Davidson — Walker Funeral Homes v. Retail Commercial and Industrial Union, Local 206, 1981 CanLII 866

Ontario Labour Relations Board

1317-81-U Davidson — Walker Funeral Homes, Applicant, v. Retail Commercial and Industrial Union, Local 206, chartered by the United Food & Commercial Workers' International Union, Respondent

BEFORE: M. G. Picher, Vice-Chairman, and Board Members C. G. Bourne and W. F. Rutherford.

APPEARANCES: Philip J. Wolfenden and Michael Walker for the applicant; Reva Devins, Charles McCormick and Jack Colvin for the respondent.

DECISION OF M. C. PICHER, VICE-CHAIRMAN, AND BOARD MEMBER C. C. BOURNE; October 14, 1981

1. This is an application for a direction under section 92 of the Labour Relations Act. The applicant, Davidson — Walker Funeral Homes, alleges that because there has been the sale of a business within the meaning of section 63 of the Act a strike which was being lawfully conducted against its predecessor before the sale cannot be lawfully continued. The case raises, apparently for the first time, the issue of whether under the Labour Relations Act the sale of a business has effect of suspending a union's right to strike until conciliation and all other conditions precedent to a strike have been exhausted with the new employer.

2. The facts are not in dispute. On August 19, 1980 the respondent union was certified as exclusive bargaining agent of the employees of Davidson Funeral Homes at its locations in Port Colborne, Welland and Fort Erie. Negotiations for a first collective agreement proceeded through all of the necessary steps under the Act and on June 1, 1981 the union commenced a lawful strike at all three funeral chapels. On August I, 198 1 the Welland location of Davidson Funeral Homes was purchased by Mr. Michael Walker who since that date has carried on business thereunder the name Davidson Walker Funeral Homes. It is common ground that the transaction was a sale of part of a business within the meaning of section 63 of the Act. While for business reasons the name "Davidson" still appears as part of the name of the funeral home, there is no corporate or business relationship between the vendor and the purchaser of the business.

3. At the time of the sale the Welland chapel employed one funeral director, Jack Schoenfeldt. He was the sole employee at that location and was represented by the union as part of the bargaining unit spanning the three locations. On July 31, 1981, having learned of the sale of the Welland home the union wired the following message to the purchaser through its solicitor in Welland:

We are certified trade union for the employees of Davidson Funeral Homes in Welland, Port Colborne and Fort Erie. We are given to understand that your client mister Mike Walker has purchased the Welland Funeral Home from Davidson and intends to operate a funeral business out of the location commencing August 1, 1981. Kindly advise if your client is prepared to meet with the union to finalize a collective agreement between your client and our union on behalf of the bargaining unit employees of the Welland operation specifically Jack Schoenfeldt and further advise if your client is prepared to recall Jack Schoenfeldt to employment as a funeral director on a full time basis. Your immediate response to this message is expected.

Jack Colvin, Secretary Treasurer, Retail Commercial and Industrial Union, Local 206.

4. In a telegram to the union dated August 4, 1981, the applicant confirmed the transaction in the following terms:

Effective August first 1981 the Welland Chapel of the Davidson Funeral Home Ltd. has been purchased by Mr. T. Michael Walker.

5. The applicant did not, however, indicate a time at which it would meet. Rather, in a further telegram sent on the same date through its solicitor it advised the union that Mr. Walker himself would be the only funeral director at that location. Its second telegram was as follows:

Walker has purchased business August first will operate business himself and won’t require any qualified assistance. When business warrants additional help will discuss same with your union. Severance pay or other arrangements for Schenfeldt remain responsibility of Davidson.

6. Thereafter the union continued to strike the Welland Chapel and to maintain a picket line, to the apparent detriment of the applicant's business. On September 15, 1981 Davidson — Walker filed this application. For the purposes of this application it does not dispute the employment status of Mr. Schoenfeldt. It agrees with the union that there has been a sale, that Schoenfeldt is an employee and that the union continues to be his lawful bargaining agent. It maintains, however, that the union is not entitled to prosecute a strike against the purchaser of a business until the conditions in the Act are met and that in this case those conditions have not been met. On that basis it submits that after August 1, 1981 the strike as against Davidson Walker has been unlawful. The employer requests extensive relief including a declaration that the strike is unlawful, a cease and desist order in relation to both the strike and the picketing as well as an order requiring the union to give notice to the public that it is not on strike against the Davidson Walker Funeral Home.

