Ontario Labour Relations Board

[1981] OLRB Rep. March 251

0823-80-R Canadian Union of Public Employees and its Local 6, Applicant, v. The Corporation of The Regional Municipality of Sudbury, Respondent, v. Ontario Public Service Employees Union, Intervener.

BEFORE: M. G. Picher, Vice-Chairman, and Board Members J. A. Ronson and W. F. Rutherford.

APPEARANCES: Mario Hikl, Roger D. Neely and Gary Ralph for the applicant; B. R. Baldwin, H. Hatton and D. Partington for the respondent; Chris G. Paliare and Pauline R. Seville for the intervener.

DECISION OF THE BOARD; March 17, 1981

1. This is an application under section 5 of The Successor Rights (Crown Transfers) Act, 1977. The applicant (hereinafter CUPE) seeks a declaration that as a result of the transfer of certain water and sewage treatment plants from the Province to the Corporation of the Regional Municipality of Sudbury it is the bargaining agent for all employees of the respondent (hereinafter the Regional Municipality) covered by the scope clause of its collective agreement. It seeks a further declaration that the scope clause in the CUPE agreement constitutes an appropriate bargaining unit and that the Regional Municipality is bound by the collective agreement between itself and CUPE and is not bound by any collective agreement between the intervener (hereinafter OPSEU) and the Crown in the Right of Ontario. In other words it seeks a declaration that would make it the sole bargaining agent of employees previously represented by OPSEU.

2. The facts are not in dispute. Until recently the Province of Ontario, through the Ministry of Environment, operated certain sewer and water facilities in and around Sudbury. By an agreement between the Province and the Regional Municipality made May 28, 1980, effective July 1, 1980, the parties executed an interim transfer (pending Ontario Municipal Board approval) of a number of facilities to the Regional Municipality. The Transfer included sewage treatment plants, sewage lift stations, wells, a water treatment plant, water storage tanks, a water booster station, a trunk water main and metering stations variously located in Sudbury, Azilda, Chelmsford, Valley East, Coniston, Dowling, Rayside-Balfour, Whanapitae and Onaping. Some twenty-four of the employees of the Ministry of the Environment working in those facilities were represented by OPSEU under its province-wide agreement in respect of all public servants, under The Crown Employees Collective Bargaining Act. As of July 1, 1980 they became employees of the Regional Municipality.

3. Prior to the transfer of the provincial facilities the Regional Municipality operated a number of its own water and sewage plants in and around Sudbury, including facilities at Levack, Falconbridge, Lively, Sudbury, Capreol and Garson. Approximately twenty-two employees working in those facilities have been represented by CUPE as part of a larger bargaining unit under its collective agreement in respect of all "outside" employees of the Regional Municipality.

4. Since the transfer there has been an intermingling of the employees represented by the two unions. The evidence of Douglas Partington, the Co-ordinator of Environment Service for the Regional Municipality establishes that there has been a change in the deployment of manpower in the merged facilities. The plants under the Ministry of Environment previously operated with a distinct crew in each area. In Valley East, for example, a single crew operated the sewage treatment plant, the sewage pumping stations, the wells and the booster. Like other similar crews in the system the crew at Valley East had its own plant serviceman and electrician. Under the Regional Municipality work is now alloted in part by function rather than by location. One crew operates wells and water treatment plants, another operates sewage stations and a unified crew of electricians and plant servicemen see to the maintenance of all of the plants. As a result employees from the two unions have been integrated and work side by side.

5. Before the enactment of The Successor Rights (Crown Transfers) Act, 1977 the bargaining agent of provincial employees was at a distinct disadvantage whenever an undertaking was conveyed from the provincial Crown to an employer in the private sector. There was then no law equivalent to section 55 of The Labour Relations Act to provide that the union's bargaining rights continued after the sale or transfer. (The Municipality of Metropolitan Toronto, [1975] OLRB Rep. Oct. 777). This Board had no jurisdiction to make orders protecting the union's rights. Nor could it sort out the equities between OPSEU and another union with conflicting bargaining rights. That hiatus in the legislation was cured by The Successors Rights (Crown Transfers) Act, 1977. The sections pertinent to this application are as follows:

l.-(1) In this Act,

(b) "Board" means the Ontario Labour Relations Board;

(f) "transfer" means a conveyance, disposition or sale;

(g) "Tribunal" means the Ontario Public Service Labour Relations Tribunal;

2.-(1) Where an undertaking is transferred from the Crown to an employer and a bargaining agent has a collective agreement with the Crown in respect of employees employed in the undertaking, the employer is bound by the collective agreement as if a party to the collective agreement until the Board declares otherwise.

