United Food and Commercial Workers International Union, Locals 175 and 633 v. New Dominion Stores Inc., 1986 CanLII 1442

[1986] OLRB Rep. October 1378

2866-85-R; 2867-85-R; 2868-85-R; 3067-85-R; 0882-86-R United Food and Commercial Workers International Union, Local 175 and 633, Applicant, v. New Dominion Stores Inc., The Great Atlantic & Pacific Company of Canada Limited, Respondents, v. Retail, Wholesale & Department Store Union, Local 528, Inter­vener; United Food and Commercial Workers International Union, Locals 175 and 633, Applicant, v. New Dominion Stores Inc., The Great Atlantic & Pacific Company of Canada Limited, Respondents, v. Retail, Wholesale & Department Store Union, Local 414 AFL-CIO-CLC, Intervener; United Food and Commer­cial Workers International Union, Locals 175 and 633, Applicant, v. New Domin­ion Stores Inc., The Great Atlantic & Pacific Company of Canada Limited, Res­pondents, v. Retail, Wholesale & Department Store Union, Local 414, AFL-CIO­CLC, Intervener; United Food and Commercial Workers International Union, Locals 175 and 633, Applicant, v. New Dominion Stores Inc., The Great Atlantic & Pacific Company of Canada Limited, Respondents, v. Retail, Wholesale & Department Store Union, Local 414, Intervener; United Food and Commercial Workers International Union, Locals 175 and 633, Applicant, v. New Dominion Stores Inc., The Great Atlantic & Pacific Company of Canada Limited, Respon­dents, v. Retail, Wholesale & Department Store Union, Local 414, Intervener

BEFORE: S. A. Tacon, Vice-Chairman, and Board Members G. 0. Shamanski and B. L. Armstrong.

APPEARANCES: Harold F. Caley and Wayne Hanley for the applicant; David Churchill-Smith, Charles R. Robertson and Tom Zakrzewski for the respondents; James Hayes, D. G. Collins, Leo J. Grandbois and Robin W. McArthur for the intervener.

DECISION OF THE BOARD; October 30, 1986

1, The above applications are brought under section 63 of the Labour Relations Act by the United Food and Commercial Workers International Union, Locals 175 and 633. With respect to Board File 2866-85-R, the Retail, Wholesale & Department Store Union, Local 528, and, with respect to the remaining four applications, the Retail, Wholesale & Department Store Union, Local 414 are added to these proceedings as interveners. The parties agreed that these matters shall be heard together. For convenience, the applicant is referred to as the UFCW and the inter­veners collectively as the RWDSU unless reference to the specific local is also necessary.

2. The parties further agree that, for the purposes of these applications, the Board could transpose the findings of fact in a decision of the Board, differently constituted, in New Dominion Stores Inc., [1986] OLRB Rep. Apr. 519 (hereinafter referred to as the MacDowell decision) to the instant circumstances. In that case, the applicants and respondents were identical to those parties in the instant applications. Intervener #1 was the UFCW Local 206 and intervener #2, which was refused standing in an oral ruling, was the United Steelworkers of America. The MacDowell decision dealt with a former "New Dominion Store" in Chatham for which the UFCW Local 206 held bargaining rights which was "converted" to an A & P store, thereby creating a conflict with the UFCW Locals 175 and 633 which held province-wide bargaining rights for A & P stores.

3, While it is necessary to refer to the MacDowell decision in more detail, it is appropriate at this juncture to note that the decision amended the scope clause of the UFCW Local 175 and 633 collective agreement to exclude the Chatham store by reference to its street address and further, restricted the UFCW Local 206 scope clause to that street address. Also at issue in the MacDowell decision was a question of intermingling. The Board did not find intermingling had occurred within the meaning of the Act and, consequently, the excerpts from the MacDowell deci­sion do not include references to that issue as a matter of fact or law.

4, The Board next sets out the following passages from the MacDowell decision.

