[1986] OLRB Rep. May 689
2582-84-R; 2706-84-R Swingline/Rexel Inc., Applicant, v. United Steelworkers of America, Respondent; United Steelworkers of America, Applicant, v. Swingline of Canada, Ltd., Swingline/Rexel Inc., Swingline Inc. and Rexel Inc. and Rexel Office Products Limited and American Brands Inc. and Marson Limited and Wilson Jones Limited and Canadian Staples Company, Respondents
BEFORE: R. A. Furness, Vice-Chairman, and Board Members L. Collins and J. A. Ronson.
APPEARANCES: David Nicholson and Dave Martin for the United Steelworkers of America;
Donald F. O. Hersey, Q. C. and Henry Epstein for applicant/respondent employers.
DECISION OF THE BOARD; May 27, 1986
[1]. In Board File 2582-84-R, Swingline/Rexel Inc. filed an application under section 63 of the Labour Relations Act with respect to the sale of a business by Swingline of Canada, Ltd. to Swingline/Rexel Inc. alleged to have taken place on or about May 1, 1984. It was the position of Swingline/Rexel Inc. that as a result of the sale of a business it was bound by a collective agreement entered into by the United Steelworkers of America ("USWA") and Swingline of Canada, Ltd. It was the position of Swingline/Rexel Inc. that a change in the character of the business so that it was substantially different from the business of the predecessor employer had not taken place and that an intermingling of employees of one business with employees of another business represented by a trade union had taken place. Swingline/Rexel Inc. requested the Board to declare that it had acquired the staple and staple machine manufacturing operations of Swingline of Canada, Ltd. and that it was accordingly bound by the collective agreement but only in so far as the agreement related to such operations and to the employees employed therein.
[2]. USWA in its reply adopted the position that Swingline/Rexel Inc. was not entitled to the relief claimed. It was the position of USWA that the reorganization amongst related companies of Swingline/Rexel Inc. did not constitute a sale. USWA stated in its reply that it had filed an application under section 1(4) and requested that it be heard and consolidated with the application of Swingline/Rexel Inc. under section 63 in order to avoid a duplication of proceedings. USWA put Swingline/Rexel Inc. to the strict proof of its entitlement to the relief claimed.
[3]. Subsequently, in Board File 2706-84-R USWA filed an application under section 1(4) of the Act. USWA submitted that all or some of the respondents named therein were carrying on associated or related activities or businesses by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, notwithstanding the corporate reorganization of the American Brands family which had taken place recently. The respondents named therein did not file replies. USWA sought a declaration that the respondents named therein constituted one employer for the purpose of the Act.
[4]. During the course of the hearings, Swingline/Rexel Inc. withdrew its application under section 63 of the Act by leave of the Board in Board File 2582-84-R and USWA amended its application in Board File 2706-84-R to include an application under section 63 as a second best alternative to its application under section 1(4). In its application under section 63, USWA alleged that there had been a sale of a business by Swingline of Canada, Ltd. to Swingline/Rexel Inc., Marson Canada Inc. and Wilson Jones, Division of Acme Seeley Inc. on or about May 1, 1984. It was the position of USWA that as a result of the sale of a business, Swingline/Rexel Inc., Marson Canada Inc. and Wilson Jones, Division of Acme Seeley Inc. is bound by a collective agreement entered into by USWA and Swingline of Canada, Ltd. It was also the position of USWA that a change in the character of the business so that it is substantially different from the business of the predecessor employer had not taken place and that an intermingling of the employees of one business with employees of another business represented by USWA had not taken place.
[5]. Reference was made earlier to the American Brands family. This proceeding before the Board involves various subsidiary companies of American Brands, Inc. which grew out of The American Tobacco Company, founded in 1890. American Brands Inc., is the result of a programme of diversification which began in 1966 and which now encompasses a wide range of core businesses separate and apart from tobacco and tobacco products. The activities and metamorphosis of some of the subsidiaries of American Brands, Inc., in Ontario will now be considered.
