviate some of the problems referred to earlier in the pipelines and electrical power systems sectors, in that it prevents local trade unions from totally destroying the bargaining pattern. This provision also protects the existing provincial bargaining legislation in the ICI from any inadvertent consequences of section 138.3.
434. Article 138.5 imposes on parent trade unions (or a council of unions) the requirement that there be just cause for interference in the affairs of the local and for the penalizing of any local official. This provision raises two very specific and extremely difficult problems of interpretation. What constitutes "interference with local autonomy" and by what standard does one measure "just cause". The matter is made more complicated by the power given to the OLRB in subsection (3) which suggests that the Board is entitled to ignore (is not bound by) "any provision of the trade union constitution". Implicit in this section is a notion of trade unions that is neither legally nor practically correct. A union is not a legal entity, except for various purposes under various statutes. There is a good practical reason for this position. It will be recalled that for years employers wanted unions to be made legal entities so that they could be sued in the same manner as corporations. Few people understood why this was not possible. The problem which must be resolved before a union can be made a legal entity is deciding what constitutes an act of the union. Clearly, if the union passes a motion at a duly called meeting and then acts in accordance with that motion, then that can be said to be an act of the union. However, if a member of the union, at a "union" function, such as a picket line, slashes a tyre on a replacement worker's car, can that be said to be an act of the union? The other members of the union can quite rightly claim that no member was authorized to act illegally and they should not be bound (or penalized, or otherwise suffer) as a result of the unlawful conduct of an individual. Clearly people who belong to an association of individuals are entitled to assume that others will act within the law. There is no clear-cut notion of when individual acts bind the union such as the case with a legal entity like a commercial corporation where the law of agency can determine whether conduct of an individual is binding on the legal entity. The notion that "acts" of a local (such as expressions of "local autonomy") and the "acts" of the parent union (such as "interference") can be simply determined is quite incorrect. In reality, all such acts are acts of individuals or officers or boards. These acts are either within or outside their constitutional powers.
435. One theory of the operation of constitutions of private associations is that the constitution is in some sense a contract between each of the members. The relationship between a local and the parent union is set out in the constitution of the parent union and the local union. In such a scheme any individual member is entitled to have the constitution enforced on his behalf as an incident of membership. The Act voids any action done under the constitution, and replaces the constitution with the notion of just cause. If the OLRB wants to, it can say an act was done with just cause because the person was following the constitution, but if the OLRB does not like the constitutional provision it can ignore it and substitute its own notion of what is proper.
436. Section 138.5 refers to the autonomy of a local trade union but in what sense can the union have more autonomy than it has under the existing constitution? Presumably the local has a constitution of some sort; then, what if the parent union is simply enforcing the local's own constitution? In what sense can that be said to be interference in the local's autonomy? Does local autonomy include actions that are ultra vires the local union? But surely the right of the members to have ultra vires conduct stopped is a right that ought to be protected. The reaction of the courts in such cases has typically been to refer the matter to internal union remedies, i.e. action by the parent union.
437. Section 138.5 suggests that the autonomy of a local union can be interfered with even if such an action is required by the constitution. Actions required by a constitution are easy to determine, but what is "interference with local autonomy"? Supposing for instance that the members of the executive board of a local decide that they will engage in part-time contracting for terms other than those set out in the collective agreement; in such case it is likely that they would be acting contrary to their own by-laws requiring all members to work for terms not less than that in the local agreement. The parent union acting to enforce the by-law would clearly be acting within its rights and in the best interests of the members of the local. If the parent union acts to enforce the by-law will it be found to be interfering with the locals's autonomy? How can the enforcing of by-laws be considered interference with autonomy? To suggest that it is interference is to claim that locals are nothing but a group of individuals with no rules governing their conduct and that they are entitled to make up whatever rules they want to as they go along. However, the section implies that persons acting within the constitution of the union may not be acting with just cause. How can this be when virtually every member, upon becoming a member agrees to abide by and uphold the constitution of the organization? This section makes it a possible offence to uphold a constitution which in turn is often a duty imposed by the constitution on an officer of the parent union. The problem is that no officer of a parent union can know whether he is acting legally or not in Ontario until someone else (the OLRB) finds that there has been just cause.
