[1984] OLRB Rep. April 604
2560-83-R Retail, Wholesale & Department Store Union, Local 414, Applicant, v. Ancaster Supermarkets Limited, c.o.b. as I.G.A., Respondent.
BEFORE: R. 0. MacDowell, Vice-Chairman, and Board Members B. L. Armstrong and W. H. Wightman.
APPEARANCES: David I. Bloom and John Fuller for the applicant; Mark Contini, Peter Berti and Paul Berti for the respondent.
DECISION OF THE BOARD; April 19, 1984
- This is an application under section 63 of the Labour Relations Act. The applicant union claims that Dominion Stores Limited has sold part of its business to the respondent and that, accordingly, the respondent is a "successor employer" within the meaning of section 63. The applicant union seeks a declaration to that effect. The material portions of section 63 are as follows:
63.-(l) In this section,
(a) "business" includes a part or parts thereof;
(b) "sells" includes leases, transfers and any other manner of disposition, and "sold" and "sale" have corresponding meanings.
(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.
The facts are not substantially in dispute. For many years Dominion Stores Limited ("Dominion") operated a retail food market in the Ancaster Plaza on Wilson Street in Ancaster, Ontario. It was one of three chain stores in the immediate vicinity. There was a Miracle Food Mart across the street and a Zehrs Market in a neighbouring building. Ancaster Plaza itself is part of a cluster of similar commercial premises in the immediate area. One of the particular advantages of the Ancaster Plaza, however, is the presence of a liquor store and a beer store.
The Dominion Store in the Ancaster Plaza was closed in August of 1982. The stock-in-trade was removed, and a "for rent" sign placed in the window. The employees exercised their bumping rights under the subsisting collective agreement between Dominion and the applicant union. Many of them were able to transfer to other Dominion stores in the Hamilton area, although the evidence does not establish whether they all were successful in obtaining alternative employment at these other stores. In any event, there was no business activity at the former Dominion premises on Wilson Street until January, 1984, when the respondent opened his independent I.G.A. food market.
Peter Berti, the owner of the respondent has been in the food business for twenty-five years, most recently as the proprietor of independent "I.G.A." food stores. At the present time he operates two such stores: one in Hamilton, and one in the Ancaster Plaza in the premises formerly occupied by Dominion. Mr. Berti testified that he noticed the vacant premises almost by accident in late August, 1984, when he happened to be driving through An-caster. Subsequent inquiries revealed that Dominion was still the lessee. Its lease expired in 1986, but had renewal options which could extend it for a further twenty-two years. After some negotiation between the respondent, Dominion, and the landlord of the Plaza, the respondent acquired an assignment of Dominion's lease. In a separate but related transaction, the respondent also acquired certain display tables, scales, shelving, coolers and refrigeration equipment which were on the premises and are more particularly described in the appendix to exhibit #4, the Bill of Sale. The respondent then injected about a hundred thousand dollars of its own capital to purchase new equipment and renovate the interior of the store. The renovations included some new plumbing and wiring, the construction of partitions and painting the premises. The transaction with Dominion did not include any signs, or stock-in-trade, nor is there any express transfer of good will or a non-competition covenant. However, the nearest Dominion Store is several miles away and it is evident that for practical purposes Dominion was withdrawing from that local market.
The "new" food store opened for business on January 18, 1984 — that is, almost a year and a half after its predecessor had closed. Mr. Berti testified that he hoped to distinguish himself from the other "chain stores" in the area by emphasizing his independence and the kind of special customer service which he thought he could provide. He said as much in an interview with the local newspaper where he regularly advertises. In other words, he hopes to capitalize upon the fact that he is not like Dominion or the other two chain stores in the immediate area which are his principal competition.
There is no doubt that section 63 frequently gives rise to vexing questions of interpretation and the retail food industry seems to have contributed more than its fair share of such problems over the years. Indeed, in purely numerical terms, there have probably been more successor rights cases in the retail food industry than in any other part of the economy. But we do not intend to review this extensive Board jurisprudence. That task was recently undertaken in a decision released several weeks ago involving this very applicant (see Retail, Wholesale and Department Store Union, Local 414 and Queensway Foods Limited, [1984] OLRB Rep. Feb. 358. In More Groceteria Limited, [19801 OLRB Rep. April 46, the Chairman of the Board conducted a similar review. We see little purpose in repeating this exercise. It suffices to say that each case in this area turns upon its own particular facts.
The critical factor in this case is that Dominion closed its business and it remained closed for almost a year and a half. It was only by chance that Mr. Berti happened to pass the premises about a year after the closure, or they might still be vacant today. Even if we accept that the success of a food market is dependent upon the support of the people who live in the locality and that any goodwill consists in the habit of customers continuing to patronize a food market located on the same premises, such goodwill would have long since dissipated by the time that the respondent opened its business. It is reasonable to infer that in the year and a half between the closure of Dominion and the opening of the respondent, Dominion's former patrons simply went next door or across the street. If those customers are "recaptured" it will not be because of any loyalty to Dominion. It will be because the respondent's products or service are good enough to deter local customers from shopping next door — whether or not in past years they might have shopped at Dominion. Accordingly, it is difficult to conclude that the respondent is, in some way, carrying on Dominion's "business". Rather, what has occurred here is merely a transfer of certain surplus assets which the respondent has incorporated into its own business. That characterization would be consistent with the decision of the Board in Darrigo Consolidated Holdings Inc., [1980] OLRB Rep. Jan. 29, where the form of the transfer and the facts are substantially similar to those in the present case. There too, a long hiatus was considered the significant factor in concluding that there had not been a "sale of a business" within the meaning of section 55 [now 63] of the Act. (See also Zehrs Markets Limited, [1974] OLRB Rep. May 331.)
In the circumstances of this case, the Board is unanimously of the view that there has not been a "sale of a business" within the meaning of section 63 of the Labour Relations Act. The application is therefore dismissed.