[1985] OLRB Rep. February 228
1660-84-R International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (UAW) and Local 1474 (UAW), Applicants, v. Collingwood Fabrics Inc., Respondent, v. Group of Employees, Objectors
BEFORE: M. G. Mitchnick, Vice-Chairman, and Board Members F. W. Murray and B. L. Armstrong.
APPEARANCES: L. A. MacLean, Carol Aitken and Mary Meaney for the applicants; R. J. McComb and A. Van Adrichem for the respondent; Margaret J. Monck for the objectors.
DECISION OF M. G. MITCHNICK, VICE-CHAIRMAN, AND BOARD MEMBER B. L. ARMSTRONG; February 28, 1985
This application was filed under section 63 of the Labour Relations Act, asserting that Daal Specialties (Canada) Ltd. has sold a part of its business to Collingwood Fabrics Inc.
The following facts are not in dispute. The applicant was party to a collective agreement with Daal Specialties (Canada) Ltd., effective from the 1st day of November, 1982, until and including the 31st day of October, 1984. In June, 1984, the respondent, Collingwood Fabrics Inc. completed a sales transaction with Daal Specialties (Canada) Ltd. by which it purchased and acquired the Narrow Fabrics Division of Daal Specialties (Canada) Ltd. at 190 MacDonald Road, in the Municipality of Collingwood. Following the completion of the transaction by which the respondent, a newly-formed Company, acquired the Narrow Fabrics Division of Daal Specialties (Canada) Ltd., the Respondent Company has continued to carry on the business of the Narrow Fabrics Division at 190 MacDonald Road. The President of the Respondent Company, Mr. A. Van Adrichem was a former managerial employee of Daal Specialties (Canada) Ltd. and was manager of the Narrow Fabrics Division of that Company. The employees of Daal Specialties (Canada) Ltd. who were working in the Narrow Fabrics Division are now employed by Collingwood Fabrics Inc., and notice to bargain was given by the applicant to Collingwood on August 20, 1984. The applicant since that date has also applied for and been granted conciliation services, and a meeting date with the conciliation officer has been arranged.
These facts disclose a section 63 "sale of a business" in its simplest form, and the respondent company, once it had retained the services of qualified labour counsel, was quick to acknowledge that. Since that time, however, a group of employees employed in the transferred operation, have filed a petition with the Board, indicating that, under the new management, they no longer wish to be represented by the applicant trade union. The only issue at the hearing before the Board, therefore, was the relevance and timeliness of that statement from employees.
Section 63 provides:
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.
(3) 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.
(6) Notwithstanding subsections (2) and (3), where a business was sold to a person who carries on one or more other businesses and a trade union or council of trade unions is the bargaining agent of the employees in any of the businesses and such person intermingles the employees of one of the businesses with those of another of the businesses, the Board may, upon the application of the any person, trade union or council of trade unions concerned,
(a) declare that the person to whom the business was sold is no longer bound by the collective agreement referred to in subsection (2);
(b) determine whether the employees concerned constitute one or more appropriate bargaining units;
(c) declare which trade union, trade unions or council of trade unions, if any, shall be the bargaining agent or agents for the employees in such unit or units; and
(d) amend, to such extent as the Board considers necessary, any certificate issued to any trade union or council of trade unions or any bargaining unit defined in any collective agreement.
(8) Before disposing of any application under this section, the Board may make such inquiry, may require the production of such evidence and the doing of such things, or may hold such representation votes, as it considers appropriate.
(10) For the purposes of sections 5, 57, 59, 61 and 123, a notice given by a trade union or council of trade unions under subsection (3) or a declaration made by the Board under subsection (6) has the same effect as a certification under section 7.
Employee "petitions" are normally verified by the Board by conducting a representation vote, and as can be seen, subsection (8) provides the Board with a power to order the taking of a representation vote. As pointed out, however, in the recent case of Antonacci Clothes Inc., [1984] OLRB Rep. July 887, the Board has never considered it appropriate to have resort to such a vote other than in circumstances where subsection (6) (or, in the public sector, subsection (11)) applies. A simple sale of a business by itself, in other words, has not been viewed by the Board as an appropriate circumstance to place in question a trade union's bargaining rights. This is particularly so in light of the express terms of section 63(10), which create an over-ride of, inter alia, the "termination of bargaining rights" provisions of section 57 of the Act. Section 57 enables the Board, upon receipt of a voluntary "petition" signed by at least 45 per cent of the employees in the bargaining unit, to ascertain the current wishes of employees by way of conducting a representation vote. To give effect to the present petition by ordering a similar representation vote would seem to fly in the face of section 63(10).
- Obviously a similar problem arises if one attempts to treat the present petition as an application for termination of bargaining rights under section 57 itself. Section 57(1) and (2)(a) provide:
57.-( I) If a trade union does not make a collective agreement with the employer within one year after its certification, any of the employees in the bargaining unit determined in the certificate may, subject to section 61, apply to the Board for a declaration that the trade union no longer represents the employees in the bargaining unit.
(2) Any of the employees in the bargaining unit defined in a collective agreement may, subject to section 61, apply to the Board for a declaration that the trade union no longer represents the employees in the bargaining unit,
(a) in the case of a collective agreement for a term of not more than three years, only after the commencement of the last two months of its operation.
