The Little Falls Dining Room et al. v. Hotel Employees Restaurant Employees Union, Local 75, 1985 CanLII 1094

[1985] OLRB Rep. November 1624

2577-83-M The Little Falls Dining Room, John The Sportsman Restaurant, Rockton Hotel, Valenca Restaurant, Atikokan Hotel, Steep Rock Inn, Employers, v. Hotel Employees Restaurant Employees Union, Local 75, Trade Union

BEFORE: Ian C. Sprin gate, Alternate Chairman, and Board Members J. Wilson and B. L. Armstrong.

APPEARANCES: F. J. W. Bickford for The Little Falls Dining Room, Steep Rock Inn and Valenca Restaurant; Alick Ryder, Q. C. for Hotel Employees Restaurant Employees Union, Local 75; no one appearing on behalf of John The Sportsman Restaurant, Rockton Hotel or Atikokan Hotel.

DECISION OF THE BOARD; November 7, 1985

1. This is a reference from the Minister of Labour to the Board pursuant to the provisions of section 107 of the Labour Relations Act. The Hotel Employees Restaurant Employees Union, Local 75, ("Local 75") has requested that the Minister appoint arbitrators to determine the merits of certain grievances which the union had filed against six employers in Atikokan. The grievances were filed under a purported collective agreement entered into on April 22, 1983. Several of the employers have objected to the appointment, contending that at the relevant time Local 75 did not represent their employees, or, in the alternative, that they were not bound to the April 22, 1983 collective agreement. In his reference, the Minister posed the following questions to the Board, namely:

whether or not collective bargaining relationships exist between the employers and the trade union and, if so, whether or not the agreement of April 22, 1983 is binding upon them.

2. Partway through these proceedings, Local 75 withdrew its claim to hold bargaining rights with respect to The Little Falls Dining Room. Accordingly, there is no need to review the evidence relating to this facility.

3. We would note at this point that John The Sportsman Restaurant, the Rockton Hotel and the Atikokan Hotel, although served with notice of the hearing into these proceedings, did not attend at the hearing. Nevertheless, counsel for the other three employers made certain general submissions which, if accepted, would also relate to the three unrepresented employers.

4. The events giving rise to these proceedings began in October 1976 with the entering into of a memorandum of agreement between Hotel, Motel & Restaurant Employees & Bartenders International Union, Local 893 ("Local 893") and the "Atikokan Hotel Association". The memorandum of agreement took the form of a lengthy collective agreement. Local 893 was a local union of what is now (as a result of a change in name) Hotel Employees Restaurant Employees International Union. Local 893 was based in Atikokan, a community of approximately 5,000 people some 150 miles west of Thunder Bay. Local 893 appears to have been a small local which, at times, lacked vigorous or knowledgeable leadership. Local 75, the trade union party to these proceedings, contends that it is the successor trade union to Local 893.

5. As already noted, the employer party to the 1976 agreement was the "Atikokan Hotel Association". Article 3(a) of the agreement referred to the Atikokan Hotel Association in the following terms:

The Union recognized the Association as an Employers' Organization acting as bargaining agent for the Employers listed in Schedule "N' attached hereto (each of whom is hereinafter referred to as the "Employer") in negotiations of a collective agreement with the Union.

Schedule "A" to the agreement reads as follows:

Schedule A

Rockton Hotel

Atikokan Hotel

The signing page of the agreement has, under the heading "for Atikokan Hotel Association", the signatures of two individuals. One was identified as the signature of Mr. John Torbiak, the owner of the Atikokan Hotel. The other signature is illegible. No evidence was led as to the founding or possible constitution of the Atikokan Hotel Association. As already noted, neither the Atikokan Hotel nor the Rockton Hotel was represented at the hearing into these proceedings.

6. On June 26, 1979 a new agreement was entered into, stated to run from July 1, 1979 to June 30, 1982. The heading of this agreement read as follows:

Memorandum of Agreement

between Hotel, Motel, Restaurant Employees Union Local 893, Atikokan, Ontario and the Atikokan Hotel & Restaurant Association said to include,

Atikokan Hotel

Hotel Steep Rock

Rockton Hotel

John The Sportsmans Restaurant Ltd.

Valenca Restaurant

Little Falls Dining Club.

The parties hereto agree to the following items as a basis of all items outstanding:

1. A common contract to be based on the terms and wage rates of the expired agreement between Hotel, Motel & Restaurant Employees & Bartenders Intl. Union, Local 893 and the Atikokan Hotel Association. Amended as follows.

There then followed a number of clauses containing changes to certain of the provisions in the 1976 agreement as well as a number of new provisions. One of the new provisions read as follows:

8. The Union agrees that the rates presently being paid at the Valenca Restaurant for the incumbent cook and Second Cook shall be Red Circle Rates and will become redundant when the incumbents terminate their employment. The rates for these positions shall be:

July July July Present 1/79 1/80 1/81

Cook 5.25 5.55 6.13 6.71

Short Order

Cook 5.00 5.48 6.06 6.62

The signing page to the document contained the following heading and signatures:

For the employer

Atikokan Hotel "John Torbiak" Hotel Steep Rock "Tern Hart" Rockton Hotel 'A. E. Olson"

John The Sportsman

Restaurant and Little

Falls Dining Club “J. Babiak"

Valenca Restaurant "M. B. Gomes"

"(illegible) Gomes"

At the time, Mr. John Babiak was both the owner of John The Sportsman Restaurant and the operator of The Little Falls Dining Club.

