Service Employees International Union, Local 183 v. Daynes Health Care Limited, 1985 CanLII 920

[1985] OLRB Rep. March 387

2053-83-U Service Employees International Union, Local 183, Complainant, v. Daynes Health Care Limited, Earl Daynes, Respondents, V. Group of Employees, Interveners

BEFORE: M. G. Mitchnick, Vice-Chairman, and Board Members W. H. Wightman and B. L. Armstrong.

APPEARANCES: Naomi Duguid, Don Burshaw II and Carolyn Shaughnessy for the complainant; Michael Gordon for the respondent; M. Longworth for the interveners.

DECISION OF M. G. MITCHNICK, VICE-CHAIRMAN AND BOARD MEMBER B. L.

ARMSTRONG; March 5, 1985

1. This is the continuation of an unfair labour practice complaint stemming from an earlier finding of the Board (in Board File No. 0927-83-R, reported [1983] OLRB Rep. Sept. 1564) that the transfer of, inter alia, a 51-bed Nursing Home licence from Balmoral Lodge Nursing Home Ltd. to Daynes Health Care Limited, operating at a new facility in Peterborough under the name Riverview Manor, constituted a "sale of a business" for the purposes of section 63 of the Labour Relations Act. Since that decision of the Board, the respondents have declined to employ at the new facility any of the employees from Balmoral Lodge beyond those few whom they were already employing, and further declined to recognize their liability to pay damages to any of the former employees of Balmoral Lodge out of work as a result. The complainant trade union has alleged throughout these proceedings:

2. that the obligation of the respondents to offer employment at Riverview Manor to all Balmoral employees, and to pay damages for any delay in doing so, flowed as a matter of law from the "sale" (particularly as set out in the Board's decision in Emrick Plastics, [1982] OLRB Rep. June 861); and

3. that the respondents' failure to employ these Balmoral employees was in any event the product of anti-union animus, and therefore in violation of the Labour Relations Act.

4. The parties' proceedings before the Board in fact began prior to the "sale" application which was decided in September 1983. The complainant and the respondent Daynes Health Care Limited applied to the Board in March of 1983, prior to the transaction being contemplated having actually taken place, for an advisory opinion as to whether what the parties had in mind would constitute a "sale of a business", with all of the legal obligations attendant upon that, within the meaning of our Act. As the Board observed in its decision therein, reported [1983] OLRB Rep. May 632:

12.. . . From the union's perspective, it has a number of members who face the prospect of termination in June and who are anxious to know whether their collective agreement rights and hence claim to jobs at Riverview will be preserved. The employer is anxious to ascertain the parameters within which he can establish the employee complement and the terms and conditions of employment of the persons hired to work at Riverview. There is no indication that the employer would abort or alter the form of the transaction depending upon the Board's decision, but it is obviously and understandably, interested in avoiding any potential liability associated with the legal uncertainty.

[emphasis added]

The Board went on to express its sympathy for the parties' desire for an "advance ruling", particularly in light of the purchaser's intention to staff the new facility from sources other than Balmoral employees, but pointed out the difficulty it would have in rendering a decision prior to the time that the facts of the transaction had fully crystallized. The Board accordingly concluded its decision by saying:

14. For the foregoing reasons, we have determined that this application must be dismissed as premature. Such dismissal, of course, is without prejudice to either party bringing a fresh application at an appropriate time in the future.

15. What happened after that is set out in the initial decision of the Board in the present complaint, now reported at [1984] OLRB Rep. August 1091:

16. Between the dismissal of the first section 63 application on May 31, 1983, and the hearing of the second one on October [should read "August"] 25, 1983, Daynes elected to proceed as if it had no special responsibility to consider the claims of Balmoral employees or their trade union. In June, 1983, Daynes advertised for, and received, applications for positions at Riverview Manor. To protect themselves, most of the Balmoral employees applied for those positions — even though the union continued to maintain that they should not have to "apply" for "their own jobs". By July 16th, Daynes had selected those individuals whom it wished to employ. These included a few employees already working for Balmoral, a few individuals already employed in other Daynes' facilities, and a much larger group of persons hired "off the street". Daynes was aware, of course, that there would shortly be a second successor rights application. Daynes was also aware of the union's claim that Daynes was acquiring and carrying on Balmoral's nursing home business, and that Balmoral's employees had a preferred right to the work opportunities generated by that business. Daynes was taking a risk that its legal position would not be sustained before the Board. Daynes was prepared to take that risk.