438. There is also one very specific problem with the drafting of subsection 138.5(4). Until the Board determines whether an action described in subsection (2) was taken without just cause, the affected individual is entitled to receive his or her wages and benefits as if the action had not been taken, unless the Board orders otherwise. Perhaps the commonest example of action taken by an international with respect to a local is the removal of an officer of the local for theft of the local's property. This section provides that such union officials, unlike the rest of the population, are to be suspended with pay until the OLRB determines whether or not the official is to repay the wages. In the circumstances would it not be better to make wages the subject of a preliminary determination by the OLRB?
439. The complainant alleges in summary as regards section 138.5 that union constitutions ought not to be ignored or treated as lightly as this section implies. In fact, this section is clearly an infringement of the freedom of association provided every citizen. Union members are entitled to set out in a constitution the powers that locals and parent unions are to have. While there could be examples of wrongful conduct by parent trade unions, the question that must be answered is whether such conduct is so common that all union constitutions in the building trades are to be made subject to supervision by the OLRB?
440. As regards section 138.6, the complainant states that this provision entitles local unions to appoint at least a majority of trustees to employee benefit plans, exclusive of the employer trustees. The complainant's concern here is that these plans are ultimately enforced by the court system. It may be that the votes required will be very expensive to conduct. One wonders whether the OLRB is the appropriate place for this type of regulation of trust documents.
441. In summary, the complainant states that its affiliated organizations have a one hundred year history of service to construction workers, and that their constitutions were created by their members at conventions. These organizations have not violated the provisions of their constitutions and there is no reason to empower the OLRB to control their activities. There is also no reason to treat construction trade unions separately and by different standards than other unions in Ontario. The complainant further submits abundant documentation, including several reports of the Legislative Committee which heard submissions concerning Bill 80.

B. The Government's reply

442. In its communication of 9 February 1994, the Government of Ontario submits that the Act is designed to promote greater democracy and local control in the relationships between Ontario construction locals and their US-based international parent unions (all of the major construction unions in Ontario are chartered by one of the 14 international building trades unions affiliated to the AFL-CIO Building and Construction Trades Department in Washington, DC). The Act gives Ontario construction locals: protection against unjust interference by their parent unions; protection of local jurisdiction from unjust alteration by their parent union; proportionate control over their pension and benefit plans; and shared bargaining rights with their parent unions in cases where the parent union holds exclusive bargaining rights on behalf of its locals.
443. The ILO Conventions and principles recognize that governments may legitimately pass regulations affecting trade union affairs in order to ensure respect for democratic rights within the trade union movement. The purpose of the Act is to protect the democratic rights of Ontario construction locals in their relations with their international parent unions. The Act was introduced in response to long-standing complaints from local construction unions about the powers of their international parents to interfere with their autonomy when the parent disagrees with local decisions reflecting local interests. Over the past several years, local construction unions have also complained about their parent unions taking arbitrary and unjustified punitive action against locals and individuals.
444. Extensive consultations took place from the time Bill 80 was introduced in June 1992 right through the public hearings stage. Meetings were held with local unions as well as with representatives of the construction internationals, including the Building and Construction Trades Department AFL-CIO, which filed this complaint and the Provincial Building and Construction Trades Council, which represents all the unionized construction trades. The Bill went through three weeks of public hearings held by a Committee of the Legislature which heard, or received submissions, from 42 unions and individuals. While all the international unions opposed the Bill, a large number of their Ontario locals went on record supporting the Bill.
445. International construction union constitutions give the executive boards, and in some cases, the international president alone, extraordinary authority over Ontario local unions and their membership. These powers are, of course, not all unique to construction. The key difference is that a greater system of checks and balances exists outside the construction industry to protect internal democracy in the relations between parent and local unions. Outside the construction industry, members of a local union have a clear option to leave their parent union if they believe it is treating them unfairly and undemocratically. The special nature of the construction industry and the rules governing it under Ontario's Labour Relations Act make it extremely difficult for construction workers to exercise the same choice without paying a significantly heavier price than is the case for workers in other industries.
446. The Government explains why it was felt that special protections were needed in the construction sector, which led to the adoption of the Act. Construction industry employment relations are distinct in many ways from other workplace settings. Construction work is generally temporary, short-term and dispersed geographically. Workers move from job-site to job-site and from employer to employer. Work is also highly seasonal - employers may hire large numbers of employees during the summer building season and virtually shut down during the winter. The industry is organized along craft lines with separate unions representing specific trades and crafts. Given the highly cyclical nature of construction work along with the constantly changing need for different skills, construction contractors normally do not keep a regular workforce. Instead, they rely heavily on craft union hiring halls to supply the skilled workers as and when they are needed for a specific project. Construction collective agreements typically have hiring hall clauses requiring unionized contractors to obtain workers from the union's local hiring hall. To respond to the unique nature of the construction industry, Ontario's Labour Relations Act contains an extensive set of special rules that apply only to the construction industry. These are set out in a special section of the new Act and cover a wide range of matters including province-wide bargaining, multi-employer bargaining, certification, and grievances.