7. For many years the applicants, UFCW Local 175 and 633, have represented the employees working in A & P's retail food stores across Ontario. For many years there has been a prov­ince-wide, multi-store collective agreement regulating the terms and conditions of employment for those employees. The agreement currently covers approximately 105 stores and 9,000 employees: 3,000 to 4,000 full-time employees, and 5,000 to 6,000 part-time employees. The rel­evant portions of the "recognition clauses" are as follows:

1.01 The Company recognizes Local Union 175 as the exclusive bargaining agent for all employees of the Company in its Retail Stores located in the Province of Ontario, save and except Assistant Store Managers, persons above the rank of Assistant Store Manager, Meat Department employees, persons regularly employed for not more than twenty-four (24) hours per week and students employed in off school hours and during the school vacation period.

1.02 The Company recognizes Local Union 633 as the exclusive bargaining agent for all Meat Department employees of the Company in its Retail Stores located in the Province of Ontario, save and except persons regularly employed for not more than twenty-four (24) hours per week and students employed in off school hours and dur­ing the school vacation period.

1.03 The term "employee" or "employees" as used in this Agreement, unless clearly specified otherwise shall mean only those employees who are included in the bargain­ing unit, as described in Sections 1.01 and 1.02 above.

PART TIME

1.01 The Company recognizes the Union as the exclusive collective bargaining agent for all employees of the Company in its Retail Stores located in the Province of Ontario, regularly employed for not more than twenty-four (24) hours per week and students employed during off school hours and during the school vacation period.

1.02 The term "employee" or "employees" as used in this Agreement, unless clearly specified otherwise shall mean only those employees who are included in the bargain­ing unit, as described in Section 1.01 above.

[emphasis added]

All of A & P's retail employees fall into one of these three employee groupings: "full-time", "part-time", "meat department".

8. In the spring of 1985, A & P purchased some 92 retail food stores from Dominion Stores Lim­ited ("Dominion"). That transaction closed on or about April 29, 1985. The details are not rele­vant here, save to note that Dominion did not dispose of all of its retail food stores. There are approximately 30 stores still owned by Dominion; however, after April 29, 1986, that company will no longer be entitled to use the name "Dominion". We do not know precisely what will happen to those stores, but it is clear that they will not be operated or described as "Dominion" stores.

9. For commercial reasons, A & P initially intended to maintain the separate identity and opera­tion of the 92 stores it had acquired from Dominion. To accomplish this purpose, A & P incor­porated a wholly-owned subsidiary named New Dominion Stores Inc. A & P and New Domin­ion shared an integrated warehousing facility, but the store operations themselves were kept separate. The employees who formerly worked for Dominion became employees of New Dominion, which paid their wages and otherwise assumed the responsibilities of employer. There was no immediate impact on the bargaining rights of the applicants or the employees they represent. Pursuant to section 63 of the Labour Relations Act, New Dominion, as a successor employer, assumed any outstanding collective bargaining obligations which Dominion may have had with its employees, including those in the Chatham store. In the Chatham store, the employees are represented by Local 206 which has entered into a collective agreement with New Dominion which is to expire in September 1986. The recognition clause of that collective agree­ment reads as follows:

1.01 The Union shall be the sole and exclusive bargaining agent for all employees of New Dominion Stores, Inc. at its retail stores in Chatham and Wallaceburg, and the townships of Dover and Chatham, Ontario, save and except Store Managers, persons above the rank of Store Manager, Assistant Store Manager.

1.02 The wages, working conditions and all other matters relative to persons regularly employed for not more than twenty-four (24) hours per week and students employed during the school summer vacation period shall be only as outlined in Appendix "B".

10. Although A & P decided initially not to integrate the "Dominion" stores into its existing chain of retail foods stores, there are some recognition that these stores had become part of the A & P corporate family. The integrated warehouse facility is one example, but there were others at the local level.

