Canada Labour Code, Parts I, II and III

Reasons for decision

Canadian Union of Postal Workers,
applicant,
and
Adecco Employment Services Limited; Mail Management Services; Canada Post Corporation,
employers.

Board File: 25423-C

Canadian Union of Postal Workers,
applicant,
and
Adecco Employment Services Limited; Canada Post Corporation,
employers,
and
Public Service Alliance of Canada; Canada Border Services Agency,
interested parties.

Board File: 25453-C
Neutral Citation: 2010 CIRB 528
July 7, 2010

A panel of the Canada Industrial Relations Board (the Board), composed of Mr. Douglas G. Ruck, Q.C., Vice-Chairperson, and Messrs. Daniel Charbonneau and Patrick J. Heinke, Members, considered the above-mentioned applications. Case Management Meetings were held on January 18, 2006, and March 22, 2006. The Board, in the company of counsel and representatives of the parties, conducted a viewing of the Gateway Postal Facility located at 4567 Dixie Road, Mississauga, Ontario, on May 23, 2006. Hearings were held February 28, 2006, May 23-24, 2006, July 17-20, 2006, August 2-3 and 8-11, 2006, November 6-7, 16-17 and 20-21, 2006, December 18-21, 2006, February 15-16, 2007, and March 7-8 and 13-16, 2007 at the Board’s Toronto Office.

Appearances

Mr. James Robbins, for the Canadian Union of Postal Workers;
Mr. Roy C. Fillion, Q.C., and Ms. Sharon L. Chilcott for the Canada Post Corporation and Mail Management Services;
Messrs. John-Paul Alexandrowicz and Matthew J. Mihailovich, for Adecco Employment Services Limited.

These reasons for decision were written by Mr. Douglas G. Ruck, Q.C., Vice-Chairperson.

I - Nature of the Applications

[1] On October 27, 2005, the Canadian Union of Postal Workers (CUPW or the union) filed an application for certification pursuant to section 24 of Canada Labour Code (Part I - Industrial Relations) (the Code) for a unit of employees of an employer which it initially identified as “mail management services (MMS)/Adecco,” working at the Canada Post Corporation’s (Canada Post or CPC) Gateway Postal Facility, 4567 Dixie Road, Mississauga, Ontario (Board File 25423-C). Subsequently, on November 3, 2005, CUPW applied to have MMS/Adecco and Canada Post Corporation declared a single employer pursuant to section 35 of the Code, on the basis that the work performed by the employees in the unit sought was identical to the work of CPC’s employees already represented by CUPW (Board File 25453-C).

[2] CUPW sought a further amendment to the above applications when it subsequently became aware that MMS was essentially an internal division of CPC and not a distinct employer. Based upon this information, CUPW described the bargaining unit as “all employees of Adecco Employment Services Limited working at the Gateway Postal Facility, 4567 Dixie Road, Mississauga, Ontario...” It also came to the union’s attention that Adecco Employment Services Limited (Adecco) also had employees in Montréal and Vancouver performing essentially the same functions as those in Mississauga. Consequently, on February 10, 2006, the union applied to expand the bargaining unit sought in its single employer application to include Adecco’s employees in Montréal and Vancouver, along with those in Mississauga.

[3] On March 7, 2006, following a case management meeting with the parties, the Board issued its decision in Adecco/Mail Management Services, 2006 CIRB LD 1372, in which it advised the parties, inter alia, that it was satisfied that it was appropriate to expand the scope of the section 35 application to include the operations in Montréal and Vancouver. On May 9, 2006, the union filed two more applications for certification, for two separate units of Adecco employees in Montréal and Vancouver, but asked the Board to keep these applications in abeyance, as it had in the case of the Mississauga employees, until the application for declaration of single employer had been dealt with by the Board.

II - Facts and Background to the Section 35 Application

[4] The hearings into this matter covered a period of 26 days and the evidence obtained, both viva voce and documentary was extensive and voluminous. The facts are essentially not in dispute, rather, the parties are opposed as to how the facts should be interpreted and as to the appropriate application of the Code to the matter under review. The Board is satisfied that the essential facts in this matter, as they relate to the Gateway Facility in Mississauga, are also, other than for a few minor variations, applicable to the Customs Postal Import Program (CPIP) operations in Vancouver and Montréal. The Board has considered all the evidence and information on file and, for purposes of brevity, the relevant facts and background are summarized below:

[5] The work performed by the employees in the three subject units is pursuant to a subcontract between Adecco and Canada Post (Exhibit Volume 10, Tab 172, pp. RP300-RP380), the latter in turn being under contract to the Canada Border Services Agency (CBSA). Effective July 1, 1992, the CBSA’s predecessor, the Department of National Revenue, entered into an Agreement Concerning Processing and Clearance of Postal Imports (the Postal Import Agreement) with Canada Post to perform certain functions, which are described in greater detail below. From 1992 to 2004, CPC had subcontracted these functions to a company called Adminserv, a Division of Livingston International Inc. The services performed by Adminserv were described as follows:

...all the parcel handling and data entry functions associated with the Secondary Inspection of all Postal Imports, including picking up containers from the staging area and moving them into the Secondary Inspection area, lifting and loading Postal Imports onto belt from container, overlabelling Postal Imports with barcodes, scanning barcode again, keying in tombstone data, resealing Postal Imports, scanning barcode again, printing and affixing E-14 invoices, removing Postal Imports from belt, streaming Postal Imports according to the following product categories: Priority Courier, expedited Postal Imports, surface Postal Imports, and registered Postal Imports, placing Postal Imports onto container and moving container of Postal Imports to egress point, all of which is more particularly set out in Schedule “B” attached hereto.

(Exhibit Volume 9, p. RP 30)

[6] CPC’s International Product Management Group (IPM) was responsible for the management and monitoring of the subcontract with Adminserv.

[7] Ms. Stephanie Glover, CPC’s Manager of International Customs Management and Communication (part of the IPM Group) was responsible for overseeing the relationship between CBSA and CPC, on both the national and local level, and for ensuring Adminserv complied with its obligations under the terms of the agreement. She testified that CPC was not completely satisfied with Adminserv and had concerns with regards to mail volumes, increased costs, complaints raised by CBSA and the fact that Adminserv had reportedly approached CBSA in an attempt to obtain the work directly. Consequently, in an attempt to rectify the concerns and introduce quality improvements and cost savings, MMS assumed responsibility from IPM for the oversight of CPC’s subcontract for the CPIP. MMS became the local CBSA contact at the three sites and IPM remained as the principle CPC contact for CBSA at the national level.

[8] Mr. Sylvio DaPonti, Director of MMS, explained that MMS, as a functional unit within CPC, was created to provide CPC with increased revenue by gaining access to customers’ mailrooms through offering on-site mail management services. According to Mr. Da Ponti, the services offered by MMS have never been part of bargaining unit work as the work has always been subcontracted to outside contractors.

[9] Following the delegation of authority to MMS, Ms. Glovers’ duties at the local level were given to four individuals: Ms. Rhonda Dagenais, National CPIP Manager; Mr. Randy French, MMS Manager Gateway; Mr. Narinder Kang, Vancouver; and Mr. André Morin, Montréal. Additionally, CPC issued a Request for Proposals (RFP) (Exhibit Volume 14, Tab 281, p. RP1180) with respect to the work. Adecco responded to the RFP (Exhibit Volume 13, Tabs 276-278) and as of July 1, 2004, Adecco replaced Adminserv as CPC’s subcontractor for the above described services.

[10] According to CPC, the CBSA (formerly the Customs portion of the Canada Customs and Revenue Agency) is responsible, among other things, for the processing of postal imports (international mail) through a customs clearing process referred to, within CPC, as the CPIP. Some of the functions of CPIP, particularly data entry and material handling, have been contracted out by CBSA to CPC. CPC has in turn subcontracted these functions to Adecco.

[11] The trucks delivering the international mail to the three CPC facilities (known as ports of entry for custom purposes) are unloaded by CPC employees in CUPW’s existing bargaining unit. The international mail is placed on conveyor belts by the CUPW workers and moved in that manner to CBSA employees who perform a primary inspection. Primary inspection is defined in the Postal Import Agreement as the “initial inspection of all inbound Postal Imports to determine if Secondary Inspection is required...” (Exhibit Volume 9, Tab 160, p. RP2) International mail cleared by CBSA at the primary inspection stage is returned to the general mail stream where it will continue to be handled by CUPW members. However, if a postal import is “intercepted” by CBSA, it is taken out of the general mail stream for further inspection within a secured area known as the Customs Secondary Inspection Area. Secondary Inspection is defined in the Postal Import Agreement as the “detailed inspection of a Postal Import for enforcement and/or duties and excise tax rating” (Exhibit Volume 9, Tab 160, p. RP2). The parcels are transferred from the primary to the Secondary Inspection Area either by conveyor belt, or placed in a monotainer and transported by forklift and elevator by CPC employees, who are CUPW members. These are the only CPC employees who have access to the secure Customs Secondary Inspection Areas; these CPC employees also remove the parcels from the Secondary Area once they have been processed.

