Ontario Labour Relations Board
[1984] OLRB Rep. October 1523
1350-84-R United Food and Commercial Workers Local 206, Applicant, v. V.S. Services Ltd., Respondent
BEFORE: R. 0. MacDowell, Acting Alternate Chairman, and Board Members B. L. Armstrong and J. A. Ronson.
APPEARANCES: Timothy G. M. Hadwen and Michael Fraser for the applicant,' Wallace M. Kenny, D. Mikel burg and R. Ellis for the respondent.
DECISION OF THE BOARD; October 17, 1984
This is an application under section 63 of the Labour Relations Act. The applicant claims that Domco Foodservices Limited ("Domco") has "transferred" its "business" to V. S. Services Ltd. ("V.S.") wit`hin the meaning of section 63 and that, accordingly, the union retains bargaining rights for the employees of V.S. and V.S. is bound by an existing collective agreement between the union and Domco.
A hearing in this matter was held in Toronto on October 11, 1984. The facts were not in dispute, and it is unnecessary to recite them at any length. It suffices to say that Domco had a two-year contract with the Ministry of Correctional Services to provide food services at the Guelph Correctional Centre. The contract prescribed the services in some detail and, as might be expected, in carrying out its duties and responsibilities, Domco had to follow the policies, procedures, and regulations, determined by the Ministry and administered by the superintendent of the Correctional facility. Domco was first engaged to provide these catering services in or about 1978. Its current two-year contract was slated to expire on September 1, 1984. On April 18, 1984, the union was certified (on an interim basis) to represent the employees of Domco working at the Guelph Correctional facility. A final certificate issued on May 24, 1984. On July 17, 1984, the union and Domco executed a document entitled "Memorandum of Agreement", which is said by the union to constitute a valid and binding collective agreement.
In accordance with the Ministry's established practice, the food service contract was put out for competitive tender in July, 1984. Sealed tenders were to be received by the Ministry no later than July 17, 1984. Domco submitted a bid, as did V.S. and several other catering contractors. V.S. was the successful bidder. By letter dated July 30, 1984, Domco advised its employees that it had lost the contract and that accordingly it was necessary to terminate their employment, effective August 31, 1984.
V.S. was scheduled to take over the operation on September 1, 1984. Early in August it approached John Sheehan, the on-site manager for Domco, and offered him continued employment. Mr. Sheehan had only worked for Domco for about ten months, but he was familiar with the site and had extensive experience in the food service business. He had worked for V.5. at the Mimico Correctional Centre for four years, and subsequently he was food service director at a private hospital in Toronto. After that, he spent about three years in business for
himself running two restaurants. Thus, although his tenure with Domco had been short and his responsibilities limited, V.S. decided to hire him. V.S. acquired the remainder of its staff through interviews with Domco's former employees and advertisements in the local newspaper. V.S. hired seven of the approximately thirteen individuals formerly employed by Domco. There was no acquisition or transfer of anything from Domco. Indeed, in the tendering process, the rules specifically prohibited any contact between competitors, and there was none. Nor was there any need for such communication following the selection of the successful bidder. V.S. is an established catering contractor with hundreds of contracts across Canada and its own management control systems which it began to implement at Guelph within the framework of the requirements and regulations stipulated by the Ministry.
We do not think it is necessary to dwell upon the evidence. The fact is, that the situation in this case is virtually identical (and legally indistinguishable) from that before the Board in Metropolitan Parking Inc., [1979] OLRB Rep. Dec. 1193. That case also involved a subcontracting arrangement (there with the federal government), and because the issue was somewhat novel, the Board engaged in an extensive analysis of the legal principles applicable in potential successor employer situations. The Board decision was unanimous and its approach has been consistently followed in later cases. On May 7, 1984, the Canada Labour Relations Board issued its decision in Cafas Inc. v. International Association of Machinists and Aerospace Workers, Local 2300, 84 CLLC ¶ 16,034 which quoted extensively from Metropolitan Parking Inc. and adopted its reasoning. The Cafas case also involved an alleged "sale of a business" when a unionized company providing services to a customer, lost a contract by tender to a non-union competitor. As in Metropolitan Parking Inc., the Canada Labour Relations Board held that there was no "sale of a business".
No useful purpose would be served by repeating, in these reasons, the analysis outlined by the Board in Metropolitan Parking Inc.. It is sufficient to say that we reaffirm that analysis, and for those reasons, this application must be dismissed.