447. The combination of the hiring hall system and special rules for bargaining make it extremely difficult for construction workers to simply opt to change unions if they are dissatisfied with their present one. As regards hiring halls, the reliance on this system for employment makes it quite complicated and difficult for a construction local simply to pull away from its parent union. Outside the construction industry, where employees are tied to a single employer and work in a fixed workplace, the situation is much easier: workers would simply replace one union with another which would come in and continue to represent those workers at the plant; the workers would all have their jobs the next day. In construction, the situation is entirely different. It is not just enough to decertify a single employer because of the nature of employment. Construction workers typically depend for their livelihood on their ability to get short-term employment with a variety of different employers through the hiring hall. The union's hiring hall is only as effective as the number of employers the local has organized since those are the only employers that the hiring hall can refer out to. A local that displaced its parent union would lose its right to work on construction projects covered by the international collective agreement. Since a local will normally cover a large number of employers in a given geographic area, a new union would have to try to decertify the parent union with as many of these employers as possible in order to make disaffiliation worthwhile. The new union would then have to try to recertify them all and bargain new collective agreements. Decertifying only a few employers would accomplish little since workers would have no effective hiring hall when those few employers lacked work.
448. Even if a new local could organize, there is an added disincentive for doing so. Members of a new union would lose the geographic mobility rights they enjoyed under the international. The internationals have a system of job mobility that allows members to sign on with the hiring hall of a sister local in another part of the province, Canada, or even the United States if work is available there. This has been an important source of employment security for many construction workers. Members of the new local could also face lengthy and costly disputes over pensions and benefits, which are held by the (international) union rather than with the employer. In the construction industry where employment and employment benefits are tied to the union rather than an employer, it is extremely difficult and costly for construction workers to exercise their democratic rights to dissociate from their parent union if they are dissatisfied with it.
449. The Government then points out that one of the most distinct legislative requirements affecting Ontario's construction industry is the mandatory province-wide bargaining scheme in the ICI sector in the construction industry, which has strengthened the role of international construction unions. In no other industry is legislative control of bargaining so extensive and specific as in the ICI sector. The special rules for ICI bargaining were designed to deal with the unusual bargaining problems in an industry that lacks stable employment relationships and stable workplaces. For most unions and for the industry generally, the ICI sector is the most important in terms of numbers of employees working, wage rates, and stability over time.
450. The Labour Relations Act mandates single trade province-wide bargaining in the ICI sector. This bargaining may only take place between designated employer and employee bargaining agencies. The new provisions give the Minister of Labour the power to designate "bargaining agencies" for unionized employers and employees in each trade in the ICI sector. The designated bargaining agencies have the exclusive right to represent their trade or employer association in that sector. Bargaining for each trade takes place between a single employee bargaining agency and a single employer bargaining agency. The employee bargaining agencies that were established in the late 1970s reflected the existing pattern of international union organizing in Canada. The internationals and their local affiliates were officially designated as the union bargaining agencies. Accordingly, the international unions share statutory bargaining authority on behalf of all Ontario locals in their trade in the ICI sector.
451. A new union trying to displace a parent international would be faced with the almost insurmountable challenge of trying to decertify simultaneously hundreds of employers during the limited window provided by the Labour Relations Act's open period (the last two months of a collective agreement). The successor union would not have access to the province-wide bargaining scheme. As a result it would lose out on one of the key organizing advantages available to the officially designated unions - each time a local union which is covered by a designation certifies (or is voluntarily recognized by) an ICI employer, the employer becomes automatically bound to the ICI provincial collective agreement. There is therefore no need to bargain a first collective agreement. A new union would have to organize employer by employer and try to negotiate a first collective agreement with each one. This makes it extremely difficult to compete against the still-designated international.
452. The Government concludes that the new provisions are needed because members of Ontario construction locals do not have easy access to the same mechanisms that other workers have if they believe a parent union is treating them unjustly and undemocratically. If an industrial parent union treated one of its locals in a manner that the local members found was unjust and undemocratic, the parent union would risk the possibility of decertification or the workers joining another union: the threat of losing thousands of members and their dues is then a powerful incentive for responsible behaviour. However, this is not a practical or viable option for construction workers. The nature of construction work and the legislative rules governing it makes it virtually impossible for a group of employees or a local union to leave their parent union without paying a very heavy price. The price is so high that the option of leaving the parent union is not available in any real sense. The relationship between members and the parent union is therefore very different than in any other setting.