11. On Saturday, January 25, 1986, the Chatham New Dominion store closed as usual at 9:30 p.m. The following day all "Dominion" signs and logos were removed from the premises and equipment, and A & P signs or logos put in their place. From Monday, January 27th to Wednes­day, January 30th, products with the Dominion label were removed from the shelves and replaced by A & P private label stock. This task was accomplished by the local staff, with the assistance of managers and assistant managers from A & P stores in Windsor and Wallaceburg. The Chatham New Dominion store which was previously identified for corporate purposes as New Dominion store number 980, became A & P store number 362. For all intents and pur­poses, it is now the same as any other A & P store. The A & P assistant store manager who came over in May 1985 to assist in the transition to New Dominion has returned as the manager of what has now become the second A & P store in Chatham.

12. Since and end of January 1986, other New Dominion food stores have been converted into A & P stores - although there are a number of stores which are still being run by A & P as "Do­minion" stores. Labour relations policies are controlled centrally by A & P, but New Dominion stores continue to have different pricing, advertising and marketing policies. However, those New Dominion locations recently converted to A & P stores are indistinguishable from the A & P stores covered by the applicants' collective agreement. The employees in Chatham will be paid by A & P, which will undertake all employer responsibilities with respect to unemployment insurance, income tax deductions, Workers' compensation, etc. Indeed, counsel for the respon­dents advised the Board that, as of February 23, 1986, New Dominion will no longer exist as an independent corporate entity, but will become the "New Dominion Stores Division" of A & P. Counsel for the respondents was not sure of the precise details or time table for winding up the affairs of New Dominion Stores, Inc., nor was he sure whether there would be any formal trans­fer to A & P of assets nominally owned by New Dominion. He submitted that, as a practical matter, formal legal ownership really does not matter very much because New Dominion was, in any event, a wholly-owned subsidiary of A & P. and thus, subject to its total control. In the case of the Chatham store, A & P has, in fact, assumed total control over the assets, stock-in-trade, equipment and business formerly operated at that location by New Dominion, and has directed the various renovations and changes mentioned above. As counsel for the respondents pointed out, since this business re-organization was "all in the family", the precise legal details are not particularly relevant - at least for labour relations purposes. For example, in the case of the employees working at the Chatham New Dominion store, it is apparent that A & P has, de facto, become their employer.

13. With respect to the legal issues, apart from the intermingling aspect which is not here relevant, the MacDowell decision concluded as follows:

14. We have no difficulty in concluding that there has been a transfer to A & P of at least part of the business of New Dominion - namely, the Chatham store. Indeed, it would appear that the corporate re-organization described by the respondents will ultimately result in A & P becoming the employer of all of the individuals now working in the New Dominion stores even if those stores continue to operate under the "Dominion" logo. We find that there has, therefore, been a "transfer" of a "business" or "part of a business" from New Dominion to A & P and that pur­suant to section 63 of the Act A & P is the successor to New Dominion in respect of the collec­tive bargaining obligations formerly existing between Local 206 and New Dominion....

15. ... it is necessary for the Board to exercise its authority under section 63(4) of the Act to define the like bargaining unit and resolve the apparent conflict between the two collective agreements to which A & P has become bound by virtue of section 63(2) of the Act. In our view, the most sensible way of doing so is to amend the provincial collective agreement so as to preclude its application to the former New Dominion store where Local 206 has bargaining rights, and to amend the current Local 206 agreement to make it clear that it does not apply to the other stores that exist or may be opened in the Chatham-Wallaceburg area. Our intention is to preserve but also confine the rights of Local 206 to the store where it had bargaining rights prior to the transaction under review.

