Union of Canadian Retail Employees, Local 1000A v. More Groceteria Limited, 1980 CanLII 804

Union of Canadian Retail Employees, Local 1000A v. More Groceteria Limited

[1980] OLRB Rep. April 486

1972-79-R Union of Canadian Retail Employees, Local 1000A Chartered by the Unitect Food and Commercial Workers International Union Applicant, v. More Groceteria Limited, Douglas R. More, and Loblaws Limited Respondents.

BEFORE: George W. Adams, Chairman and Board Members W. G. Donnelly and M. J. Fenwick.

APPEARANCES: Paul I. J. Cavalluzzo and Dan Gilbert for the applicant; and Frank A. Highley and Douglas R. More for the respondents.

DECISION OF G. W. ADAMS, CHAIRMAN AND BOARD MEMBER M. J. FENWICK;

April 8, 1980

1The respondent's name is changed to read: More Groceteria Limited and the style is amended to add Douglas R. More as a respondent.

2The xpplicant applies under section 55 of The Labour Relations Act for a declara­tion that the respondent More Groceteria Limited is a successor employer and bound by the terms of a collective agreement between the applicant and Loblaws Limited as the said agreement pertains to certain premises located at 179 Wortley Road, London, Ontario.

3A collective agreement was filed with the Board and describes the signatory trade union as: "Union of Canadian Retail Employees, Local 1000, Chartered by the Amalga­mated Meat C Itters and Butcher Workmen of North America" (hereinafter referred to as Local 1000). The applicant advised the Board that it is the successor of that trade union by virtue of a merger between The Retail Clerks International Union (hereinafter referred to as "Retail Clerks") and the Amalgamated Meat Cutters and Butcher Workmen of North America (hereinafter referred to as "Amalgamated"). In 1978 the Union of Canadian Re­tail Employees merged with Amalgamated and Local 1000 was issued a charter dated No­vember 1, 1978. The said charter was filed with the Board in this matter and we were advised that Local 1000 had obtained status before the Board in Cordesco Limited, File No. 1868-78-Ron March 6, 1979, a decision which was also filed in this matter. In June of 1979 the Retail Clerks and Amalgamated merged in the manner approved by the Board in Research Foods (1976) Limited and described at paragraph 4 and 5 of that decision, thusly:

"'The evidence establishes that the applicant organization is the di­rect result of a merger of two organizations which had previously estab­lished their status as trade unions for the purposes of the Act: the Retail Clerks International Union on the one hand and the Amalgamated Meat Cutters and Butcher Workmen of North America on the other. Mr. Clifford Evans, previously the International Vice-President and Canadian Director for the Retail Clerks testified that in January, 1979 the Retail Clerks Executive Board adopted both the merger agreement and the constitution proposed for the merged organization. The Execu­tive then called a special convention for June 5th and 6th, 1979 where the merger agreement and proposed constitution were unanimously ap­proved by delegates representing the members of the Retail Clerks. Mr. Romeo Mathieu previously the International Vice-President of the Amalgamated Meat Cutters and Canadian Director testified that in January their International Executive Board similarly adopted the merger agreement and proposed constitution and called a special con­vention for June 5th and 6th where their delegates also approved the two documents. The following day, on June 7th, the first meeting of the merged association was convened.

The merger agreement stipulated that all members of the Retail Clerks and the Amalgamated would be members of the merged organi­zation upon the effective date of the merger which was, by the terms of the merger agreement, the date upon which the Retail Clerks and Am­algamated approved the merger agreement. At the same time as each parent union approved the merger agreement, the respective delegates also approved the constitution for the new organization. The merger agreement also made provision for the persons who were to be officers in the merged organization. The International President of the Retail Clerks, for example, was to be the President of the merged organization and the International Secretary-Treasurer of the Amalgamated was to be the International Secretary-Treasurer of the applicant. In approving the merger agreement, therefore, the Board concludes that the two or­ganizations approved these persons as officers for the new organization held on June 7th, the officers, in accordance with the terms of the merger agreement, were formally installed as officers of the applicant organization. The constitution for the merged organization provides for a procedure for the election of officers and calling of meetings. In ac­cordance with the provisions of section 1(i)(n) of The Labour Rela­tions Act, the constitution establishes that one of its purposes is the reg­ulation of relations between employees and employers. It appears from the evidence that since its founding convention on June 7, 1979 the merged organization has been functioning in accordance with its consti­tution."