7. The only employer signatory to the 1979-1982 agreement who testified in these proceedings was Mr. M. Gomes, the owner of the Valenca Restaurant. Mr. Gomes testified that he is an immigrant from Portugal who, between 1959 and 1977, worked with the Canadian National Railway fixing track. In 1977 he purchased the Valenca. According to Mr. Gomes, when he purchased the restaurant, he could read "almost nothing" in English, and even now he reads "very little" English. In these proceedings, Mr. Gomes testified in fairly fluent, although heavily accented, English. According to Mr. Gomes, in June of 1979 a group of people came to his restaurant, of whom he recognized only Mr. John Babiak, the owner of John The Sportsman Restaurant. Mr. Gomes testified that Mr. Babiak had at times given him advice about the operation of his restaurant. According to Mr. Gomes, after he joined the group, there was some discussion about a union, which he did not understand. Later, everyone signed a document. According to Mr. Gomes, Mr. Babiak told him to sign, and accordingly, he did so, as did his wife. Mr. Gomes testified that when he signed the agreement, he felt he was signing with respect to some town-related business, and did not know that he was signing a collective agreement.

8. Before leaving the matter of the 1979-1982 agreement, we would comment on the state of the document itself. When filed in these proceedings, the document had lines drawn through its various provisions (but not the signatures) in a different colour of ink to that used to draft the document. The only person to testify with respect to the lines was Mrs. Margaret Slobozian, who at the time was an active member of Local 893 and who later became its president. Mrs. Slobozian testified that she recalled that the lines were put through the document when she and others were using it to prepare yet another document. Based on this recollection Mrs. Slobozian indicated that she felt that there must have been a more detailed document prepared incorporating the terms of the June 26, 1979 agreement. However, continued Mrs. Slobozian, she did not actually recall signing any such document. At another point in her testimony, Mrs. Slobozian suggested that the lines may have been put through the June 26, 1979 document when that document was used as an aid in preparing proposals for a later collective agreement. Given Mrs. Slobozian' s testimony, and the lack of any contradictory evidence on point, we are satisfied that whenever the lines were placed through the June 26, 1979 document, it was subsequent to the document's execution and do not affect its validity.

9. As indicated above, someone executed the June 26, 1979 document on behalf of each of the six employers named in the agreement. As already noted, of the individuals who signed for the employers, only Mr. Gomes testified. From Mr. Gomes' testimony, it appears that the Valenca Restaurant never formally took out membership in, or assigned bargaining rights to, the Atikokan Hotel and Restaurant Association. It is of some interest that Mrs. Slobozian, the only signatory to the June 26, 1979 document on the union side who testified in these proceedings, stated that it was her understanding that each of the people who signed on the employer side signed for themselves individually. Mrs. Slobozian further testified that in the discussions leading up to the signing of the document, each of the owners had spoken for themselves, although Mr. John Babiak of John The Sportsman Restaurant had done most of the talking.

10. It appears from Mrs. Slobozian' s testimony that initially all of the employers signatory to the June 26, 1979 document applied its provisions, including deducting dues from employee wages and forwarding them to the union. Notwithstanding the testimony of Mr. Gomes to the effect that he was not aware that he had signed a collective agreement, the Valenca initially paid its employees pursuant to the agreement and deducted and forwarded dues to the Local with respect to some of its employees. Mr. Gomes explained this by saying that he paid his employees the same as was being paid to employees at John The Sportsman Restaurant, and that it was his bookkeeper who had deducted the union dues. In cross-examination, Mr. Gomes acknowledged that he and his wife had signed all employee paycheques as well as all cheques to the union covering dues deductions.

11. It is not at all clear from the evidence as to just how long the Valenca continued to apply the terms of the collective agreement. Mr. Gomes in his testimony indicated that the restaurant stopped applying the agreement in 1980, while Mrs. Slobozian variously indicated that the date in question was in early 1982, sometime in 1979, and about a year after the signing of the June 26, 1979 document. However, Mrs. Slobozian most frequently referred to 1979 as the year in which the Valenca ceased applying the agreement. Given this evidence, we are led to conclude that the Valenca applied the terms of the June 26, 1979 agreement until sometime in 1979 or 1980. According to Mr. Gomes, he stopped applying the agreement after his employees had signed a letter to the union, which had been typed by his bookkeeper, indicating they did not want to be involved with the union or pay union dues. Mrs. Slobozian's recollection was that at the time Mr. Gomes had said to her that he did not need the union since he and his wife were doing the work at the restaurant. It was also Mrs. Slobozian's recollection that at the relevant time the restaurant had only one employee, and this employee had written to the union saying that she did not want the union or to have union dues deducted from her salary. Mrs. Slobozian acknowledged that from that time forward, the Valenca did not regard itself as bound by a collective agreement.

12. Commencing in 1978, the economy of Atikokan started to suffer as two local mines began to wind down their operations. This downturn in the economy affected the local hospitality industry. One of the results was the closing of the Hotel Steep Rock in August of 1979. The hotel building, its furnishings and certain stock-in-trade were taken over by the Federal Business Development Bank, presumably pursuant to a mortgage arrangement. On or about December 21, 1979 the Federal Business Development Bank sold the hotel building, furnishings, and stock-in-trade to Steep Rock Inn (1979) Ltd., a firm owned by Mr. James Balonyk and Mr. M. Hensrud. The purchase did not specifically include any goodwill. The new owners of the hotel replaced all existing furniture and carpets. They also did some repair work and turned an area that had been used for a bar into a banquet room and meeting rooms. The hotel reopened in February 1980, under the name of Steep Rock Inn instead of the former Hotel Steep Rock. The Inn hired all new employees. These new employees came within classifications provided for in the 1979-1982 collective agreement.