[6]. Henry Epstein became, on May 1, 1984, vice-president and general manager of Swingline/Rexel Inc. He reports to David Miller, the president of Swingline Inc., at Long Island City, New York. Prior to his present position, Mr. Epstein was vice-president and general manager of Ofrex Group Canada Limited and was located in Mississauga, Ontario. At the present time Swingline/Rexel Inc. is located at 11 Ingram Drive in Toronto. Ofrex Group PLC of London, England was the owner of Ofrex Group Canada Limited. The latter company is owned by American Brands, Inc. Prior to May 1, 1984, Swingline of Canada, Ltd. was owned by MCM Products, Inc. and once again this ownership may be traced back to American Brands, Inc. In the Toronto area, American Brands, Inc. through various subsidiaries owns Humpty Dumpty Potato Chips, Andrew Jergens Company Limited, Benson & Hedges Tobacco, Pinkerton Securities, Gold Belt Tobacco, Co-operative Chemicals and other well known companies. Mr. Epstein testified that Swingline/Rexel Inc. is not associated or related in any of its business activities with either Acme Seeley Inc. or Wilson Jones, Division of Acme Seeley Inc. He further testified that the same is true with respect to Marson Canada Inc. Swingline/Rexel Inc. does not share common manufacturing facilities with either Wilson Jones, Division of Acme Seeley Inc. or Marson Canada Inc. In addition, Swingline/Rexel Inc. does not have common directors with these two companies. Swingline/Rexel Inc. has its own advertising budget, its own catalogue and does not share either sales or purchasing personnel with these other two companies. Swingline/Rexel Inc. prepares its own budget and Mr. Miller reviews the budget with Mr. Epstein. Marson Canada Inc. and Wilson Jones, Division of Acme Seeley Inc. do not have any input into the budget prepared by Mr. Epstein.
[7]. It was the evidence of Mr. Epstein that Swingline/Rexel Inc. is in the stapler and staples business, whereas Marson Canada Inc. is in the automobile after market, such as, for example, body fillers, and that Wilson Jones, Division of Acme Seeley Inc. is in the paper products market, such as, for example, expandable filing products and other office paper products. While Swingline/Rexel Inc., Marson Canada Inc. and Wilson Jones, Division of Acme Seeley Inc. all share a building on Ingram Drive, they have different entrances and different addresses. As was stated earlier, the address of Swingline/Rexel Inc. is 11 Ingram Drive. Marson Canada Inc.'s address is 7 Ingram Drive and the address of Wilson Jones, Division of Acme Seeley Inc. is at 9 Ingram Drive. In addition, each of these three companies has its own separate sign outside the building. The office and production facilities of the three companies in the building on Ingram Drive are located on two floors. The eating area for the employees of Swingline/Rexel Inc. is not shared with employees from the other two companies. Swingline/Rexel Inc. pays rents to Marson Canada Inc. for the use of its premises on Ingram Drive and has spent about twelve thousand dollars in alterations to the premises to make them more suitable for the activities of Swingline/Rexel Inc. A system of fences, doors and alarms separates the facilities of the three companies within the building. The manufacturing facilities of Wilson Jones, Division of Acme Seeley Inc. are located on the upper floor of the building, while the manufacturing facilities of Swingline/Rexel are located on the lower floor of the building. While the office washrooms are separated, the plant washrooms for Swingline/Rexel Inc. and Wilson Jones, Division of Acme Seeley Inc. are shared. The production and office facilities of Marson Canada Inc. are located entirely on the lower floor.
[8]. During the first part of 1984, Swingline Inc. decided that their product was not being sold in Canada in the quantities they felt it should be. Swingline Inc. attributed that to the fact that Swingline of Canada, Ltd. was selling three different product groups. Swingline Inc. made the decision that the control of their product line should be handled by someone else. Representatives of Swingline Inc. approached the representatives of Ofrex Group PLC in the United Kingdom about the possibility of obtaining a stronger nucleus and a stronger product group in Canada if Swingline' s products and the products of another company called Rexel were put together so that staplers and staples would be sold by the same company. Swingline/Rexel Inc. is engaged in the same product line as Swingline of Canada, Ltd., except that it was strictly a distribution company with no manufacturing facilities. Accordingly, the decision was made to put together the product lines from Swingline of Canada, Ltd. which was owned by MCM Products, Inc. together with Swingline Inc.'s products. Swingline Inc. felt that if they were to take another route, they could have their own people who represented them and would do a better job of marketing the products. In other words, Swingline of Canada, Ltd. was controlled by MCM Products Inc. and that was the change that Swingline Inc. wanted to make and they made it. On April 1, 1984, Ofrex Group Canada Limited was sold by Ofrex Group PLC to Swingline Inc. In April of 1984, Swingline/Rexel Inc. purchased capital equipment from Swingline of Canada, Ltd. to the value of over three hundred thousand dollars. In addition, Swingline/Rexel Inc. as of December of 1984, owed Marson Canada Inc. over seven hundred thousand dollars in inventory and over fifty thousand dollars for the good will in connection with the Ace brand of stapler. In November of 1984, the name of Ofrex Group Canada Limited was changed to Swingline/Rexel Inc.
