[1985] OLRB Rep. March 425
1115-84-R United Food and Commercial Workers, Local 206, Chartered by United Food and Commercial Workers International Union, Applicant, v. Keele-Wilson Supermarket Limited, Respondent, v. Group of Employees, Objectors
BEFORE: R. O. MacDowell, Vice-Chairman, and Board Members H. Kobryn and J. Wilson.
APPEARANCES: D. V. MacDonald and C McCormick for the applicant; J. Paul Wearing, R. Rosenblatt, Q. C. and Joe Chetti for the respondent, Domenic Reda, Tony Iozzo, Sabrina Iaboni and Roman Gidmondi for the objectors.
DECISION OF THE BOARD; March 6, 1985
I
- This is an application under section 63 of the Labour Relations Act, which reads, in part, as follows:
- 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.
For ease of reference, the applicant will be referred to as "the union", the respondent will be referred to as "the company", and the alleged predecessor, Canada Safeway Limited, will be referred to simply as "Safeway".
This case involves the operation of a grocery business from premises located in a shopping plaza at Finch and Weston Road in the Municipality of Metropolitan Toronto. For some years, there was a Safeway store in that location. By sublease, the company acquired the right to use those premises for its own grocery business. The union contends that the subleasing arrangement and a collateral transfer of certain store equipment, constitutes a "sale" of part of Safeway's "business" to the company. The union argues that as a result the company "inherits" the Safeway collective agreement. The company's position is that it has acquired the right to use certain premises owned by a property developer and formerly used by Safeway, but that such acquisition does not constitute a sale of a business within the meaning of section 63 of the Labour Relations Act.
The hearings in this matter consumed two days and, as it turned out, the facts were not substantially in dispute. The Board heard the evidence of Joseph Chetti, the president of the company, Terry Lyons, a union member who formerly worked in the Safeway store, and Jim Egerton, the former manager of the Safeway store. We prefer the evidence of Mr. Chetti, the company's president, and Mr. Egerton, over that of Terry Lyons.
The company has been in existence since 1971. Joseph Chetti has extensive experience in the grocery business. He worked for a "chain store" as a teenager and, in the early 1970's, ran a small "family" corner grocery store. In 1977, Mr. Chetti and his brother-in-law concluded that the large chain stores (Loblaws, Dominion, A & P, etc.) were not meeting the needs of the large ethnic population in Metropolitan Toronto. Their range of products was too rigid and too standardized in accordance with North American tastes. In trying to generalize and be "all things to all people", the chain stores were missing a growing and potentially profitable market — people who might shop at one chain store or another for convenience, but would be prepared to travel some distance to a specialty store providing a more familiar range of goods and services.
In October 1977, the company opened its first Tops market at Six Points Plaza in Toronto's west end, with a view to serving the Italian market. Subsequently, a second location was opened in the Brampton area. Both endeavours were very successful. According to Mr. Chetti (and on this point his evidence was uncontradicted), ethnic customers were indeed prepared to travel some distance to patronize a store catering to their particular tastes. His business met their needs. Local chain stores did not. By the end of 1983, the company began to consider further expansion.
The Safeway location at Finch and Weston Road came to the company's attention through the efforts of a real estate agent with which the company had had previous dealings. The store was in a plaza and had been losing money. Safeway was anxious to leave, and the shopping centre owner was anxious to have the premises occupied by another food store, because a food store attracts customers who would regularly patronize the other commercial operations in the plaza. For his part, Mr. Chetti saw the opportunity to acquire, on favourable terms, a store in a general area with a large ethnic population. He predicted they would respond favourably to his own marketing concept. He was right. The subleasing arrangement was negotiated in February, 1984. The sublease was executed on March 5, 1984.
The Safeway store actually closed on February 25, 1984. In the preceding weeks, notices were posted to advise customers of the impending closing and to identify the nearest Safeway stores. None of the stores is near enough to likely benefit from local walk-in trade. On the other hand, since a family shopper will often use an automobile to carry home the week's groceries, it is difficult to predict how far he will be willing to travel or assess the actual impact of this invitation to shop at other Safeway locations. There is simply no evidence on this point.
The "Super Tops" market opened on April 10, 1984. In the six-week period between the closing of the Safeway store and the opening of Super Tops, the company carried out extensive renovations at a cost of about three quarters of a million dollars. The state of the physical premises, services and utilities dictated the general layout of the store's major