453. The Act is designed to ensure that construction workers have access to an adequate system of checks and balances to safeguard local autonomy, and accomplishes this with the minimum possible interference in internal union affairs. The Act provides minimum standards legislation that interferes as little as possible on parent unions' legitimate freedom of action. The minimal regulation that it does provide is justified to protect the rights of local unions to organize their administration and activities in accordance with the interests of their membership without fear of unjustified reprisals from a parent union. Ontario's new law is much less intrusive than the Landrum-Griffin Act in the United States, which the international constructions unions, and indeed all American unions, are covered by. That law not only regulates union trusteeships but also sets out a comprehensive code to regulate internal union affairs, including election rules.
454. Contrary to the complainant's allegation that the Act will "radically alter the relationship between (their) affiliated organizations and their local unions in Ontario" the only effect of the Act is to ensure those relationships are founded on minimum standards of democracy and fairness. The Act does not replace union constitutions with government policy as the complainant alleges; it simply gives Ontario locals the opportunity to appeal to a neutral objective outside body if they believe their parent union is acting in an arbitrary and unjust manner. This body is the Ontario Labour Relations Board which is an independent tribunal with labour, employer and neutral representatives. In exercising its powers under the Act, the OLRB's only concern would be whether a parent union is exercising its rights according to basic democratic principles. The Act clearly acknowledges that parent unions have legitimate grounds for taking actions that can affect local autonomy. It is only concerned with actions that are taken without just cause.
455. The Act does not ignore union constitutions. The law makes clear that the Ontario Labour Relations Board must consider the union's constitutions. It does not however allow a parent union to rely solely on the constitution in arguing that its action was taken for just cause. Most constitutions typically provide enormous discretion for parent unions to take action against local unions and officers. In some cases these actions may well be necessary to protect the interests of the local membership. The Act does not prevent these types of justified actions. However, if the parent union uses its powers in an unfair manner, for example, to punish a dissident local or to block a rival slate from winning local elections, the Board would have the power to inquire into the matter if an affected local or member complained. The protections in the Act are somewhat analogous to protections that already exist in the Labour Relations Act, which have been recognized as necessary minimum standards. For example, unions that operate hiring halls are subject to a duty of fair referral. They can develop their own internal rules for referring members to jobs but they have to make sure these rules are not developed or applied in a manner that is arbitrary, discriminatory or in bad faith.
456. The Government then describes the significant provisions of the Act. Firstly, the Act protects the autonomy of locals by ensuring that a parent union could not take over or interfere with a local union unless it had just cause for its actions. It also prevents a parent union from penalizing a local officer or member without just cause. An aggrieved local or member can complain to the OLRB if it considers the parent union had acted without just cause (these protections are set out in section 138.5). An example of interference other than formal trusteeship or supervision might be the international appointing its own business agent to the staff of a local union. Another example might be requiring a local to assign the international control over its funds that have been collected from local dues.
457. The law recognizes that a parent union may have legitimate reasons for taking action against a local or local officer in order to protect the interests of the union membership. The Board would only have authority in cases where such actions were taken without just cause, for example, to punish a local for pursuing Canadian autonomy. The Act establishes a complaints-based mechanism that allows a local union to complain that a parent union acted without just cause. The parent union does not have to argue just cause before acting. The Act makes clear that the Board must consider the union constitution in determining whether an action was taken without just cause. However, the Board is not entirely bound by the constitution. Many constitutions have broad provisions that allow a parent union to impose trusteeship or supervision on a local where the parent union deems that to be "in the best interests" of the union. Some constitutions allow the parent union to suspend local officers for failing to comply with orders of the international. These sorts of provisions can provide an unchallengeable rationale for the actions of the parent. The Act allows complainants an opportunity to complain about abuses of such powers rather than having a complaint summarily dismissed. The Act does not rewrite union constitutions. It simply sets a minimum standard of fairness that would allow a local union or member to complain that a parent union had exercised its powers in an unjust or arbitrary manner.
