[1983] OLRB Rep. August 1244
0696-83-R; 0703-83-R; 0697-83-U; 0702-83-R; 0705-83-R; 0706-83-R; 0707-83-R Kevin Bartlett, Applicant, v. United Food & Commercial Workers International Union, Local Union 175, Respondent, v. Beaton Supersave Inc., Intervener; David Swain, Applicant, v. United Food & Commercial Workers International Union, Local Union 633, Respondent, v. Beaton Supersave Inc., Intervener; Robert D. Pursel, Applicant, v. United Food & Commercial Workers International Union Local 633, Respondent, v. 404199 Ontario Inc., carrying on business as Cartwright Supersave, Intervener; Randy L. Wright, Applicant, v. United Food & Commercial Workers International Union Local 75, Respondent, v. 404199 Ontario Inc., carrying on business as Cartwright Supersave, Intervener; John Carvaiho, Applicant, v. United Food & Commercial Workers International Union Local 175, Respondent, v. 404199 Ontario Inc., carrying on business as Cartwright Supersave, Intervener
BEFORE: R. D. Howe, Vice-Chairman, and Board Members F. W. Murray and H. Kobryn.
APPEARANCES: Peter Lockyer, Peter Spence and Kevin Bartlett, for Kevin Bartlett; Peter Lockyer, Peter Spence and David Swain for David Swain; D. Stephen Jovanovic and John Cayalho for John Cavalho; D. Stephen Jovanovic and Robert D. Pursel for Robert D. Pursel; D. Stephen Jovanovic and Randy L. Wright for Randy L. Wright; Harold F Caley, David A. McKee, Denis Sexton and Bud Adam for Locals 633 and 175; George W King and Ron Beaton for Beaton Supersave Inc.; George W King and Lyle Cartwright for 404199 Ontario Inc.
DECISION OF THE BOARD; August 22, 1983
File No. 0696-83-R is an application under section 63 of the Labour Relations Act in which the applicant Kevin Bartlett contends that a sale of a business by Gordons Markets, a Division of Zehrmart Limited ("Gordons"), to Beaton Supersave Inc. ("Beaton") took place on or about May 2, 1983, and requests the Board to exercise its power under section 63(4)(c) to define the composition of the "like bargaining unit" (for employees other than meat department employees). File No. 0697-83-R is a similar application pertaining to meat department employees. File Nos. 0702-83-R and 0703-83-R are applications under section 57 of the Act for declarations that the respondent local unions (referred to in this decision as the "union", or as "Locals 633 and 175") no longer represent the employees in the respective bargaining units for which they are the bargaining agents. File Nos. 0705-83-R, 0706-83-R, and 0707-83-R are termination applications under section 57 in respect of the meat department employees, part-time employees (and students), and full-time employees of 404199 Ontario Inc., carrying on business as Cartwright Supersave ("Cartwright") for whom Locals 633 and 175, respectively, have allegedly obtained bargaining rights as a result of a sale of a business by Gordons to Cartwright.
Counsel for Locals 633 and 175 contends that his clients have given notice to bargain under section 63(3) of the Act and that, as a result, each of the aforementioned termination applications is untimely by virtue of section 63(10), read in conjunction with section 57 of the Act. Counsel for the other parties submit, on the other hand, that no such notice has been given. Moreover, counsel for the termination applicants submit, in the alternative, that even if a notice has been given under section 63(3), such notice does not have the effect of closing the collective agreement "open period". On the agreement of the parties, on August 8, 1983 the Board heard the evidence and representations of all of the parties to these various applications, concerning those issues. Union counsel also reserved the right to argue in the alternative at a later date, if necessary, that the termination applications are untimely because Beaton and Gordons are carrying on associated or related activities under common control or direction and should, therefore, be found by the Board to be one employer under section 1(4) of the Labour Relations Act. He also reserved the right to rely upon section 1(4) at a later date (if necessary) in respect of Cartwright and Gordons.
In 1981, Gordons and Locals 175 and 633 entered into collective agreements covering full-time, part-time, and meat department employees, respectively. Each of those collective agreements came into force on July 10, 1981, and continued in force until July 9, 1983. Pursuant to its collective agreement covering Gordons' full-time employees, and in accordance with section 53 of the Act, on or about April 22, 1983 Local 175 gave Gordons the following written notice to bargain:
Please be advised that Local Union 175 hereby gives notice of its intent to open negotiations for the purpose of amendments and modifications to the current Collective Agreement (full-time).
I would appreciate hearing from you as to suitable dates to commence negotiations.
Yours very truly,
(signed)
W.E. HANLEY
President
Ontario Retail Council
Similar notice was given at or about that time by Local 175 in respect of the "part-time" collective agreement, and by Local 633 in respect of the "meat department" collective agreement. The union subsequently applied for and obtained the appointment of a conciliation officer pursuant to section 16 of the Act.