The second section 63 application was brought without delay, following completion of the sale transaction in August, and the Board, equally without delay, rendered its decision, against the employer, on September 15, 1983. The reaction of the parties to that decision is also chronicled in the August 1984 decision:

19. The Board decision of September 15th did not alter the respondent's stance. The respondent did not accept the section 63 declaration. The respondent did not acknowledge the collective agreement or apply its terms to the employees working at Riverview. The respondent did not recall or reinstate any former Balmoral employees. When those employees filed grievances under their collective agreement, asserting that their seniority (etc.) entitled them to continued employment, the grievances were ignored. The respondent did not process them. The respondent sought judicial review of the Board decision. The union filed this complaint.

20. In this complaint the employer took the narrow position that Emrick Plastics, supra, did not apply, or ought not to apply, to the facts before the Board in this case. The Emrick Plastics case dealt at some length with the question of a successor employer's obligations to the employees of his predecessor upon a "sale of a business", and concluded:

21. We conclude, similar to the British Columbia Labour Relations Board, that section 63(2) of our own Act continues the effect of a collective agreement over a sale transaction without hiatus, and that the purchaser stands literally in the shoes of its predecessor with respect to any rights or obligations under that agreement. The purchaser, in other words is given no opportunity to "weed out undesirable employees" contrary to the provisions of the collective agreement, nor to decline to recognize any of the seniority or other rights accrued by employees under the collective agreement than the vendor would have been. The obligations of neither employer are determined by whether the employer on its own chose to treat a severance at a give point in time as a termination or a lay-off.

As the panel put the issue before it in the present proceedings, again in the August 1984 decision:

28. As we have already mentioned, the position taken by Daynes in this case is very similar to the one taken by the respondent employer in Emrick Plastics Inc., [1982] OLRB Rep. June 861 — so similar, in fact, that counsel for Daynes conceded that Daynes' position could not be sustained unless Emrick were distinguishable or this panel of the Board was persuaded to reject the Emrick reasoning.

And, as the Board noted:

30. . . . If such obligation (to continue the employment of Balmoral employees) flowed naturally from section 63, the employees of Balmoral would have to be retained, and it is unnecessary to consider whether Daynes' refusal to retain them constitutes an independent unfair labour practice.

31. The respondents' argument that Emrick Plastics did not apply in this case turned on the fact that Riverview opened its doors, and began accepting residents from Balmoral, a few days before Balmoral was completely and finally closed. A brief recitation of the facts from the "sale" decision of September 15, 1983, will help to place the respondents' argument in context:

32. Balmoral and Mr. Daynes entered into an arrangement whereby Daynes would purchase both Balmoral's licence and the property at 1155 Water Street. Daynes intended to apply the licence to a new home to be constructed on Water Street. An agreement between

Balmoral and Earl Daynes was executed on April 16, 1982. Daynes agreed to "purchase the licenced nursing home business undertaking" of the vendor. The agreement defined "licenced nursing home business" to mean "the 51 bed nursing home presently located …..at 293 London Street, Peterborough". "Undertaking" was defined as "the right to operate the 51 bed licenced nursing home business, granted in the form of a licence issued under the authority of the Ministry of Health". The contract was conditional on the Ministry of Health approving the transfer.

6.. . . In the fall of 1982, the Ministry authorized the transfer of the licence from Balmoral to Daynes. The construction of Riverview Manor began in October 1982, and it was completed on August 10, 1983. On the next day a team of inspectors from the Ministry of Health visited Riverview Manor and gave final approval for it to open as a home licensed for fifty-one residents.

7. While construction was in progress the Ministry insisted that the top floor of Balmoral be closed. The eighteen residents who had lived there were transferred to Extendicare's home in Peterborough in February, 1983. Balmoral's legal capacity was temporarily reduced from fifty-one to thirty-three, and Extendicare's licensed capacity was increased correspondingly on a temporary basis, to drop back to its original level through attrition.