3.-(1) Where an undertaking is transferred from an employer to the Crown and a bargaining agent has a collective agreement with the employer in respect of employees employed in the undertaking, the Crown is bound by the collective agreement as if a party to the collective agreement until the Tribunal declares otherwise.

4.-(1) Where an undertaking was transferred from the Crown to an employer or from an employer to the Crown and an employee organization trade union or council of trade unions was the bargaining agent in respect of employees employed in the undertaking immediately before the transfer and,

(a) a question arises as to what constitutes a unit of employees that is appropriate for collective bargaining purposes in respect of the undertaking; or

(b) any person, employee organization, trade union or council of trade unions claims that by virtue of section 2 or 3, a conflict exists as to the bargaining rights of the employee organization, trade union or council of trade unions,

any person, employee organization, trade union or council of trade unions concerned may apply to the Board, in the case of the transfer of the undertaking to an employer, or to the Tribunal, in the case of the transfer of the undertaking to the Crown, and the Board or the Tribunal, as the case requires,

(c) may determine the composition of the unit of employees referred to in clause a;

(d) may amend, to such extent as the Tribunal or the Board considers necessary,

(i) any bargaining unit in any certificate issued to any trade union or council of trade unions,

(ii) any bargaining unit defined in any collective agreement,

(iii) any unit of employees determined by the Tribunal to be appropriate for collective bargaining purposes in respect of the undertaking, or

(iv) any unit of employees that is designated by the Lieutenant Governor in Council as an appropriate bargaining unit for collective bargaining purposes in respect of the undertaking.

(2) Where an undertaking is transferred from the Crown to an employer or from an employer to the Crown, any person, employee organization, trade union or council of trade unions may apply to the Board, in the case of the transfer of the undertaking to an employer, or to the Tribunal, in the case of the transfer of the undertaking to the Crown,

(a) within sixty days after the transfer of the undertaking; or

(b) within sixty days after written notice is given by the employee organization, trade union or council of trade unions of desire to bargain to make or renew, with or without modifications, a collective agreement.

and the Board or the Tribunal, as the case requires, may terminate the bargaining rights of the employee organization, trade union or council of trade unions bound by a collective agreement in respect of employees employed in the undertaking or that has given notice, as the case may be, if in the opinion of the Board or the Tribunal, the transferee of the undertaking has changed the character of the undertaking so that it is substantially different from the undertaking as it was carried on immediately before the transfer.

5.-(l) Notwithstanding section 2, where an undertaking is transferred from the Crown to an employer who intermingles the employees employed in the undertaking immediately before the transfer with employees employed in one or more other undertakings carried on by the employer or an undertaking is transferred from an employer to the Crown and employees employed in the undertaking immediately before the transfer are intermingled with employees employed in other undertakings of the Crown and an employee organization, trade union or council of trade unions that is the bargaining agent in respect of employees employed in any of the undertakings applied to the Board, in the case of the transfer of the undertaking to an employer, or to the Tribunal, in the case of the transfer of the undertaking to the Crown, the Board or the Tribunal, as the case requires,

(a) may declare that the employer or the Crown, as the case may be, is no longer bound by the collective agreement referred to in section 2 or 3;

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

(c) may declare which employee organization, trade union or council of trade unions shall be the bargaining agent in respect of each such bargaining unit; and

(d) may amend, to such extent as the Board or the Tribunal considers necessary,

(i) any certificate issued to any trade union or council of trade unions,

(ii) any bargaining unit defined in any collective agreement,

(iii) any unit of employees determined by the Tribunal to be appropriate for collective bargaining purposes in respect of any of the undertakings, or

(iv) any unit of employees that is designated by the Lieutenant Governor in Council as an appropriate bargaining unit for collective bargaining purposes in respect of any of the undertakings.

(2) Where an employee organization, trade union or council of trade unions is declared to be a bargaining agent under subsection 1 and it is not already bound by a collective agreement with the successor employer in respect of employees employed in the undertaking that was transferred, the employee organization, trade union or council of trade unions is entitled to give to the successor employer written notice of desire to bargain to make or renew, with our without modifications, a collective agreement.

