Ontario Labour Relations Board

[1981] OLRB Rep. June 658

0230-81-R International Woodworkers of America, Local 2-353, Applicant, v. G.A.C. Industries Ltd., Respondent.

BEFORE: N. B. Satterfield, Vice-Chairman and Board Members J. D. Bell and M. J. Fenwick.

APPEARANCES: Naomi Duguid, Harold Sachs, John Hackett and John McCarthy for the applicant; J. P. Wearing and R. Baylum for the respondent.

DECISION OF THE BOARD; June 26, 1981

1. The name of the respondent is amended to read: "G.A.C. Industries Ltd.".

2. The International Woodworkers of America, Local 2-353 ("the union") has applied under section 55 of The Labour Relations Act for a declaration that the respondent G.A.C Industries Ltd. ("G.A.C") is the successor employer in the sale of a business which the union alleges has taken place between G.A.C. and Travel Mate Motor Homes Limited ("Travel Mate"). The union is also seeking a declaration that, as a consequence of the sale, G.A.C is bound to the collective agreement between Travel Mate and the union which purports to be effective from August 23rd, 1979 until August 22nd, 1981.

3. At the hearing into this application, counsel for G.A.C. admitted that a sale within the meaning of section 55 of the Act had taken place between G.A.C. and Travel Mate and that Travel Mate and the union were parties to the aforementioned collective agreement. Counsel contended, however, that the Board had a general discretion under section 55 to declare a successor employer in a sale of a business not to be bound by the collective agreement to which a predecessor employer and a union had been bound. Counsel further contended that, in the instant application, there were terms in the collective agreement between Travel Mate and the union relating to a sale of a business which should cause the Board to exercise that general discretion and declare that G.A.C. was not bound to the collective agreement between Travel Mate and the union.

4. G.A.C. counsel submits that section 55 requires the Board to make two separate determinations: first, whether a sale of a business has taken place; and second, if a sale has taken place, the Board must determine what bargaining rights flow through to the successor employer as a result of the sale. In other words, counsel views section 55 as setting up a dual obligation for 1 he Board and the latter one of these, that is the obligation to determine what bargaining rights flow through to a successor employer, creates, in counsel's view, the Board's discretionary authority to determine whether those rights are to flow through. Counsel submits further that the words .... . until the Board otherwise declares . . ." support his interpretation of the section and give to the Board the discretion to declare whether the bargaining rights are to continue.

5. Applicant counsel takes the contrary position. Counsel submits that the Board is required to make a finding as to whether a sale of a business has taken place. Where the Board finds that there has been a sale, the existing bargaining rights automatically flow through to the successor employer. Counsel submits further that the words " ... until the Board otherwise declares.. ." are intended only to accommodate other sub-sections of section 55 which deal with a variety of circumstances that may arise out of a sale of a business and which sub-sections empower the Board to fashion alternate remedies to the automatic flow through of bargaining rights.

6. The Board views sub-sections 2 and 3 of section 55, which are set out below, to be declaratory in nature and to have the purpose of protecting the bargaining rights of employees in the business which is sold and those of the trade union which is their bargaining agent.

(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 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 13 or 45, 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 13 or 45, as the case requires.

This general declaratory nature is modified by other sub-sections in order to accommodate complications which may arise in the sale of a business. These sub-sections empower the Board to apply remedies other than the protective provisions of sub-sections 2 and 3. It may re-define the bargaining unit (sub-section 4): terminate bargaining rights where the purchaser of the business has changed its character so that it is substantially different from the business of the predecessor employer (sub-section 5): and, where there has been an intermingling of employees, declare that the successor owner is no longer bound by the a collective agreement, determine proper bargaining unit configuration and declare which unions have bargaining rights in respect of that unit and amend any certificates which it has issued or any bargaining units defined in any collective agreement (sub-section 6).

7. The fact that sub-section 6 is operative notwithstanding sub-section 2 and 3 lends credence to the Board's view that those two sub-sections are declaratory in nature. That seems to be the view of the Board in its decision in Bermay Corporation Limited [1979] OLRB Rep. July 608, in which the Board was dealing with the circumstances in a sale of a business where part of the work force of the predecessor employer was merged with the existing work force of the successor employer. A trade union held bargaining rights for the employees of the predecessor employer and they constituted one-third of the merged work force. The other employees were not represented for collective bargaining purposes by any trade union. The Board relied on its specific powers under sub-sections 6 and 8 to deal with the problem. In this respect, see paragraphs 17 and 18 wherein the Board stated:

8. '... While section 55 of the Act operates to protect the bargaining rights of those employees and their union it also provides a mechanism to balance their interest with the interest of the respondent's former employees and new employees who work side by side with them. Section 55(6) of The Labour Relations Act provides:

"(6) notwithstanding subsections 2 and 3, where a business was sold to a person who carries on one or more other businesses and a trade union or council of trade unions is the bargaining agent of the ~mp1oyees in any of the businesses and such person intermingles the employees of one of the businesses, the Board may, upon the application of any person, trade union or council of trade unions concerned,

(a) declare that the person to whom the business was sold is no longer bound by the collective agreement referred to in sub-section 2;

(b) determine whether the employees concerned constitute one or more appropriate bargaining units;

(c) declare which trade union, trade unions or council of trade unions, if any, shall be the bargaining agent or agents for the employees in such unit or units; and

(d) amend, to such extent as the Board considers necessary, any certificate issued to any trade union or council of trade unions or any bargaining unit defined in any collective agreement."