4Paragraph 11(A) of the merger agreement between the two trade unions provid­ed:

"11. Local Unions and Other Chartered Bodies

(A) Each chartered body of either the Retail Clerks or the Amalga­mated shall retain its charter as of the date of its original issue and be­come, by virtue of the consolidation, a chartered body of the Merged Organization. Should the charter number of Local Unions in the Retail Clerks and the Amalgamated be the same, the International President and International Secretary-Treasurer may assign identification desig­nations to avoid confusion. The International President and Interna­tional Secretary-Treasurer of the Merged Organization shall issue new charters to all Retail Clerks and Amalgamated chartered bodies. The charters will contain the date of their original chartering by the Retail Clerks or the Amalgamated. The International President and Interna­tional Secretary-Treasurer shall jointly issue all future charters. All charters shall be signed by the International President and Interna­tional Secretary-Treasurer of the Merged Organization."

Paragraphs 15(A), (B), (C) and (D) provided:

"15. Rights, Property, and Obligations Of Merged Organization

(A) On the effective date of the merger, all the property, real, per­sona ,and mixed, and all rights, title, and interest, either legal or equi­table, in any monies, funds, or property, tangible and intangible, of the Retail Clerks and the Amalgamated, including but not limited to their respective separate names, trademarks, copyrights, labels, registra­tions, emblems, and union shop cards, and all debts due to each of their., all the rights, privileges, and powers, and every other interest of each of them, of whatever nature, shall, by virtue of the merger of the Retail Clerks and the Amalgamated, be transferred to and vested in the Merged Organization. Title to any property, real, personal, or mixed, legally or beneficially vested by deed or otherwise in the Retail Clerks or the Amalgamated, shall not be in any way impaired by reason of the merger but shall in all respects be vested in the Merged Organization by virtue of the merger. The Merged Organization shall, on and after the effective date of the merger, assume and be responsible for all the debts, liabilities, contract obligations, and other obligations of the Re­tail Clerks and the Amalgamated. Such debts, liabilities, contract obli­gations, and other obligations shall from that time forth attach to the Merged Organization to the same extent as if the said debts, liabilities, contract obligations, and other obligations were incurred or otherwise contracted by it.

(B) Nothing in this Merger Agreement shall affect the rights of any chartered body of the Retail Clerks or the Amalgamated in and to their respective assets under the provisions of the Constitution.

(C) The Merged Organization shall be deemed, for all purposes, to be a combination and continuation of the Retail Clerks and the Amalga­mated. Neither of such organizations shall be deemed, for any purpose, to be dissolved, terminated, or discontinued, but upon the effective date of the merger the Constituent Unions shall be merged and contin­ued as a single organization, governed by this Merger Agreement and the Constitution of the Merged Organization, which Constitution shall be an amendment to and substitute for the present separate constitu­tions of the Retail Clerks and the Amalgamated.

(D) The merger of the Retail Clerks and the Amalgamated shall not affect, interrupt, or change in any way the continuing status, or the rights or duties with respect to third persons, of either the Retail Clerks or the Amalgamated or any organization chartered by the Retail Clerks or the Amalgamated, and further, shall not impair the status of such or­ganizations in any pending action or proceedings, or any right, title, or interest in any property, or arising from any deeds, bonds, mortgages, leases, or contracts of any kind, including but not limited to recognition agreements and collective bargaining agreements, or the continuity thereof, and, further, shall not impair any federal, state, provincial, ter­ritorial, or commonwealth certification or any representational rights or any other rights or obligations of such organizations under their ex­isting collective bargaining agreements or checkoff authorizations. All authority, power, and rights, jurisdictional and otherwise, held by or vested in the Retail Clerks and/or the Amalgamated under or in con­nection with any charter or affiliation with the AFL-CIO and CLC shall automatically be vested in the Merged Organization."