458. Secondly, section 138.3 of the Act prevents a parent union from changing a local's geographic, sectoral or work jurisdiction without just cause. Unlike in industrial workplaces, construction workers typically get work through the hiring hall. A local's jurisdiction determines what projects the local hiring hall can refer its members to. For example, a local can only refer members to projects that fall within its assigned geographic jurisdiction; as a result, control over a local jurisdiction has a profound effect on members' livelihoods. The international parent assigns and controls the jurisdiction of each local union. International constitutions typically give the international broad powers to change a local's jurisdiction, transfer work to a different local and merge locals. If a local's jurisdiction is circumscribed or eliminated, access to employment opportunities for its members are cut. The Act recognizes that parent unions can have a legitimate role in resolving disputes between their locals or dealing with locals that do not fulfil their responsibilities under the Labour Relations Act. Accordingly, the law only prohibits parent unions from making changes without just cause. It means, for example, that a parent union could not try to punish a local union by taking away its jurisdiction.
459. Thirdly, section 138.2 of the Act ensures that local unions have a say in the collective bargaining process and collective agreements that affect them. In some sectors of the construction industry, bargaining rights for Ontario locals are held solely in the name of the international parent. This means that the parent union has the right to bargain and sign collective agreements on behalf of their locals without any legal obligation to involve their locals at the bargaining table or in ratification. Sometimes the parent union passes bargaining rights to their local unions but it has no legal obligation to do so and it can take them away at any time. Under the Act locals will be deemed to hold shared bargaining rights wherever those rights are currently held in the name of the parent union. This means that locals will have a guaranteed right to sit at the bargaining table and ratify collective agreements affecting their members. In cases where internationals already give their locals this right, the Act would not affect them at all. The new law makes sure that all locals have this right if they do not already.
460. If bargaining rights are not already shared, the Act requires the parent and its locals to work out a partnership for bargaining. In order to ensure that this new rule does not disrupt collective bargaining, the Act provides a mechanism for resolving disputes if a parent and its locals cannot agree on how to establish such a relationship. While the Minister could require the formation of a council of trade unions, this power is carefully limited: the Minister could only do so if an affected party applied and if the parties cannot work out an arrangement themselves. This mechanism is modelled on a scheme that already exists in Ontario's ICI sector, where shared bargaining rights are guaranteed through ministerially designated bargaining agencies made up of the internationals and their locals. In the ICI sector, construction unions must bargain on a province-wide basis through "employee bargaining agencies" that are designated by the Minister of Labour. There is a single agency for each trade and each agency is made up of the international parent union and its local affiliates. These agencies work out their own rules for bargaining, ratification and voting. This scheme has been in place since 1978 and has generated no complaints of violations of ILO Conventions.
461. Fourthly, section 138.6 of the Act gives local members the right to name the majority of union trustees to administer pension or benefit plans that cover their members. In a non-construction workplace, employment benefit plans are nearly always tied directly to the particular employer. However, since construction workers shift from job to job and from employer to employer, construction unions have developed special arrangements for pension plans and other employment benefit plans. Typically all employers of a trade are bound by a similar collective agreement with a union for the province or for a particular geographic area. The agreements require employers to contribute a fixed rate per hour worked to pension funds, health and welfare funds, other benefit funds and training funds. Contributions per hour worked are banked in each employee's account in the pension and benefit plans. Despite the variety of employers and jobs, an employee has contributions made to the same plan. The plans are administered by the union or by boards of trustees made up of equal numbers of employer and employee representatives. Some types of welfare funds are locally administered, but in other cases, the international parent has the power to appoint most or all of the union trustees. Given the importance of the various welfare funds for members, there is some concern that the local unions should have a guaranteed voice in selecting the trustees who administer the funds. The introduction of democratic selection procedures ensures that the trustees will reflect the long-term interests of the local memberships.

C. The Committee's conclusions

462. The Committee notes that the allegations in this case relate to legislative amendments introduced by the Government of Ontario (Canada) in order to modify some of the existing industrial relations arrangements which govern the building and construction sector in the province. The amendments, as enacted, are attached as Annex I, along with other relevant provisions of the Ontario Labour Relations Act (OLRA).
463. The Government submits that the Act is designed to promote greater democracy and local control in the relationships between Ontario construction local unions and their international parent unions, based in the United States. The complainants, in addition to questioning the opportuneness of these amendments and the fact that they single out some construction trade unions, argue that this measure constitutes unwarranted interference in trade unions affairs, contrary to Convention No. 87.
464. Given the highly technical nature of this case, the Committee summarized all the information and arguments submitted by both sides, so that the whole impact of the amendments may be appreciated and the global context understood. It wishes however to circumscribe the issues which it is called upon to examine.