13. The new owners of the Steep Rock Inn took the position that they had no relationship with Local 893. On February 4, 1980, Ms. Connie Daw and Mrs. A. MacDavid, the secretary and president respectively of Local 893, jointly wrote to Mr. Hensrud, one of the new owners of the Steep Rock, as follows:

As part of the new ownership at the Hotel Steep Rock, we wish to bring to your attention that a subsisting collective bargaining agreement is in effect between your predecessor and Local 893.

Under the provisions of the Labour Relations Act, Local 893 holds sucessor (sic] rights with your new company and fully intends to enforce all provisions of the collective agreement now in force and effect.

We request your written acknowledgement of this letter, together with your written agreement to continue recognition of Local 893 as required at law.

Trusting we will hear from you forthwith in this matter.

This letter was not responded to. On March 27, 1980 Ms. MacDonald and Ms. Daw sent a letter to the Steep Rock which read as follows:

To Whom It May Concern:

Attention: Mr. Hensrud, Mr. Balonyk

Due to the fact that you have Dining room girls working and you have been open approximately 30 days, we have not recieved [sic] your union list of girls or union dues for them.

We would like to point out to you once again, Article 29, page 12, Successor Rights in your contract, which we have at your establishment. It is imparative [sic] that we have your answer as to whether you are accepting the union or not within 48 hours or we intend to take legal steps and refer you to the Board.

The second letter was also not replied to. On April 11, 1980 four grievances were filed with the Steep Rock Inn. One was a grievance by Local 893 complaining that the Inn's owners had "not accepted the union and have not called back the union girls". The other three grievances were by individuals who had been laid off at the time the Steep Rock had closed. In their grievances the three complained that they had not been recalled to work when the Inn re­opened. The individuals personally delivered the grievances to the Inn, at which time they were told by Mr. Hensrud that the new owners did not have a collective agreement with the union. The Inn did not respond to any of the grievances. Local 893 did not pursue the grievances to arbitration. It was the evidence of Mr. Balonyk, one of the new owners of the Steep Rock Inn, that at the end of April 1980 Mr. Thomas Rees, an official of the International Union, came to the front desk of the hotel and talked to him. Mr. Balonyk testified that he advised Mr. Rees that he would not talk to him since the Inn had nothing to do with the union, at which point Mr. Rees left. Mr. Rees, however, denied that he had visited the Steep Rock in April of 1980.

14. Mr. Rees testified that he is an international union organizer based in Montreal. Another International Union representative, Mr. Charlie Ireton, had assisted Local 893 in the events leading up to the signing of the 1979-1982 agreement. However, Mr. Ireton had since retired, leaving Mr. Rees as the only International Union organizer in Canada. According to Mr. Rees, in late 1981 the International Union office in Cincinnati sent him a copy of a letter to the International from Mrs. Slobozian, the then President of Local 893, seeking assistance. Given his other duties, Mr. Rees' assistance to the Local was limited primarily to a series of short trips into Atikokan. Mr. Rees did ask Mr. Kowalczyk, the full-time business agent of a union local in Thunder Bay, to assist Local 893. Mr. Kowalczyk was not called to testify in these proceedings. The limited evidence of other witnesses touching upon Mr. Kowalczyk's activities indicates that Mr. Kowalczyk actually spent very little time on matters pertaining to the situation in Atikokan.

15. It is clear that by the time Mrs. Slobozian became president of Local 893 in 1981 only the Atikokan Hotel, the Rockton Hotel and John The Sportsman Restaurant were applying the terms of the collective agreement. There were a number of problems with John The Sportsman remitting dues deducted from employee wages, but the amounts involved were always remitted after Mr. Rees discussed the matter with the owner. Mr. Rees also made a visit to the Valenca Restaurant. Mr. Rees testified that he believed he went to the Valenca in March of 1982, although in cross-examination he agreed his visit might have been in 1981. When Mr. Rees visited the Valenca, he raised with Mr. Gomes, the owner, the fact that he had not been remitting union dues or paying the employees the proper wages, to which Mr. Gomes replied that he did not want to have anything to do with the union. How the conversation ended is in dispute. Mr. Gomes testified that after he told Mr. Rees he did not want to have anything to do with the union, Mr. Rees threw a book he was carrying on the floor and yelled until ordered out of the restaurant. Mr. Rees, however, testified that he was starting to discuss the terms of the collective agreement when Mrs. Gomes pulled out a big carving knife, at which point he concluded it was time to leave. Mr. Rees testified that he advised the Local to send a registered letter to the Valenca setting out its position, and that he was later advised that such a registered letter had been sent, but not picked up.

16. As noted above, it was the evidence of Mr. Balonyk, one of the owners of the Steep Rock Inn, that in April 1980 Mr. Rees visited the Inn only to be told by Mr. Balonyk that the Inn had nothing to do with the union. Mr. Rees denied that this had occurred. According to Mr. Rees he made one visit to the Steep Rock. At various points in his testimony Mr. Rees indicated that his visit was in late 1980, in 1981, and in early March 1982. Mr. Rees testified that on his visit to the Steep Rock he presented himself at the front desk, handed the person at the front desk his card, and asked to see the manager. Mr. Rees was advised that the manager was busy. Mr. Rees waited for an hour, only to then be advised that the manager had left the Inn.