7. The union submits that its bargaining rights, including its right to strike, are protected by section 63 of the Act. It argues that in this case it has exercised those rights and has exhausted all of the statutory pre-conditions to a strike under the Act. It maintains that it is therefore entitled to continue its ongoing strike against the predecessor employer as a lawful and timely strike against the purchaser of the business.

8. The resolution of this complaint turns on the interpretation of section 63 of the Act. It provides, in part as follows:

63.(l) In this section,

(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, 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 he were named as the employer in the application.

(3) Where an employer on behalf of whose employees a trade union or council of trade unions, as the case may be, has been certified as bargaining agent or has given or is entitled to give notice under section 14 or 53, sells his business, the trade union, or council of trade unions continues, until the Board otherwise declares, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union or council of trade unions is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement or the renewal, with or without modifications, of the agreement then in operation and such notice has the same effect as a notice under section 14 or 53, as the case requires.

(10) For the purposes of sections 5, 57, 59,61 and 123, a notice given by a trade union or council of trade unions under subsection (3) or a declaration made by the Board under subsection (6) has the same effect as a certification under section 7.

9. Section 63 as it now stands has evolved through several amendments of the Act. A review of the history of the section is helpful to a better understanding of the rights and duties which it confers on unions and employers respectively.

10. Prior to the enactment of successorship legislation, the bargaining rights of a trade union terminated upon the sale or disposition of a business. The common law afforded no protection to established collective bargaining rights when the employer's legal identity was altered. As concluded in earlier cases such as Brantford Produce Company Ltd. 61 CLLC ¶ 16,193, unless the parties to the employment relationship were contractually bound or the union had been certified for that specific employer's business, the Board could not enforce collective bargaining. A mere change in the legal ownership of the business was therefore fatal to the trade union's representation rights.

II. In the 1962 Ontario Royal Commission's Report on Labour — Management Relations in the Construction Industry, (the Goldenberg Report), the need for statutory protection of a trade union's bargaining rights upon a transfer of ownership was seen as essential to orderly industrial relations. At p. 114 of its report, the Commission suggested:

i. The Act should provide that where a business or part thereof is sold, leased or transferred, the purchaser, lessee or transferee shall be bound by all the proceedings before the date of sale, and shall become ipso facto a party thereto, and that the proceedings shall continue as if no such change has occurred, and that if a bargaining agent was certified the certification shall remain in effect, and if a collective agreement was in force that agreement shall continue to bind the purchaser, lessee or transferee to the same extent as if it had been signed by him.

ii. Consideration should be given to measures for the protection of acquired bargaining rights in situations arising from certain types of business practices which may affect such rights, for example, where a contractor, engaged on a number of projects in each of which he has a different partner, is in a position to shift employees from a project with respect to which certification has been granted to another.

12. In response to this concern the Legislature enacted successor rights legislation in the form of the Labour Relations Amendment Act, S.O. 1962-63, c. 70, s. 47(a), which provided:

47a.-(l) In this section,

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

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

(2) Where an employer who is bound by or is a party to a collective agreement with a trade union or on behalf of whose employees a trade union has been certified as bargaining agent or has given or is entitled to give notice under section 11 or 40 sells his business, the trade union continues, until the Board otherwise directs, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement, and such notice has the same effect as a notice under section 11.

13. It should be noted that the Legislature's first intention, reflected in The Labour Relations Amendment Act, S.O. 1961-62 c. 28, was to enact a provision similar to the present section 63, including the "flow through" of any collective agreement in effect at the time of the sale of a business. However that amendment was not proclaimed in force and the more limited rights described above were enacted instead. It is clear from these tentative and incremental legislative steps that in its first proclaimed version section 63(2) (then section 47a(2)) was intended only to preserve the bargaining rights of the trade union on the sale of a business. The union then gained the advantage of not being required to reorganize and obtain certification in respect of the like bargaining unit in the business of the new employer. The limited right which the union had, however, was to give notice to bargain to the new employer, who in turn must recognize its right to act as exclusive bargaining agent, as though it had been certified. It is clear that in enacting that legislation the Legislature was concerned only with protecting the union's bargaining rights. To the extent that a collective agreement could not survive the sale of a business, the Legislature obviously did not intend to preserve the established rights of employees, apart from the right to be represented by the same union.