[12] The employees provided by Adecco, on the other hand, work exclusively in the secured Secondary Inspection Area. When the intercepted parcels arrive in the Secondary Inspection Area, they are removed from the conveyor belt or monotainers by Adecco employees who affix a barcode sticker (CU barcode label) onto the parcels and scan the barcode so CBSA can track the packages and the duty levied on them. Adecco employees then enter the names and addresses of the senders and recipients (known as the tombstone data) into a CBSA computer system. The Adecco employees then place the parcels onto a conveyor belt for inspection and duty assessment by customs officers. Once the customs officer has inspected the package and levied duty, if required, he/she places the parcel onto a conveyor belt where it is transported to the Take Away Area. An Adecco employee who receives the parcel will reseal it, if it has been opened by a customs officer for inspection, scan the CU barcode label and determine whether a tariff is owing. If a tariff is owing, the Adecco employee will use the CBSA computer system to print a label for the parcel showing the amount of duty and affix the invoice (E14 invoice) to the parcel. If the customs officer has determined that no tariff is owing, the Adecco employee removes the CU barcode label.

[13] The inspected parcel then proceeds along the conveyor belt where it is streamed or sorted based upon product type and may leave the Secondary Inspection Area either by conveyor or monotainer to be returned to the general mail stream, where it will be handled by CPC’s CUPW members for forwarding to its destination. CPC’s CUPW members are also responsible for collecting any tariff for duty payable on international mail which they deliver.

[14] At the Gateway facility, in addition to the Secondary Inspection Area located on the second, floor there is also a designated area on the first floor enclosed by a metal cage for handling a time sensitive CPC product known as Expedited Mail Service (EMS). Access to the area is restricted and monitored by CBSA. Everyone working in the Secondary Inspection Area and the EMS area requires security clearance.

[15] Prior to 1992, all of the functions associated with the inspection and rating of Postal Imports, including data entry of the tombstone data and material handling conducted in the Secondary Inspection Area, were performed by customs officers. Also, prior to 1992, Postal Imports with duty owing were not delivered to the addressee by CPC employees; rather CPC employees delivered notices advising an individual that he or she was required to attend at the port of entry postal facility and pay any outstanding duties before the Postal Import was released.

[16] One significant distinction between the manner in which the work was performed by Adminserv and how it is now conducted by Adecco, is the additional scan that takes place at the Take Away known as the Event Manager Scan, the SAP scan and/or Association Scanning.

[17] Association Scanning was implemented as a means of identifying or marrying the foreign postal administration barcode with the CU barcode, as only the CU barcode was encoded with the prompt to collect a tariff. Consequently, if the E14 invoice was missing from a package or the CU barcode had not been scanned at the point of entry and delivery, there was no prompt to collect a tariff. Prior to the introduction of association scanning, CPC reports that the oversight resulted in an unrecovered loss in excess of five million dollars. By marrying the foreign postal administration barcode with the CU barcode, the prompt to collect a tariff would appear regardless of which barcode was scanned.

[18] The Adminserv contract was amended to include Association Scanning in 2003 (Exhibit Volume 9, Tab 164, p. RP208), but was not immediately implemented pending further discussions with CBSA. In 2006, CBSA agreed that Association Scanning could be performed on all postal imports.

[19] Whereas the Adminserv contract was project specific, the Adecco contract contains provisions contemplating the provision of resources in connection with numerous contracts within CPC for different operating groups. It is also notable that Adminserv had been paid a monthly fee that was based upon the number of units processed together with a monthly fixed fee. The contract also allowed Adminserv to charge CPC for all consumable supplies purchased with a mark-up. In the case of Adecco, the contract stipulates that payment is based upon the number of labour hours billed and sets out the bill rate for the various classifications. The bill rate, which Adecco charges Canada Post, includes a markup and administration costs. The employees working in the Customs Secondary Inspection Area are given the same benefits by Adecco, through Sun Life, as offered to its other employees. CPC supplies the equipment and consumables that were previously supplied by Adminserv.

[20] When Adecco was awarded the contract, Ms. Joanne Stewart, Adecco’s National Account Director, created a transition plan that contemplated Adecco making offers of employment to the displaced Adminserv employees. Arrangements were made for representatives of Adecco and Canada Post to tour the CPIP sites, to introduce Adecco to the affected employees and invite them to apply for employment with Adecco. Ms. Stewart testified that the transition plan was put in place to minimize, as much as possible, any disruption resulting from the change in contractors.

[21] The Board also heard extensive testimony as to the duties and responsibilities of the Adecco site leads and on-site supervisors with respect to the day-to-day operations at the CPIP locations. Their principle duties may be summarized as follows:

• scheduling and determining the number of Adecco resources required to meet the production targets;
• scheduling and staffing overtime shifts, as required;
• setting individual performance targets;
• monitoring and assessing the performance of Adecco employees working in CPIP;
• liaising with Adecco staffing coordinator to obtain new resources and terminate the assignment of resources not meeting Adecco productivity standards;
• monitoring attendance of Adecco employees;
• conducting annual performance reviews;
• providing on-the-job training;
• addressing disciplinary issues.

[22] The site leads are also responsible for monitoring the inventory levels in the Secondary Inspection Area, as well as the daily production level. If the production levels are below the established targets, Adecco is responsible for adjusting the staffing levels and resources. The daily records respecting volumes processed per hour make up the Weekly Operating Procedure Reports (WOPR) (Exhibit Volume 3, Tab 90, p. 1024), which are submitted to the MMS managers on a weekly basis. The WOPR enable the MMS managers to determine and evaluate the level of service being delivered by Adecco in accordance with the terms of its contract. Along with the WOPR, the site leads also provide the MMS managers with Weekly Quality Control Reports (WQCR) (Exhibit Volume 3, Tab 90, p. 1025) and timesheets.

[23] The MMS managers, as noted above, monitor Adecco’s performance with respect to the CPIP subcontract. The role and duties of Mr. French came in for particular scrutiny and his examination-in-chief and cross-examination were lengthy and extensive.

[24] Mr. French is responsible for the CPIP at the Gateway Facility, as well as the National CPIP. The amount of time he spends at the Gateway Facility and the individuals he contacts is seemingly dependent upon the reason for his visit. However, for a brief period while his office in Aurora was being constructed, he was based at the Gateway Facility.

[25] Mr. French meets with Ms. Stewart on what he described as on an as needed basis. It was his testimony that their meetings often concerned staffing issues and, in particular, the lack of presence of security cleared employees to perform the CBSA work. He also testified that he occasionally spoke with the Adecco staffing coordinator about similar matters.

[26] Mr. French holds regularly scheduled meetings with the Adecco branch manager responsible for the Gateway CPIP operation and also meets or discusses matters with her on an as needed basis. Issues discussed are generally related to Adecco’s performance under the contract and may concern quality matters, production and environmental issues. Mr. French testified that he was able to monitor Adecco’s performance based upon his weekly review of the WQCR and the WOPR. He also stated that by comparing the total hours on the weekly timesheets with the hours indicated on the WOPR, he could monitor what Adecco was charging CPC for its services.

[27] Mr. French testified that a significant part of his duties consisted of responding to any complaints raised by CBSA in a timely manner. He also said he would meet with CBSA to discuss staffing requirements for holidays and occasions when the workload was expected to increase.

[28] The matter of emails in which Mr. French’s name appears in the “to” addressee line or in which he was copied also came under intense scrutiny. There were approximately 66 emails tendered as exhibits that dealt with issues of staff replacements and of those, Mr. French’s name appears in 37. For instance, in the email found in Exhibit Volume 3, Tab 85, pp. 861 and 863, a site supervisor is reporting that an Adecco employee has failed to show up for work and should not be returned to the site. Approximately one week later, an Adecco supervisor makes the same request. Mr. French, seemingly in response to the supervisor’s email, asks if “this has been taken care of yet” (Exhibit Volume 3, Tab 85, p. 863).

[29] In an email chain found at Exhibit Volume 3, Tab 85, p. 870, an Adecco employee without the requisite security clearance is the topic of discussion. Mr. French responds to the email and advises that the associate without the security clearance must leave the site immediately.