17. The 1979-1982 agreement expired on June 30, 1982. On September 7, 1982 Mr. Rees, on behalf of Local 893, filed a request for the appointment of a conciliation officer to assist with the negotiations of a new agreement. On the request form, Mr. Rees referred to the employer as "Atikokan Hotel Association, representing among others, Atikokan Hotel, Rockton Hotel, John The Sportsman Restaurant, Valenca Restaurant", and listing the address of the employer as "Mr. John Torbiak, President, Atikokan Hotel Association, Atikokan Hotel". Mr. Rees testified that he prepared the form in question at his home in Montreal following a telephone call from Mrs. Slobozian. Mr. Rees testified that the omission of the Steep Rock Hotel and The Little Falls Dining Room occurred only because he did not have all the names of the Atikokan hotels and restaurartts before him when he filled in the form, and was not because the union was of the view that it did not have bargaining rights for these two establishments. The application for appointment of a conciliation officer contained the following comment:

The individual employers have never given notice to the Trade Union that they are no longer members of the Association.

Nonetheless, each individual employer was requested to negotiate by the Trade Union by individual notice in addition to the notice to bargain given the Employers Association.

No further detail was given with respect to any notices to bargain, including which employers were, or were not, given an individual notice to bargain. There was, however, filed with the Board a copy of certain bargaining proposals prepared by officials of Local 893. These proposals are under a covering page which state that a new agreement was to be between Local 893 and

"Atikokan's Hotel Association said to Include that which are Union:

Atikokan Hotel

Rockton Hotel

John The Sportsman's Restaurant Ltd.

Valenca Restaurant".

18. On September 22, 1982 the Minister of Labour appointed a conciliation officer. The conciliation officer scheduled a meeting for October 5, 1982 in Atikokan. Mr. Rees and certain officials of Local 893 attended the meeting on behalf of the union. Attending on the employer side were Mr. J. Babiak, of John The Sportsman, Mr. J. Torbiak of the Atikokan Hotel, and Mr. J. Perchaluk of the Rockton Hotel. At the meeting a memorandum of settlement was entered into between Local 893 and the "Atikokan Hotel Association". By way of the memorandum the parties agreed to the terms of a collective agreement which they did "agree to recommend ... to their respective principals". The memorandum was signed by Mr. Torbiak, Mr. Babiak and Mr. Perchaluk "for the Association".

19. One of the provisions of the memorandum of settlement was that "effective 1^st November, 1982 the Association agrees to recognize Local 75 as the bargaining agent succeeding Local 893". This provision recognized a proposed merger of Local 893 into Local 75 that was scheduled to become effective November 1, 1982. The effectiveness of this merger is one of the issues in these proceedings. Local 75 is a large Toronto-based local which, in 1982, began to absorb a number of smaller locals of the Hotel Employees Restaurant Employees International Union in Ontario. The evidence before us establishes that a vote was held in which a majority of members of Local 893 voted in favour of the local merging with Local 75. Article 5, section 19 of the Constitution of the International Union empowers the union's General President, with the approval of the union's general executive board, to merge local unions. This power was exercised by an instrument dated October 25, 1982 entitled "Declaration and Order for Merger" signed by the President under which Local 893 was merged into Local 75 effective November 1, 1982. Having regard to these facts, we are satisfied that Local 75 has acquired the rights, privileges and duties of Local 893 with respect to the employers who are party to these proceedings.

20. On April 6, 1983, Local 75 filed grievances against the Atikokan Hotel, the Rockton Hotel and John The Sportsman Restaurant alleging that the three establishments had not made payments to the union's health and welfare plan as provided for in the memorandum of agreement signed on October 5, 1982. The grievances were signed by Mr. George Pineo, the Business Manager and Secretary of Local 75. When testifying before the Board, Mr. Pineo was asked why grievances had not been filed against either the Valenca Restaurant or the Steep Rock Inn. Mr. Pineo, who is based in Toronto, testified that he had received information from Tony Kowalczyk that employees at the Atikokan, Rockton and John The Sportsman had problems collecting on dental claims, and that he had investigated the matter and discovered that the three establishments were not making the required payments. Accordingly, stated Mr. Pineo, he filed the grievances against the three employers. It will be recalled that Mr. Kowalczyk had been the business representative of the Thunder Bay Local of the union. It appears that by this point in time the Thunder Bay Local had become (or was shortly about to become) part of Local 75, and that Mr. Kowalczyk was serving as a business representative on behalf of Local 75. On April 12, 1983 Local 75 requested that the Minister appoint an arbitrator to hear the three grievances pursuant to the expedited arbitration procedures set out under section 45 of the Labour Relations Act. As provided for in section 45, the Minister appointed a grievance settlement officer to meet with the parties. The grievance settlement officer met with representatives of the union and the three grieved against employers in Atikokan on or about April 22, 1983. (Some of the evidence suggests that the meeting may have actually been held on April 21st.) On that day the union and the three employers entered into a settlement whereby the employers agreed to make payments to the health and welfare plans.