The predecessor's collective agreement expired October 31, 1984, and, absent a "sale of a business", an employee application under this section would have been timely if filed, as this petition was, on October 5th, 1984. As Mr. MacLean for the applicant points out, however, the Board in such cases as Vaunclair Meats, [1981] OLRB Rep. Aug. 1186; Independent Paper Convertors Inc., [1979] OLRB Rep. March 207; Biltmore-Stetson, [1983] OLRB Rep. Jan. 9, has held that the effect of section 63(10), upon a "sale of a business" taking place, is to postpone, for a period of one year from the date of giving of notice to bargain to the successor, the period during which an application to test the Union's bargaining rights may be brought. Mr. McComb, for the respondent company, concedes that Mr. MacLean's position is sustained by the above line of cases, but submits that the Board, in the circumstances present here, ought to reconsider that position. In particular, the respondent points to an assertion made to the Board by the petitioning employees' spokesman, Mrs. Monek, that the trade union failed to be in contact with the employees in the unit prior to opening negotiations with the successor employer. Mr. MacLean, countering for the applicant trade union, responded with the assertion that a full investigation of the facts would reveal good reason, not unconnected with activity by the "new" employer, for the trade union having conducted itself as it has. He submits, however, that such an inquiry need not be entered into, as the only issue which the Board has before it at the present stage is the timeliness of an application under section 57.
- The Board agrees with Mr. MacLean's latter submission. The issue which the Board must deal with is the legal one of timeliness, and it is difficult to put any other interpretation on the language of section 63(10) than that which the preceding line of cases has done. The Board in Vaunclair Meats, for example, wrote:
5.... In drafting section 55(10) [now 63(10)] the Legislature was obviously obliged to balance the interest of maintaining the stability of bargaining rights when there is a transfer of a business, on the one hand, with the freedom of employees to terminate the bargaining rights of their union, on the other hand.
By the plain language of the Act, and specifically by making sections 49 [now 57] and 53 [now 61] subject to the qualification of section 55(10), the Legislature has clearly opted to give precedence to preserving the stability of a union's bargaining rights where there has been a sale of a business. As the language of the Act reveals, the Legislature has adopted the view that special protection should extend to a union over the often unsettling period during which it seeks to establish a collective bargaining relationship with a new employer. In some cases the transition to a new management may be smooth and without incident as the successor employer willingly accepts to renew the framework, if not the precise terms, of the previous collective agreement. The transition, can, however, be jarring to a union, especially, if the new employer, bent on changing the style and methods of a business, brings fundamental proposals for change to the bargaining table. Some of these proposals may be acceptable to a union and some may not.
Where a business has changed hands the possibility of greater stress on a union is real; it can no longer be sure that it will bargain with the same expectations along the paths that it travelled time and again with the predecessor employer. In this sense a union bargaining with a successor employer after the transfer of a business is in a situation similar to a union bargaining a first collective agreement after certification. By enacting section 55(10) of the Act the Legislature has recognized that reality and has provided the union faced with a first negotiation with a successor employer the same protection of its bargaining rights as would operate to protect the negotiations of a first collective agreement. Like a newly certified union, a union dealing with a successor employer can proceed with the assurance that its bargaining rights cannot be subject to attack for a minimum of one year. That is the unequivocal effect of section 49(1) of the Act and it is the clearly intended consequence of section 55(10) of the Act.
The foregoing provisions represent a policy choice by the Legislature grounded in well established collective bargaining principles. . .
That the same result would flow when the sale occurred while the collective agreement itself was still in effect, and the employees' "open period" had not yet been reached, appears to have been specifically contemplated in the language of the Vaunclair Meats case. The Board wrote, also at paragraph 5:
"It appears that counsel for the intervener is correct in his argument that given the proper timing, notice under section 55(3) could foreclose an open period in the event of the sale of a business."
And indeed, whatever else might be said about the result flowing from this interaction of the provisions of section 63, it would seem stranger still if a major difference in result could be achieved by the simple expedient of manipulating the "sale" date by a few days.
The Board, having regard to all of the foregoing considerations, must conclude that the Legislature contemplated that no termination application could be brought by employees at the present time. Hence, even though the Board is prepared to treat the present petition as a termination application, such application will not be inquired into by the Board at this time.
The Board notes that it is now in receipt of a formal application for termination of bargaining rights filed by counsel for Mrs. Monck, but not received by the panel until after the hearing took place. Counsel indicates that the application was filed in the event that the Board refused to consider the initial petition filed in October as such an application. The Board has, however, so considered the original petition, so that the formal application is in fact redundant. For the reasons given above, however, the Board has found such application to be "untimely" as a statement of employee wishes.
Having regard to the facts and acknowledgments before it, therefore, the Board finds that a "sale of a business" occurred on or about June 29, 1984, from Daal Specialties (Canada) Ltd. to Collingwood Fabrics Inc., and that the applicant was entitled, inter alia, to give notice to bargain, as it did, to Collingwood Fabrics Inc. on August 20, 1984.
DECISION OF BOARD MEMBER, F. W. MURRAY;
I dissent.
I would have found that the petition or termination application should be treated as timely, and would have accordingly inquired into the petition at this time.
I cannot believe that the Legislature in drafting the legislation intended that the door should be slammed shut on the "open period" as provided in section 57 of the Labour Relations Act merely because the company has changed ownership. It is clear that the position I take flies in the face of the decision in the Vaunclair Meats case and to a degree the position may be in conflict with the wording of section 63 subsection 10, upon which the Vaunclair Meats decision was based.
The balancing of interest of maintaining the stability of bargaining rights when there is a transfer of a business, on the one hand, with the freedom of employees' rights to terminate the bargaining rights of their union under section 57 of the Act, or indeed to seek a new bargaining agent under section 5 of the Act, on the other hand, comes out far more in favour of maintaining the choice of a group of employees during the open period than that of maintaining the stability of bargaining rights during the "open period" as provided in either sections 5 or 57 of the Act.
It would seem to me that the taking of a representation vote is far less disruptive to the employees and the employer than is the turmoil that will result for a period of at least a year if the union has in fact lost the support of the employees.
Accordingly, I would have treated the petition as timely and inquired into its bona fides.