[30] Mr. French was also included on emails involving the possible termination and/or replacement of certain Adecco employees. At Exhibit Volume 3, Tab 85, p. 856, Mr. French, in response to emails concerning two employees seeking extended leave due to a family emergency, advises the staffing coordinator that “we are not going to wait 2 to 3 months for an answer to the original question. Please remove them from their assignments.” Similarly, in September 2005, Mr. French was included on an email distribution list that concerned an Adecco employee who had failed to show up for work (Exhibit Volume 3, Tab 85, p. 864). Mr. French’s input in this matter was to send an email to those on the distribution list reminding them of Adecco’s policy of “3 strikes, you’re out!”

III - Positions of the Parties

A - The Union

[31] The union’s position is that the employees provided by Adecco are in fact employed by CPC and/or, in the alternative, CPC and Adecco as common employers. The union submits that the employees in question are rightfully covered by the existing CPC/CUPW collective agreement, in that the Adecco employees work in the same facilities as CPC’s employees and do the same type of work. CUPW points out that it has filed a grievance under its collective agreement with CPC for failure to apply the terms of the agreement to Adecco employees.

[32] CUPW maintains that the CPIP is jointly managed by CPC and Adecco, as evidenced by the fact that CPC managers are in daily contact with Adecco’s on-site supervisors to give them direction, and CPC provides all guidance, direction and instruction on how to perform the work. Furthermore, CUPW states that Adecco hires its employees in accordance with CPC specifications and recommendations, CPC tests data-entry personnel on typing skills, and terminates Adecco employees who do not perform well. The union maintains that CPC provides scanners used by CPIP employees for express mail, global and registered mail, and also provides the furniture, equipment and supplies used by Adecco employees, as well as the facility in which they work. It states that CPC and Adecco jointly modify work schedules and schedule overtime. The union maintains that CPC is involved in monitoring Adecco employees on a daily basis, and that the work of the latter is integrated with CPC operations. CUPW states that Adecco employees at the Gateway facility wear badges identifying them as “Canada Post-Toronto Exchange Office,” identical to CPC’s full-time employees.

[33] CUPW maintains that unlike its predecessor Adminserv, which provided specific services such as data entry, shipping and mailing services, etc., Adecco is merely a personnel agency, recruiting and supplying temporary labour, and is not in the shipping, mailing or data entry business, and that CPC plays a large role in the direction and control of the Adecco employees. The union alleges that Adecco and CPC are “associated or related” by virtue of the contract between them. CUPW submits that the “escalation” process, as set out in the contract between CPC and Adecco is indicative of the common direction and control exercised by them. “Schedule ‘G’ - Key Persons & Escalation Process” of the contract (Exhibit Volume 10, Tab 172, p. 380) provides at clause 3:

3. Canada Post – MMS Escalation Process

We have established the following Escalation Process in order to monitor the quality of Adecco’s service and to ensure our Client's expectations are met.

a. Status Call – the Staffing Coordinator would call the client within 30 minutes of the order being placed or within 24 hours of [sic] the order is to be filled a week or more away.

b. Status Update – if within 2 hours, we realize that we will not be able to fill the order in time (for a next day order), then the Staffing Coordinator will escalate the issue to his/her Branch manager. The Branch Manager will then “Distribute” the order to “Preferred Offices”. These are offices located within a 30-mile radius of the originating branch, i.e. this would most likely happen, especially if we receive an order for 20 people on a Friday afternoon, and we want to ensure that the order is filled.

c. Escalation – if within a reasonable time-frame, i.e. by the next day for an easy requirement, we still cannot fill the order, then the Branch Manager would escalate the problem to the Ottawa Adecco Project team for advice. Suggestions might be to call other staffing agencies within their region, or call in security-cleared associates from other regions to come in and work if the situation requires it. This step must be approved by the Director, Client Programs for CPC account.

The union contends that even though CPC may refer to the above as a fast track for problem resolution, a more accurate description is a “contractual process for common management.”

[34] With respect to the protection of its bargaining rights, the union maintains that CPC’s reorganization of its international mail in 1992 resulted in the elimination of some bargaining unit work that was contracted to Adminserv. The union says that after Adminserv took over the work, CPC employees were no longer needed to deliver cards advising customers that a parcel was being held for them as CPC ended the notification practice. As well, the amount of pre-inspection mail handling was reduced as were the number of locations where inspections took place. Prior to July 1, 2004, Adminserv supplied management and used temporary workers from different agencies, including Adecco, near the end of their contract. After July 1, 2004, CPC supplied management through MMS and “transitioned” the existing workforce to Adecco. The union submits that nothing prevents CPC from terminating its contract with Adecco and “transitioning” its employees to another service provider and thereby extinguishing the employees’ rights to be represented by a union.

[35] CUPW distinguishes between the complete contracting out of the service by CPC to Adminserv in 1992, and the current situation with Adecco which, the union alleges, merely provides the employees to perform work which was performed by CUPW members prior to 1992.

[36] CUPW submits that CPC has admitted a clear delineation of responsibility between them and CBSA. The evidence clearly shows that customs is in charge of inspections and CPC does the processing and tariff collection. The employees of CPC and Adecco input tombstone data, which is a task CBSA has not done since 1992. It is the CPC and Adecco employees who are responsible for placing parcels on the conveyors for inspection by customs. Additionally, the union submits the integration of work has involved extensive hands-on management of employees in secondary processing, notably the SAP scanning, introduced in secondary processing for CPC’s own purposes to avoid charges for delays in customs processing.

[37] CUPW contends that the present situation is not conducive for good industrial relations, as it makes no sense to have identical bargaining unit work performed at one end of the conveyor belt by employees working under the CUPW-CPC collective agreement, while employees working at the other end of the belt are low wage CPC/Adecco employees.

[38] The union concedes that it is difficult to attribute job losses to any single factor, but says the bargaining unit has gotten smaller over the years. According to the union, the only reason why the unit is not even smaller is because it merged with the letter carriers. For these reasons, the Board should exercise its discretion in favour of CUPW and in favour of the Adecco employees.

[39] CUPW submits that the five criteria as established by the Board in numerous cases for determining a common employer, pursuant to section 35 of the Code, are clearly satisfied in the present matter. As indicated in PLH Aviation Services Inc., 1999 CIRB 37, the Board must be satisfied that :

1. There are two or more enterprises involved in the undertaking;
2. The businesses in question are under federal jurisdiction;
3. The businesses are associated or related;
4. The businesses in question are employers as defined by the Code;
5. Said businesses being operated by employers have common direction or control over the undertaking.

[40] CUPW submits that the Board may find two or more entities to be associated or related for the purposes of the common employer provisions of the Code as a consequence of their contractual arrangements. It is through the use and implementation of the terms of the contract that the companies acquire common control and direction even in the absence of joint ownership (A.T.U., Local 279 v. Ottawa-Carleton Regional Transit Commission (F.C.A.), [1989] F.C.J. No.416; 104 N.R. 189). The union submits that the evidence supports its contention that the CPC/Adecco arrangement displays a level of joint management indicative of common direction and control over the operation.

[41] The union submits that the Board, based upon the evidence before it, may declare one employer to be the real or true employer of a group of employees in the context of a common employer application. The factors to be considered for determining the true employer are as set out in Nationair (Nolisair International Inc.) (1987), 70 di 44; and 19 CLRBR (NS) 81 (CLRB no. 630):

1. Factual situation;
2. Control over access to employment;
3. Establishment of working conditions;
4. Performance of work on a day-to-day basis;
5. Others, like employee perceptions, integration of employees into the company, degree of permanence of their employment.

(pages 74-75)

[42] CUPW submits that when examining a tripartite relationship the key test is “fundamental control” over the subject employees (Pointe-Claire (City) v. Quebec (Labour Court), [1997] 1 SCR 1015). If, as in the matter at hand, the supply agency is merely an intermediary or not that dissimilar to an internal human resources department, then the host and not the agency will be found to be the true employer.

[43] CUPW also submits that it has never been the practice of the Board to deny a section 35 application because of delay in bringing the application.

B - Canada Post Corporation

[44] Canada Post takes the position that the employees in the proposed unit are employees of Adecco and denies that the work performed is identical to that of CPC’s CUPW members, in that its own employees are involved in mail sorting and delivery, while Adecco’s employees provide customs related work to the CBSA through a subcontract with CPC. Canada Post denies that it has control over hiring, supervising, paying or disciplining Adecco employees; that it provides them with guidance, direction and instruction on how to perform the work; or that it jointly controls, with Adecco, the work schedules and overtime requirements of Adecco employees. It denies exercising any control or direction whatsoever over Adecco employees, but admits that its managers for each of the three locations liaise with Adecco’s on-site supervisors from time to time in order to effectively monitor and administer the contract.