[9]. When Ofrex Group Canada Limited was in business it was located in Mississauga where it carried on a warehousing operation dealing with staples, staplers and other products which are no longer handled by Swingline/Rexel Inc. Most of the products were imported from the United Kingdom, particularly from the parent company Ofrex Group PLC. At that time the staff consisted of between eight and ten office people together with about five employees in the warehouse. When the change in name came to Swingline/Rexel Inc. accompanied by the move to Ingram Drive, the office employees came and Swingline/Rexel Inc. changed its methods. Swingline/Rexel Inc. did not hire any office employees from Swingline of Canada, Ltd. or from Marson Canada Inc. When Swingline/Rexel Inc. moved to Ingram Drive they were strictly in the business of warehousing. However, upon the move to Ingram Drive they picked up the manufacturing of staples from Marson Canada Inc. At the time of the move to Ingram Drive, Swingline/Rexel Inc. hired about sixteen former employees of Swingline of Canada, Ltd. These employees had been covered by the collective agreement with USWA. Mr. Epstein testified that Swingline/Rexel Inc. contacted the USWA and told them who they were and what they would be doing. USWA was told that Swingline/ Rexel Inc. would be honouring the basic terms and conditions of a collective agreement which had been entered into between USWA and Swingline of Canada, Ltd. Mr. Epstein informed the Board that Swingline/Rexel Inc. had tried to sign a collective agreement with USWA with respect to the manufacturing workers but had not received any response to their offer. He informed the Board that Swingline/Rexel Inc. has entertained grievances under the collective agreement and has gone on to arbitration and that moreover, Swingline/Rexel Inc. has a seniority list which has been in place since May 1, 1984.
[10]. During the time period when Mr. Epstein was hospitalized, David Martin, a representative of USWA, met with John Vota, a labour relations specialist from Swingline Inc. who was visiting Toronto. At that meeting, Mr. Vota made it clear to Mr. Martin that Swingline/Rexel Inc. was an existing company which was taking over an existing product line from another company and that it was not obligated to honour the collective agreement which had been in force between USWA and Swingline of Canada, Ltd. as it pertained to office staff. This meeting was held on April 27, 1984. It was the evidence of Mr. Epstein that since April of 1984, the USWA has not attempted to apply the collective agreement with Swingline of Canada, Ltd. with respect to the office employees of Swingline/Rexel Inc. With respect to sharing the building on Ingram Drive, Swingline/Rexel Inc. has a letter from Marson Canada Inc. which sets forth the square footage which is being occupied by that company and states the monthly charges to be made to Marson Canada Inc. The joint occupation of the building has caused the companies to use certain common areas for the moving of products within the building. These common areas which are marked with yellow lines have been assessed by the appraisers for the municipality on a split of fifty/fifty between Swingline/Rexel Inc. and Wilson Jones, Division of Acme Seeley Inc. Where it is necessary to share facilities, these two companies share them. Such as, for example, the sharing of common shipping doors. However, in these areas they do not share a common shipping desk or use common shippers. Each company has its own forklift truck. However, these two companies do share a common time clock for the use of their employees.