8. Before disposing of an application under this Act, the Board or the Tribunal, as the case may be, may require the production of such evidence and the doing of such things, or may hold such representation votes, as it considers appropriate.

11 .-(1) Where, on an application before the Board under this Act, a question arises as to whether an undertaking has been transferred from the Crown to an employer, the Board shall determine the question and its decision is final and conclusive for the purposes of this Act.

6. The Act is clearly designed to permit the Board to weigh and resolve competing interests affected by the transfer of an undertaking from the Crown to the private sector. The union representing the Crown employees has an interest in preserving its bargaining rights after the transfer. A union with prior bargaining rights for employees of the purchaser has an interest in protecting the integrity of its bargaining rights by seeing that the scope clause in its collective agreement is given full force and effect. The employer and the employees each have an interest in seeing collective bargaining between them continued in bargaining structures most conducive to a sound relationship, with a minimum of dislocation and fragmentation.

7. As the few applications previously brought illustrate, the Act is obviously drafted pragmatically to give the Board the latitude to respond to the particular fact situation before it. In some instances of a transfer and merger of employees the Board may realign bargaining structures in a number of separate units that are consistent with Board policy, and dispose of the application by polling the employees within each unit as to their preference of bargaining agent. (e.g. Owen Sound General and Marine Hospital, [1978] OLRB Rep. Aug. 759). Where, on the other hand, there is an intermingling of employees in the merged enterprise and the great preponderance of them have been represented by one of two competing unions the Board may follow the principles in Alliance Dairy, [1966] OLRB Rep. Aug. 336 and declare the preponderant union to be bargaining agent without a representation vote. (e.g. The Regional Municipality of Halton, [1978] OLRB Rep. Aug. 750). Where there has been a transfer of a Crown undertaking but no intermingling of employees, and it appears in light of established bargaining history that the transferred employees constitute an appropriate bargaining unit, the Board may declare a continuation of the bargaining rights of the union which has represented the Crown employees. (e.g. The Corporation of the City of Timmins, [1980] OLRB Rep. May 656).

8. As the cases illustrate, the Act contemplates a flexible approach to applications made under it. There are no mechanical solutions; the ultimate resolution of the application must ultimately depend on the labour relations equities of the case.

9. In the instant case counsel for OPSEU raised the question, albeit not forcefully, whether there has in fact been a "transfer" within the meaning of the Act. It is common ground that the transaction by which the Regional Municipality acquired the Crown undertaking is subject to the approval of the Ontario Municipal Board. That approval is presently pending. Counsel for OPSEU suggested that the fact that OMB approval has not yet been given might take this application outside the scope of the Act, predicated as it is on there being the "transfer" of an undertaking from the Crown.

10. It goes without saying that in this Province a municipality can do those things which it has the statutory power to do under The Municipal Act, R.S.O. 1970, c. 284 as amended, subject to all of the conditions set out in that legislation. It appears that as a matter of municipal law the acquisition from the Crown of sewage and water works by a municipality is subject to the approval of the Ontario Municipal Board. It must be emphasized that we are not here concerned with whether there has been a "transfer" within the technical sense of The Municipal Act. The threshold issue is whether there has been a "transfer" for the purposes of The Successor Rights (Crown Employees) Act, 1977. The meaning of the word "transfer" within The Successor Rights (Crown Employees) Act, 1977, must, like the words "sale of a business" in section 5 of The Labour Relations Act, be construed having regard to the purposes of that legislation (cf Thorco Manufacturing Ltd. 65 CLLC ¶16,052). The Act is designed to quiet disputes about bargaining rights and provide relief to employers, employees and unions alike when there has been a change of employer as an undertaking passes from the public sector to the private or vice versa. It is in that sense that the word "transfer" as defined in section 1(1)(1) of the Act is to be construed.