21. While the grievances were being settled on April 22, 1983, a discussion occurred concerning the possibility of signing a formal collective agreement embodying the terms of the memorandum of agreement of October 5, 1982. Such a document had been brought to the meeting by the union representatives. Near the conclusion of the meeting the collective agreement, which had already been executed on behalf of the union, was signed by representatives of the three employers in attendance. The agreement filed with the Board has a covering page to it. Counsel representing certain of the employers in this matter contended that the covering page had been added after the document had been signed by the employers. However, the only person to testify who had been present at the meeting, namely, Mr. Terry Smith, who had been in attendance on behalf of Local 75, indicated that the cover page was on the agreement at the relevant time. In these circumstances we are satisfied that the cover page was on the document when executed by the employers. The cover page read as follows:

ATIKOKAN HOTEL

ASSOCIATION AGREEMENT

BETWEEN:

ATIKOKAN'S HOTEL ASSOCIATION

AND:

HOTEL EMPLOYEES & RESTAURANT EMPLOYEES UNION, LOCAL 75 SUCCESSOR UNION TO LOCAL 893

EFFECTIVE:

1ST DAY OF JULY, 1982

TO

30TH DAY OF JUNE, 1984

ATIKOKAN'S HOTEL ASSOCIATION SAID TO INCLUDE:

• ATIKOKAN HOTEL

HOTEL STEEP ROCK

• ROCKTON HOTEL

• JOHN THE SPORTSMAN'S RESTAURANT LTD. VALENCA RESTAURANT

LITTLE FALLS DINING CLUB

22. The marks beside the names of the Atikokan Hotel, the Rockton Hotel and John the Sportsman's Restaurant on the cover page of the agreement appear to have been entered in ink. It will be recalled that representatives of these three establishments were at the meeting of April 22, 1983. On the first page of the collective agreement after the cover page is a heading indicating that the agreement is between Local 75 and "Atikokan Hotel Association". Article 3(a) of the agreement provides that the union recognizes the Association "... as an Employers' Organization acting as bargaining agent for the Employers listed in Schedule "A" attached hereto ...". There is no schedule "A' attached to the agreement. On the signing page, under the heading "For the Company" are the signatures of Mr. John Babiak, of John The Sportsman Restaurant; Mr. John Torbiak, from the Atikokan Hotel, and Mr. Joseph Perchaluk of the Rockton Hotel. Mr. Terry Smith, who, as already noted, was the only person present at the meeting on April 22nd who testified, stated that he understood that these three gentlemen had signed on behalf of the Atikokan Hotel Association.

23. The terms of settlement of the grievances of April 6, 1983 were not honoured by the three employers signatory to the settlement. Accordingly, on August 16, 1983 fresh grievances were filed against the three. At the same time grievances were also filed against The Little Falls Dining Room, the Valenca Restaurant and the Steep Rock Inn. Mr. Pineo testified that grievances were filed against these three additional establishments because he had discovered that they also had not been making payments to the health and welfare plan. It appears that at least the first attempt to serve copies of the grievances on the employers was made by Mr. Kowalczyk. Mr. Balonyk, one of the owners of the Steep Rock Hotel, testified that in August of 1983 Mr. Kowalczyk came to the hotel with a letter, but he refused to accept it. Mr. Allan Taylor, now a full-time representative of Local 75 based in Thunder Bay, testified that in August of 1983 he accompanied Mr. Kowalczyk to Atikokan while he delivered some lerters to a number of establishments, including the Valenca restaurant. According to Mr. Taylor, at the Valenca, Mr. Gomes, the owner, indicated that he was not interested in the union and that there was no union at the restaurant. When Mr. Kowalczyk handed Mr. Gomes a letter, Mr. Gomes ripped it up, put it on the floor, and told Mr. Kowalczyk and Mr. Taylor to leave, which they did.

24. On August 30, 1983 Mr. Pineo requested that the Minister of Labour appoint arbitrators to deal with the August 16, 1983 grievances pursuant to section 45 of the Act. A grievance settlement officer was appointed to try to help the parties resolve the matter, but without success. Subsequently, Mr. Pineo requested that the grievances proceed to an arbitration hearing. It was at that point that certain of the employers objected to the appointment of an arbitrator, contending that Local 75 held no bargaining rights with respect to their employees or, in the alternative, they were not bound to the April 22, 1983 collective agreement. This in turn led to the Minister referring this matter to the Board.

25. We turn now to consider the status of the bargaining rights affecting the various employers. The position of counsel for certain of the employers is that there is not, and never has been, an organization known as the Atikokan Hotel Association. It follows, contends counsel, that any agreement entered into by the Atikokan Hotel Association is invalid since one cannot have an agreement with an imaginary party. There is no evidence before the Board, one way or the other, to show that the Atikokan Hotel Association was formed as a formal employers' organization with a constitution or letters patent, or that it has "members" in the sense of employers formally joining the organization. It may well be that at all times the Association was nothing more than an informal grouping of employers who were acting together. The two "founding members" of the Association, namely the Rockton Hotel and the Atikokan Hotel, could likely have been able to clear up the matter of the status of the Association, but neither attended at the hearing in this matter. If the Association was a formal employers' organization within the meaning of section l(l)(j) of the Act, then it was entitled under section 51, the relevant parts of which are set out below, to enter into collective agreements on behalf of its member employers.

51.-(1) A collective agreement between an employers' organization and a trade union or council of trade unions is, subject to and for the purposes of this Act, binding upon the employers' organization and each person who was a member of the employers' organization at the time the agreement was entered into and on whose behalf the employers' organization bargained with the trade union or council of trade unions as if it was made between each of such persons and the trade union or council of trade unions and upon the employees in the bargaining unit defined in the agreement, and, if any such person ceases to be a member of the employers' organization during the term of operation of the agreement, he shall, for the remainder of the term of operation of the agreement, be deemed to be a party to a like agreement with the trade union or council of trade unions.

(2) When an employers' organization commences to bargain with a trade union or council of trade unions, it shall deliver to the trade union, or council of trade unions a list of the names of the employers on whose behalf it is bargaining and, in default of so doing, it shall be deemed to bargain for all members of the employers' organization for whose employees the trade union or council of trade unions is entitled to bargain and to make a collective agreement at that time, except an employer who, either by himself or through the employers' organization, has notified the trade union or council of trade unions in writing before the agreement was entered into that he will not be bound by a collective agreement between the employers' organization and the trade union or council of trade unions.

