Contracting Out

1
Contracting Out

• John W. Saunders
• Hicks Morley Hamilton Stewart Storie

Presented for the Association of Municipal
Managers, Clerks and Treasurers of Ontario,
Annual Conference Tuesday, June 13, 2000
2
General Rule

• Normal and customary function of Management to
  contract out

3
General Rule

• Residual rights theory of Management

4
General Rule

• If union desires to limit the Employers right to
  contract out, it must be put in the collective
  agreement

5
Recognition Clause

• All Public Works employees of the City, save and
  except supervisor and those above the rank of
  supervisor.

6
Recognition Clause

• All employees must be in a bargaining unit
• Not - have to do the work the same as before
• Can hire service to do work formerly done by the
  employees

7
Recognition Clause

• Does not, by itself, preclude contracting out by
  the City.

8
Contracting Out Requirements

• Good safe
• For proper business consideration

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Good Safe

• Proportion of work contracted out?
• Was the work contracted out central or peripheral
  to the Employers function?

10
Contracting Out Clauses

• No contracting out if it causes the layoff of
  bargaining unit members.
• Need causal relationship
• Need to show that there was a direct relationship
  between contracting out and the layoff of the
  employees.

11
Contracting Out Clauses

• No contracting out if there are bargaining unit
  persons on layoff capable of performing the work
  in question.

12
Contracting Out Clauses

• No contracting out where there is person
  available who is qualified to do the work.

13
Consultation

• Employer must/should consult with the union prior
  to contracting out.

14
Consultation

• As soon as possible prior to contracting out, the
  City should contact the union to discuss this
  matter.

15
Consultation

• The City shall obtain the approval of the union
  prior to all contracting out.

16
Valid Contracting Out?

• Valid contracting out
• Use of temporary agency employees
• who is the employer

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Valid Contracting Out?

• Payroll
• Hiring
• Sick leave replacement

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Valid Contracting Out?

• Supervision
• Discipline
• Reports to whom

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Valid Contracting Out?

• Control

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Montreal Locomotive Test

• change of profit
• guaranteed
• paid per project
• speculation
• paid hourly rate

21
Montreal Locomotive Test

• risk of loss
• who would cause them to lose their job
• what would cause them to lose their job

22
Montreal Locomotive Test

• ownership of tools
• computer
• trucks
• loaders
• hand tools
• pens and paper

23
Montreal Locomotive Test

• control
• who is directing the work
• who assigns the work
• who decides when work done
• who decides how work done

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Government Funded Projects

• Control over the selection of employees.
• Control over the method and performance of the
  work.
• Control over the decision whether money should be
  paid for wages or other expenditures.

25
Government Funded Projects

• Control over the length and duration of the
  performance of job functions.
• Whether the work performed was part of or
  integral to that of the alleged employer.
• Who benefited from the work performed.

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Don Mills Foundation Test

• The party exercising direction and control over
  the employees performing the work
• the party bearing the burden of remuneration
• the party imposing discipline

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Don Mills Foundation Test

• the party hiring the employees
• the party with the authority to dismiss the
  employees
• the party which is perceived to be the employer
  by the employees and

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Don Mills Foundation Test

• the existence of an intention to create the
  relationships of employer and employee.

29
Town of Ajax Case

• Charterways
• Specific facts
• Divided court

30
Fire Fighters

• Minimum staffing
• absolute number
• Number per vehicle

31
Fire Fighters

• Dispatch
• Inspection
• Mechanical

32
CUPE

• Payroll
• Garbage
• Other

33
Contractual Provisions

• Cancellation of contract
• Insurance for contractors

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Contractual Provisions

• Performance
• completion
• substantial performance
• incomplete performance

35
Contractual Provisions

• Remedies for incomplete or inadequate performance
  
• specific performance
• damages
• monetary
• other

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Contracting Out

• John W. Saunders
• Hicks Morley Hamilton Stewart Storie