[45] With respect to the application of section 35 of the Code, CPC maintains that CPC and Adecco are not associated or related businesses, as their relationship is merely contractual, and are not operated under common control or direction. CPC argues that the Board ought not to exercise its discretion in issuing a section 35 declaration because of, inter alia, the delay by CUPW in seeking such a declaration when it knew since 1992 that CPC had contracted out the customs work. Canada Post also argues that the work being performed by Adecco is for the CBSA which is governed by the Public Service Labour Relations Act (the PSLRA) and not by the Code and, therefore, any subcontractor performing work for the CBSA must also fall under the PSLRA. Thus, CPC argues that since under section 35 of the Code both employers for which a declaration is sought must be governed by the Code, the Board has no jurisdiction to grant the application.

[46] CPC denies that it supplies all equipment necessary for Adecco employees to perform their work and states that, rather, the equipment is supplied by both CBSA and CPC. With respect to the identity badges worn by Adecco employees, CPC submits that they are not indicative of control exercised by CPC, but that rather the badges permit the employees to enter the facility, otherwise they would be denied entry by security staff.

[47] CPC submits that it is imperative to keep in mind the nature and division of the work performed by CBSA at the postal facility. CBSA is responsible for the processing of Postal Imports through a customs clearing process known as CPIP. There are two levels to the screening process at the ports of entry (Gateway, Montréal and Vancouver). When the Postal Import arrives at the port of entry, it is transported by a CUPW member to a conveyor belt for a Primary Inspection by a CBSA officer, who determines whether further inspection is required. If the CBSA officer determines that the Postal Import requires further inspection, it is directed to the Secondary Inspection Area. CPC stresses that CUPW members have never worked in the Secondary Inspection Area.

[48] CPC asks that the Board not ignore the reality of the situation in that the operation is made up of two large companies, one of which supplies manpower to the other. If the Board accepts CUPW’s argument of common employer, it would impair the business operations of both companies, and would give CUPW, not postal work, but CBSA work. CPC says that, apart from the technical aspect of the case, for the Board to grant what the union is seeking there would have to be a compelling labour relations reason for the Board to do so.

[49] CPC submits that the situation may be summarized as follows:

• The work performed by Adecco employees has never been bargaining unit work for the CUPW unit.
• That work was never requested by CUPW in any shape or form.
• That work had always been carried out openly, so CUPW had to be aware of it since 1992.
• Parcels are not in control of CPC in the Secondary Inspection Area and are only returned back to CPC when released by CBSA.
• CBSA can terminate the contract within 120 days.
• CBSA is the only party that owns the work.

[50] For CPC, the work done by Adecco employees is integrated with the work of CBSA’s employees.

[51] CPC denies CUPW’s contention that it was responsible for setting the rates charged by Adecco. CPC, in support of its position, relied upon Ms. Stewart’s testimony that she was the individual on behalf of Adecco who had set both the hourly rate and the billing rate contained in Adecco’s Financial Proposal (Exhibit Volume 13, Tab 276, p. RP1152). It was her testimony that after Adecco was selected as the successful bidder it met with CPC Procurement to negotiate the proposed billing rate. She said the bill rate went down but the hourly rate remained as proposed by Adecco. Ms. Stewart testified that the same can be said for the hourly rate charged in all subsequent extensions of the contract.

[52] As regards CPC’s involvement during the transition from Adminserv to Adecco, CPC submits that its role and involvement was to help facilitate a smooth transition which was in everybody’s interest. CPC says it felt that such was particularly important as problems had developed with the Adminserv contract and it was therefore necessary to demonstrate support for the change.

[53] As for the contention that Mr. French was directly involved in staffing matters, CPC says that if and whenever such did occur, it was limited to the following specific occasions:

1. When there was concern that Adecco was not fulfilling the terms of its contract with CPC and not supplying a pool of qualified security cleared resources in a timely fashion.
2. When he was informed by CBSA and CPC of the need for extended shifts during holiday periods. Mr. French would pass the information to the Adecco site leads and supervisors so they could adjust their schedules accordingly.
3. When there were complaints by CBSA regarding Adecco’s performance.

[54] As for the fact that Mr. French’s name appears in the distribution list in approximately 37 emails concerning staff replacements (Exhibit Volume 3, Tab 85, p. 851), CPC submits that he had not asked to be included on the lists and did not anticipate having to take any action as a consequence of receiving the emails. Of the five emails to which Mr. French did respond, CPC points out that such took place when the matter was a critical element or aspect of CPC’s contract with CBSA. For example, when an employee was on-site without appropriate security clearance (Exhibit Volume 3, Tab 85, p. 870), Mr. French, as he was obliged to do in accordance with the contract, made it known that the employee had to leave immediately. Canada Post submits, however, that MMS managers do not have a role in assessing employee performance, nor do they participate in the annual performance review process and that such matters rest exclusively with Adecco.

[55] CPC contends that the approval required of the MMS managers on the Adecco time sheets is a “perfunctory process” that satisfies Adecco’s internal audit process. There are times according to CPC that time sheets are amended or altered after having been approved and need to be signed again (Exhibit Volume 4, Tab 91, p. 1133). CPC points out that it was necessary and expected that Mr. French would, on a weekly basis, compare the weekly timesheets against the total hours indicated in the WQCR, which set out the volumes processed per hour (pph). It was Mr. French’s responsibility to set the pph based upon historical data and his own observations of the volumes in the CPIP operation. In this manner, he was able to measure Adecco’s performance.

[56] CPC disagrees with CUPW’s assertion that the way in which it manages the Adecco contract is indicative of common ownership and control of the work. CPC takes the position that the manner in which the MMS managers monitor and assess Adecco’s performance is consistent with the contractual arrangement and does not support a common employer arrangement. CPC submits that Mr. French, as the manager responsible for CPIP at the Gateway facility, as well as the National CPIP, was obliged to have additional and more frequent contact with Adecco due to the nature of his duties and responsibilities. CPC submits that even though Mr. French, on occasion, may have spent a few days per week at the Gateway facility, his time was spent with CBSA and Adecco site leads and not with the employees, neither did he provide the employees with instructions or direction. Canada Post says that his meetings with Ms. Stewart took place on an as needed basis, particularly when matters of security were at issue. According to the employer, all MMS managers were responsible for following up with Adecco regarding any concerns that CBSA might have with respect to staffing requirements and ensuring their needs were met in a manner consistent with their schedule. As well, Mr. French was responsible for overseeing any IPM/CBSA joint ventures. On the “escalation process,” CPC argues that it is the way a business relationship goes. If a problem occurs and cannot be solved at the local level, it escalates to a higher level. That is the essence of how a contract should and must function and that CPC’s main concern was that it met its obligations to CBSA.

[57] In response to CUPW’s argument that CPC has control of the entire CPIP process, CPC submits that once the parcel goes into the secondary process, it is out of the mail stream. It is no longer CPC’s responsibility. Any allegation that Adecco’s employees are de facto CPC’s employees is wrong. There is no intermingling or interrelationship with CPC employees and Adecco/Ex-Adminserv employees. There is no erosion of the bargaining unit. There is no undermining, no “ghost” at the table. There is no reason to order a single employer declaration.

[58] Even if Mr. French inadvertently overstepped his authority on occasion, it does not change the contractual agreement between Adecco and CPC.

[59] CPC submits that CUPW, through its single employer declaration, is attempting to acquire CBSA work as part of its bargaining unit. CUPW is asking the Board to ignore 15 years of self imposed ignorance and inertia, and to accept, instead of evidence, an adverse effect upon the union. The corollary to that would in effect nullify the arms-length relationship contract between CPC and Adecco. It would impair their business operations.

[60] CPC submits that the facts and evidence as submitted by the union do not demonstrate that there exists a strong and compelling labour relations reason to make the declaration or order sought by the union. CUPW and CPC are large sophisticated organizations with a long history and are knowledgeable of what the Board has ordered in the past. CUPW cannot use the Code in this manner to expand its bargaining unit.

C - Adecco

[61] Adecco’s position is that it is a human resources service provider while CPC is Canada’s national postal service, that its contractual relationship with the latter does not create a common employer relationship, and that Adecco and CPC are not under common control or direction, associated or related. Adecco denies that CPC exercises control over Adecco’s employees, that Adecco employees perform postal service work, and that there is intermingling between Adecco’s and CPC’s employees. Rather, it states that its employees perform certain custom-clearing services for CBSA, and CPC’s only role is to administer its subcontract with Adecco. It denies that CPC provides guidance, direction and instruction to Adecco’s employees on how to perform the work.