It is common ground among the parties that there has been a sale of a business, within the meaning of section 63 of the Act, by Gordons to Beaton in respect of the Gordons store at 46 Main Street West in Ridgetown, Ontario. It is also common ground among the parties that there has been a sale of a business within the meaning of section 63 by Gordons to Cartwright in respect of the Gordons store at 22 Talbot Street in Wheatley, Ontario. For purposes of arguing the two issues presently before us, the parties further agreed that those sales took place on May 2, 1983, and May 9, 1983, respectively.
On May 25, 1983, Denis Sexton, the Secretary-Treasurer of the union's Ontario Retail Council, sent (by "double registered" mail) the following letter to Ron Beaton, the purchaser of Gordons' Ridgetown store:
We have been informed that you have taken over the operation of the closed Gordons Store at the above address.
As you are aware Locals 175 & 633 of the United Food and Commercial Workers International Union, holds [sic] the bargaining rights for all of the Gordons locations in Ontario, including this particular store.
It is our position that by virtue of Section 63 of the Ontario LaUour Relations Act, Locals 175 & 633 hold the bargaining rights for all employees of this store. Those Successor Rights operate by virtue of the Act, so that no application need be made at the Ontario Labour Relations Board.
In accordance with the Act, it is the Union's position that, as operator(s) of this store, that you are bound by the Collective Agreement to which locals 175 & 633 is a party with Gordons Markets (a division of Zehrmart Ltd.), dated September 15th, 1981 and effective as of July 10th, 1981.
Would you please contact me in respect of a meeting to discuss the necessary arrangements for the application of the aforesaid Collective Agreement in this store. Should you fail to respond to this letter or should you fail to recognize Locals 175 & 633 Successor Rights, an application will be filed with the Ontario Labour Relations Board, to ensure that the rights of Locals 175 & 633 are protected.
Mr. Beaton received that letter on May 28, 1983. On May 26, 1983, Mr. Sexton sent an identical letter to Lyle Cartwright, the purchaser of Gordons' Wheatley store. That letter was also received on May 28, 1983.
Mr. Sexton testified that the purpose of his letters of May 25 and 26 was to inform the new owners that there was a collective agreement in force and that, under the law, the collective agreement flowed with the business in the case of a sale. He also testified that, in recognition of the fact that a small independent store is not the same as a large retail chain, he felt that it would be appropriate to sit down with the new owners to discuss their intentions and determine "how best to proceed from there". He told the Board that this would not necessarily involve the imposition of the existing collective agreement(s) since that might be "too heavy" for them. Although he expressed the opinion that the final paragraph of those letters was a notice to bargain, he conceded in cross-examination that the union's intention to meet with the new owners and, if appropriate, to bargain a less onerous agreement, was not "spelled out in the letters. He also conceded that the union's intention "could have been made more clear".
On or about June 10, 1983, Messrs. Beaton and Cartwright each mailed an identical response to Mr. Sexton's letters, in the following terms:
I am in receipt of your letter dated May 25, 1983 relating to the Gordon Collective Agreement at this store.
I would be agreeable to setting a date for a meeting with you to discuss our mutual interest in this agreement.
I will await your reply as to possible dates for such a meeting.
After Mr. Sexton received those letters, he instructed Business Representative Bud Adam to follow up on them by setting up meetings with the new owners. Accordingly, Mr. Adam telephoned Mr. Beaton, and was referred to counsel (Mr. King) who was handling all such matters on Mr. Beaton' s behalf. Mr. Adam then attempted on two occasions to telephone Mr. King but was unable to speak with him as he was out of the office. Mr. Adam also attempted to telephone the Wheatley store but was advised that it had an unlisted telephone number. Although he intended to personally attend at that store to make arrangements for a meeting, other commitments precluded him from doing so. His efforts to arrange such meetings ceased after the union was notified of the aforementioned termination applications.
- Section 63(3) provides as follows:
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.
Neither the Act nor the Board's Rules of Procedure specify any particular form which must be used to effectively give notice to bargain under section 63(3). Moreover, as indicated by the Board in Davidson-Walker Funeral Homes, F1981] OLRB Rep. Oct. 1359, at paragraph 31, in determining whether a document constitutes written notice to bargain within the meaning of section 63(3), "substance must prevail over form if the Act is to be realistically applied". Thus, a telegram which, among other things, requested counsel for the successor employer to advise the union if his client was prepared to meet with the union to finalize a collective agreement between the successor employer and the union on behalf of the bargaining unit employees of the operation in question, was held to be written notice to bargain within the meaning of section 63(3). (In that case there was no collective agreement in force between the union and the predecessor employer at the time of the sale.) Moreover, notice need not expressly refer to section 63(3); see, for example, Independent Paper Convertors Inc., 111979] OLRB Rep. March 207. In that case, the following letter was held to constitute proper notice under section 63(3):
We understand that sometime this year you purchased the business formerly carried on by Top Paper Products Ltd. As you may be aware Top Paper Products Ltd. had a collective agreement with our local which expired October 31, 1977. Notice to bargain under this collective agreement was sent to the prior employer on August 9, 1977 and we have had two meetings in an attempt to conclude a collective agreement.