16. It is now necessary to specify in somewhat greater detail the "conversions" which gave rise to these applications. In Board File 2866-85-R, three former "New Dominion" stores located in Sault Ste. Marie on Churchill Boulevard, Northern Avenue and Bay Street became "A & P" stores and a further New Dominion store closed. There are apparently three other A & P stores in Sault Ste. Marie which we may term "traditional" A & P stores, i.e., which were not former New Dominion stores. Board File 2867-85-R concerns two converted stores at 1147 Barton Street and 967 Fennell Avenue in Hamilton where there are also four traditional A & P stores including ones at 2500 Barton and 952 Fennell and one in nearby Dundas. As well, one New Dominion store con­tinues to operate under that name in Dundas. Board File 2868-85-R deals with two converted stores in London, on Huron Street and Wonderland Road; five traditional A & P stores also operate in London and one other New Dominion store has been closed. In Board File 3067-85-R, three former New Dominion stores became A & P stores (Geneva Street in St. Catharines, Chemong Road in Peterborough and Midtown Drive in Oshawa). Traditional A & P stores in those areas consist of: four in St. Catharines, two in Peterborough and two in Oshawa. It should also be noted that one "old" Dominion store was not purchased by A & P in the initial sale and continues to operate in St. Catharines although the vendor is no longer able to use the name "Dominion", and one "old" Dominion store was not purchased and later closed in Peterborough. Finally, Board File 0882-86-R concerns three converted stores in Brampton (on Vodden, Main Street and Sandalwood Parkway) where two other traditional A & P stores operate as well.

17. In the Board's view, this detail places the issue of the conversions in the necessary context of A & P's entire operations in the various locales. As is apparent from the examples in Ham­ilton, the "converted" A & P stores may well be in relatively close proximity to traditional A & P store locations.

18. Counsel for the applicants urged the Board to follow the MacDowell decision to both amend the UFCW province-wide scope clause to exclude the specific "conversions" and also to restrict the RWDSU scope clauses to the street addresses in those municipalities where conversions have occurred. Counsel submitted that the UFCW was not challenging the bargaining rights of the interveners at the "converted" stores themselves. However, counsel contended that the UFCW was entitled to retain its province-wide bargaining rights with only the minimal incursions necessitated by section 63 and that the interveners must "fit into" the existing and otherwise geo­graphically unlimited bargaining rights held by the applicants. Essentially, counsel argued that the RWDSU should bear the risk of uncertainty in the future rather than the UFCW which had a prima facie right to represent bargaining unit employees at all A & P stores. That is, should A & P decide to open a new store under the "New Dominion stores" division or should a "converted" store move elsewhere in the municipality, for example, the UFCW should be entitled to represent those employees, otherwise the interveners would be gaining rather than merely preserving their bargaining rights existing at the time of the conversion. For the Board not to restrict the interven­ers' scope clauses to street addresses, it was asserted, would continue, rather than resolve, the con­flicts between the collective agreements of the UFCW and RWDSU. Moreover, counsel stressed that, given the conversions might well result in closure of traditional A & P stores in close geo­graphic proximity, to the detriment of the UFCW bargaining unit members and notwithstanding the pre-eminent bargaining rights of the UFCW in the A & P organization. In support, counsel referred to the following cases: Loblaw Groceterias Co. Limited, [1973] OLRB Rep. Jan. 72; Simcoe Block (1979) Limited, [1982] OLRB Rep. Jan 118; Pinecrest Products Limited, [1972] OLRB Rep. Nov. 973; Hotel Dieu of Kingston, [1984] OLRB Rep. June 816; The Oshawa Wholesale Limited, [1965] OLRB Rep. Feb. 589. Finally, counsel emphasized that, in addition to the MacDowell decision, similar "conversions" have been dealt with by agreement of the parties therein in Board File No. 2869-85-R and Board File No. 0217-86-R. In the former instance, the scope clause of the intervener United Steelworkers of America was restricted to the relevant street address in Sarnia, notwithstanding that the intervener apparently held bargaining rights in Sarnia and Lambton County. In the latter application, although a Board decision has not as yet issued, the parties agreed to restrict the scope clause of the intervener United Steelworkers of America, Locals 14045 and 14974 to three street addresses in Windsor, although the intervener's bargaining rights were apparently municipal-wide. In summary, counsel submitted the Board should follow the MacDowell decision and the ensuing "pattern" represented in the Board files just noted.