If, however, the Association was not a formal employers' organization, but merely a loose grouping of employers acting together, then, in our view, when a representative of each employer signed a collective agreement, it bound that employer to the agreement as a separate party to the agreement. Non-signatories of the agreement, however, would not have been bound.

26. Given our conclusions set out above, it is relatively simple to deal with the situation of the Rockton and Atikokan Hotels. If the Atikokan Hotel Association was an employers' organization under section 1(1)(j) of the Act, then since the Rockton Hotel and Atikokan Hotel were apparently the founding members of the Association and never withdrew from membership, the Association at all times had authority to bargain on their behalf, and they would have been bound to all collective agreements entered into by the Association. If, however, the Atikokan Hotel Association was not an employers' organization within the meaning of the Act, but simply a loose grouping of employers acting in concert, the two hotels would still be bound to the April 22, 1983 collective agreement since representatives of both hotels executed the document. In these circumstances, we are satisfied that Local 75 holds bargaining rights with respect to employees of both hotels, and that both hotels were bound by the provisions of the collective agreement entered into on April 22, 1983.

27. The situation with respect to the Valenca Restaurant is somewhat different. Mr. Gomes' evidence indicates that the Valenca never formally became a member of the Atikokan Hotel Association and never specifically authorized the Association to bargain on its behalf. Mr. Gomes and his wife did, however, sign the document of June 26, 1979. On the objective evidence, we reject Mr. Gomes' testimony that he did not know what he was signing. Mr. Gomes acknowledged that he signed the document following a discussion about the union. The document contained a provision which related only to the Valenca. After signing the document, the Valenca for a time deducted dues from employee wages and forwarded them to the union. Although Mr. Gomes tried to indicate that this was something his bookkeeper had done on his own initiative, Mr. Gomes acknowledged that he and his wife were the ones who actually signed employee paycheques and the union dues cheques. Accordingly, they would have been aware that the restaurant had dealings with the union. In all the circumstances, we are satisfied that Mr. Gomes likely did understand that he was signing a document related to the union, and that he subsequently knowingly applied the terms of the agreement.

28. It will be recalled that the agreement entered into on June 26, 1979 did not in itself contain all the terms agreed to by the parties, butt rather incorporated, with certain changes, the terms of a previous collective agreement. Counsel for the Valenca contends that the document of June 26, 1979 could not be a collective agreement binding on the Valenca in that the Valenca had not been party to the previous agreement. In our view, this argument does not stand. At law there was nothing prohibiting the Valenca from agreeing to be bound by a new agreement which incorporated, by reference, the terms of a previous agreement to which it was not bound. In our view, this is what occurred when Mr. and Mrs. Gomes signed the June 26, 1979 agreement on behalf of the Valenca.

29. The collective agreement entered into by the Valenca on June 26, 1979 expired on June 30, 1982. The Valenca did not sign any subsequent collective agreement. The question arises as to whether either the memorandum of settlement entered into on October 5, 1982, or the formal collective agreement entered into on April 22, 1983 were binding on the restaurant. Counsel for Local 75 submits they were, contending that those who signed the April 22, 1983 agreement were agents for, or at least had ostensible authority to bind, the Valenca. Counsel further contends that since the Valenca held itself out to be a member of the Atikokan Hotel Association at the time it executed the 1979 agreement, it would be unfair for the Board to now hold that the Valenca was not bound by the subsequent agreements entered into by the Association. We are unable to accept this contention. Prior to the signing of the memorandum of agreement in October of 1982 and the signing of the collective agreement in April 1983, the union had been put on actual notice that the Valenca did not want to have any dealings with the union. Mrs. Slobozian of Local 893 was advised of this fact in 1979 or 1980. In or before March of 1982, Mr. Rees was advised by Mr. Gomes that he did not want to have anything to do with the union. Mr. Rees was at the time an official of the International Union acting on behalf of Local 893. Local 893 was clearly aware of the position being taken by the Valenca. When Local 75 became the successor to Local 893, it acquired the rights of Local 893 such as they existed at the time, including any consequences which flowed from Local 893's knowledge of the position adopted by the Valenca. Given the position adopted by the Valenca, we are satisfied that it would have been unreasonable for Local 75 to believe that those signing the October 1982 and April 1983 documents had real or ostensible authority to sign on behalf of the Valenca. Equally, we do not believe it can reasonably be said that the union was in any way misled concerning the status of the Valenca.

30. If the Valenca was bound by the provisions of the April 22, 1983 collective agreement, it would only be because of the legal effect of section 51. Section 51 relates to collective agreements entered into by employers' organizations. As already noted, it has not been demonstrated one way or the other that the Atikokan Hotel Association is an "employers' organization" within the meaning of the Act. Accordingly, Local 75 has not demonstrated that the section applies in this case. Further, even assuming that the Atikokan Hotel Association is a formal employers' organization under the Act, we do not believe the action of the Association in signing the 1983 collective agreement had the effect of binding the Valenca to the agreement. A fair reading of section 51 contemplates that an employers' organization will bargain for and bind its members (although not necessarily all of its members) to a collective agreement, but that it cannot bind non-members. See: Paul D 'Aoust Construction Limited, [1976] OLRB Rep. Sept. 529. If it is the case that the Atikokan Hotel Association is a formal employers' organization, the Valenca never became a formal member of the organization and, hence, did not automatically become bound to agreements entered into by the Association. As already noted, regardless of the formal status of the Hotel Association, the Valenca was bound to any collective agreements actually executed by an official of the restaurant. In that no official of the restaurant executed either the October 1982 memorandum or the April 22, 1983 collective agreement, we are satisfied that the Valenca Restaurant was not bound by the terms of the collective agreement.

