Citation: Ontario Public Service Employees Union v. Thames Emergency Medical Services Inc., 2015 ONSC 2413
DIVISIONAL COURT FILE NO.: 457/13 DATE: 20150603
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
Swinton, Sachs and Labrosse JJ.
BETWEEN:
ONTARIO PUBLIC SERVICE EMPLOYEES UNION LOCAL 147 Applicant
– and –
THAMES EMERGENCY MEDICAL SERVICES INC. Respondent
Counsel: Richard A. Blair, for the Applicant Mark D. Contini, for the Respondent
HEARD at Toronto: April 8, 2015
REASONS FOR JUDGMENT
Swinton J.
Overview
[1] The Ontario Public Service Employees Union Local 147 (“the Union”) has brought an application for judicial review seeking to quash an arbitration award dated August 15, 2013. The arbitrator dismissed a grievance claiming that the grievor had been improperly terminated and denied pension credits, disability and supplementary health and dental benefits under the collective agreement between the Union and the respondent Thames Emergency Medical Services Inc. (“Thames”).
[2] In my view, the decision of the arbitrator was a reasonable one. Accordingly, I would dismiss the application for judicial review.
Background Facts
[3] Prior to March 25, 2012, Thames had a contract to provide land ambulance services to the County of Middlesex. Its employees who provided those services were represented by the Union.
[4] In October 2011, the County of Middlesex advised Thames that as of March 25, 2012, Middlesex-London Emergency Services Authority (“Middlesex”) would assume responsibility for the provision of land ambulance services in the region that had been served by Thames.
[5] While Thames would no longer perform land ambulance services in Middlesex County after March 25, 2012, it continued to provide such services in Elgin-St. Thomas with employees who are represented by another union, the CAW (now UNIFOR).
[6] On October 14, 2011, Thames gave written notice to all employees in the bargaining unit represented by the Union that their employment would terminate on March 25, 2012. The grievor, Michelle Kinney, was an ambulance paramedic who had been off work since July 25, 2011 because of a work-related injury. She was receiving workers’ compensation benefits at that time.
[7] There is no dispute that there was a “sale of a business” from Thames to Middlesex within the meaning of s. 69 of the Labour Relations Act, S.O. 1995, c.1, Schedule A (“the Act”). Of importance for this case is s. 69(2), which deals with the application of a collective agreement to a successor employer, in this case Middlesex. It states:
Where an employer who is bound by or is a party to a collective agreement with a trade union or council of trade unions sells his, her or its business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if the person had been a party thereto and, where an employer sells his, her or its business while an application for certification or termination of bargaining rights to which the employer is a party is before the Board, the person to whom the business has been sold is, until the Board otherwise declares, the employer for the purposes of the application as if the person were named as the employer in the application.
[8] On March 6, 2012, the Union and Middlesex entered into a Transition Agreement, which included a provision dealing with employees who were in receipt of disability or workers’ compensation benefits. That provision states:
Employees who are in receipt of WSIB and/or Long Term Disability benefits as of March 25, 2012 shall remain employed by Thames EMS as long as they continue to satisfy the appropriate eligibility requirements. When, and/or if, after March 25, 2012 they become able to perform the essential duties of a paramedic, subject to the Human Rights Code obligations, they shall become employees of the Employer. The Employer reserves its rights to require appropriate medical documentation from the employees in question. Seniority for such employees shall continue to accrue in accordance with the Collective Agreement and shall be accordingly recognized by the Employer upon their assumption of employment with the Employer.
[9] Thames was not a party to the Transition Agreement. The terms of the Transition Agreement are the subject of an application to the Human Rights Tribunal of Ontario brought by the grievor against the Union and Middlesex.
[10] On March 22, 2012, the grievor filed her grievance against Thames, alleging unjust termination and a denial of ongoing benefits under the collective agreement. Under the collective agreement between Thames and the Union, an employee absent on workers’ compensation would continue to accrue seniority for up to 24 months.
The Arbitration Award
[11] At the time of the hearing before the arbitrator, the grievor was still off work and in receipt of workers’ compensation benefits. The Union took the position that the grievor was entitled to the provision of benefits under the collective agreement with Thames, including continued employment.