8. The remaining thirty-three residents of Balmoral Lodge were transferred to Riverview Manor between August 15 and 18, 1983. During this brief period the two homes operated concurrently with the approval of the Ministry of Health, and when the last residents were moved Balmoral surrendered its licence.

The Board dealt with the thrust of the respondents' argument in its conclusions set out at paragraph 38 of the August 1984 decision:

When the sale of a business occurred, the Balmoral employees did not revert to the status of "laid off employees" or employees who had been properly terminated. They were actively employed by Balmoral until its business had been completely transferred to Daynes, and, upon the acquisition of Balmoral's business, they became employees of Daynes with full seniority rights and a claim to any work opportunities then available. Their status as employees in the bargaining unit did not change, and Daynes had no more right to change it than its predecessor had. Nor does it matter that, in reality, the actual acquisition of Balmoral's business took place in stages over a three-day period, as Balmoral gradually withdrew from the business of providing nursing home care to its residents, and Daynes gradually assumed that responsibility. Notionally. this means only that Daynes gradually acquired parts of Balmoral's business and by August 18, 1983. it had finally acquired the whole. That could not affect the rights of Balmoral employees who, as the transfer of business unfolded, became employees of Daynes. The Balmoral employees could not be discharged without just cause, and if Daynes suddenly found itself with too many employees for the available work, it was required to reduce its work force in accordance with the layoff provisions in the collective agreement, taking into account the seniority rights of all of its employees.

[emphasis added]

6. That panel of the Board, as can be seen, dealt with the case at that stage on the assumption that the respondents had lawfully employed persons at Riverview other than those working at Balmoral Lodge for at least the three or four days before Balmoral closed. The Board proceeded on that assumption because that issue had not yet been litigated: such "lawfulness" would require, in light of the collective agreement found by the "sale" decision to continue to apply, as well as the unfair lahour practice provisions of the Labour Relations

Act:

1. that the respondent did in fact have a need, while beds were gradually being "moved" from Balmoral to Riverview, for more employees to operate both locations than already were employed at Balmoral Lodge (presumably on the basis that sufficient staff could not be moved from Balmoral as the beds moved);

2. that there were no employees on lay-off with recall rights under the Balmoral agreement at the time; and

3. that the decision to hire persons other than Balmoral employees for the start-up of Riverview was in any event not tainted by any anti-union considerations.

As it turns out, however, the issue of whether the non-Balmoral employees were hired lawfully is irrelevant. The best it could do for the respondents, as the Board noted in the paragraph just cited, would be to open up a competition for retention of the available jobs at Riverview on the basis of whatever seniority rights the non-Balmoral employees (again, assuming they had been lawfully hired) could claim to have acquired under the collective agreement in the few days before Balmoral Lodge finally closed and additional employees had to be laid off. But as the material disclosed to the Board at the last hearing indicates, those employees acquired no such seniority rights, for the reasons discussed below.

7. Arbitrators are frequently called upon to decide whether an individual, once properly transferred into a bargaining unit from service with the employer elsewhere, can claim seniority credit for all service with the employer, or only for service spent within the unit. In this case, the language of the particular collective agreement, to begin with, points heavily against the seniority claims of non-Balmoral employees, in that it provides:

ARTICLE XIII: SENIORITY

13.01 An employee will be on probation until he has completed three (3) calendar months of employment. Upon completion of such probationary period, the employee's name shall be placed on the respective seniority list and credited with three (3) calendar months seniority. .

[emphasis added]

The use of the word "employment" in that Article could, of course, point in either direction. But this particular agreement defines the meaning of "employee", and thus arguably the meaning of "employment", as follows:

2.03 The word "employee" or "employees" wherever used in this Agreement shall be interpreted as such, limited to the scope of this Agreement.

And that scope is defined as follows:

PREAMBLE

WHEREAS the Union has been certified by the Ontario Labour Relations Board as the certified bargaining agent of the employees of the Employer in the bargaining unit described as follows, namely: all employees of Balmoral Lodge Limited in Peterborough, Ontario, save and except professional nursing staff, physiotherapists, occupational therapists, supervisors, foremen, persons above the rank of supervisor or foreman, office staff, persons regularly employed for not more than twenty-four (24) hours per week, and students employed during the school vacation period.