31. Counsel for the Valenca contends that the union abandoned its bargaining rights with respect to the restaurant. The Board has in certain cases concluded that, because of a union's inactivity, the union can be taken to have abandoned its bargaining rights. Such a conclusion does not involve the Board terminating a union's bargaining rights because of the union's inactivity, but rather the Board making a finding of fact that the union had voluntarily given up those rights. See: John Entwistle Construction Ltd., [1979] OLRB Rep. Nov. 1096 and Re Carpenters District Council of Lake Ontario and Hugh Murray (1974) Ltd. et al; Re Labourers' International Union of North America and John Entwistle Construction Ltd. et al, (1982) 1980 CanLII 1826 (ON HCJ), 125 D.L.R. (3d) 568 (Ont. Div. Ct.). In the instant case, we do not believe that the union ever voluntarily gave up its bargaining rights with respect to the Valenca. On June 26, 1979 Local 893 entered into a collective agreement with the Valenca which was to run until June 30, 1982. In 1981 or early 1982 Mr. Rees, on behalf of Local 893, visited the Valenca to complain that the restaurant had not been remitting union dues or paying employees pursuant to the collective agreement. On September 7, 1982 Mr. Rees filed a request for the appointment of a conciliation officer which named the Valenca. The bargaining proposals prepared by Local 893 at about the same time specifically named the Valenca. The formal collective agreement signed by Local 75 on April 22, 1983 referred to the Valenca Restaurant on its cover page. On August 16, 1983 Local 75 grieved against the Valenca. While the evidence as a whole indicates that from 1980 or early 1981 to 1983, the union (and particularly Local 893) was ineffective in trying to enforce its bargaining rights, the actions taken on behalf of Local 893 and Local 75 referred to above, are not indicative of any actual abandonment of bargaining rights. Further, at no time was an application filed to have the Board formally terminate bargaining rights at the Valenca pursuant to the provisions of the Labour Relations Act. In all of the circumstances, we are satisfied that Local 75 retains bargaining rights with respect to employees of the Valenca Restaurant. As already noted, however, the Valenca did not sign or become bound by the terms of the 1983 collective agreement.

32. This then brings us to the final employer party to these proceedings, namely, the Steep Rock Inn. The Hotel Steep Rock signed the 1979-1982 collective agreement. It will be recalled that the hotel closed in August of 1979 and the hotel building, furnishings and certain stock-in-trade were taken over by the Federal Business Development Bank. The bank, in turn, sold these items to the Steep Rock Inn (1979) Ltd., which, after making structural changes to the building and replacing all existing furniture, re-opened in February 1980 under the name of Steep Rock Inn. In these proceedings, Local 75 contended that there had been a sale of a business to the Steep Rock Inn (1979) Ltd. such that its bargaining rights continued with respect to the new owners. It will be recalled that a similar claim was advanced by Local 893 in its February 4, 1980 and March 27, 1980 letters to the new owners of the Steep Rock Inn, although the claim was not adjudicated on at the time.

33. The sale of a business is dealt with by section 63 of the Act, the relevant parts of which read as follows:

63.-(1) 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.

(12) Where, on any application under this section or in any other proceeding before the Board, a question arises as to whether a business has been sold by one employer to another, the Board shall determine the question and its decision thereon is final and conclusive for the purposes of this Act.

34. At the hearing counsel for the Steep Rock Inn objected to the Board's considering the applicability of section 63 in these proceedings. In this regard, counsel contended that it was inappropriate to raise the issue in the context of these proceedings, since it was beyond the terms of the Minister's reference and further, in his view if the union had desired to raise the issue, the time to do it was shortly after the new owners had opened for business. We are unable to accept these submissions. Section 63(12) of the Act specifically empowers the Board to deal with the question of whether a business has been sold in a proceeding other than an application under section 63. In order to answer the questions posed by the Minister, we believe it necessary to consider the applicability of section 63. Further, we are unable to accept the contention that because the union did not file an application under section 63 when the Inn opened under new owners it is foreclosed from now relying on section 63. This conclusion is, however, separate from the question of whether its failure to do so at the time indicates an abandonment of its bargaining rights.

35. The Steep Rock Inn contends that there was not a sale of a business within the meaning of the Act since the new owners did not purchase anything from the owners of the Hotel Steep Rock but rather made their purchase from the Federal Business Development Bank. Further, it appears to be the Inn's position that all it purchased was certain assets and not a business. The Inn also relies on the fact that there was a period subsequent to the purchase prior to the opening of the Inn. In our view, the fact that under the relevant purchase documents the new owners of the Steep Rock Inn acquired assets formerly owned by the Hotel Steep Rock, as opposed to providing for a purchase of its "business", is not necessarily determinative. The Board has in numerous cases recognized that what is characterized as the sale of assets in commercial documentation may, in fact, involve a sale of a business within the meaning of section 63. See, for example, Culverhouse Foods Ltd., [1976] OLRB Rep. Nov. 691. Similarly, it matters not whether a sale (which is defined in section 63 to include any transfer) is done through an intermediary such as a receiver. See: Hamilton Cargo Transit Ltd., [1983] OLRB Rep. June 887. Section 63 has also been held to cover a series of dispositions so as to bind the ultimate purchaser. See: Culverhouse Foods Inc. op cit. The fact that an operation has been shut down for a lengthy period prior to being re-opened by new owners is a factor that suggests there has not been a transfer of a business, but only a transfer of certain assets. However, it is only one factor among many to be taken into account, and the Board has, in certain situations, concluded that there has been a continuation of a business and a sale notwithstanding the fact that the business has been shut down for a lengthy period of time. See: Sisman's of Canada Limited, [1980] OLRB Rep. July 1059.

