You are a Board member of a residential condominium in Ontario and have just been advised that, unbeknownst to the Board, your condominium security or cleaning company recently became unionized without your knowledge.  

The lawyer for the corporation shocks the Board by revealing that, regardless of your opinion and wishes, the Collective Bargaining Agreement (CBA) from the existing company that just unionized will now apply to any replacing company. 

The lawyer explains that the law provides that existing union contracts (CBAs) will carry over when any new building service provider is engaged, as if nothing had changed.

This is true even if all employees of the former company leave the site to continue employment elsewhere with their exiting company. 

This is a very real example of what is happening in residential condominiums and organizations all over Ontario, where building service providers are found. 

Let’s delve deeper into this issue and consult with experts to gain a broader perspective on the impacts of Ontario Union Successor Rights Legislation.

Ontario Union Successor Rights in the Building Services Sector

Simplified, building service providers include persons or companies that provide cleaning or security services to a premises or building, including residential condominiums.

On January 1, 2018, the Ontario Liberal government made significant changes affecting residential condominiums through Bill 148, also known as the “Fair Workplaces, Better Jobs Act.”  These changes impacted the Ontario Labour Relations Act (LRA) and the Employment Standards Act (ESA). 

The changes remain in place and are effective today, commonly known as LRA 69.1, as they relate to union succession. The changes made in 2018 improved unionization rights by maintaining the bargaining rights that a union had established with original employers. 

When a building service provider (whether unionized or non-unionized) replaces an existing unionized building service provider, the new service provider is required by law to recognize the bargaining rights of the trade union of the exiting employer and is obligated to apply that CBA. 

As a direct result of LRA 69.1, all CBAs now run based on the site location of the work being performed, and not as employees, as was the case in the past. Simply put, if your existing building service provider is unionized, condominiums must engage new companies during procurement processes that are willing to accept and adhere to the CBA that the exiting company has been using. 

Impact to Condominium Corporations, Service Providers & Employees

Michael Smyth, Labour and Employment lawyer at Hicks Morley, cautions that, “Building service providers that are considering bidding on work will have to exercise due diligence to determine whether the existing building service provider is unionized, and, if so, the scope of bargaining rights held by the union and the terms and conditions set out in the collective agreement. That is not something that they really had to be concerned about before January 1, 2018, as there was no mechanism for automatically transferring those bargaining rights as there is now. As a result, there will also be consequences for condominiums whose building service providers become unionized.” 

The ability of service providers to compete for new contracts, especially when unionization is an issue, can be impacted, as it reduces the pool of clients, particularly when competing companies do not wish to become unionized. Service providers are frustrated because they are being forced to deal with multiple unions and various CBAs due to LRA 69.1, which causes administrative overburdening. 

LRA 69.1 has a radiating effect on condominium corporations. Some service providers refuse to compete for unionized buildings, therefore providing an advantage to unionized service providers. Some condominiums are forced to remain with existing unionized service providers due to a lack of interest in procurement processes. 

Employees are speaking out about LRA 69.1, feeling they may be experiencing a loss of workplace democracy. Before January 1, 2018, employees were free to unionize or not, depending on their individual wishes and were free to select any union they wished to have represent them. Now, employees being selected by a new company for a site that is unionized must become members of the existing union (CBA) regardless of whether they want to be a union member or not.

The New Realty

Since 2018, property management firms have refrained from discussions on the topic and impact of LRA 69.1 as they must rightfully remain neutral and unbiased. Boards that have found their condominium has become unionized can get justifiably upset, given the impact. Once affected, there is little that a Board can do except to accept their new state of affairs because if they interfere, they may be subject to severe consequences through ‘union busting’ remedies found in Ontario law.

The new reality is that LRA 69.1 extends successor rights, effectively attaching representational rights to a building location that removes freedom of choice from affected employees, service providers, and condominium corporations. The question that begs is whether such piecemeal unionization has a place in the Ontario labour marketplace.  
Gerry Miller, Managing Partner at Condominium Law Firm Gardiner, Miller Arnold LLP, advises, “The impact on the condominium industry can be significant because once a unionized service provider provides service to a condominium corporation, then that building will likely always be unionized and that will add costs for these services, which will result in higher maintenance fees for unit owners.” 

Our Takeaway – Be Aware When Changing Condominium Service Providers
•    As an end user of a non-unionized building service provider, Boards and property managers should seek advice from legal counsel as soon as possible to include a notice provision in all service agreements that compels service providers to provide advanced notice of any material change that may affect the condominium, including potential unionization.
•    When engaging building service providers for quotes, ask all competing companies to provide in writing whether the company is or has plans to unionize, or is subject to a union organizing campaign. 

Quintin Johnstone brings a wealth of experience and accredited expertise in both the private and public sectors. As the founder and CEO of Samsonshield / Riskboss, he is a leader in the residential condominium security and risk management industry.
www. samsonshield.com
 

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