14. The Legislature did not, in other words, adopt the broader Goldenberg recommendation that when a business is transferred the purchaser of the business should be "bound by all of the proceedings before the date of sale". As noted in Aircraft Metal Specialists Ltd. [1970] OLRB Rep. Sept. 702 the purpose of section 47a was twofold:

To prevent the subversion of bargain-rights by transactions which are designed to get rid of the union. We have encountered situations where there are transactions between various corporate entities which are in effect 'paper transactions', and are a form of corporate charade engaged in for the purpose of eliminating the trade union. In this type of case the Board has liberally interpreted section 47(a) to preserve the bargaining rights and has attempted to look beyond 'paper transactions' to achieve that purpose.

To preserve the bargaining rights with respect to work which has accrued to the benefit of the employees as a result of their union becoming the bargaining agent through certification or voluntary recognition. Once the union had been recognized with respect of a particular business the union then obtains a right to bargain with respect to wages, hours and other conditions of employment in that business. The right to participate in the business and its functions in that manner is in the nature of a vested right and section 47(a) allows the union to pursue that bargaining right when all or part of the business is sold.

15. It is significant that the language of section 47(a)(2) as first enacted, which is the very language of the present section 63(3), did not preserve the rights of employees or their union under the Act as they stood at the time of a sale; only the right of representation was preserved. This was reflected by the following observation of the Board in Thorco Manufacturing Ltd., 65 CLLC ¶116,053:

Section 47(a) does not operate to bind the successor of the business with the collective agreement which has been made between the union and the predecessor employer but only with the obligation to recognize the union's bargaining rights for his employees in a like bargaining unit. The new employer is therefore, left free to bargain for and to negotiate his own agreement with the union.

16. It was not until a further amendment of The Labour Relations Act in 1970 (The Labour Relations Amendment Act 1970 (No. 2), S.0. 1970, c. 85, s. 22) that the language currently found in section 63(2) was introduced. That legislation provided for the flow through of a collective agreement that was in effect at the time of a sale.

17. The section was amended to provide, in part:

47(a)(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 it, 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, the person to whom the business has been sold is, until the Board otherwise declares, the employer for the purpose of the application as if he were named as the employer in the application.

(3) Where an employer on behalf of whose employees a trade union or council of trade unions, as the case may be, has been certified as bargaining agent or had given or is entitled to give notice under section 11, sells his business, the trade union or council of trade unions continues, until the Board otherwise declares, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union or council of trade unions is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement and such notice has the same effect as a notice under section 11.

18. Under the then section 47(a)(2) (later section 55(2) and now section 63(2)) a subsisting collective agreement was protected from termination upon a sale of a business. Significantly the amended section 47(a)(3) (now section 63(3) as further amended by S.O. 1975, c. 76, s. 15(1)) adopted the very language of the earlier section 47(a)(2) to describe the rights of a union which did not have a collective agreement, but was certified and had given notice or was entitled to give notice to bargain under section 13 (now section 14). In 1975 the same language was extended to explicitly cover a union whose collective agreements had expired at the time of the sale of a business. The right of a union, whether in a first agreement negotiation or in a renewal situation, was to give the new employer notice to bargain, such notice to have the same effect as notice under section 13 (now 14) or section 45 (now 53).

19. Counsel for the union concedes that the giving of notice under section 63(3) has significant legal consequences to the extent that, in the words of the Act, it "has the same effect as a notice under section 14 or 53.. ." Notice under those sections triggers the duty to bargain and the negotiation and conciliation processes which are the preconditions to a lawful strike or lockout under the Act. More specifically, section 15 of the Act requires the parties to meet and bargain within fifteen days from the giving of the notice. The notice effectively freezes the rights and duties of the union, the employer and the employees by the operation of section 79(1) of the Act. Where the notice has been given under section 14 or 53 the Minister is required, by section 16 of the Act, to appoint a conciliation officer. By virtue of section 72(2) of the Act where no collective agreement is in operation no strike or lock out can commence until the Minister has appointed a conciliation officer and fourteen days have elapsed after a no­ board report. The scheme of bargaining under the Act clearly contemplates that the giving of notice under sections 14 and 53, and by clear extension the giving of notice under section 63(3) of the Act, are required before a union can lawfully strike or an employer can lawfully impose a lockout. That is not disputed by the union in the instant case. Counsel for the union maintains, however, that in this case the union did not give notice under section 63(3). In her view the union is therefore free to pursue the continuation of the prior right to strike which matured against the predecessor employer, Davidson Funeral Homes.