19. Counsel for the respondent indicated that the respondent was prepared to follow the MacDowell decision, where the matter was fully argued, in the instant case and concurred that the MacDowell result had been adopted on agreement in two other instances. Counsel informed the Board that A & P now operates New Dominion Stores Inc. as a division within the corporation as distinct from what may be termed the "A & P" division. As a general principle, counsel agreed with counsel for the interveners that the Board should not anticipate future events.

20. Counsel for the interveners submitted that the "second" conclusion of the MacDowell decision, that the interveners' scope clauses should be restricted to street addresses, should not be followed. It was stressed that the scope clause of Local 414, while couched in "municipal-wide" terminology, was tantamount to a province-wide agreement. Counsel did acknowledge that Local 528 in Sault Ste. Marie did more closely approximate the circumstances in the MacDowell decision dealing with Chatham but, again, submitted the intervener should not be restricted to street addresses. Counsel contended that New Dominion Stores Inc. was a large operation capable of continuing as a separate entity within the corporate structure without intermingling. What the interveners wished to preserve were their existing broad bargaining rights. Given the rapidly changing nature of the retail food industry, counsel argued the Board should neither anticipate future conflicts between the bargaining rights of the applicants and the interveners nor should the Board seek to resolve that potential conflict in the absence of a specific factual context. To restrict ~he interveners' clauses to street addresses, it was asserted, would actually precipitate an erosion of those rights should specific street addresses change and/or should additional stores be opened by New Dominion Stores division. Counsel submitted that the Board need not go beyond amending the UFCW scope clause to resolve the existing conflicts created by the "conversions" and, to do more, would serve to "extend" the UFCW's bargaining rights. That is, the resolution proposed by the interveners' counsel would maintain the status quo, protecting the applicants without harming the interveners and without prejudice to the company. Counsel distinguished those cases referred to by counsel for the applicants on the ground that the "transferred" units were not broad based, that is, virtually province-wide. With reference to the MacDowell decision, counsel noted that the applicant and intervener therein were both locals of the UFCW and, further, his representations might well not have been made in that case.

21. The relevant sections of the Act read: 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 employee 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.

(4) Where a business was sold to a person and a trade union or council of trade unions was the bargaining agent of any of the employees in such business or a trade union or council of trade unions is the bargaining agent of the employees in any business carried on by the person to whom the business was sold, and,

(a) any question arises as to what constitutes the like bargaining unit referred to in subsection (3); or

(b) any person, trade union or council or trade unions claims that, by virtue of the operation of subsection (2) or (3), a conflict exists between the bargain­ing rights of the trade union or council of trade unions that represented the employees of the predecessor employer and the trade union or council of 1384 trade unions that represents the employees of the person to whom the busi­ness was sold,

the Board may, upon the application of any person, trade union or council of trade unions con­cerned,

(c) define the composition of the like bargaining unit referred to in subsection (3) with such modification, if any, as the Board considers necessary; and

(d) amend, to such extent as the Board considers necessary, any bargaining unit in any certificate issued to any trade union or any bargaining unit defined in any collective agreement.

12. The parties did not dispute, and the Board so finds, that what occurred in the instant applications, as in Chatham, constituted a transfer of a business or part of a business within the meaning of section 63 of the Act and, therefore, that A & P is the successor employer in respect of the collective bargaining obligations formerly extant between the interveners and New Dominion Stores Inc. Moreover, there was no disagreement, and the Board so directs, that the recognition clause of the UFCW collective agreement must be amended to exclude those "converted" stores through reference to street addresses as, otherwise, there is an apparent conflict between the col­lective agreements of the UFCW, Locals 175 and 633, and of the RWDSU Local 414 or 528.