[11]. Mr. Epstein testified that when it comes time to negotiate a collective agreement for the plant employees, the parameters for negotiating will be set by himself, Mr. Miller and Mr. Vota. There are no plans to have joint discussions with either Wilson Jones, Division of Acme Seeley Inc. or with Marson Canada Inc. The transition which occurred in the corporate divisions of American Brands, Inc. were put into effect in April and May of 1984 and there was very little time for the three companies to arrange their affairs in the new setting. For example, the representatives of Wilson Jones, Division of Acme Seeley Inc. who are located in Renfrew did not have enough time to set up an office on Ingram Drive. This caused an arrangement to be worked out with Swingline/Rexel Inc. whereby for a period of about five weeks these two companies shared offices and the office staff of Swingline/Rexel Inc. did the work for Wilson Jones, Division of Acme Seeley Inc. until the latter was able to provide its own office employees. It was the evidence of Mr. Epstein that none of the directors of Swingline Inc. were directors of Marson Canada Inc. or of Wilson Jones, Division of Acme Seeley Inc. He testified that American Brands, Inc. owns one hundred per cent of Swingline Inc. and that Swingline Inc. owns one hundred per cent of Swingline/Rexel Inc.
[12]. In cross-examination, Mr. Epstein agreed that the name of Swingline/Rexel Inc. had been used on May 1, 1984, at the time of the takeover, but that the name of Swingline/Rexel Inc. was not in existence until November of 1984. He also agreed that previously Ofrex Group Canada Limited had been owned one hundred per cent by Ofrex Group PLC, which had in turn been owned one hundred per cent by Gallaher Limited and that Gallaher in turn was owned one hundred per cent by American Brands, Inc. Mr. Epstein explained that the reorganization had been necessary on May 1, 1984, because Swingline Inc. in the United States had no control over Swingline of Canada, Ltd. even though their products had been sold in Canada by this company. On the other hand, the Ofrex Group was a competitor of Swingline of Canada, Ltd. for many years and had been controlled by the Ofrex Group in the United Kingdom. The decision to have the Canadian company a subsidiary of the American company was decided upon because it was thought to be better to do so in recognition of the fact that the markets in the two countries are very closely related with respect to marketing and sales, whereas the situation in the United Kingdom was quite different. The witness explained that Swingline of Canada, Ltd. previously had three different operations and that these operations had been split up into different hands. Mr. Epstein testified that Swingline of Canada, Ltd. had become Marson Canada Inc. with merely a change of name. And by way of a parallel example, the witness stated that Swingline/Rexel Inc. was Ofrex Group Canada Limited with a change of name. Mr. Epstein explained that Swingline Inc. never bought Swingline of Canada, Ltd. because Swingline of Canada, Ltd. had been owned by MCM Products, Inc. The reality of the situation as viewed by the witness was that Swingline Inc. merely wanted the control over the marketing and distribution of the products that they manufacture. This led to the closing of the plant in Mississauga and the relocation on Ingram Drive. The witness agreed that the president of Swingline/Rexel Inc. was on the board of directors of Swingline Inc. And that Swingline/Rexel Inc. buys its products from Swingline Inc. and sells them in the Canadian market.
[13]. On further cross-examination, the witness confirmed that Mr. Miller comes to Toronto in July or August and goes over the budget once it has been prepared and also takes the opportunity to discuss the corporate plans of Swingline/Rexel Inc. for the coming year. Mr. Epstein agreed that he attended the reorganizational meetings in February or March of 1984. He attended the meeting on behalf of Ofrex Group Canada Limited. The meeting was held to explain how the changes which would come into effect on May 1, 1984 with respect to Swingline of Canada, Ltd. would affect the three companies which would be in operation on May 1, 1984. Representatives from Swingline Inc. attended the meeting as did Alexander Laco and another director on behalf of Marson Canada Inc. and Joseph Fitzpatrick on behalf of Acme Seeley Inc. in Renfrew and Richard Bowden from Wilson Jones, Division of Acme Seeley Inc. The meeting was chaired by Frank Spender who is one of the comptrollers with American Brands, Inc. He co-chaired the meeting as did Dick Lowden also from American Brands, Inc. in their financial planning department. The latter was there to administer the amounts to be paid by Swingline/Rexel Inc. and Wilson Jones, Division of Acme Seeley Inc. to Marson Canada Inc. At the reorganizational meeting there was no discussion of manpower needs. This was left to the individual companies and each company was required to hand in proposals with respect to what they needed to operate their companies. The meeting served to correct any overlaps between the competing needs of the three companies. When disagreements arose as to value and necessity of items which were to be paid for, Mr. Spender ironed out disputes and also adjusted competing demands with respect to space, inventory, fixed assets, and any problems of the three companies. In the words of Mr. Epstein, he was there as an outside party to make a binding decision on the issues in dispute.