5By notice dated July 25, 1979 the International President and Secretary-Treasurer of the United Food and Commercial Workers International Union (the newly merged trade union) advised the applicant that pursuant to paragraph 11 of the merger agreement they were assigning the applicant a "alpha-numeric" identification of 1000A to avoid duplica­tion. This notice was filed with the Board in this matter. It is also noted that by letter dated September 4, 1979 Loblaws was advised of this change which it acknowledged by letter dated September 10, 1979 over the signature of Mr. A. Faas, Director of Industrial Rela­tions.

6The respondent(s) were given the opportunity to inspect all of these filings which had been transferred from Board File No. 1718-79-R and its counsel indicated that he wished to make no representations in this respect, leaving the Board to satisfy itself as to the propriety of documentation so filed.

7Having regard to these filings; to the earlier decisions of the Board in Cordesco Limited, supra, and Research Foods (1976) Limited; and to the provisions of The Labour Relations Act as previously applied in The Spectator, [1974] OLRB Rep. April 235, the Board is satisfied that the applicant is the successor union to Local 1000, signatory to the col­lective agreement with Loblaws Limited filed with the Board.

8This then brings us to the principal issue of whether Loblaws Limited sold a part of its business to the respondent(s) so as to bring into operation the provisions of section 55 of The Labour Relations Act upon which the applicant relies. Section 55 provides, in part:

"55. —(1) In this section,

(a) 'business' includes a part or parts thereof;

(b) 'sells' includes leases, transfers and any other manner of disposi­tion, and 'sold' and 'sale' have corresponding meanings.

(2) 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 business, the person to whom the business has been sold is, until the Board otherwise de­clares, bound by the collective agreement as if he had been a party thereto and, where an employer sells his business while an application for certifica­tion or termination of bargaining rights to which he is a party is before the Board, if e person to whom the business has been sold is, until the Board otherwise declares, the employer for the purposes of the application as if he were named as the employer in the application."

9The facts are not in dispute and were introduced through the testimony of Doug­las R. More, the sole shareholder of the respondent company and an officer of that compa­ny. The respondent company was incorporated December 3, 1979, although More owned another retail food store in Stratford, Ontario. He testified that he had read in the newspa­per that Loblaws was closing down its store at 179 Wortley Road, in the City of London and, as a consequence, he went to London and inspected the premises. The premises and loca­tion were sufficiently agreeable that he contacted a Mr. Doug Price who was described to the Board as the Property Manager of Loblaws. Following a meeting with Price on Novem­ber 5, 1979 and a further inspection of the premises and its contents, More entered into both a lease with Loblaws for the premises and a bill of sale in the amount of $14,000 for certain "goods, chattels and effects" contained therein. The lease's preamble notes that by head lease dated May 28, 1958, Sun Life Assurance Company of Canada leased the premises to Loblaws for thirty (30) years commencing June 1, 1954 with the option of renewing the lease for each of four (4) renewal terms of five (5) years each.

10By paragraph 4(G) of the sublease to More, he covenanted to use the demised premises only for a retail food market. By paragraph 4(Q) his power of assignment was lim­ited. The duration of the lease is for five (5) years from December 1, 1979 to November 30, 1984 with the option to renew for two additional five year terms provided that Loblaws exer­cises partnering options under the head lease.

11Loblaws discontinued its operation of the premises on Saturday, December 1, 1979. More, apparently acting through the respondent company, took possession of the premises on December 5, 1979 and opened for business on December 19, 1979. More ad­vised that neither he nor his respondent company has an ongoing business or commercial re­lationship wit Loblaws other than the lease. The respondent(s) acquired no foodstuffs from Loblaws and markets none of the company's products. Indeed, Loblaws is considered a competitor. More advised the Board that two weeks before Loblaws closed the Wortley Road store, it opened a "super store" five miles away at Highway 401 and Wellington Street in the City of London. There's also a daily bus service from the Wortley Road premises to the super store for the first week after it closed the Wortley Road store and thereafter bi­weekly until the respondent(s) opened for business. The bus service ceased the Friday be­fore the respondent(s) opened for business and was provided free of charge.