18. An obvious concern in the resolution of the conflict that arises upon the intermingling of employees who have previously been organized with employees who were previously not organized is the interest of the employer to have its industrial relations conducted within the framework of a rational bargaining structure. In this case, the Board is satisfied that it would be contrary to the interests of the employer and of the employees as a group to segregate the former employees of Goldcrest into a vestigial bargaining unit that would exclude all other production employees. It would, in our view, be equally inappropriate to effectively grant the bargaining rights for the two thirds of the production employees who have not previously been organized to the applicant without any indication of the wishes of that majority group. The Board is therefore satisfied that it should in these circumstances describe the appropriate bargaining unit and exercise its discretion under section 55(8) of The Labour Relations Act to conduct a representation vote among all of the employees in the bargaining unit".

19. There would be no need for subsections 4, 5, 6 and 8 were the Board to have broad discretion under section 55 as G.A.C. counsel contends. Moreover, if the Legislature had intended the Board to have wide powers to deal with the bargaining rights of trade unions and to protect the interests of employees when there has been a sale of a business, if would have set out the Board's general discretion and defined its specific authority, as needed, in terms similar to those used elsewhere in the Act. For example, contrast the definition of the Board's powers in section 79(4) of the Act with those in section 55(2) and (3):

Where a labour relations officer is unable to effect a settlement of the matter complained of or where the Board in its discretion considers it advisable to dispense with an inquiry by a labour relations officer, the Board may inquire into the complaint of a contravention of this Act and where the Board is satisfied that an employer, employers' organization, trade union, council of trade unions, persons or employee has acted contrary to this Act it shall determine what, if anything, the employer, employers' organization, trade union, council of trade unions, person or employee shall do or refrain from doing with respect thereto and such determination, without limiting the generality of the foregoing may include, notwithstanding the provisions of any collective agreement any one or more of,

(a) an order directing the employer, employers' organization, trade union, council of trade unions, employee or other person to cease doing the act or acts complained of;

(b) an order directing the employer, employers' organization, trade union, council of trade unions, employee or other person to rectify the act or acts complained of; or

(c) an order to reinstate in employment or hire the person or employee concerned, with or without compensation, or to compensate in lieu of hiring or reinstatement for loss of earnings or other employment benefits in an amount that may be assessed by the Board against the employer, employers' organization, trade union, council of trade unions, employee or other person jointly or severally.

[emphasis added]

While in clauses (a), (b) and (c), the Act gives the Board power to grant specific forms of relief, the phrase " ... without the limiting of generality of the foregoing. . .," in the preamble to those clauses makes it abundantly clear that the Board's remedial powers are not limited to those enumerated, specific powers.

9. In a similar fashion, compare sections 55(2) and (3) with sections 82 and 83 of the Act where the Board 's... in its discretion,... may direct what action if any a person.., shall do or refrain from doing.. ." when it has declared a strike or a lockout to be unlawful. That language leaves no doubt about the discretionary nature of the power conferred, or that the power is being conferred by those sections.

10. Section 1(4) of the Act likewise makes it clear that the Board has the discretionary authority to "... treat.., corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and [to] grant such relief, ..., as it may deem appropriate." in circumstances where, in its opinion, two or more business entities under common control or direction are carrying on associated or related activities or businesses. Nor can there by any doubt that the Board's authority is conferred by section 1(4).

11. In the Board's view, had the Legislature intended the Board to have wide discretion as to the flow through of bargaining rights in section 55, it could have made a clear grant of that power, as it has done so in other sections of the Act. As it is, the Act confers, as already noted above, specific authority on the Board to deal with particular circumstances arising out of the sale of a business and section 55 is devoid of any clear grant of wider discretion. Furthermore, the Legislature had ample opportunity when section 55 was amended in 1970 to include the flow through provisions, to provide the Board with the discretion to decide whether bargaining rights should flow through. The Legislature has not done so and to accept G.A.C. counsel's proposition would be to give section 55(2) a meaning which the Legislature did not intend.

12. Having regard to G.A.C.'s admission of the sale and to the existence of a collective agreement between the predecessor employer and the union, the Board finds that there has been a sale of business from Travel Mate Motor Homes Limited to G.A.C Industries Limited within the meaning of section 55 of the Act.

13. Accordingly, G.A.C. Industries Limited is bound by the collective agreement between Travel Mate Motor Homes Limited and the International Woodworkers of America, Local 2-353 which purports to be effective from August 23rd, 1979 until August 22nd, 1981.