20. In other words, counsel for the union submits that section 63(3) gives the union a choice. She argues that when the sale of a business take place during a strike the union may either continue the strike as an ongoing incident of continuing bargaining or, in the alternative, it can give notice to the employer under section 63(3), thereby ending its strike and reverting to the negotiation and conciliation process that must be pursued to the point of a no-board report before a strike can be lawfully undertaken against the new employer.

21. In our view that analysis of section 63(3) raises some fundamental problems. Firstly, bearing in mind that legislation must be presumed to have some meaning and purpose, it is difficult to see why a union should need the alternative which she describes. Mediation is generally available to willing parties when a strike is ongoing. Moreover, there is nothing under the Act to prevent a union from pursuing mediation and suspending ongoing strike for such time as it sees fit, assuming no lockout has been imposed. It is difficult to see why the Legislature would have deliberately fashioned the possibility of a second round of con­ciliation as a precondition to a strike at the option of the union when the union already has the capacity to suspend its strike and explore the possibility of a mediated solution to its dispute.

22. A further difficulty with the union's interpretation is the obvious inequality in bargaining that it would create. In the scheme of the Act the strike and lock out are co-relative rights. Neither party can strike or lockout until the requirements of the Act, in the form of notice, bargaining, conciliation and the lapse of time after a no-board report have been met. A significant feature of the balance of bargaining under the Act is that neither party can, except by making a collective agreement, remove the other's power to lawfully use economic sanctions once those conditions precedent have been met. As a corollary right, the choice as to the timing of a strike or lockout rests entirely in the discretion of the union and employer respectively. If the union's interpretation of section 63(3) obtains, that fundamental balance would be shifted on the sale of a business. If we were to accept the union's interpretation, the Act so construed would give to the union the unilateral right to end not only an ongoing strike by giving notice under section 63(3), but also the unilateral right to end an ongoing lockout by giving the same notice. Since the power of notice under section 63(3) is exclusively the union's, the employer could not exercise a similar right. Counsel for the union was not troubled by that anomaly. We are.

23. We cannot accept the union's construction of the rights granted by section 63(3) of the Act. Its interpretation would spawn procedures that are unnecessary and which are fundamentally counter to the scheme of bargaining generally contemplated by the Act. In effect, counsel for the union submits that section 63(3) of the Act, by continuing the union s right to bargain for the employees has, in the words of Goldenberg, continued all collective bargaining proceedings as they were before the sale. Neither the history nor the words of the section support that conclusion.

24. The limited words of section 63(3) of the Act and their piecemeal evolution stand in sharp contrast to the plain words that might have been chosen to impart the intention advanced by the union, and which have been chosen by the Legislature in a different context of successorship. Section 62 of the Act, which deals with the consequences of amalgamation or merger by which one union may become the successor of another, is unequivocal in its terms. Where there has been a merger, amalgamation or transfer of jurisdiction the section vests in the Board the authority to declare that the successor union has "acquired the rights, privileges and duties under this Act of its predecessor" and subsection 3 of section 63 provides:

Where the Board makes an affirmative declaration under subsection (1), the successor shall for the purposes of this Act be conclusively presumed to have acquired the rights, privileges and duties of its predecessor, whether under a collective agreement or otherwise, and the employer, the successor and the employees concerned shall recognize such status in all respects.

25. The wording chosen by the Legislature to describe the rights of a union vis-a-vis the successor employer where no collective agreement is in effect are obviously more limited. The plain reading of the section leads to the conclusion that the union has what the section gives it, namely the entitlement (in our view a word indistinguishable from "right") to give notice to the new employer of its intention to bargain to make a first collective agreement or to renew and amend a previously expired collective agreement. By the inescapable words of the Act the notice so given, for the purposes set out in subsection (10) of section 63, has the same effect as certification.