[62] Adecco supports CPC’s position that CPC managers are not in daily contract with Adecco supervisors, that CPC and Adecco do not jointly modify work schedules and schedule overtime, and that CPC does not test Adecco employees prior to hiring or terminate Adecco employees. It states that CPC is not involved in any way in the supervision of Adecco employees.

[63] Adecco maintains that the Board ought not to exercise its discretion concerning the application for declaration of single employer, because it is an abuse of process and the issue of CUPW’s representation of Adecco’s employees should be determined through the certification process. Adecco also states that the union has known since 1992 that CPC had contracted out the work and should have sought such a declaration before now, if it felt that CPC and Adecco were common employers.

[64] Adecco further maintains that its work for CBSA is not governed by the Code, because the CBSA is governed by the PSLRA and therefore so should its subcontractors.

[65] Adecco submits that the Board ought to dismiss the application on the basis that CUPW has failed to establish that the requisite criteria for a section 35 application were met. Alternatively, Adecco submits that even if CUPW is able to establish that the criteria for a section 35 declaration were met, the Board should not exercise its discretion to grant the declaration.

[66] Adecco states that in the context of an application for certification, the Board has held in Nationair (Nolisair International Inc.) (1987), supra, that where it must identify the true employer, its task is to determine who has fundamental control over the employees. Fundamental control is determined by examining such factors as :

• The identification of the person who does the paying, who ultimately bears the cost and the impact this has on the employment relationship.
• The person who controls access to employment.
• The person who actually establishes working conditions.
• How the work is actually performed on a day-to-day basis, who assigns it, who determines and approves the standards governing the performance of the work.
• Employees’ perception, their identification with the company, their degree of integration, and the fortuitous, temporary or permanent nature of their employment with the company.

[67] Even where the criteria set out in section 35 are objectively present, the Board, submits Adecco, must decide whether to exercise its discretion to make the requested declaration. The Board’s jurisprudence consistently reflects a requirement that a labour relations purpose exists in order for it to exercise its discretion to issue a section 35 declaration. The onus is strictly on the applicant to establish a sound labour relations purpose.

[68] The object of a section 35 is remedial in nature and is designed to prevent employers from circumventing their obligations under the Code. It is therefore fundamental to the exercise of the Board’s discretion to consider whether the situation is one in which there is an erosion of the bargaining rights. Section 35 is not intended to advance a union’s position to provide it with rights it has not otherwise obtained.

[69] Timelines are also an important consideration. The party seeking the single employer declaration must act with due diligence. Where it does not, the Board ought to refuse to exercise its discretion.

[70] It is Adecco’s position that while some of the criteria may be satisfied, two key criteria are not. Adecco submits that it is clear from the evidence that CPC and Adecco are not associated or related activities. Adecco and CPC have no interrelationship of operations. Their only relationship is that of a commercial subcontracting relationship. The businesses do not provide similar services and products. Adecco is a human resources service provider, while CPC is Canada’s national postal service. It is also evident that there is no vertical integration and that they have no common ownership or management. Adecco suggests that the only possible way for CUPW to succeed would be to characterize the activities of Adecco, CPC and CBSA, as associated or related. The “tripartite” relationship could possibly be considered to be a form of vertical integration.

[71] Adecco submits that its relationship with CPC is absent any common control and direction and that this criterion cannot be satisfied, as CPC is not the true employer, for the following reasons:

• Through its selection, hiring and replacement processes, Adecco controls access to employment.
• Adecco bears the cost of their employment.
• Adecco through its supervisors exercises direction and control over the Adecco employees.
• Adecco disciplines, dismisses and terminates assignments of its employees.
• As a result of the interviews and selection by Adecco, and having signed a series of Adecco’s employment-related documents, the employees perceive Adecco as their employer.
• The Adecco employment agreements and employment-related documents establish the existence of an intention to create the relationship of employer and employees.

[72] Adecco also submits that the Board must be mindful of the fact that CUPW has generally ignored the relationship since CPC first began contracting out the customs-clearing work to Adminserv in 1992.

[73] CUPW did not take any steps to allege the existence of a single employer situation until November 2005, 13 years later. It is clear CUPW did not take prompt steps to allege the existence of a single employer relationship. Therefore, in addition to not serving a valid labour relations purpose, a Board declaration at this time could cause serious prejudice to both employers.

[74] Adecco submits that there is no valid labour relations purpose which could justify the exercise of the Board’s discretion in the preset circumstances as:

• Employee wishes can be determined through the certification process;
• No erosion of the bargaining rights;
• No intention to evade collective bargaining obligations; and
• Collective bargaining between Adecco and CUPW would be meaningful.

IV - Analysis and Decision

[75] The applicant has requested that the Board consider issuing a single employer declaration with respect to CPC and Adecco or, in the alternative, an order naming CPC as the employer.

[76] Section 35 of the Code reads as follows:

35. (1) Where, on application by an affected trade union or employer, associated or related federal works, undertakings or businesses are, in the opinion of the Board, operated by two or more employers having common control or direction, the Board may, by order, declare that for all purposes of this Part the employers and the federal works, undertakings and businesses operated by them that are specified in the order are, respectively, a single employer and a single federal work, undertaking or business. Before making such a declaration, the Board must give the affected employers and trade unions the opportunity to make representations.

(2) The Board may, in making a declaration under subsection (1), determine whether the employees affected constitute one or more units appropriate for collective bargaining.

[77] As has been determined by this Board and its predecessor the Canada Labour Relations Board (CLRB) (see Muir’s Cartage Ltd. and Canada Post Corporation (1992), 89 di 12; 17 CLRBR (2d) 182; and 92 CLLC 16,060 (CLRB no. 955) and Murray Hill Limousine Service Ltd. et al. (1988), 74 di 127 (CLRB no. 699)) for a single employer declaration to be considered, five prerequisites that may be summarized as follows must be satisfied:

1. There must be two or more enterprises or businesses;
2. The businesses in question must be under federal authority;
3. The businesses must be associated or related;
4. The businesses for which the declaration is sought must be employers;
5. The businesses must be operated by employers exercising common control or direction over them.

[78] As reflected in the Board’s jurisprudence, a single employer determination is generally a two-step process in which the Board first decides whether the above criteria are objectively satisfied. If the criteria are met, the Board must next decide if it should exercise its discretion and grant the declaration. The discretionary authority rests upon the principle that there must be a valid labour relations purpose for issuing the declaration.

[79] The parties did not dispute that, based upon the facts as presented, three of the above criteria were clearly satisfied. There were two or more enterprises involved and the businesses for which the declaration is sought are employers. As for the second criterion above, section 4 of the Code describes the Board’s jurisdiction over a federal work, undertaking or business as:

4. This Part applies in respect of employees who are employed on or in connection with the operation of any federal work, undertaking or business, in respect of the employers of all such employees in their relations with those employees and in respect of trade unions and employers’ organizations composed of those employees or employers.

[80] The definition of federal work, undertaking or business is found at section 2 of the Code which states, in part:

2. In this Act,

“federal work, undertaking or business” means any work, undertaking or business that is within the legislative authority of Parliament...

[81] The parties did not question that CPC and Adecco are federally based enterprises and the Board is satisfied that both are interprovincial undertakings in their own right, as defined by the Code, and are therefore subject to the provisions of the Code.

[82] Based upon the above, the Board is left with two matters to determine. First, it is necessary to decide whether CPC and Adecco are associated or related activities and second, whether they exercise common control or direction over the businesses.

A - Associated or Related Activities

[83] In determining whether two or more operations are associated or related, the Board examines the degree of inter-relationship of the operations of the two businesses. The Board must determine whether the businesses provide similar services and products, whether there exists a vertical integration, whether they occupy the same niche and the extent of the common ownership or management (see The Canadian Press et al. (1976), 13 di 39; [1976] 1 Can LRBR 354; and 76 CLLC 16,013 (CLRB no. 60)).

[84] CUPW contends that two or more entities may be found to be associated or related as a consequence of their contractual arrangements. The union submits that it is through the use and implementation of the terms of the contract that the businesses acquire common control and direction even in the absence of joint ownership (A.T.U., Local 279 v. Ottawa-Carleton Regional Transit Commission (F.C.A.), supra). CPC and Adecco submit that other than for the commercial subcontract respecting the work of CBSA, there is no interrelationship of operations. They submit that as Adecco is a human resources service provider and CPC is a national postal service the businesses do not provide similar services or products. It is their contention that none of the functions provided by Adecco’s employees overlap with the functions of CPC bargaining unit employees.