[14]. In additional cross-examination, Mr. Epstein explained that the Rexel name originates in the United Kingdom as part of Ofrex Group PLC and that a stapler of that name is manufactured there and sold in Canada by Swingline/Rexel Inc. The witness explained that he agreed with Mr. Vota's position that the reorganization involved an existing company taking over an existing product line and that in these circumstances, Swingline/Rexel Inc. was not obligated to honour the collective agreement between the USWA and Swingline of Canada, Ltd. The witness agreed that the position of USWA was just the reverse. Mr. Epstein explained that the seniority list put into effect by Swingline/Rexel Inc. was with respect to the employees who started working for Swingline/Rexel Inc. on May 1, 1984. Some of the employees had told Mr. Epstein that they went through the bumping positions of the collective agreement with Swingline of Canada, Ltd. for their jobs. He explained that when Swingline/Rexel Inc. was approached on the issue of employees retaining their seniority, he agreed to do so as a show of good faith and to unequivocally state the commitment of Swingline/Rexel Inc. to continue to operate at Ingram Drive. It was the evidence of Mr. Epstein upon cross-examination that it was the position of Mr. Martin that all employees of Swingline/Rexel Inc. were covered by the collective agreements formerly with Swingline of Canada, Ltd. and that until that was resolved, no discussions could take place with respect to a separate collective agreement for the manufacturing employees. It was Mr. Epstein's position that Swingline/Rexel Inc. wanted a separate collective agreement for the manufacturing employees.
[15]. In further cross-examination, the witness explained how the reorganization had changed the areas on Ingram Drive formerly occupied by Wilson Jones, Division of Acme Seeley Inc. and now occupied by Marson Canada Inc. and Swingline/Rexel Inc. The witness explained that the difference between Swingline/Rexel Inc. and Swingline of Canada, Ltd. with respect to functioning was that Swingline of Canada, Ltd. had two products, namely, staplers and staples, and that Rexel had some plastic products too. Ofrex Group Canada Limited had no manufacturing facilities at all and was strictly involved in warehousing and distribution. Swingline of Canada, Ltd. in general had a sales force across Canada and that company employed individuals across Canada in that capacity. Rexel employed the majority of manufacturers representatives across Canada. However, such people were not employees and worked as commission agents. While Swingline of Canada, Ltd. was dealer-oriented and sold from dealers to dealers from coast to coast, Rexel was oriented more towards the wholesale market and that if incoming orders were not filled, then such orders would be routed through the wholesalers. Mr. Epstein stated that Swingline/Rexel Inc. had never asked employees to work beyond eight hours and if they did they would pay overtime. He further explained that the office staff and the whole organization of handling by Swingline/Rexel Inc. had changed from the way it formerly was in that orders by mail, telephone or telex are handled differently from the way they were handled by Swingline of Canada, Ltd. Swingline/Rexel Inc. has gone over to a computerized environment, whereas Swingline of Canada, Ltd. was more oriented to a manual office. By way of a similar comparison, the witness stated that Swingline of Canada, Ltd. and Swingline/Rexel Inc. both carried the Swingline brand of staples and staplers. The witness expressed the belief that the president of Swingline Inc. and the president of Wilson Jones Company and the president of MCM Products, Inc. arranged the reorganization so that their products could be sold in Canada directly by subsidiaries of the American parent companies.