Inasmuch as we have been unsuccessful in concluding a collective agreement we are enclosing the expired agreement and would be prepared to meet with you during the week of July 10, 1978 in order to attempt to conclude a collective agreement.
The giving of written notice to bargain pursuant to section 63(3) has important ramifications for the employer to whom it is given. It triggers the section 15 duty to meet within fifteen days from the giving of such notice (or within such further period as the parties agree upon), and to bargain in good faith and make every reasonable effort to make a collective agreement. Once it has been given, the Minister must appoint a conciliation officer upon the request of either party: see section 16(1); cf. section 16(2). Such notice also triggers the section 79(1) "statutory freeze" which precludes (for the period specified therein) the successor employer from altering, without the consent of the union, the rates of wages or any other term or condition of employment or any right, privilege or duty of the employer, the union, or the employees. (For such freeze to bind the successor employer following a sale of a business, notice to bargain must be given to the successor employer under section 63(3), even if the predecessor employer was bound by the section 79(1) "freeze" at the time of the sale: see, for example, Oxford Manor Rest Home, 11980] OLRB Rep. Dec. 1786, and The Winchester Press Limited, [1982] OLRB Rep. Feb. 284.) Moreover, by virtue of section 63(10) of the Act, the giving of such notice has, for the purposes of sections 5, 57, 59, 61, and 123, "the same effect as a certificate under section 7". Thus, in Independent Paper Convertors Inc., supra, the Board held that no termination application can be made within one year of the giving of notice to bargain to a successor employer pursuant to (what is now) section 63(3). (In that case, the notice to bargain was given after the expiry of the collective agreement that had been in force between the union and the predecessor employer.) See also Vaunclair Meats Limited, [1981] OLRB Rep. Aug. 1186.
While we agree with union counsel that "substance must prevail over form" in determining whether a letter or other document constitutes a section 63(3) notice to bargain, in view of the significant legal rights, duties, and responsibilities triggered by a section 63 notice to bargain, we are of the view that, as a matter of labour relations policy, it is essential that a document which a trade union asserts to have effected such notice, should clearly be, in substance, a notice of the union's desire to bargain with a view to making a collective agreement or the renewal, with or without modifications, of the agreement then in operation. Having carefully considered the submissions of the parties, we are not satisfied that the union's letters of May 25 and 26 are, in substance, notices to bargain. While Mr. Sexton may have intended them to be such notices, on a fair reading of those letters as a whole, it is apparent that they merely inform the purchasers of the effect of section 63(2) on the union's existing bargaining rights and collective agreements, and request "a meeting", the specified purpose of which is "to discuss the necessary arrangements for the application of the [July 10, 1981 to July 9, 19831 collective agreement in [the stores in question]". They do not, as a matter of substance, notify the successor employers of a desire on the part of the union to bargain with a view to making a collective agreement or the renewal, with or without modifications, of the agreement then in operation. As noted by opposing counsel, there is a striking contrast between the clear and unequivocal wording of the union's letter of April 22, 1983 to Gordons, by which it specifically gave "notice of its intent to open negotiations for the purpose of amendments and modifications" to the collective agreement, and the language contained in the union's letters of May 25 and 26. Thus, the letter of April 22nd demonstrates that the union was able to give clear and unequivocal notice to bargain, and underlines the inadequacy of the letters upon which it is attempting to rely in the present case for that purpose.
For the foregoing reasons, the Board finds that the aforementioned letters do not constitute notices to bargain within the meaning of section 63(3) of the Act and, therefore, do not render the aforementioned termination applications untimely. In view of that finding, it is unnecessary to determine the issue of whether a section 63(3) notice can effectively close a collective agreement "open period".
The parties are in agreement that if the union intends to pursue its request for declarations under section 1(4), that matter should be dealt with by the Board prior to embarking upon a hearing of the merits of the termination applications. Accordingly, if within one week of the date of this decision union counsel notifies the Board (in writing) that his clients intend to pursue their requests for section 1(4) declarations, these files will be scheduled for hearing for the purpose of hearing the evidence and representations of the parties with respect to that matter. Otherwise, the files will be scheduled for hearing for the purpose of hearing the evidence and representations of the parties with respect to all other matters arising out of and incidental to these applications.
These matters are hereby referred to the Registrar.