[85] Adecco also submits that the only way in which CUPW could make a convincing argument that the businesses are associated or related would be to include CBSA as part of a tripartite relationship in which the three businesses are shown to be engaged in the delivery, processing, inspection and tariff assessment of international parcels. Adecco contends that it is only in this manner that the businessss could be said to be related, but that the Board, even if such was found to be the case, could not issue a section 35 declaration as CUPW brought its application selectively and did not name CBSA as a responding party.

[86] Whether or not CBSA should or could be named as a common employer with CPC and Adecco is not an issue which is currently before the Board. CBSA, as an interested party, was advised of the application, but chose not to participate in the proceedings and CUPW did not seek to have CBSA named as a responding party. The same applies to Public Service Alliance of Canada (PSAC), which presently holds the bargaining rights for CBSA employees. Additionally, the labour relations of CBSA come under the jurisdiction and authority of the PSLRA and not the Code, therefore the Board would not appear to have the requisite authority over CBSA. However, given that the Board did not receive any evidence or hear any submissions on this particular issue during the course of the hearing, it is not able to and need not make a definitive ruling at this time.

[87] As for the contention that the contractual arrangements between CPC and Adecco means that the enterprises are associated or related activities, the Board is not persuaded by CUPW’s submissions. The Board is of the view that despite the existence of the subcontractual arrangement between CPC and Adecco, the evidence does not support the union’s position that the businesses are associated or related. The business of Adecco as a human resources provider is neither comparable nor similar to the business of CPC as Canada’s national postal service. There is no common ownership or management as between CPC and Adecco and no indication that they are in any manner vertically integrated. The Board is also satisfied that the work of the Adecco employees in their performance of the CBSA duties is distinct from the work performed by the CUPW bargaining unit members. Adecco deals with parcels only when it falls under the direct care and control of CBSA and is out of the general mail stream until such time as CBSA determines otherwise. The presence of the Secondary Inspection Area is not a mere artifice, but rather serves as a clear delineation between the nature of the work performed by the Adecco employees and that performed by members of the CUPW bargaining unit. It is also significant to note that this work, despite CUPW’s assertions to the contrary, has never been performed by CUPW members and prior to 1992 was carried out by customs officers.

B - Common Control and Direction

[88] In situations in which businesses are owned by the same company, have a common board of directors or officers and are financially linked, the question of whether there is common control and direction is generally not very difficult to answer. However, as noted in TELUS Communications Inc. et al., 2004 CIRB 278:

[260] The Board agrees that the ownership structure of a business is only part of the relevant factors looked at in the assessment of common control and direction. There exists a variety of other possible factors that can weigh in this assessment including, but not limited to, the coordination or integration of operations, the common decision makings, shared programs, policies or services, as well as the overall representation of the different businesses to the public, clients, employees, etc. Consideration must be given to the circumstances as a whole, weighing the factors that point to common control or direction and those which do not.

[89] The Board expressed a similar view in Prince Rupert Grain Ltd. and British Columbia Terminal Elevator Operators’ Association, 2007 CIRB 389, wherein it stated:

...The Board has indicated that it does not require total commonality of control such that all the enterprises must be controlled by the same group of individuals (see The Canadian Press et al. (1976), 13 di 39; [1976] 1 Can LRBR 354; and 76 CLLC 16,013 (CLRB no. 60)). Rather, it is sufficient if “the policies of the various enterprises are closely coordinated, integrated, and subject to joint direction.”

(page 58)

[90] CUPW contends that the evidence supports a finding of common direction and control on the basis of the joint management of the workplace by CPC and Adecco. The union submits that joint management, almost by definition, implies common direction and control and directs the Board to the decision of the Canadian Union of Public Employees v. Brantwood Manor Nursing Homes Limited, [1986] OLRB Rep. January 9:

115. Brantwood has not so much transferred a function “out” to another organization as it has brought another entity into its own organization to assist in the immediate supervision of a function which remains under Brantwood’s ultimate control and continues to be performed on the same premises as before, in substantially the same manner as before by persons with similar skills as those who performed it before. From a labour relations perspective, the enterprise now operated in an integrated fashion by Brantwood and Med + Experts is in substance the enterprise which was being operated by Brantwood alone when CUPE acquired the right to represent persons employed by Brantwood in that enterprise. Portions of what might be described as the personnel and first line supervision functions in that enterprise are now performed by Med + Experts, over which Brantwood has authority which, from a labour relations perspective, is similar to that typically possessed by the senior management of any enterprise in relation to those who perform personnel and first line supervision functions within the enterprise they manage. Not surprisingly, senior management does not often involve itself on a day-to-day basis in matters which are the province of the personnel department and first line supervisors. The personnel department deals with hiring, firing and discipline of workers and the first line supervisors deal with their day-to-day supervision. But for Brantwood’s having placed these personnel and first line supervision functions within a separate corporate form which has been made the paymaster of those workers, however, the personnel department and first line supervisors would not be mistaken for “the employer” to the exclusion of senior management. By exercising our discretion under subsection 1(4) we preserve the labour relations status quo by attaching the bargaining and collective agreement rights of the union to what is in substance the enterprise in respect of which those rights were acquired.

[91] CPC submits that its and Adecco’s operations are related only insofar as the customs clearing process is a necessary step in the process of delivering postal imports, but that such relatedness is not sufficient to meet the section 35 requirements. CPC urges the Board to distinguish between its role in managing the contract with Adecco and directing the activities of employees performing work under the contract. CPC points out that there is no intermingling between Adecco employees and CUPW bargaining members, as the Adecco workers are with CBSA in the enclosed Secondary Inspection Areas and EMS cell.

[92] Canada Post submits that it is not involved in the hiring, training, evaluation or scheduling of the Adecco employees and the pay rates were set by Adecco during the RFP process. CPC argues that the oversight on its part is due to its relationship with CBSA and the need to be sure that its obligations to CBSA are met. Canada Post contends that this is not common control or direction as contemplated by the Code.

[93] Adecco’s position on this issue is similar to CPC’s, but stresses the role that CBSA has in ensuring Adecco meets the terms of its commitment to provide customs clearing service to CBSA. Adecco points out that:

• Adecco employees and CBSA employees work together and in close proximity performing tasks related to CBSA’s inspection of international parcels, assessment of applicable tariffs and recording tariffs;
• There is a significant level of day-to-day interaction between CBSA officers and Adecco employees;
• CBSA establishes work-related requirements for Adecco employees;
• CBSA supplies the key equipment and supplies required for Adecco’s performance of the customs clearing work including, CBSA computer system, conveyor belts and the E14 labels that advise customers of the amount of tariff that has been assessed.

[94] Adecco submits that the situation is not as portrayed by CUPW and that in reality the areas of joint management are limited and are more in the nature of oversight by CPC, with respect to the performance of the contract. Adecco points out that in comparison to many other of its contractual arrangements with its customers in this situation, it uses on-site supervisors and site-leads who are responsible for both the operational and non-operational supervision of the employees. In the area of non-operational duties, the site-leads and supervisors provide orientation to new employees, monitor attendance and performance, conduct performance appraisals and, when necessary, terminate an employee’s assignment.

[95] The Canada Labour Relations Board (the CLRB), the Board’s predecessor, in the case of Ottawa-Carleton Regional Transit Commission et al. (1988), 72 di 189; and 19 CLRBR (NS) 165 (CLRB no. 670) had occasion to consider a case similar to the matter at hand and determine what distinction, if any, is to be made between managing a contract and managing employees performing work under the terms and provisions of the contract. In 1985, The Ottawa-Carleton Regional Transit Commission (OC Transpo) subcontracted its bus service for the disabled, known as Para Transpo, to Blue Line Taxi Co. It was the union’s contention that: 1) OC Transpo was the true employer and 2) OC Transpo and Blueline should be declared a single employer. The union argued that the contract was merely a means or contrivance by which OC Transpo was able to avoid the expenses and obligations associated with a collective agreement. The union, in support of its position, pointed to a number of factors such as the fact that both OC Transpo and Blue Line had initially been involved in training the drivers, although Blue Line later assumed this responsibility. The drivers worked under rules and regulations devised by both OC Transpo and Blue Line. OC Transpo had the authority to request that a driver be dismissed and OC Transpo gave Blue Line the daily schedules for the drivers. OC Transpo was in charge of the dispatching, and the drivers were obliged to notify the OC Transpo dispatch when they booked off for lunch or breaks and if there was an accident or any unusual occurrences during their shift. The union referred the CLRB to the Ontario Labour Relations Board’s decision in Canadian Union of Public Employees v. Brantwood Manor Nursing Homes Limited, supra, in support of its case.