13. What is vigorously disputed by the interveners, however, is the further direction in the MacDowell decision that the scope clause of the intervener be correspondingly restricted to the rel­evant street addresses. There was no suggestion that the Board was bound by the MacDowell deci­sion as a matter of stare decisis or res judicata nor is it apparent that the interveners' arguments in the instant case were made before that panel. On the other hand, the Board should not lightly reach a different conclusion given that the MacDowell decision was followed in two subsequent instances on agreement of the parties therein. While the intervener in the MacDowell decision was another local of the same International, the UFCW, that was not the case in the other two instances wherein the USWA held the bargaining rights in the stores affected. And, all the appli­cations arise in the same factual context, namely, the "conversion" of a number of New Dominion Stores to A & P stores. On the other hand, the bargaining rights of the former Dominion empire, and subsequently New Dominion Stores Inc., were held by the intervener Local 414 across the province with relatively few exceptions, one of those exceptions being a sister RWDSU Local 528. Counsel for the interveners points to the considerable reach of the RWDSU's bargaining rights in urging that a decision or pattern dealing with the "exceptions" are not analogous.

14. By virtue of section 63(4) of the Act, the Board has a discretion to define the "like" bargaining unit and amend whatever other bargaining unit definition considered necessary to resolve the conflict between bargaining rights created by the operation of section 63. To state the issue so simply, however, belies the complex nature of the problem. As is evident from the eloquent and thoughtful submissions of counsel, sound arguments may be marshalled in support of both positions.

15. Section 63 of the Act is conservative, its intent is to preserve existing bargaining rights from the exigencies of commercial transactions, to provide some stability to those bargaining rights. But the concept of "preservation" contrasts both with "expansion" and "diminution". That the Board has not permitted section 63 to serve as a vehicle for expanding bargaining rights was not disputed. Conversely, however, the Board should not interpret section 63 so as to restrict bar gaining rights beyond the minimum needed to resolve the conflict in bargaining rights created by the operation of section 63 itself. In making this determination, the Board has regard to the scope of the bargaining rights of the bargaining agents prior to the commercial transaction involved, the nature and scope of the commercial transaction itself and other relevant circumstances. This minimalist approach also implies that the Board should do no more than resolve existing conflicts. Obviously, the resolution, of itself, must not generate further conflicts in bargaining rights. However, neither should the Board anticipate future conflict or seek to resolve potential conflict apart from a specific factual context. In short, the Board must have regard to the circumstances of each case in the context of a conservative resolution of the matters with which section 63(4) of the Act is concerned.

16. In the instant case, the "converted" stores constitute a small proportion of the stores covered by the UFCW province-wide collective agreement with A & P and by the RWDSU, Local 414, collective agreement with New Dominion Stores, now operated as a separate division of the corporate parent. The RWDSU Local 414 bargaining rights are certainly "broadly based" whether described as "extended municipality" or "virtually province-wide". While the RWDSU Local 528 holds bargaining rights much more limited in geographic scope, the Board is not persuaded that a different approach should be adopted in the circumstances. The Board does not consider it advis­able or necessary to speculate upon the future given the pace of change in the retail food industry and in this corporation in particular. Should events generate further conflict in the bargaining rights of the applicants and interveners, those may be the subject of further proceedings to be determined in their own factual context. The Board should not prejudice the position of either at this juncture. Thus, the Board is not prepared to restrict the scope clause of the RWDSU, Local 414, or Local 528 collective agreements with New Dominion Stores to the street addresses of the "converted" stores. However, in the Board's view, it is necessary to add a clarity note to those scope clauses to preserve bargaining rights at those converted stores.

17. For the foregoing reasons, then, the Board:

(a) finds that the store "conversions" in the instant applications constitute a transfer of part of a business within the meaning of section 63 of the Act;

(b) directs that the scope clause of the A & P provincial collective agree­ments be amended to exclude those converted stores by reference to their street addresses;

(c) directs that a clarity note be added to the scope clauses of the New Dominion Stores collective agreement with Local 414 and with Local 528 confirming that the bargaining unit includes those stores formerly oper­ated as New Dominion Stores and currently operated by the A & P divi­sion of the corporate parent at the various locations described by ref­erence to their street addresses.

18. The Board directs that the parties meet to resolve the precise wording to give effect to the Board's decision. Should the parties be unable to so agree, the Board remains seized.