12When the respondent(s) opened the store, five full-time employees and six part-­time employees were employed. It is common ground between the parties that all Loblaws' employees who had worked at the subject premises were transferred to other Loblaws stores under a guarantee of employment clause contained in the subject collective agree­ment.

13On cross-examination, More acknowledged that a local church group had protested the closing of the Wortley Road store by Loblaws because a significant number of older people resided nearby the store and for whom a two mile walk to the nearest store would be extremely inconvenient. More acknowledged that the premises constituted a "neighbourhood store" in that it relies on local clientele. He also admitted that the purchase of the fixtures and chattels was conditional on the granting of the sublease. And, finally, More acknowledged that on commencing business he placed advertisements in certain "penny saver" newspapers describing the store as "formerly Loblaws" or words to that ef­fect.

14Counsel for the respondent(s) submitted that these facts did not disclose the sale of part of Loblaws business to the respondent(s). He submitted that the respondent(s) rep­resented a parallel business which existed previous to the acquisition of the Wortley Road premises. He stressed the arms length relationship between Loblaws and More and the re­spondent company and argued that More had simply purchased certain fixtures and chattels from Loblaws together with the granting of a lease. He pointed to the existence of two Lob-laws stores nearby and to the fact that Loblaws had attempted to dissipate any goodwill associated with the premises by providing a free bus service to other stores for a period of time. Counsel for the applicant, of course, argued the contrary. He pointed to the fact that there had been direct dealings between the respondent(s) (more accurately More) and Lob-laws and that Loblaws retained ultimate control over the premises. He pointed to the fact that there had been very little hiatus between the closing of the store by Loblaws and its opening by the respondent(s). He also asked the Board to note that the respondent(s) had not operated previously in the immediate vicinity nor did Loblaws continue or commence to operate nearby. It was his submission, that the busing by Loblaws was to preserve the local goodwill associated with the premises until the store reopened and was not designed to dissi­pate it. He submitted that had Loblaws intended the latter, it would have continued to pro­vide the bus service after the respondent(s) opened for business. He also reminded the Board of the protest of the store closing on behalf of local consumers. Council accompanied these submissions on the fact with exhaustive and thoughtful representations on the legal principles to be applied. In the light of this analysis, he argued that in these kinds of cases the rule was and ought to be that a transfer of a store location from one retail food operation to another constitutes a sale of a business unless the circumstances are such that the location it­self is no longer of value as a retail store in that the habit of customers to patronize the store is broken or spent.

15Section 55 of The Labour Relations Act is a very important part of the legislation guarding against the subversion of acquired collective bargaining rights and providing some permanence to them in an otherwise volatile commercial context. in the former respect, it is assisted by the various unfair labour practice sections of the Act together with section 1(4) which permits the Board to treat as one employer a business carried on through more than one corporation where there is a common control or direction and whether or not these businesses are being carried on simultaneously. An interesting early example of this unfair labour practice aspect of the provision can be found in the important Thorco Manufacturing Limited, (1965), 65 CLLC ¶16,052 case, a case that today could be just as fairly dealt with under section 1(4). However, this purpose of the provision is not applicable in the facts at hand. We are satisfied that the relationship between the respondent(s) and Loblaws has been arms length and there is no evidence that the subject commercial transactions were other than for bona fides business purposes.