465. There is no doubt that part of the amendments introduced through Bill 80 interfere with the constitution of some trade unions; this is in fact admitted by the Government when it states that it wished to ensure an adequate system of checks and balances to safeguard local autonomy of construction workers' organizations "... with the minimum possible interference in internal union affairs". It is also clear that the Act as amended will significantly alter the relationship between international and local unions in that part of the Ontario building and construction industry covered by Bill 80, and that it will profoundly affect the industrial relations and collective bargaining structure governing that part of the industry. While the complainant and the Government differ in their appreciation as to the necessity for these amendments and their possible impact, the Committee's function in this case is not to assess whether the Government was right or wrong in deciding to modify that industrial relations system, or part of it, in response to a perceived need for greater union democracy: this is a matter for government judgement, just as the authorities may decide that special provisions are needed in a given sector by reason of special circumstances. The Committee would however recall that the principle of consultation and cooperation between public authorities and employers' and workers' organizations at the industrial and national levels is one to which importance should be attached, particularly where the authorities consider adopting legislative amendments which may profoundly and durably affect the role of these organizations. It draws the attention of the Government to the provisions of the Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113). (See also Digest of decisions and principles of the Freedom of Association Committee of the Governing Body of the ILO, 1985, 3rd edition, para. 650.)
466. While it would be inappropriate for the Committee to comment on the Government's decision to amend the law, the Committee must however examine whether, in so doing, the Government enacted labour legislation which is not in conformity with ILO Conventions and principles on freedom of association, in particular those relating to interference in trade union activities and administration.
467. Article 3 of Convention No. 87 provides that workers' organizations have the right to draw up their constitutions and rules, to organize their administration and activities, and to formulate their programmes; these rights are extended to higher level organizations through Article 6; Article 3.2 adds that public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof. On this issue of non-interference by public authorities, the Committee has expressed the view that the only limitations on the rights set out in Article 3 of Convention No. 87 which might possibly be acceptable should aim solely at ensuring respect for democratic rules within the trade union movement (Digest, op. cit., para. 453). That is precisely the rationale invoked by the Government as justifying the legislative amendments. The complainants deny for their part that there have been such problems and argue that, by and large, the previous system functioned properly. In this respect, the Committee notes in some of the documents submitted as part of the complaint (Official Report of Debates, Standing Committee on Resources Development; issues of 15, 17, 22, 24 and 29 November, and 1 December 1993) that, even within the trade union movement, opinions are sharply divided on the nature, satisfactory or otherwise, of relationships between internationals and locals. As pointed out earlier, it is not for the Committee to decide whether, in fact, the problems were so serious as to warrant legislative intervention. The Committee must, however, examine the sections challenged by the complainant, in the light of the principle mentioned above.
468. The Committee stresses emphatically that extreme caution is required when dealing with provisions of this kind, whether they concern workers' or employers' organizations. As a rule, the autonomy of trade unions and higher level organizations, including as regards their various relationships, should be respected by public authorities. Legal provisions impinging on this autonomy should therefore remain an exception and, where deemed necessary by reason of unusual circumstances, should be accompanied by all possible guarantees against undue interference.
469. Turning to the specific provisions which may raise problems with the principles of freedom of association, the Committee observes that two sections empower the OLRB to disregard a trade union constitution when deciding whether:
- - a parent union had "just cause" to alter the jurisdiction of a local trade union (section 138.3(4));
- - a parent union or a council of trade unions had just cause "to assume supervision or control or otherwise interfere with a local trade union" (section 138.5(3)), or to "remove from office, change the duties of an elected or appointed official of a local trade union or impose a penalty on such an official or on a member of a local trade union" (section 138.5(4)).
470. The Committee considers that, while these provisions might allow government interference in the internal affairs of trade unions, several qualifying factors must be taken into account in the particular circumstances of the present case.
471. Firstly, in the opinion of the Committee, the Act is designed to prevent possible abuses by parent unions against local unions and their members, which for very practical and immediate reasons - namely, obtaining work and maintaining integrity of their pension funds - are tied to parent unions. Therefore, actions by parent unions which respect the democratic will and interests of local trade unions should not raise problems nor trigger applications by the latter to the OLRB.
472. Secondly, the control of possible abuses is not a systematic one, exercised by the authorities in a discretionary fashion, but is based on the notion of just cause and depends on the filing of an application by an interested party (sections 138.3(3) and 138.5(3)) which, under a system of rule of law, implies compliance with due process.