36. We turn now to consider the facts of this case. Although there has been some structural changes to the building and new carpets and furniture have been installed, the building in question continues to be used as a hotel or inn. Further, there is no evidence to suggest that the Inn has attracted, or seeks to attract, a different type of clientele than that which frequented the hotel before the sale. The same classifications of employees are apparently being utilized as was the case prior to the sale. Although there was no formal transfer of goodwill, the fact that the new owners continue to use the Steep Rock name suggests an attempt to capitalize on whatever goodwill the Hotel Steep Rock had. In all the circumstances, we are satisfied that there has, in fact, been a sale of a business by way of an intermediary, from the Hotel Steep Rock to the Steep Rock Inn (1 979 Ltd. It follows, pursuant to section 63(2) of the Act, that the Steep Rock Inn continued to be bound by the terms of the 1979-1982 collective agreement.

37. Concerning the April 22, 1983 collective agreement, our reasoning with respect to the Valenca Restaurant also applies to the Steep R.ock Inn. Local 893 was aware of the sale at the time it occurred and shortly thereafter became aware that the new owners did not regard the union as having bargaining rights. As early as April 11, 1980, the Local was complaining that the new owners had "not accepted the union and have not called back the union girls". There is a dispute in the evidence as to whether Mr. Rees, on behalf of Local 893, visited the Steep Rock in April 1980 and was told the Inn had nothing to do with the union, or whether he went to the Inn sometime between late 1980 and March 1982 but was unable to see the manager. In either event, nothing occurred which would have indicated to the union that the new owners had altered their position that they had nothing to do with the union. Accordingly, when the 1982 memorandum of settlement and the April 22, 1983 collective agreement were signed, the union was on actual notice that the Steep Rock Inn did not regard the union as having bargaining rights for its employees. Given the facts of this case, it is reasonable to infer that the Steep Rock Inn (1979) Ltd. was never a member of the Atikokan Hotel Association (assuming it was a formal employers' organization with members). The Steep Rock Inn did not itself execute the 1982 memorandum of settlement or the 1983 collective agreement. Accordingly, we are satisfied that neither document was binding on the Inn.

38. The contention that the union abandoned its bargaining rights was also raised with respect to the Steep Rock Inn. It will be recalled that on February 4, 1980 and again on March 27, 1980, the officers of Local 893 wrote to the new owners of the Inn seeking to enforce the Local's bargaining rights. On April 11, 1980, four grievances were filed against the Steep Rock Inn. If Mr. Balonyk's evidence is accepted, Mr. Rees visited the Steep Rock at the end of April 1980. Mr. Rees, however, testified he was at the Steep Rock at some later point in time, although he admitted he did not actually gel; to talk to anyone. Mr. Rees did not name the Steep Rock when he requested the appointment of a conciliation officer on September 7, 1982. It will be recalled that Mr. Rees testified that this was simply the result of an oversight resulting from the fact that he did not have all the names of the Atikokan hotels before him when he filled in the request form. No such explanation was advanced, however, to explain why the negotiating proposals prepared at about the same time by Local 893 referred to a number of establishments but not the Steep Rock Inn. Local 75 did not file a grievance against the Steep Rock on April 6, 1983 when it grieved against three other Atikokan establishments, although grievances were filed against the Steep Rock on August 16, 1983. Given this evidence, the issue of whether the union ever abandoned its bargaining rights is not an easy one to decide. However, on balance, we are of the view that the evidence falls short of disclosing an actual abandonment of bargaining rights on the part of the union. Accordingly, we are of the view that Local 75 continues to hold bargaining rights with respect to employees of the Steep Rock Inn. The Inn was not, however, bound to the terms of the April 22, 1983 collective agreement.

39. It will be recalled that the Minister in his reference posed the following questions to the Board, namely:

... whether or not collective bargaining relationships exist between the employers and the trade union and if so, whether or not the agreement of April 22, 1983 is binding upon them."

In the same order as the employers are listed on the reference, our answers to these questions are as follows:

The Little Falls Dining Room

No collective bargaining relationship exists between this employer and Hotel Employees Restaurant Employees Union, Local 75, and this employer was not bound by the April 22, 1983 collective agreement.

John The Sportsman Restaurant

A collective bargaining relationship does exist between this employer and Hotel Employees Restaurant Employees Union, Local 75. Further, this employer was bound by the April 22, 1983 collective agreement.

Rockton Hotel

A collective bargaining relationship does exist between this employer and Hotel Employees Restaurant Employees Union, Local 75. Further, this employer was bound by the April 22, 1983 collective agreement.

Valenca Restaurant

A collective bargaining relationship does exist between this employer and Hotel Employees Restaurant Employees Union, Local 75. However, this employer was not bound by the April 22, 1983 collective agreement.

Atikokan Hotel

A collective bargaining relationship does exist between this employer and Hotel Employees Restaurant Employees Union, Local 75. Further, this employer was bound by the April 22, 1983 collective agreement.

Steep Rock Inn

A collective bargaining relationship does exist between this employer and Hotel Employees Restaurant Employees Union, Local 75. However, this employer was not bound by the April 22, 1983 collective agreement.