16Unfortunately, however, the latter function of the section — providing some permanence to collective bargaining rights — is often the most difficult to apply. Here the Legis­lature has determined that the objectives of labour relations policies require that the rightful prerogatives of owners independently to rearrange their businesses and even eliminate themselves as employers be balanced by protection to the employees from a sudden change in the employment relationship. Indeed, the transition from one corporate organization to another will in most cases be eased and industrial strife avoided if employees and their rep­resentatives are assured of some real measure of continuity in the collective bargaining proc­ess by operation of law. So strong is the basis to this policy that the Supreme Court of the United States arrived at a similar conclusion without the benefit of a specific statutory provi­sion like section 55. See John Wiley & Sons inc. v Livingston, (1964), 376 U.S. 543,84 S.Ct. 909; Goldberg, The Labor Law Obligations of a Successor Employer (1969), 63 N.W.L.Rev. '735; Note, (1966), 66 Col.L.Rev. 967; Note, (1969), 82 Harv.L.Rev. 418. This ongoing nature of collective bargaining agreements underlines again that such documents are not "ordinary contracts" nor are they in any real sense the simple products of consensual relationships. See McGavin Toastmaster Ltd. v Ainscough et al, 1975 CanLII 9 (SCC), 1 S.C.R. 718; 54 D.L.R. (3d) I Laskin, C.J.C. It is against these impressive policy considerations that the Board must g ye meaning to and apply section 55.

17The fundamental issue in cases of this kind is the threshold determination of the section: Has a business been sold? The term "sells" is defined to include "leases, transfers; and any other money of disposition." This all-embracive definition obviously reflects the la­bour relations policy considerations discussed generally above. To repeat, collective bar­gaining rights are not to be treated as co-extensive with commercial ownership and, to this extent, labour law policy seeks to insulate industrial relations from disruption by necessary and inevitable interaction in the market place. The term "business", on the other hand, is simply defined to include "a part or parts thereof." No similar exhaustive definition was at­tempted by tae Legislature in recognition, we think, of the great diversity in commercial af­fairs and the resulting need for a case by case elaboration of the term in the light of labour law policy. A brief perusal of the many factual situations giving rise to the Board's jurispru­dence bears testimony to the wisdom of this legislative choice. Accordingly, at the outset of reviewing a few of the cases that have applied the term "business" in the context of retail food stores, it should not be surprising to learn that the Board in determining whether a business has been sold has not deferred to the commercial documentation employed; has not been influenced by the use of intermediary agents to effect transfers; and has not made simple distinctions between asset and business dispositions. Rather, it has tried to make workplace assessments with respect to the continuity of a particular enterprise, activity, or service arriving at conclusions that a court of law in a commercial matter might not arrive at, but conclusions which are fair to both the statute and context under review. See Gordons Markets (decision of the Divisional Court of Ontario, unreported, November 21, 1978). This we understand to be the main purport of the following excerpt taken from R. v. B.C. Labour Relations Board ex parte Lodum Holdings Ltd., (1969), 1968 CanLII 586 (BC SC), 3 D.L.R. (3d) 41 (B.C.S.C.) at page 52 per Dryer J.

"The importance of the "business" in its labour relations aspect is the jobs it provides for the employees. One factor to be considered therefore, is whether the same or substantially the same jobs are being performed. That depends on a number of factors, such as whether the jobs are being per­formed at the same or substantially the same times and places, in respect of the same or substantially the same goods or services, and for the same or sub­stantially the same customers or patrons, etc. These matters are, in my opin­ion, more important than the form of transfer."

18The retail food cases provide a classic illustration of the Board's attempt to ground the definition of business to the peculiarities of a particular industry and the policy of the statute in providing some measure of permanence to the collective bargaining process. One of the first cases is Dutch Boy Food Markets, (1965), 65 CLLC ¶16,051. There the owner of certain premises in Kitchener leased the premises for fifteen (15) years to Carroll's Limited who carried on a grocery business at the location for two years. Carroll's in turn as­signed its interest in the lease to Steinberg's Limited who thereafter carried the same type of business for approximately seven years. In 1964 Kitchener Food signed an offer to purchase all leasehold improvements and fixtures at the subject location conditional on the assign­ment of the lease between the original owners of the premises and Carroll's Limited. Stein­berg's ceased operations December 24, 1964 and, after extensive alterations, Kitchener Food opened for business February 10, 1965. None of the former employees of Steinberg's were in the employ of Kitchener Food. In finding that Kitchener Food had purchased part of Steinberg's business the Board observed that had Kitchener Food only purchased the con­tents of the subject premises and moved them into other premises, it would have had no diffi­culty in finding the transaction was only the sale of assets. But the transaction, in fact, amounted to a disposition of Steinberg's entire operation in the Kitchener area. The Board also noted that the existence of a restrictive covenant by Steinberg's would have conclu­sively established the sale of a business but the absence of such a covenant does not establish the contrary where the facts of the industry militate otherwise. It then went on to, in effect, find that the somewhat unusual features of the retail food supermarket gave a particular meaning to the term "business" often coincident with a disposition or relinquishing of the physical premises. In this respect it wrote:

"A retail food supermarket, unlike some other businesses, has no cus­tomer orders or lists which can be transferred to a purchaser who intends to carry on the same type of business. By the very nature of a retail food busi­ness, with the exception of the name, a vendor has no goodwill which he can effectively give or withhold from a purchaser. The success of a food super­market is dependent, on large measure, upon the support of the people who live in the area in which the store is located. Accordingly, any goodwill con­sists in the habit of customers of the vendor continuing to patronize the food market located on the same premises. If there was any goodwill to be ac­quired by Kitchener Food it was inherent in the premises themselves in which Steinberg's had carried on the same type of business as that carried on by Kitchener Food. Accordingly, the exemption of goodwill from the pur­chase price, in our opinion, has no real meaning.

Each food supermarket chain endeavours to attract customers on the par­ticular quality of its merchandise. In this connection it features and adver­tises its own name brand products. Accordingly, it is to be expected that one chain food store would not be interested in acquiring the foodstuffs and in­ventory of another chain food store. This perhaps is particularly true in the instant case, since the evidence is that Steinberg's ceased its operation on the premises in question because is had not proved to be a sufficiently profitable operation to maintain. In our view, the failure of Kitchener Food to pur­chase the foodstuffs and inventory does not have any significant effect in our determination as to whether there was a sale of a 'business'.

With reference to the argument relating to the lapse of time before Kitch­ener Food opened its store, we are of the opinion that an analogy cannot be drawn between a retail food business and a manufacturing operation. In the latter case, if there was a shut down of the operation at the time of a sale to a purchaser who intends to carry on the same type of business, the result gen­erally would be a production and financial loss to both the vendor and the purchaser. In the former case, however, it is generally necessary to shut down operations at the time of a sale in order to give the new owner an op­portunity to make renovations which are in accord with its particular method of merchandising and carrying on business. It also allows time for the new owner to stock the premises with its own foodstuffs and inventory. In the in­stant case, Kitchener Food acted with all reasonable expedition in opening the premises for commercial operations following its acquisition of the prem­ises. In our opinion, the fact that there was a time lapse between the cessa­tion of Steinberg's operations and the commencement of operations by Kitchener Food does not make the transaction any less the sale of a 'busi­ness'.''

19Cases confirming these views with similar positive findings of business sales are Leader's Cover Farms Food Market [1966] OLRB Rep. Nov. 636; L & M Food Markets (Ontario) Limited [1965] OLRB Rep. Sept. 440; Super City Discount Foods Limited [1970] OLRB Rep. April 118; Gordons Markets [1978] OLRB Rep. Dec. 1102. However, it is to be noted that Super City, supra, and the two Gordons Markets cases involved non-arm's length transactions where the Board had little difficulty in concluding that intra-corporate group transfers of business activity had occurred.

20Cases in the retail food industry where the Board has dismissed section 55 applica­tions include Sunnybrook Food Markets [1966] OLRB Rep. Oct. 53; Sunnybrook Food Market (Keele) Limited [19741 OLRB Rep. Jan. 47; Zehrs Markets Limited [1974] OLRB Rep. Apr. 311; Dominion Stores Limited [1979] OLRB Rep. 626; and Darrigo Consolidated Holdings Inc. File No. 0266-79-R decision issued January 15, 1980. In the first Sunnybrook case Steinberg's operated stores in Ajax and Whitby prior to the assignment of its Whitby store lease to the respondent company. At about the time that Steinberg's closed the Whitby store it opened an Oshawa store and the Oshawa and Ajax stores were about five miles (dis­tant) from the former Whitby location. In dismissing the application the Board appears to have been influenced by the fact that Steinberg's and Sunnybrook competed with each other by advertising in the community served by the other. Moreover, at the time Steinberg's closed its Whitby store and opened its Oshawa store, the move was prominently advertised at the Whitby store and customers urged to take their business to the Oshawa store. Focusing on these facts, the Board at paragraph 9 concluded:

“Having regard to all of the circumstances of the instant case, we conclude that 1 his is not a case (such as the Dutch Boy case was) in which one employer goes out of business and another, purchasing all the substantial assets, opens for business at the same premises. Rather, this is a case in which an employer, changing the location of its business operations within a particular market area, disposes of certain unwanted premises and other assets to a competi­tor. In arriving at this conclusion, we have had regard, inter alia, to the fact that Steinberg's retained the services of certain of its employees, who were transferred from Whitby to Oshawa. This is consistent with the conclusion that Steinberg's has not disposed of its business in the market area in ques­tion. We would agree with the view expressed by the majority of the Board in the Dutch Boy case that the differences or similarities in employment forces as between "predecessor" and "successor" employers would not otherwise be relevant to the issue.

Counsel for the applicant submitted that in this case the Board failed to take into account that the definition of "business" includes the disposition of a part of a business and that the case was also incorrect if it stands for the proposition that a business cannot be sold to a com­petitor. He also submitted that the Board's view of the relevant market area in this case was far too broad. He submitted that the relevant market area for a "neighbourhood store" should be confined to the immediate vicinity of the store without cogent market evidence to the contrary. While each case must be decided on its own facts and the particular panel hear­ing the facts is in the best position to make the necessary judgments, we find counsel's argu­ment persuasive. We would decline to follow this case if it stands for the proposition counsel fears it supports. Clearly, an employer in this industry can dispose of a part of its business (and to a competitor) where it is prepared to gamble that a more remote store through wide­spread advertising can recapture all or part of that which it has ostensibly disposed of. Each of the parties to such a transaction is gambling with respect to the value of the disposition, but the facts of the case before this panel and our understanding of local patronage weighs against the conclusion of a mere asset disposition and lease assignment. Without evidence to the contrary, we accept counsel's submission that the relevant market of a neighbourhood store should be narrowly defined and the particular facts in this case support this conclusion.

21In the second Sunnybrook case the "A & P" had the benefit of a ten year lease on certain premises in Brampton together with three five year options for renewal. At the con­clusion of the ten year term, "A & P" gave six month's notice to the lessor that it would not be extending the lease. The evidence was that "A & P" had found the premises too small and outmoded; the profit was marginal; and it was negotiating for a replacement outlet in Brampton that was three times as large. "A & P" did not sell its fixtures to the respondent company until some six weeks before it ceased operations in the location fortifying the con­clusion that there had been no direct or indirect transfer of the premises by "A & P" through the intermediary of the lessor. The relationship between the lessor and respondent company was therefore independent of "A & P" interests and its business decisions. Indeed, there had been no discussions about the lease between "A & P" and the respondent company and the sale of the fixtures was in no way conditional upon the successful completion of the lease transaction. The Board emphasized all of these factors in dismissing the application and dis­agreed with the general proposition that in the retail food business "the business adheres in the premises." Counsel did not contend that the case was incorrectly decided. Indeed, it shows that there are circumstances where an employer may come to a conclusion that a loca­tion is no longer of value to him and unilaterally take steps to cease operations. In such cir­cumstances, the resulting disposition of trade fixtures appears just as that. However, in the facts at hand, there was direct dealings between Loblaws and More; the purchase of the fixtures was conditional on the granting of a sublease; and More is limited to using the prem­ises as a retail grocery store. Further, we think the bus service maintained by Loblaws is more consisten' with a desire to provide for the local customers until More got his store into operation. There is no evidence that Loblaws could be reasonably assured that the clientele of this store would patronize its other locations five and two miles distant. Rather, the com­mercial relationship between Loblaws and More is more akin to Loblaws selling and More buying a part of Loblaws business, although each side to the transaction gambling, to some extent, on its worth.