ARTICLE II: SCOPE AND RECOGNITION

2.01 The Employer recognizes the Union as the sole collective bargaining agent for all its employees at the Balmoral Lodge Limited as certified by the Labour Relations Board on February 29, 1980, and as specified in the preamble of this Agreement.

8. All of this points in the direction of finding that "seniority" under this agreement is based on employment in the transferred Balmoral Lodge unit, rather than with the successor employer generally. Making this analysis redundant, however, is the fact that the respondents have now acknowledged that the "employer" at Riverview Manor is different from that at any other Nursing Home in which Mr. Daynes has an interest, including the Homes from which some of the non-Balmoral employees were drawn. Mr. Daynes, we are told, has different partners in the corporations operating each of these Homes, and the "employer" entity in each case is different. Accordingly, it ceases to matter whether the language of Article 13.01 is to be read as granting seniority rights after three months' employment in the bargaining unit itself, or with the employer generally: in either case, on the facts before us, "employment" for the non-Balmoral employees with the employer in question dates back only to the hiring at Riverview Manor Nursing Home. That employment did not for any non-Balmoral employee reach three months by August 18, 1983, the date when Balmoral Lodge closed and the seniority rights of its employees to continue in active employment, as opposed to being laid off, had to be assessed. Even assuming all of the earlier points in the respondents' favour, therefore, it turns out that the question of seniority rights left open by the Board's August 1984 decision cannot assist the respondents, nor the individuals that they retained in favour of the Balmoral Lodge employees, in any competition for the available jobs at Riverview as of August 18, 1983.

9. There remains to consider one further argument, put forward chiefly by Mr. Longworth on behalf of 5 employees of other "Daynes" Homes hired at Rivervtew in preference to the Balmoral employees. This is an argument which Mr. Longworth requested leave of the earlier panel to reserve on, and accordingly was not specifically addressed by that panel in its decision of August 1984. The argument is that the hiring at Riverview of non-Balmoral employees prior to the closing of Balmoral itself created a situation of "intermingling" of Union and non-Union employees within the meaning of sub-section (6) of section 63 of the Act, such as would justify the taking of a representation vote. Mr. Longworth argues that, one way or another, the hiring of both Balmoral and non-Balmoral employees at Riverview is a fact, and one that the Board ought now to be prepared to take into account.

10. In the Board's view, however, what occurred in this case (again, assuming that the hiring of non-Balmoral employees at least for the transitional week was lawful) was not the kind of "intermingling" giving rise to the extraordinary remedies provided, in spite of a "sale of business", in section 63(6). Subsection (6) provides:

(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 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.

And subsection 8 provides:

(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.

Dealing with the meaning of "intermingling", as used in subsection (6), the Board in Antonacci Clothes Inc., [1984] OLRB Rep. July 887, considered an earlier decision of the Board in Bermay Corporation Limited, [1979] OLRB Rep. July 608, and commented:

27. ... We do not understand the quoted references to "new employees" as suggesting that the Board will order a representation vote whenever a successor employer hires, at or shortly after the time of a sale, persons who were not previously employed by the predecessor employer. The "new employees" referred to by the Board in Bermay Corporation Limited were employees hired simultaneously with the consolidation by Bermay of its existing furniture business with the business it purchased from Golderest and the consequent intermingling of Bermany's former employees with employees formerly employer by Golderest. The Board's resort in Bermay Corporation Limited to its powers under section 63(6) did not depend on the presence or absence of "new employees", but on the intermingling of employees identified with the two pre-existing bargaining units. It may not have been possible, and in any event was not necessary, for the Board to determine whether the "new employees" represented an accretion to one or other or both of those pre-existing bargaining units. The important fact was that the merger of businesses had made it necessary to redefine bargaining units and, as a result, bargaining rights; it was that exercise, and not the hiring of "new employees", which created the representation issue to which the Board responded by ordering a representation vote.

28. In this case, the respondent Antonacci Clothes came into existence for the purpose of engaging in the transaction which we have found constituted a sale of business within the meaning of section 63. The only business in which this respondent has engaged is the business it purchased from British Brand. All its employees can therefore be described as falling within the "like" bargaining unit in respect of which the applicant's bargaining rights are preserved by our finding that there has been a sale of business. If one disregards the change in ownership of the business in question, the situation here is this: a small number of the employees employed in the business prior to February 1st are no longer employed in it, and another, larger, number have since been hired to work in the business. Those circumstances would not normally give rise to a question of representation, unless it were a question raised in a timely manner by the employees themselves. The fact that some employees are new to the unit is of no more consequence than it would have been had the ownership of this business remained unchanged. The change of ownership does not change that result where, as here, the sale of business has not itself created circumstances which give rise to a question of representation.