[12] The arbitrator rejected Thames’ argument that the grievor’s employment was automatically transferred to Middlesex by virtue of the sale of the business. However, she concluded that “the business for which OPSEU held bargaining rights with Thames is no longer in operation”, and the grievor must look to Middlesex for the ongoing benefits sought, with the exception of benefits that had “crystallized” under the collective agreement prior to the sale. She held that Thames had no ongoing liability under the collective agreement except in relation to severance, and accordingly, the grievance was dismissed.
[13] In reaching her conclusion, the arbitrator stated (Award, p. 10):
However, I agree with [employer’s counsel’s] submission that outside of entitlements that crystallized, Thames has no ongoing liability to her under the Collective Agreement after the sale. To determine that such liability under the Collective Agreement continues would require an employer no longer in business, without associated revenues, to face unknown financial responsibilities. I am not persuaded that any of the authorities provided by Ms. Letton compel such a conclusion. With the sale of the entire business, Middlesex-London has replaced Thames as the employer party to the Collective Agreement, effective the date of the sale. At that point, Ms. Kinney’s entitlement to ongoing benefits under a Collective Agreement lay entirely with the successor. I am not persuaded that the Collective Agreement that Thames has with another union for a different bargaining unit can in any way advance the Union’s claim on behalf of Ms. Kinney.
Was the Arbitrator’s Decision Unreasonable?
[14] There is no dispute that reasonableness is the standard of review of an arbitral decision interpreting a collective agreement.
[15] The Union argues that the decision is unreasonable. The Union submits that the arbitrator properly held that the sale of the business to Middlesex did not operate to terminate the grievor’s employment. Accordingly, the Union submits, the grievor had the right, while in receipt of workers’ compensation benefits, to remain in employment and accrue seniority for 24 months. The Union states that the arbitrator, in accepting that Thames had no ongoing obligation to provide benefits, reached an unreasonable decision inconsistent with the scheme of the Labour Relations Act and relevant case law.
[16] The Union argues that the arbitrator unreasonably concluded that there was an entire sale of the business, as Thames continued to operate another land ambulance service where the CAW represented the emergency medical service employees. Further, it is submitted that she also unreasonably considered that Thames would face “unknown financial responsibilities” if it had ongoing liabilities to the grievor, and she failed to treat the grievor’s right to accumulate seniority as a vested right.
[17] In my view, the decision was reasonable. I agree with Thames’ submission that the arbitrator’s decision is consistent with the labour relations jurisprudence.
[18] There is significant authority supporting the arbitrator’s conclusion that on the sale of a business, an employee has a right to elect whether to take up employment with the successor employer or whether to remain with the predecessor employer. For example, the Labour Relations Board described the effect of s. 63 of the Act in United Food and Commercial Workers International Union v. Cabral Foods Inc., [1985] OLRB Rep. 165 at para. 9:
… section 63 does not extinguish any of the predecessor employer’s collective bargaining or collective agreement obligations. When a sale occurs during the term of a collective agreement covering a unit of employees of the predecessor engaged in the sold business, the result of the operation of section 63 is that a separate collective agreement is effectively created between the successor and the union party to that collective agreement covering persons employed by the successor in the sold business. There will then be two agreements and two collective bargaining relationships, when once there was only one. Of course, one of those agreements will have nothing to operate on if the predecessor no longer has employees who fall within the bargaining unit description, but the absence of such employees no more terminates the predecessor’s obligations that [sic] it would if a sale had not taken place.
[19] Cabral has been followed in Labourers’ International Union of North America, Local 1059 v. The Cadillac Fairview Corporation Limited, [1997] OLRB Rep. March/April 187 at paras. 28-32 and International Brotherhood of Electrical Workers, Local 586 v. E.P. Electrical Contracting Ltd, [2011] O.L.R.D. No. 1244 at para. 21.
[20] Arbitrators have also held that the sale of a business does not result in the automatic transfer of employees to the successor employer. For example, Canadian Broadcasting Corp. v. Communications, Energy & Paperworkers Union of Canada, [2001] C.L.A.D. No. 294 (M.H. Freedman) states at para. 82,
On a sale of the business the employment relationship between the employee and his original employer is not interrupted, unless the employer and individual employee so agree, or unless the statute so provides, which it does not here, or unless there is something in the collective agreement expressly so providing.