[96] By majority decision, the CLRB held that there was no common direction or control as fundamental control over the operation rested with Blue Line and not OC Transpo. The CLRB found that the contract had not been motivated by industrial relations considerations and noted that the work being done within the Para Transpo operation had never been performed by OC Transpo employees. It was also the CLRB’s finding that there was no integration or intermingling between the OC Transpo employees and the Blue Line / Para Transpo employees. The CLRB went on to say:

Obviously, while a contract can set up “common control or direction”, just as much as ownership can do, the presence of a contract, and even a very detailed one at that, does not necessarily mean that there is actual “common control or direction”. The contract has to be interpreted in the context of what is really going on. The Brantwood contracts were not real contractings-out. The OLRB thought they were merely a device for getting the same work out of employees via a roundabout route that evaded certain aspects of the collective agreement. Thus, the making of a single employer declaration was fully appropriate.

Such is far from being the case here. This is a real contract. In the opinion of this Board, the conditions do not exist to justify the making of a section 133 declaration. The kind of “common control or direction” contemplated in that section does not exist in this particular situation.

(page 202)

[97] The case of Air Canada et al. (1993), 91 di 101; 18 CLRBR (2d) 295; and 93 CLLC 16,037 (CLRB no. 998) was also a matter in which the CLRB had to consider whether the terms of a subcontract constituted common control and direction. The International Association of Machinists and Aerospace Workers (IAM) was the recognized bargaining agent for a unit of employees of Aeroguard Security Services (Aeroguard) which held a contract to provide pre-boarding security personnel for Air Canada. When the contract concluded, it was subsequently awarded to Executive Community Services Limited (Executive) who had entered into a voluntary recognition agreement with the Teamsters. The IAM argued that it continued to be the bargaining agent and that Air Canada and Aeroguard should be declared a single employer, as should Air Canada and Executive. The contract differed to some degree from the subcontract in place in the OC Transpo case in that Air Canada, alone, did not provide oversight or ensure compliance with the terms of the contract. Rather an Airline Committee consisting of representatives of all the airlines operating out of Terminal 2 administered the contract, along with Air Canada.

[98] The terms of the contract set out the hours that screening services were to be available, the amount per hour paid per person, as well as the overtime amount and that paid for statutory holidays. The contract also called for the contractor to supply a manager for its services and supervision of its personnel. The Committee met with the contractor on a regular basis and established the operating procedures for the contractor. If any personnel were found by the Committee to not be performing properly in that they were “intemperate, incompetent, negligent or dishonest,” the committee could request their removal (page 12, Air Canada et al. (1993), supra). It was, however, up to the contractor to decide how best to comply with the request, i.e. termination or transfer. Any complaints from the public would be forwarded by Air Canada to the contractor via the managerial and supervisory staff. Air Canada did not give any direct orders to the security screening personnel.

[99] The CLRB dismissed the single employer applications holding that:

...It is clear, following an examination, that a real contract existed by which Aeroguard provided certain services to Air Canada and the other carriers. Operating within the terms of the contract Aeroguard was autonomous; it was the employer that had fundamental or decisive control over the employees.

In all of the Board’s previous cases, the factual situation most akin to the one here is that found in Ottawa-Carleton Regional Transit Commission, supra. If anything, the facts here make for a stronger case that Air Canada and Aeroguard, although bound by the terms of a detailed contract and working side-by-side on a day-to-day basis in specific yet distinct roles, were nevertheless not under “common direction or control” within the meaning and for the purposes of section 35 of the Code.

(page 32)

[100] The OC Transpo and Air Canada decisions are instructive but not determinative of the matter presently under review. Each case must be considered on its own merits based upon the applicable facts and circumstances. The contract between CPC and Adecco, similar to the subcontracts in the OC Transpo and Air Canada cases is comprehensive but does not, in the opinion of the Board, constitute common management, control or direction. CPC, in accordance with its contract with CBSA, has an obvious and real interest in ensuring that such matters as hiring, training, evaluations and discipline are conducted in a manner that is consistent with its obligations and committments to CBSA. Even though certain CPC managers may periodically take it upon themselves to exceed their oversight responsibilities (as will be dealt with in greater detail below), the Board is satisfied that CPC’s oversight did not negate nor, in any way, reduce the role and responsibilities of Adecco. The evidence as presented did not establish that CPC has a determinative role in the hiring, training evaluation or disciplining of the Adecco employees.

[101] Additionally, setting pay rates was Adecco’s responsibility and CPC, as would be expected, has an interest in ensuring that the rate remains consistent with the amount set by Adecco during the RFP process. Therefore, in the opinion of the Board, CPC’s use of the WQCR’s and WOPR’s to assess production levels and the cost of the work is reasonable and to be expected.

[102] CUPW contends that the escalation procedure contained in the contract is in effect a “contractual process for common management.” Based upon the Board’s review, it is not able to agree with this characterization. The escalation process is as stated in the opening sentence of the clause: “We have established the following Escalation Process in order to monitor the quality of Adecco’s service and to ensure our Client’s expectations are met.” (Exhibit Volume 172, p. RP380)

[103] The union, in large measure, relies upon the words and actions of Mr. French in support of its contention that CPC exercised common control and direction with Adecco over the subject employees. The union pointed to numerous emails in which Mr. French purportedly presented himself as the person in charge of the Adecco employees and directing the performance of their work. For instance, in certain emails, Mr. French used the term “our employees” (Exhibit Volume 5, Tab 99, p. 1479), in others he used the terms “we” and “all of us” (Exhibit Volume 3, Tab 90, p. 957). As well, Adecco Leads and personnel wrote to Mr. French about “your staff” (Exhibit Volume 5, Tab 99, pp. 1495 and 1506-1508), Randy’s “high performing team” (Exhibit Volume 3, Tab 90, p. 954). There were also occasions when Adecco personnel wrote to Mr. French about such matters as taking time off (Exhibit Volume 3, Tab 83, p. 826), reviewing job titles and approving appraisals (Exhibit Volume 8, Tab 157, pp. 2595-2596).

[104] The Board is satisfied that Mr. French’s actions were motivated by his desire to ensure that there was absolute and complete compliance by Adecco with the terms and provisions of the subcontract. He took his responsibilities seriously and, at times, that led him to acquire a level of interest in Adecco’s operation that exceeded his actual duties and responsibilities, but such, in the opinion of the Board, did not place CPC in a position of common control and direction.

C - Discretion

[105] Section 35 of the Code enables but does not require the Board to grant a single employer declaration even when it is satisfied that the required prerequisites have been met. This discretionary authority resides with the Board as the granting of a single employer declaration is a remedial power that is not to be granted unless there is “...an evident purpose, in terms of industrial relations...” (The Canadian Press et al. (1976), supra). Given the Board’s finding that CPC and Adecco are not associated or related activities and do not have common control and direction over the subject employees, the Board is not called upon to exercise its discretion. However, as the Board, during the course of the hearings, received evidence and heard submissions on this point, it would point out that even if all the criteria for a single employer declaration had been satisfied, it is questionable as to whether the Board would have granted the declaration.

[106] Is this a situation in which the union’s bargaining rights are under assault or being undermined or eroded (Air Canada et al. (1989), 79 di 98; 7 CLRBR (2d) 252; and 90 CLLC 16,008 (CLRB no. 771); Télébec ltée et al., 2004 CIRB 300)? Is there a need for the Board to preserve the union’s bargaining relationship (Air Canada et al. (1989), supra)? Has CPC attempted to thwart the provisions of its collective agreements with CUPW (Muir's Cartage Ltd. and Canada Post Corporation (1992), 89 di 12; 17 CLRBR (2d) 182; and 92 CLLC 16,060 (CLRB no. 955))? Would the parties’ labour relations be enhanced by issuing a single employer declaration (Autocar Royal (9011-4216 Québec Inc.) et al., 1999 CIRB 42)? Based upon the facts as presented, the Board, in all likelihood, would be inclined to answer the foregoing questions in the negative. The work in question has never been performed by members of the CUPW bargaining unit and there is no indication that CPC entered into the arrangement with Adminserv and later Adecco for the purpose of thwarting or avoiding CUPW’s rights or weaken its bargaining position. There was, in fact, no indication that the union’s bargaining position has been weakened or eroded by the present arrangements.