[emphasis added]

11. The same can be said of the present situation, even if (contrary to what we now know) the successor employer of Balmoral was the same entity that owned and operated other Nursing Homes in the province. It is a special characteristic of nursing homes in this province that they may only be operated under the authority of a licence that is specific as to both number of beds and the geographic area, and the only source of authority under which Riverview Manor was permitted to open and operate in Peterborough was the sale, or pending sale, of the 51-bed Balmoral Lodge licence. In Caressant Care of Canada Limited, [1984] OLRB Rep. August 1060, by way of contrast, the purchaser of a Nursing Home licence in St. Thomas combined that licence (and the corresponding beds) with a licence it had just acquired on its own from the Ministry of Health. To the extent, in other words, that these geographically-limited licences have become synonymous with a "business" in this industry, the successor had in fact provided at the new St. Thomas location additional work opportunities from a second "business" of its own, and not simply additional staff. The Board found that situation to constitute "intermingling", as contemplated by section 63(6), and in doing so drew the following contrast:

Indeed, where a business covered by a collective agreement is purchased and is not expanded by or integrated with the work provided by a second existing 'business', it is difficult to see how the provisions of section 63(6) can be meant to apply at all, irrespective of where the employees may be drawn from. A purchasing employer does not, in other words, create a situation where the bargaining rights attaching to a single, newly-acquired business are called into question simply by supplementing the bargaining unit with employees not previously covered by the collective agreement, whether those employees are selected from "off the street'~, or from an entirely different location of the employer. A purchaser dealing with a single business is in the same shoes as the vendor vis-a-vis the collective agreement. It is true that the subsection speaks of the purchaser intermingling the employees of one business with those of another. But that appears to be simply a more precise way of referring to the intermingling of the businesses themselves: it is in fact the "employees" of the businesses who are capable of being "intermingled". The focus of section 63 is on the business and it is the practical problem of running two integrated businesses, either each ostensibly under a different collective agreement, or one under a collective agreement and one "non-union", which would appear to have prompted the Legislature to provide the relief contemplated by subsection 6. .

12. Here all of the work opportunities at the new facility of Riverview Manor as of the date Balmoral Lodge closed were those provided by the 51-bed licence which Balmoral Lodge Nursing Home Ltd. had agreed to sell to Daynes Health Care Limited, and in contemplation of which the Ministry approved the early opening of Riverview. The fact that another Home in the area, Extendicare, was allowed to increase its licenced allotment temporarily because one floor of Balmoral had to be closed before Riverview was ready does not, as Mr. Longworth would argue, change anything. Extendicare's licence was gradually allowed to reduce through attrition to its original level, and Riverview by the date of Balmoral's closing was allowed to operate the same 51-bed complement it had been promised under the arrangement with Balmoral. While a "business" in this industry does in fact appear to be synonymous with a licence to operate, and its corresponding beds, it is not synonymous with the actual residents occupying those beds at a given point in time. The authority of Daynes Health Care Limited to operate a 51-bed Nursing Home in the City of Peterborough, as of August 18, 1983, came from the licence it had agreed to "purchase" from Balmoral, and nowhere else. Once this is recognized, it becomes apparent that the recently-reported decision of the British Columbia Labour Relations Board in Bell Farms Limited, [1985] CLLC ¶ 16,007, referred to the Board by Mr. Longworth subsequent to the hearing, is analogous to the case of Caressant Care of Canada Limited, and not to the present case at all.

13. From all of the foregoing, to sum up again, it follows that Daynes Health Care Limited was under an obligation to staff the new facility at Riverview, operating under the licence "transferred" from Balmoral, with the available staff from Balmoral Lodge. And if that was Daynes' legal obligation, it also follows that it is liable in damages to those employees to the extent that it failed to do so, on the basis of all wages and benefits properly payable under the terms of the Balmoral collective agreement. Whether, as the union suggests, it is also liable to pay damages to the non-Balmoral individuals actually employed but not paid in accordance with the collective agreement, as the union argues, is more problematical. Those individuals have only been employed at all over the past 17 months on the basis of the respondents' position that no collective agreement governed the situation, and we are not persuaded that it is open to persons in this group to claim that they have suffered monetary loss under the collective agreement because the respondent's position was wrong.