473. Thirdly, this external control is exercised by the Ontario Labour Relations Board, an independent body with tripartite representation (section 104 of the OLRA), with special competence and jurisdiction in labour matters (section 105 of the OLRA). This means that all parties may appear at hearings and present evidence and arguments (section 104(13)), that allegations must be established and that rules of natural justice must be observed.
474. In addition, section 138.3(3) provides for instance that the OLRB, when considering a jurisdiction dispute, must consider the trade union constitution (although it is not bound by it), the ability of the local trade union to carry out its duties under the Act, the wishes of the members of the local trade union, and whether the alteration would facilitate viable and stable collective bargaining. Likewise, when assessing an application made under section 138.5(3) concerning an alleged interference by a parent union in the autonomy of a local trade union, the OLRB must consider the trade union constitution (although it is not bound by it), and such other factors as it considers appropriate.
475. Taking into account all the circumstances of this case, and emphasizing once again that no general principle can or should be derived from this decision, the Committee considers that the legislative amendments in question do not appear to be a violation of the Conventions and principles of freedom of association. Considering however the potential interference in trade union affairs that they might entail, and in order fully to appreciate the ultimate impact of this legislation, the Committee is of the view that further information is needed on the operation, in practice, of the amended industrial relations framework in that part of the construction sector, and requests the Government to provide such information.

The Committee's recommendations

476. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
- (a) Taking into account all the particular circumstances of this case, the Committee considers that the legislative amendments introduced by the Government of Ontario through Bill 80 to amend the industrial relations framework in part of the construction industry do not appear to be a violation of the Conventions and principles of freedom of association. It would however recall that the principle of consultation between public authorities and employers' and workers' organizations at the industrial and national levels is one to which importance should be attached, particularly where the authorities consider adopting legislative amendments which may profoundly and durably affect the role of these organizations.
- (b) The Committee requests the Government to keep it informed of the operation, in practice, of that modified framework.

Annex I

Bill 80 1993
An Act to amend the Labour Relations Act
1. The Labour Relations Act is amended by adding the following sections:
138.1-(1) In sections 138.2 to 138.6,
"constitution" means an organizational document governing the establishment or
operation of a trade union and includes a charter and by-laws and rules made
under a constitution; ("acte constitutif")
"jurisdiction" includes geographic, sectoral and work jurisdiction;
("jurisdiction")
"local trade union" means, in relation to a parent trade union, a trade union
in Ontario that is affiliated with or subordinate or directly related to the
parent trade union and includes a council of trade unions; ("syndicat local")
"parent trade union" means a provincial, national or international trade union
which has at least one affiliated local trade union in Ontario that is
subordinate or directly related to it. ("syndicat parent")
(2) In the event of a conflict between any provision in sections 138.2 to
138.6 and any other provision of this Act, the provisions in sections 138.2 to
138.6 prevail.
(3) In the event of a conflict between any provisions in 138.2 to 138.6 and
any provision in the constitution of a trade union, the provisions in sections
138.2 to 138.6 prevail.
138.2-(1) This section applies with respect to employees in a bargaining unit
in the construction industry other than in the industrial, commercial and
institutional sector referred to in the definition of "sector" in section 119.
(2) If a parent trade union is the bargaining agent for employees described in
subsection (1), each of its local trade unions is deemed to be bargaining
agent, together with the parent trade union, for employees in the bargaining
unit within the jurisdiction of the local trade union.
(3) If a parent trade union is party to a collective agreement that applies to
employees described in subsection (1), the local trade union is deemed to be a
party, together with the parent trade union, to the collective agreement with
respect to the jurisdiction of the local trade union.
(4) The Minister may, upon such conditions as the Minister considers
appropriate, require a parent trade union and its local trade unions to form a
council of trade unions for the purpose of conducting bargaining and
concluding a collective agreement,
(a) if an affected local trade union, parent trade union or employer requests
the Minister to do so; and
7(b) if the Minister considers that doing so is necessary to resolve a
disagreement between a parent trade union and a local trade union concerning
conducting bargaining or concluding a collective agreement.
(5) The Minister may make rules governing the formation or operation of the
council of trade unions, including the ratification of collective agreements,
if the parent trade union and the local trade unions do not make their own
rules within sixty days after the Minister's decision under subsection (4).
(6) The parent trade union and the local trade unions shall comply with rules
made by the Minister.
138.3-(1) A parent trade union shall not, without just cause, alter the
jurisdiction of a local trade union as the jurisdiction existed on 1 May 1992,
whether it was established under a constitution or otherwise.