22Zehrs Markets Limited [1974] OLRB Rep. Apr. 331 is another example of a situa­tion where the Board concluded that occupation of certain physical premises involved the mere assignment of a lease. This case best illustrates the principle put forward by the appli­cant's counsel that the passage of time may so dissipate customer patronage that no ongoing business can be said to have been transferred. In that case, Busy B ceased operation in Janu­ary of 1972 by virtue of an independent business decision regardless of the eventual disposi­tion of the subject premises. Almost one year later Zehrs commenced operations. The hia­tus of time weighed against the finding that Busy B had transferred a part of its business to Zehrs.

23Dominion Stores Limited [1979] OLRB Rep. July 626 also demonstrates the Board's willingness to find against the sale of a business in appropriate circumstances. In that case Dominion stores operated a store in the immediate vicinity of the acquired prem­ises and its occupation of the acquired premises (formerly occupied by Gordons) was ac­companied by a closing of Dominion's original store in the area. This fact, together with a hiatus of five months convinced the Board that Dominion was simply moving its existing premises within the relevant market area and not acquiring the business of another. In doing so, Dominion achieved the elimination of a competitor through the benefit of a non-com­pete clause but there would appear to have been no evidence that Dominion's purpose was an increase in business by virtue of the operation of that provision. Indeed, the non-compe­tition clause running with the lease appears to have been an incidental benefit in Dominion's independent dealings with the lessor. Had Dominion maintained its original store or if the principal purpose of the transaction had been to obtain the benefit of the non-competition clause, the result may well have been different. In the facts at hand, More does not operate another store in the area and, as noted before, the commercial relationship between Lob-laws and More was direct.

24Finally, in Darrigo Consolidated Holdings Inc. (supra) the Board was satisfied that Dominion stores had facilitated the transfer of only a lease to Darrigo and not a busi­ness because of a hiatus in business activity of some fourteen (14) months. Another confi­rmation of the principle recommended by counsel for the applicant.

25Having regard to all of the foregoing and to the evidence before us we are satisfi­ed, and we so find, that Douglas More and, latterly, the respondent company, purchased a part of Loblaws business. Accordingly, they are bound by the applicant's collective agree­ment with Loblaws and, more generally, subject to a collective bargaining relationship with the applicant as provided for by section 55.

DECISION OF BOARD MEMBER W. G. DONNELLY:

1. The majority of the Board has accurately set out the facts relevant to the disposi­tion of this case and has reviewed the jurisprudence carefully in arriving at its conclusion that Loblaws sold part of its business to More Groceteria Limited. However, I disagree with my colleagues and would have dismissed the application.

2. The finding by the majority holds that Loblaws had sold a part of its business to More Groceteria Limited. The evidence led established that the Loblaws store was closed and a new "super store" was opened five miles away. All of the employees of Loblaws had been transferred to other Loblaws' stores. More Groceteria Limited did not hire any Lob-laws' employees. It subleased the premises from Loblaws and acquired certain chattels and fixtures. While it is clear that the business of a supermarket was being carried on by More, I am of the opinion that the business was not transferred from Loblaws to More, but that More established a new business to compete with Loblaws.

3. As the majority notes, a purpose of section 55 of the Act is to provide some degree of permanence to collective bargaining rights. In this case, the bargaining rights of the Union have not been affected by the transaction since all of the employees have been em­ployed by Loblaws pursuant to the seniority provision of the Loblaws collective agreement. Thus, the Union's bargaining rights have been preserved. The finding by the Board in this case permits the trade union to acquire the bargaining rights for employees who have not had the opportunity to choose whether they wish to be represented by the applicant in col­lective bargaining. In my opinion, granting the Applicant the relief it seeks goes beyond the purpose and intent of section 55. The Board is extending the bargaining rights of the Appli­cant over new employees of More Groceteria by finding that Loblaws sold its business to More.

4. The establishment of a new Loblaws store and the transfer of employees to Lob-laws other stores preserved the bargaining rights of the Applicant. More Groceteria did not, in my opinion, acquire the business of Loblaws but merely established a new parallel busi­ness to compete with Loblaws in the same general market area. For these reasons, I would dismiss this application.