14. As for Daynes Health Care Limited itself, having been aware, when it sought an advance ruling, of the risks it was incurring in proceeding to hire without regard to the Balmoral collective agreement, having continued to ignore the collective agreement after the Board's finding of a "sale of a business" in September of 1983 (and we recognize that Daynes applied for judicial review of that decision, as was its right), and having failed to modify its position and take steps to protect itself even after the further Board decision adverse to it in August of 1984, it now asks the Board to take into its remedial consideration the fact that a damage award of 17 months' duration to all of those Balmoral employees whom it did not hire would have the practical effect of forcing the company into bankruptcy, to the detriment of all parties concerned.

15. While the Board, in the present circumstances, might be excused for reacting immoderately to that submission, it is sufficient to point out that over that same period of time the Balmoral employees left on the street have each, as individuals, suffered the precise loss that the respondents are now concerned about being called upon to pay. So far as the powers of the Board are concerned, we clearly must order those losses to be borne by the party or parties whom the Board has found to have acted unlawfully. Whether, as a practical matter, the extraction of the full measure of damages is in all of the parties' continued best interest is a matter that the complainant, as it has indicated, is capable of assessing on its own, and dealing with in discussions with the respondents. And in the event the parties are unable to work out an arrangement that permits the continuation of the employment opportunities over which these (lengthy) proceedings have been fought, the complainant is entitled to its order from the Board to substantiate its position in any bankruptcy proceedings. The question of creditor priorities, beyond that, is not a matter for the Labour Relations Board. The concerns expressed by the respondent Daynes Health Care Limited do, however, underscore the very concerns of the complainant which previously led to the addition of Earl Daynes personally as a respondent, and it is not inconceivable in light of all of the circumstances and allegations surrounding these proceedings, that the Board could ultimately be persuaded that this is an appropriate case to direct its compensatory order against Mr. Daynes as well. Compare, for example, Sunnylea Products & Jacob Zunnfeldt, [1981] OLRB Rep. Nov. 1640.

16. Apart from all of the foregoing, the parties have advised the Board that, following their own discussions with respect to the final resolution of this matter, the respondent Daynes Health Care Limited is now ready to offer employment to a list of former Balmoral employees worked out by the parties. That ought to take place immediately, as continued delay for any reason only adds to the ultimate total in damages which the respondent will be liable to pay. Unfortunately, however, the parties at the hearing were in dispute over the impact of the public sector's Inflation Restraint Act on the Balmoral Lodge collective agreement which the respondent has inherited, the second year of which appears to fall within the "control" period for that legislation. That collective agreement was not submitted to the Inflation Restraint Board for approval, and the respondent indicates that that Board continues to be available for such a procedure. It is agreed that, in the present circumstances, the discretionary range for increases permitted under the legislation (assuming no other adjustments to the "compensation" package) for the second year of this collective agreement (i.e., effective July 1, 1983) is between 38 and 50 cents per hour (or $750.00 to $1,000 over the control year). The respondent's position with respect to the Inflation Restraint Board is set out in a letter to the Board dated January 28, 1985, the essential points of which are as follows:

Accordingly then, and to recapitulate, my client is unable to agree to the wage rates put before the Board by Ms. Duguid as applying to the second year of the Collective Agreement as being accurate and correct. The Company takes the position that the rates payable under the provisions of the Collective Agreement commencing July 1, 1983 are properly governed by the provisions of the Inflation Restraint Regulations.

My client takes the position that the entire Agreement must be put before the Inflation Restraint Board and that the increases under that Agreement, including all fringe benefits and fringe benefit costs, cannot be implemented without IRB approval. My client takes the position that the increases themselves must be limited to $750 (maximum) lie. 38 cents per hour in view of the financial position of the enterprise and the very substantial increase in rates which occurred in the first year of the Agreement.