11. In Owen Sound General and Marine Hospital,(supra), OPSEU argued that the date of the transfer of a psychiatric hospital from the Crown must depend on the qualification of the merged undertakings as a psychiatric facility within the legal designations found in The Mental Health Act, R.S.O. 1970, c. 268, as amended, and The Mental Hospital Act, R.S.O. 1970, c. 270, as amended. These technical qualifications were effective only May 3, 1980 although the actual transfer of functions from the Crown to the private hospital occurred on April 1, 1978. In that case the Board determined that the date of the transfer for the purposes of the Act was April 1, 1978. In so concluding it commented, (at p. 765):

While the amendment of the legal designations has to be given some weight, the Board considers that this factor cannot be determinative in identifying the date at which the transfer took place. It is the time of the actual transfer of the functions of the undertaking from the Crown to the new employer that must be identified. This time can only be identified by a consideration of all the circumstances surrounding the transaction. (emphasis added)

In our view the foregoing passage reflects the proper approach to construing the words "conveyance, disposition or sale" in section 1(1) of the Act. The Act should be given a broad and liberal interpretation consistent with its legislative purpose. (The Interpretation Act, R.S.O. 1970, c.225, s.10).

12. In the instant case there was a transfer of functions from the Ministry of Environment to the Regional Municipality on July 1, 1980. From that date the water treatment and sewage facilities previously under the Ministry have been operated exclusively by the Regional Municipality. As of that date the employees of the Ministry of Environment became employees of the Regional Municipality. Since then they have been on the Regional Municipality's payroll and have been subject to its exclusive supervision and direction. For all practical purposes there has been a change of employer. While technically that change may be reversed by a determination of the Ontario Municipal Board, from the viewpoint of the existing labour relations of the parties it is complete. In these circumstances the Board is satisfied that on July 1, 1980 there was a transfer of an undertaking for the purposes of The Successor Rights (Crown Transfers) Act, 1977. Counsel raised the issue of what might happen if OMB approval should eventually be withheld. We need make no comment upon that possibility save to say that the legislation would appear to contain ample scope to resolve any problems that might arise.

13. We turn to consider the merits of the application. Counsel for OPSEU concedes that there has been an intermingling of employees for the purposes of section 5(1) of the Act. He argues however that the Board should distinguish between the maintenance employees, on the one hand, and the water treatment and sewage facilities employees on the other hand. He maintains that while there might be a substantial intermingling of the maintenance employees, the employees who work as operators in the sewage treatment facilities and in the water supply facilities are only slightly intermingled, with a great preponderance of them being employees represented by OPSEU. On that basis he asks the Board to find that the operators, lab technician and electrician who work in the water supply and sewage treatment facilities constitute an appropriate bargaining unit within the meaning of section 4(1)(b) and to declare, pursuant to section 1(1)(c) of the Act that OPSEU remains the bargaining agent of the employees in those classifications. In support of his argument he stresses the purpose of the Act is to preserve existing bargaining rights and refers the Board in particular to the decision in The Corporation of the City of Timmins, (supra).

14. We find that there are important distinctions between The City of Timmins and this case. In that application, which also involved the transfer of water treatment and sewage facilities, the Board expressly found that there had been no intermingling of employees and no interchange between jobs done by OPSEU represented employees and those performed by employees in CUPE's bargaining unit. Moreover, the CUPE bargaining unit was not an "all employee" unit but was described simply in relation to certain classifications. In that case the employer endorsed OPSEU's position. There being a clear division between the job functions and locale of the OPSEU and CUPE employees respectively, the Board saw no reason not to preserve the bargaining rights of OPSEU, reasoning along the lines of a similar decision of the Board under section 55 of the Act in The City of Peterborough, [1979] OLRB Rep. Feb. 133.

15. In this case there is a substantial intermingling of employees who work in the sewage and water facilities of the Regional Municipality. While the maintenance men may move among the various locations, they interact on a daily basis with the operators who work within them. There is, moreover, some intermingling among the operators themselves, notably at the Dowling Sewage Treatment Plant and at Sudbury and Lively.

16. The Regional Municipality opposes OPSEU's request to retain a vestigial unit. Its counsel argues that it is now in an invidious position. Employees in its facilities work side by side and perform the same work at substantially different rates of pay and receive different benefits under two separate collective agreements. It submits that its water and sewage operations are an integrated whole, and that the intermingling of the employees in all classifications justifies treating them as one group for collective bargaining purposes. Its counsel expresses the municipality's concern that the fragmentation of this aspect of its operations will cause undue expense in bargaining and administering separate collective agreement, with the potential for whipsawing between the two unions. He also raised concerns about the employer's water and sewage facilities being in double jeopardy with the possibility of separate strikes at different times by maintenance employees under CUPE and operators under OPSEU.