(2) The parent trade union shall give the local trade union written notice of
an alteration at least fifteen days before it comes into effect.
(3) On an application relating to this section, the Board shall consider the
following when deciding whether there is just cause for an alteration:
1. The trade union constitution.
2. The ability of the local trade union to carry out its duties under this
Act.
3. The wishes of the members of the local trade union.
4. Whether the alteration would facilitate viable and stable collective
bargaining without causing serious labour relations problems.
(4) The Board is not bound by the trade union constitution when deciding
whether there is just cause for an alteration.
(5) If a local trade union makes a complaint to the Board concerning the
alteration of its jurisdiction by a parent trade union, the alteration shall
be deemed not to have been effective until the Board disposes of the matter.
138.4-(1) This section applies if, on the 1st day of May, 1992,
(a) a parent trade union was party to a collective agreement whose geographic
scope included the province and which applied to employees described in
subsection 138.2 (1); or
(b) a parent trade union had given notice to bargain for the renewal of such a
collective agreement.
(2) Sections 138.2 and 138.3 do not operate to authorize a local trade union
to enter into a separate collective agreement or a separate renewal collective
agreement or to alter the geographic scope of the collective agreement.
138.5-(1) A parent trade union or a council of trade unions shall not, without
just cause, assume supervision or control of or otherwise interfere with a
local trade union directly or indirectly in such a way that the autonomy of
the local trade union is affected.
(2) A parent trade union or a council of trade unions shall not, without just
cause, remove from office, change the duties of an elected or appointed
official of a local trade union or impose a penalty on such an official or on
a member of a local trade union.
(3) On an application relating to this section, when deciding whether there is
just cause, the Board shall consider the trade union constitution but is not
bound by it and shall consider such other factors as it considers appropriate.
(4) If the Board determines that an action described in subsection (1) was
taken with just cause, the Board may make such orders and give such directions
as it considers appropriate, including orders respecting the continuation of
supervision or control of the local trade union.
2. The Act is amended by adding the following section:
138.6-(1) If benefits are provided under an employment benefit plan primarily
to members of one local trade union or to their dependants or beneficiaries,
the local trade union is entitled to appoint at least a majority of the
trustees who administer the plan, excluding the trustees who are appointed by
employers.
(2) If benefits are provided under such a plan primarily to members of more
than one local trade union or to their dependants or beneficiaries, those
local trade unions are entitled together to appoint at least a majority of the
trustees who administer the plan, excluding the trustees who are appointed by
employers.
(3) If, in the circumstances described in subsection (2), benefits are
provided to members outside of Ontario or to their dependants or
beneficiaries, the local trade unions are entitled together to appoint that
proportion of the trustees (excluding trustees appointed by employers) that
corresponds to the proportion that the members in Ontario of the local trade
unions bears to the total number of members participating in the plan.
(4) Subsections, (1), (2) and (3) apply despite any provision to the contrary
in any agreement or other document.
(5) Unless otherwise agreed by the interested local trade unions, the
appointment of trustees under subsection (2) or (3) shall be determined by a
majority vote of those local trade unions voting, with each local trade union
being entitled to cast a single ballot.
(6) The initial appointments of the trustees under this section shall be made
not later than six months after the day on which this section comes into
force.
(7) In this section, "employment benefit plan" means a plan that provides any
type of benefit to an individual or his or her dependants or beneficiaries
because of the individual's employment or his or her membership in a trade
union and includes a pension plan or another arrangement whereby money is
contributed by or on behalf of the individual for retirement purposes.
Labour Relations Act
Section 104.-(1) The Board known as the Ontario Labour Relations Board is
continued under the name Ontario Labour Relations Board in English and
"Commission des relations de travail de l'Ontario" in French.
Composition and appointment
(2) The Board shall be composed of a chair, one or more vice-chairs and as
many members in equal numbers representative of employers and employees
respectively as the Lieutenant Governor in Council considers proper, all of
whom shall be appointed by the Lieutenant Governor in Council.
...
(13) The Board shall determine its own practice and procedure but shall give
full opportunity to the parties to any proceeding to present their evidence
and to make their submissions.
...
Construction Industry
Definitions
Section 119. In this section and in sections 120 to 155.
...
"sector" means a division of the construction industry as determined by work
characteristics and includes the industrial, commercial and institutional
sector, the residential sector, the sewers and water mains sector, the roads
sector, the heavy engineering sector, the pipeline sector and the electrical
power systems sector.