I note that in this case, only part of the employer’s operations was sold, and the arbitrator did not determine the rights, such as bumping rights or severance, available to employees who stayed with the predecessor employer (at para. 95).
[21] However, these earlier cases did not determine the precise issue before the arbitrator in the present case – namely, the scope of the employee’s rights available under the collective agreement with the predecessor employer when there has been a sale of the entire business.
[22] While the Union argues that there was only a partial sale of Thames’ business, the arbitrator found that there was a sale of the entire business. That was a reasonable conclusion, given that the work of the bargaining unit represented by the Union was wholly transferred to Middlesex. This is not a situation similar to the Canadian Broadcasting Corporation, Trillium Health Centre v. Canadian Union of Public Employees, [2012] O.L.A.A. No. 72 (W. Kaplan) or Ottawa Hospital v. Canadian Union of Public Employees, Local 4000, [2009] O.L.A.A. No. 476. In those cases, there was a partial sale of the business, the predecessor employer continued to carry on business covered by the relevant collective agreement, and the employees were asserting ongoing collective agreement rights against the predecessor employer.
[23] Given that there was a sale of the entire business to Middlesex, Thames had no further involvement with the business that was subject to the collective agreement with the Union. Consistently with past case law, the arbitrator concluded that on the sale of the entire business, Middlesex replaced Thames as the employer for purposes of providing ongoing benefits under the collective agreement (see, for example, Emrick Plastics Inc., [1982] OLRB Rep. June 861 at para. 18 and Re Computing Devices Canada Ltd. and Computing Devices Canada Employees’ Association, [1995] O.L.A.A. No. 332 (Kelleher) at paras. 19-20). She reasonably concluded that the collective agreement with the predecessor could only have force and effect with respect to rights that have accrued or crystallized.
[24] The arbitrator was aware that Thames continued to operate another land ambulance service in Elgin-St. Thomas. However, that was a separate business operating with employees in a different bargaining unit and represented by a different union. She correctly held that Thames had divested itself of all the business subject to the collective agreement with the Union.
[25] The Union asserts that the grievor had a vested right to remain in employment and accrue seniority for up to 24 months. However, the Supreme Court of Canada has held that the right to accrue seniority is not a vested or accrued right (Dayco (Canada) Ltd. v. National Automobile, Aerospace and Agricultural Workers Union of Canada (CAW-Canada), 1993 144 (SCC), [1993] 2 S.C.R. 230 at para. 48; Hémond v. Coopérative fédéré du Québec, [1984] 2 S.C.R. 962 at p. 975).
[26] Finally, the Union argues that the arbitrator failed to consider the scope of the duty to accommodate under the Human Rights Code, R.S.O. 1990, c. H.19, which may impose obligations on employers to accommodate in a bargaining unit or business not subject to the collective agreement. However, the grievance before the arbitrator did not require her to consider the scope of the duty to accommodate. Her task was to determine whether the grievor had an ongoing entitlement to the provision of the benefits under the collective agreement by the predecessor employer, and she properly limited herself to that task.
Conclusion
[27] The arbitrator’s decision fell within the range of possible, acceptable outcomes. Her reasons are clear and logical. Accordingly, the application for judicial review is dismissed.
[28] Costs to the respondent are fixed at $5,000.00 all inclusive, an amount agreed upon by the parties.
Swinton J.
Sachs J.
Labrosse J.
Released: June 3, 2015
CITATION: Ontario Public Service Employees Union v. Thames Emergency Medical Services Inc., 2015 ONSC 2413
DIVISIONAL COURT FILE NO.: 457/13 DATE: 20150603
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
Swinton, Sachs and Labrosse JJ.
BETWEEN:
ONTARIO PUBLIC SERVICE EMPLOYEES UNION LOCAL 147 Applicant
– and –
THAMES EMERGENCY MEDICAL SERVICES INC. Respondent
REASONS FOR JUDGMENT
Swinton J.
Released: June 3, 2015