D - True Employer

[107] Counsel for the applicant union referred the Board to a series of cases including Pointe-Claire (City) v. Quebec (Labour Court), supra. In this case, the Supreme Court of Canada upheld a decision of the Quebec Labour Court, which found that an employee supplied to the City of Pointe-Claire by a placement agency, was an employee of the city, and not the agency. In paragraph 35 of its decision, the Supreme Court noted that the Labour Court had focused on the issue of who had actual control over the employee's day-to-day work. Ultimately, the Supreme Court favoured a more comprehensive approach to determining who was the true employer. The Supreme Court stated:

48. According to this more comprehensive approach, the legal subordination and integration into the business criteria should not be used as the exclusive criteria for identifying the real employer. In my view, in a context of collective relations governed by the Labour Code, it is essential that temporary employees be able to bargain with the party that exercises the greatest control over all aspects of their work–and not only the supervision of their day-to-day work. Moreover, when there is a certain splitting of the employer’s identity in the context of a tripartite relationship, the more comprehensive and more flexible approach has the advantage of allowing the consideration of which party has the most control over all aspects of the work on the specific facts of each case. Without drawing up an exhaustive list of factors pertaining to the employer-employee relationship, I shall mention the following examples: the selection process, hiring, training, discipline, evaluation, supervision, assignment of duties, remuneration and integration into the business.

(page 19)

[108] The Board has referred to Pointe-Claire (City) v. Quebec (Labour Court), supra, in a number of subsequent decisions, including Mackie Moving Systems Corporation, 2002 CIRB 156; Penske Logistics, 2001 CIRB 146; and Saskatchewan Wheat Pool, 2002 CIRB 173. In each of these cases, the Board determined that individuals supplied by a personnel agency were employees of the client, rather than the personnel agency.

[109] Even before the Supreme Court’s decision in Pointe-Claire (City) v. Quebec (Labour Court), supra, the Board had issued decisions finding employees supplied by a placement agency to be employees of the client. The applicant referred to Nationair (Nolisair International Inc.) (1987), supra, where the Board found that flight attendants hired through personnel agencies were employees of the airline. In that case, the Board set out the following criteria to assist in the determination of who is the true employer:

1. The Board will assess the factual situation but will not give decisive weight to agreements where they are not confirmed by the facts.

Thus, in our jurisdiction, significant weight cannot be given to the payment of wages. The Canada Labour Code speaks of an employee (employé) and makes no reference to remuneration in the definition of this term, contrary to the Quebec Labour Code, for example, which gives a salaried employee (salarié) freedom to associate. More significant will be the identification of the person who does the paying, who ultimately bears the cost, and the impact this has on the employment relationship.

2. Another indicator will surely be the person who controls access to employment: the person who hires or who gives the work to be performed. Here, regard must be had to the selection process and the criteria used. The person who in fact has the power to approve the selection and influence it decisively is more akin to an employer than a mere occasional user. The lessee who retains or exercises a veto or equivalent over the selection of personnel is certainly not extraneous to the employment relationship.

3. A third criterion concerns the actual establishment of working conditions. Who actually establishes working conditions? An agency that is merely a disguised employment office, a kind of clearing house with a title, could hardly be termed an employer. In this situation, it would merely be an agent acting on behalf of the employer, the equivalent of the personnel department of a company of which it is an integral part and whose wishes it carries out as an employee.

4. Another criterion concerns the actual performance of work. How is the work performed on a day-to-day basis? Who assigns the work? Who in fact determines and approves the standards governing the performance of the work? In this regard, who has the last word, the final say? Is it the person who evaluates, who decides, who determines that an employee will work or be terminated because of his performance? What expertise does the agency have with respect to the work performed? What is the degree of similarity between the duties performed by regular employees and those performed by employees from outside?

5. Other criteria may also assist the Board in its determination: the employees’ perception, their identification with the company, their degree of integration into the company, the fortuitous, temporary or permanent nature of their employment with the leasing company.

Finally, it is essential that these criteria, whose significance may vary from case to case, be weighed without losing sight of the purpose of the legislation, namely, to promote access to collective bargaining:

...

(pages 74-75)

[110] Approximately five years after the CLRB rendered its decision in Nationair (Nolisair International Inc.), supra, concerning the flight attendants, it was called upon to consider a subsequent application filed on behalf of the Canadian Union of Public Employees (CUPE) requesting, in part, that Nationair be declared the true employer of the passenger agents working at Nationair. Interestingly, at the time of the application, CUPE was the recognized bargaining agent for the passenger agents employed by Service de Personnel Sol-Air Corp. working at Nationair. Initially, the union had agreed to Sol-Air being designated as the true employer, but as certain terms and provisions in the contract between Nationair and Sol-Air had changed over the years with respect to the nature of Nationair supervision, CUPE argued that Nationair was the true employer and/or Nationair and Sol-Air were a single employer. The contract in question set out the number of passenger agents and supervisors that Sol-Air was to provide, as well as the wage rate Sol-Air was to receive. Sol-Air hired the agents, was responsible for their remuneration, training, work assignments, discipline and layoffs and recalls. The passenger agents, while on the job, wore the same uniforms as Nationair flight attendants, used Nationair offices and equipment. There was also evidence that certain Nationair supervisors were inclined to exercise their duties more actively and with greater detail to attention than their quality control responsibilities seemed to require.

[111] The CLRB in Nolisair International Inc. (Nationair Canada) et al. (1992), 89 di 94 (CLRB no. 960), found that two very important factual distinctions or changes had taken place since it rendered its decision in 1987:

First, the terms and conditions of the successive contracts between Nationair and Sol-Air concerning the passenger agents evolved in such a way that Nationair has fewer opportunities to intervene in the selection and training of the agents. Second, this evolution in the content of the contract, which might be of little consequence were it not accompanied by concrete examples, establishes that the organization and control of the work of the passenger agents rests primarily with Sol-Air.

(page 25)

The CLRB went on to find that:

Sol-Air is a company that has its own organization, its own management and supervisory personnel and passenger agents. Between 1988 and 1990, Sol-Air was responsible for hiring, dispatching, scheduling and paying these employees. Ultimate responsibility for their training rested with it, even though Nationair representatives sometimes got involved in certain training-related matters. Sol-Air was also responsible for discipline. The evidence did not establish that discipline during this period was metedout at the suggestion or request of Nationair. The same is true of the decisions to lay off and recall employees in a predetermined order even though fluctuations in personnel are obviously dependent on fluctuations in Nationair’s operations.

Sol-Air must meet Nationair’s requirements and respect Nationair’s flight schedule in determining passengers [sic] agents’ hours, ensuring that enough agents are on duty at the times determined by Nationair. This is inherent in the contract. The fact that Sol-Air must also meet performance and quality standards set by Nationair likewise does not seem excessive in the context of this case. In this regard, the interventions, some more extensive than others, by Nationair supervisors in how passenger agents perform their duties are not, in the instant case, such as to deprive Sol-Air of its employer status.

The role of Nationair supervisors and the impact of the performance and quality standards on Sol-Air’s operations may indicate common direction and control, about which we will have more to say later, but they do not have the effect of depriving it of its employer status within the meaning of the Code.

(pages 25-26)

[112] Similar to the finding in Nolisair International Inc. (Nationair Canada) et al. (1992), supra, the Board is satisfied that Adecco has and exercises ultimate authority over the subject employees. Adecco has its own corporate structure and organization in place and is responsible for the hiring, assigning of work, scheduling, remuneration and discipline. It is Adecco, through its site-leads and supervisors, that manages the day-to-day work. The site-leads, based upon the needs of CBSA, assign the work, address attendance issues, conduct performance evaluations, deal with complaints respecting non-performance and provide the necessary training. If and when additional staff is required, Adecco is responsible for recruitment and Adecco has the final say as regards terminations and/or discipline. The fact that it must comply with the terms of the contract with CPC is, under the circumstances, reasonable and necessary, as CPC is required to provide a certain level of service in compliance with its contract with CBSA. On occasion, CBSA may pass on instructions directly to Adecco employees or convey the information to CPC, who, in turn, informs the Adecco site-leads. The wearing of the CPC badges by the Adecco employees is for security reasons and does not indicate that they are CPC employees. As noted previously, even though certain supervisors, on occasion, were inclined to exercise their duties more actively and with greater detail to attention than perhaps was warranted does not divest Adecco of its authority and position as the true employer.

E - Conclusion

[112] For the reasons as set out above, the Board hereby dismisses the application filed on behalf of CUPW requesting a single employer declaration with respect to CPC and Adecco or, in the alternative, an order naming CPC as the employer for the CPIP operations located at the Gateway Postal Facility in Mississauga, Ontario, Montréal, Quebec, and Vancouver, British Columbia.