Terra Services Inc. v. Her Majesty the Queen 2018 NLSC 221 As the Province of Newfoundland and Labrador remains a major driver of local construction and development the issue frequently arises as to whether the protections intended by the Mechanics’ Lien Act (“MLA”) can be extended to these provincial projects. As a general rule, the […]read more
Employer’s Operations Fall Within Definition of “Construction Industry”
The Prince Edward Island Labour Relations Board (“Board”) recently heard an Application for Review of a Certification Order in H-Line Enterprises v. International Brotherhood of Electrical Workers, Local 1432, 2014 CanLII 36807. H-Line Enterprises (“Employer”) brought forth the application for review after the International Brotherhood of Electrical Workers, Local 1432 (“Union”) was certified as the bargaining agent for all of its employees under s. 54, Part II of the Labour Act, R.S.P.E.I. 1988, Cap. L-1 (“Act”) which deals with Construction Industry Labour Relations.
Although the Board addressed a myriad of incidental issues within this decision, this summary is focused on the Board’s determination as to whether the Union was properly certified pursuant to Part II of Act. The Employer argued that its overall business operations did not fall within the definition of the “construction industry” and as such the application for certification was brought improperly. In Prince Edward Island, the definition of “construction industry” under the Act is as follows:
52(c) “construction industry” means the on-site construction, alteration, decoration, repair, or demolition of buildings, structures, roads, sewers, water mains, pipelines, tunnels, bridges, canals, or other works but excludes the manufacture, installation or sale of any prefabricated house or modular home or mobile home;
“Employer” is defined at section 52(f) as follows:
52(f) “employer” means any person who employs or in the preceding twelve months has employed more than one employee and who operates a business in the construction industry;
In arguing that the business’s operations did not fall within the construction industry, the Employer brought forth evidence that it performed “maintenance work” on power and distribution systems over the years. Historically, the Employer’s President estimated that 94% of its operations consisted of “rebuild” projects (which he characterized as maintenance work), while 6% consisted of new construction.
The evidence was clear that on and around the date of the Application for Certification, the business’s operations were varied: some of its employees were constructing a new transmission power line; other employees were replacing transmission poles; and, another crew was engaged in tree trimming. The Employer argued that because it was engaged primarily in “maintenance” work historically, it should not fall within the definition of the “construction industry.”
The Union argued that the nature of work performed by the Employer on the date of the Application should be the key consideration. On the other hand, the Employer argued for broader analysis in considering the overall operations of the Employer going back several years, which consisted primarily of “maintenance” work.
The Board concluded that the appropriate analysis fell somewhere in the middle of the two positions. The work engaged in by an employer “on and around the date of an application for certification” is the primary consideration in determining whether it is part of the construction industry. Upon review of the evidence, the Board was satisfied the Employer’s activities fell within the definition of “construction industry.”
Although the Board determined that it need not address the Employer’s argument of whether the “rebuild” work (i.e. replacing transmission poles) constituted “maintenance” work, it nevertheless decided that the act of replacing entire sections of transmission lines cannot be seen as “maintenance,” and would also fall within the definition of the type of work performed within the “construction industry.”
Lessons for Employers
The legislative schemes relating to construction industry labour relations differ between the Atlantic Canadian provinces. As such, the determination as to whether an employer is engaged in construction work may vary depending on the jurisdiction. Generally, employers should be mindful that engaging in construction work – even if it is a temporary project or an ongoing activity that is incidental to its main operations – gives rise to a risk of union certification and that the certification process is different than in the non-construction industry.
As illustrated in this decision, the determination as to whether an employer falls within the definition of the construction industry, and is therefore at risk of an application for union certification, can be quite complex. Given the subtleties involved in such a determination, it is prudent that employers involved in construction-related activities seek legal advice to determine whether their operations fall within the definition of construction industry under the Act.