26. The issue in this case relates directly to the issue before the Board in Oxford Manor Rest Home, [1980] OLRB Rep. Dec. 1786. In that case the Board was required to assess a union's claim that a freeze of the employee's rights under section 79 of the Act instituted by notice to bargain to the predecessor employer continued in effect against the successor employer after the sale of the business. Interpreting section 63(3) (then 55(3)) the Board determined that the freeze binding the predecessor employer, triggered by notice to it under section 14 of the Act, did not survive the transfer of the business. In other words, the rights of the union as against the prior employer as they stood under the Act at the time of the sale did not continue without interruption to bind the new employer. Any freeze of the conditions of employment binding the successor employer was found to originate entirely in the notice to bargain given to the successor employer under section 63(3) of the Act and extended only to conditions as they stood at that date. In concluding that section 63(3) does not vest in the union all ongoing proceedings and rights under the Act as against the successor employer the Board commented at p. 1788:

In essence the trade union, such as in the instant case, continues 'to be the bargaining agent for the employees of the person to whom the business was sold' and 'is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agree­ment'. Nothing in the section explicitly puts the new employer into the shoes of the previous employer so as to make all the rights and obligations relating to the collective bargaining relationship automatically attach to the new employer. The fact that the Legislature has specifically set out that the trade union shall continue to be the bargaining agent and shall have the right to serve notice to bargain on the new employer, militates against there being any additional rights or privileges from any other notice to bargain which may have been served on the previous employer. This view is further fortified by an examination of section 55(2) which, in dealing with a sale of business while an application for certification or termination is before the Board provides, .... person to whom the business has been sold is ... the employer for the purposes of the application as if he were named as the employer in the application.' In this latter case where the Legislature intended that the new employer should fit precisely into the shoes of the previous employer it has explicitly said so. Had the Legislature similarly intended in section 55(3) we have no doubt it would have said so.

27. It should be noted that the giving of notice to a successor employer under section 63(3) affords the union extraordinary protection to its bargaining rights — protections which are clearly beyond those available if the section were merely to continue all proceedings under the Act as they stand at the time a business is sold. In a recent decision the Board had occasion to explore the benefit to a union conferred by sections 63(3) and (10). In Vaunclair Meats Limited, [1981] OLRB Rep. Aug. 1186 the Board found that the giving of notice by a union under section 63(3) (then 55(3)) has the effect of sheltering a union for at least one year from applications for the termination of its bargaining rights or from raids by another union. When a union gives notice under the section that would otherwise be the open period in which the union is vulnerable to termination or displacement is effectively closed. In dismissing the application for termination brought by an employee in that case the Board commented:

Where a business has changed hands the possibility of greater stress on a union is real; it can no longer be sure that it will bargain with the same expectations along the paths that it travelled time and again with the predecessor employer. In this sense a union bargaining with a successor employer after the transfer of a business is in a situation similar to a union bargaining a first collective agreement after certification. By enacting section 55(10) of the Act the Legislature has recognized that reality and provided the union faced with a first negotiation with a successor employer the same protection of its bargaining rights as would operate to protect the negotiation of a first collective agreement. Like a newly certified union, a union dealing with a successor employer can proceed with the assurance that its bargaining rights cannot be subject to attack for a minimum of one year. That is the unequivocal effect of section 49(1) of the Act and it is the clearly intended consequence of section 55(10) of the Act.

28. There are compelling reasons for qualifying the rights of unions and employers by postponing the right to strike or lock out on the sale of a business. By the present operation of article 63(3) an employer who purchases a business during a strike is given at a minimum the opportunity to advance his own proposals and attempt to make a collective agreement in an atmosphere free of the inevitable tension of a strike or lockout. The industrial dispute will, after all, generally not be of his own making. The new employer may well bring to the bargaining table a substantially different point of view, shaped by such various factors as his own production and marketing strategies, his employment policies or collective agreements in other plants, his general objectives for the business, and an economic well being that may differ substantially from his predecessor's. In many respects he may display a more positive face with more positive results. The view, implicit in the Act, therefore, is that at the moment of the sale the successor employer should be given a fair opportunity to bargain initially in an atmosphere devoid of the stress caused by a lockout or strike. Moreover, the opportunity so given to the new employer is not prejudicial to the union in any terminal sense. The right to strike the new employer is not removed; it is only postponed for the time which the Act allows for any two parties to avail themselves of the statutory mechanisms designed to assist them to reach an accommodation. In our view that result is more consistent with the scheme of the Act. It is, moreover, the only conclusion supportable on the words of section 63 viewed in the overall context of the statute.

29. The Board is mindful of the practical difficulty that a union might face in some instances where the precise timing of a sale or indeed the conclusion that a sale of a business has occurred is less than clear. The Act itself makes express allowance for a certain amount of uncertainty over whether there has been a sale when an application for a declaration to that effect is pending before the Board, and it suspends liability accordingly. Section 63(9) for example, exempts an employer from the obligation to bargain until the rights of the parties have been clarified by the decision of the Board in an application pending under section 63.