The response of counsel for the complainant was that the predecessor Balmoral had already, prior to the sale, unilaterally implemented the full 50 cent an hour increase in the second year of the collective agreement, and that that was accordingly the rate that the purchaser of the business had "acquired". In response to this, counsel for the respondents in a further letter of February 21, 1985, made the following acknowledgment:

My client has no means by which to challenge the assertions made in the second paragraph of counsel's letter and, accordingly, is not in the position to argue that the increase of $.50 per hour was inappropriate, even though there was a total failure on the part of the Predecessor Employer and the Trade Union to disclose those matters to the purchaser prior to the closing of the said transaction.

Counsel also in that letter, however, states:

I am instructed by my client that it is its view that the Collective Agreement in question between the Predecessor Employer and the Union is subject to I RB Guidelines. Accordingly, the increment in the first year of the Agreement ought to have been a total of nine per cent (9%) .

[emphasis added]

On the basis of what facts the Inflation Restraint Act can be said to apply to the first year of the collective agreement, which counsel's January 28, 1985, letter appears to acknowledge, came into force prior to the date that the legislation did, is not explained, and the Board is not prepared to give any weight to this apparent change of position by the respondents.

17. That the restraint legislation limits increases in "compensation" in the second year of the agreement to the 50 cents an hour already implemented by Balmoral, on the other hand, is acknowledged by the response of the complaint itself, which submitted through its counsel's letter of February 14, 1985:

Consequently, at the time the sale took place, employees were receiving wages which had been increased in accordance with the provisions of the Act by $50 per hour. This is the wage rate "acquired" by the successor employer, Riverview, which must continue to pay such rate to employees pursuant to the provisions of the agreement until the expiry of the control year on June 30, 1984.

The parties are proceeding to conciliation, and have not yet reached a new collective agreement. Thus, the wages payable to employees at present and pending either a negotiated settlement or the decision of an interest arbitrator, should be the wage rates set out in the collective agreement for the period up to June 30, 1983 plus $50 (per hour).

Having said that, then, the complainant went on to submit:

There is no need for the parties to submit such increases to the Inflation Restraint Board, since they fall squarely within the increases allowed by the Act in the control year.

We would therefore ask that the Board make the appropriate order as to compensation payable to employees, originally terminated by Balmoral in August, 1983, and to pay them compensation calculated in accordance with the wages described in this letter

18. Having regard to the foregoing, the Board is of the view that it ought to direct the respondent to offer to re-instate the Balmoral employees forthwith (subject only to the medical examinations required by law) on the basis of paying them at a rate of 50 cents per hour above the hourly rate in force under the collective agreement as of June 30, 1983. As the respondents have indicated they are no longer in a position to put forward the submission that the 50-cent increase already put into effect by the predecessor is inappropriate, and as the complainant appears to be content to recognize that the restraint legislation would allow no other "compensation" to be claimed under the second year of the contract, we agree with the complainant's submission that no further issue appears to exist before this Board which could be affected by a determination of the Inflation Restraint Board.

19. It is therefore the order of the Board that the respondent Daynes Health Care Limited:

(1) forthwith offer to re-instate in active employment the former employees of Balmoral Lodge in accordance with the wage rate set out in paragraph (2) and with the seniority list filed by the parties with the Board, without loss of either seniority or service credit from the time of their lay-off; and

(2) forthwith compensate such employees in damages for all loss of wages and benefits as a result of their wrongful lay-off, including interest in accordance with Board Practice Note No. 13, on the basis of a wage rate of 50 cents per hour above the rates in effect under the collective agreement on June 30, 1983.

The complainant has asked as well for a posting and meetings on the premises. It should be borne in mind, however, that it has not been found necessary to litigate this complaint on the basis of anti-union animus. In the view of the Board, the history of these proceedings set forth in the body of this decision can be hoped to be self-explanatory to the employees affected, and, since any further explanation by the union presumably will precede the former Balmoral employees' acceptance of the respondent's recall offer, the additional requests for relief by the complainant are denied.

20. The Board will remain seized of this matter should the parties find themselves unable to agree on the assessment of damages owing under paragraph 19(2) above.

OPINION OF BOARD MEMBER W. H. WIGHTMAN;

Having dissented from the majority in the earlier finding (Board File No. 0927-83-R) I cannot concur in this finding which I believe flows from an incorrect premise.