17. Counsel for CUPE joins the employer in urging the Board to terminate OPSEU's bargaining rights entirely. He submits that the bargaining unit sought by OPSEU has little or no real bargaining history to support it since the employees in the water and sewage facilities represented by OPSEU were previously part of a province-wide bargaining unit, and were not themselves an established unit, as was the case in the Peterborough decision. He also stressed that unlike in the Timmins case, here the bargaining rights in CUPE's collective agreement are in respect of "all employees" of the Regional Municipality except office and clerical employees who are represented by a separate CUPE local.

18. In our view the facts of this case do not make a compelling argument in favour of OPSEU's position. The establishment of a separate and new OPSEU bargaining unit that will include only some of the employees who work in the sewage and water treatment facilities, with others being represented by CUPE, has little to commend it from a labour relations standpoint. To give effect to OPSEU's request would be to establish a new grouping of employees in a unduly fragmented structure. It could, for the reasons advanced by counsel for the Regional Municipality, create some genuine labour relations problems for the employer. As a result of changes implemented by the Regional Municipality its water and sewage operations are a single unit for administrative and business purposes. It would require compelling reasons to fragment only part of those facilities into a separate unit for collective bargaining purposes.

19. OPSEU's position would be more persuasive if it were contending for a unit that would include all employees in water and sewage facilities, including maintenance staff. It would be more compelling still if there were no intermingling of employees, as in the Timmins case. In this case, however, the lack of both of these factors makes a substantial difference.

20. In this case there is no clear history supporting the fractional bargaining unit proposed by OPSEU. To establish such a unit would sharply fragment the employees in this part of the Regional Municipality's operations forcing both employer and employees to operate within a less rational bargaining structure. It would require the employer to bargain twice and administer separate agreements in respect of employees in the same part of its operations. It would also risk leaving the employees in the small, vestigial unit with diminished authority at the bargaining table. In our view the industrial relations costs of that proposal clearly outweigh its benefits. We therefore decline to accede to OPSEU's request to amend the bargaining unit described in CUPE's collective agreement to carve out a portion of the employees heretofore represented by OPSEU. The unit of employees contained in the scope clause of that collective agreement constitutes the more appropriate bargaining unit in this case.

21. We consider next how to resolve the issue of representation. As the Board has noted, the number of employees previously included in the all employee bargaining unit represented by CUPE is considerably larger than the number of employees who have been represented by OPSEU. CUPE represents approximately 169 employees as compared to 25 for OPSEU. In these circumstances we need have little doubt about the relative support of the two unions among the employees in the bargaining unit. While, as the Board noted in Owen Sound General and Marine Hospital, [1978] OLRB Rep. May 445 at 449-50) a representation vote may sometimes be appropriate to resolve the transfer of a complex bargaining structure from one sector to another, there will also be instances where the principles in Alliance Dairy Ltd., (supra) apply under The Successor Rights (Crown Transfers) Act, 1977. Where the bargaining structure that ultimately prevails is a comprehensive unit previously represented by one union and that union's membership strength is clearly preponderant, the Board may allow the merger to operate as though there had been an accretion to that bargaining unit and terminate the competing bargaining rights without a representation vote (e.g. The Regional Municipality of Halton, (supra)). We are satisfied that this is such a case.

22. The Board therefore declares that, effective on the date of this decision:

(a) The Corporation of the Regional Municipality of Sudbury is no longer bound by the collective agreement between OPSEU and the Crown in Right of Ontario (represented by Management Board of Cabinet);

(b) The employees of the respondent covered by the collective agreement referred to in paragraph (a) and those covered by the collective agreement between CUPE and the respondent constitute one appropriate bargaining unit which is defined as follows:

All employees of The Regional Municipality of Sudbury save and except foremen, persons above the rank of foreman, employees included and excluded under a subsisting collective agreement between The Regional Municipality of Sudbury and Canadian Union of Public Employees, Local 207, persons regularly employed for not more than twenty-four (24) hours per week, and students hired for the school vacation period.

(c) both employees of the respondent formerly covered by the collective agreement referred to in paragraph (a) and those employees covered by the collective agreement between the respondent and CUPE are covered henceforth by the collective agreement between CUPE and The Regional Municipality of Sudbury.