30. Usually, as in this case, an arm's length transaction constituting the sale of a business is easily identified. Sometimes, however, the issue of whether there has been a sale of business within the meaning of section 63 of the Act may be a close and contentious question whose answer will only emerge after extensive discussions between the parties or after litigation of a section 63 application. Where the Board is satisfied that a union has continued a strike after the effective date of a sale, but has done so on the strength of a belief held in good faith and on reasonable grounds that no sale within the meaning of the Act in fact occurred, the Board may exercise its discretion not to grant an unlawful strike declaration in respect of such time as the union did not know or could not reasonably be expected to know that a sale of the business within the meaning of the Act had in fact transpired. The same considerations would apply to an application for a declaration that an employer has unlawfully continued a lockout after the transfer of a business.

31. In this case the parties addressed considerable argument to whether the unions telegram of July 31, 1981 constituted written notice to bargain to the successor employer within the meaning of section 63(3). We are satisfied that it does. Substance must prevail over form if the Act is to be realistically applied; it is clear in this instance that by its telegram the union notified the new employer that it was the bargaining agent and that it wished to meet with a view to making a collective agreement — the very thing contemplated by section 63(3). More importantly, in this case, the giving of notice under section 63(3) does not have any bearing on the union's right to strike. Its importance is that it triggers the employer's duty to bargain and opens to both parties the procedures and rights that arise thereafter under the Act.

32. For the foregoing reasons the Board must conclude that under the Act a union is not permitted to continue a strike when the sale of transfer of a business has occurred within the meaning of section 63 of the Act. Nor can a successor employer continue a lockout instituted before the transfer by its predecessor.

33. We turn to apply the foregoing conclusion to the facts of this case. The parties are agreed that the union has conducted a strike over a period of time during which we have found it could not lawfully do so. The only issue, therefore, is whether we should exercise our discretion to so declare. In this case we are not persuaded that our discretion to grant a declaration or to order any further remedial relief should at this time be exercised against the union. It is well established that the Board will consider the conduct of an applicant in deciding whether to grant a declaration in respect of an unlawful strike or lockout (see, Northdown Drywall and Construction Ltd. [1972] OLRB Rep. June 666; Canadian Elevator Manufacturers, [1975] OLRB Rep. Nov. 868; York County Board of Education, [1980] OLRB Rep. Aug. 1154. From the first business day after the sale of the funeral chapel to the filing of this application the employer took the position with the union that the one employee at that location, Mr. Schoenfeldt, was terminated. On that basis it is difficult to see how through this application it can be heard, for the first time, to complain that the union has unlawfully withheld his services. The employer's response to the union and its apparent adherence to that position until the filing of this application must be viewed at the very least as creating a situation of substantial uncertainty. The Board has in the past declined to grant a declaration of an unlawful strike in favour of an applicant which has purported to terminate striking employees (see Joyce and Smith Plating Co. Ltd. 56 CLLC ¶118,048; National Refractories Ltd. 63 CLLC 16,276. We are satisfied that that is the appropriate conclusion in this case. We have no reason to doubt, moreover, that from the date of this decision the union and employees concerned will comply with the requirements of the Act.

34. For the foregoing reasons the application is dismissed.

DECISION OF BOARD MEMBER W. F. RUTHERFORD;

1. I concur with the decision dismissing the application. My difference with the panel majority is the interpretation of section 63 of the Act involving the sale of a business while a legal strike is in progress. Section 63(3) quoted in the main body of the report projects a union entitlement when a business is sold. I interpret this section of the Act to mean that the union is only entitled to their contractual position at the time of sale If an agreement is in force it continues If the parties are in the process of submitting amendments or negotiations that continues — If a legal strike or lockout is in effect that continues until settlement.

2. When an enterprise is purchased, the new owner involved in the purchase assumes all liabilities and assets accrued by the former owner, including any outstanding union arbitration awards.

3. The "entitled to give notice" in section 63(3) does not make it mandatory on the union to re-submit previous proposals to the new owner while on a legal strike. The new owner would have full knowledge of the bargaining progress of both sides while in the process of purchase of the enterprise.

4. The union's telegram to the new owner offering negotiations, while not mandatory, was a prudent move on behalf of the union. The fact that the company ignored the proposal of further negotiations was less than prudent.