[16]. Alexander Laco informed the Board that he was formerly the president of Swingline of Canada, Ltd. and was currently employed by Marson Canada Inc. and was its president. The three directors of Marson Canada Inc. as of May 1, 1984, were himself, Bob McIntyre and Judy Listiak. None of them were directors of Swingline of Canada, Ltd. The parent company of Marson Canada Inc. is the Marson Corporation of Chelsea, Massachusetts. This company owns one hundred per cent of the share of Marson Canada Inc. None of the directors of the Marson Corporation are directors of Wilson Jones, Division of Acme Seeley Inc. or Swingline Inc. The Marson Corporation in turn is owned one hundred per cent by MCM Products, Inc. and that company is in turn owned one hundred per cent by American Brands, Inc. Mr. Laco described the products of Marson Canada Inc. as automotive body plastics, rivets, hand tools and various other accessories having to do with car maintenance and repair. He gave evidence that Marson Canada Inc. does not share any common products lines with either Wilson Jones, Division of Acme Seeley Inc. or Swingline/Rexel Inc. Marson Canada Inc. has prepared its own catalogue and does not engage in advertising in common with either Swingline/Rexel Inc. or with Wilson Jones, Division of Acme Seeley Inc. The three companies do not participate together in any trade fairs and do not share computer facilities. He explained that there was no common budget and that there were no regular meetings with the other two companies. The banking and payroll systems are different and there is no common sales or marketing staff. The companies do not share a switchboard or reception area and have not engaged in any related activities with any companies of American Brands, Inc. in the Toronto area. Marson Canada Inc. has its own shipping/receiving area, its own time clock, and its own separate entrance. However, the lunchroom for employees is shared with other companies in the building. In readying the building on Ingram Drive for the reorganization which came into effect on May 1, 1984, Marson Canada Inc. spent one hundred and ninety thousand dollars. To the witness's knowledge, Swingline/Rexel Inc. and Wilson Jones, Division of Acme Seeley Inc. spent additional amounts in order to prepare their portion of the premises for their own needs. Mr. Laco gave evidence that the object of the leasehold changes was to facilitate the independence of the three companies and for security reasons.
[17]. Mr. Laco repeated the reasons given by Mr. Epstein for the reorganization of the companies affected by this application. He testified that Swingline Inc. and Wilson Jones, Division of Acme Seeley Inc. felt that their companies in Canada were not getting enough assistance in marketing their products and so decided upon a scheme to split up Swingline of Canada, Ltd. in the way previously described. Previously, Marson had sold what was associated with office supply companies in addition to its marketing of products for the automobile after market. He gave evidence that the lease on the building on Ingram Drive was in the name of Swingline of Canada, Ltd. and that Marson Canada Inc. sold assets and inventory to Swingline/Rexel Inc. as a surviving company. While Swingline of Canada, Ltd. was still in existence the witness informed the Board that Marson Canada Inc. is now the landlord under the lease. Marson Canada Inc. assumed the liabilities of Swingline of Canada, Ltd. and gradually the latter will disappear. The other two companies have no connection with Swingline of Canada, Ltd. He informed the Board that collective agreements had been prepared between Marson Canada Inc. and the USWA, but had not been signed by the USWA upon presentation. The witness had no explanation as to why the USWA had declined to sign collective agreements with respect to the plant and office employees of Marson Canada Inc. It was the position of Mr. Laco that Marson Canada Inc. is the successor of Swingline of Canada, Ltd. and that Marson Canada Inc. was continuing to employ former employees of Swingline of Canada, Ltd. as they were required. He testified that Marson Canada Inc. supplied a list of employees to the other two companies so that they could decide which employees they required to perform their operations.
[18]. The collective agreements which existed between Swingline of Canada, Ltd. and the USWA provided for seniority which covered the three divisions of the company, namely, the Marson Division, the Wilson Jones Division and the Swingline Division. The witness emphasized that the seniority covered all three divisions and was applied notwithstanding the different product lines of the different divisions. Mr. Laco gave evidence that there had been a history of no layoffs in twenty-five years and that only in 1982 were layoffs necessary. A failing economy caused this and in the 25-year period employees would have gone from one division to another. In 1982 there were layoffs and some of the employees escaped layoffs by being able to bump into another division. However, this was not done frequently and he was not aware of a person who would work a full shift for one division and then work for another division. If this happened, in the view of Mr. Laco, he would presumably have been paid overtime. Mr Laco also gave evidence that a number of the directors of Marson Canada Inc. are also directors of the the Marson Corporation. Mr. Laco was involved in the implementation meetings and his opinion was requested and was given with respect to what had to be done, commitments regarding assets, costs, money being paid and when it was to be paid and various miscellaneous matters. He was, for example, asked his opinion on the number of employees necessary to operate the companies from the standpoint of manufacturing. In addition, he was asked for his recommendations with respect to severance pay for employees who were affected by the reorganization. He gave evidence that a number of employees exercised their option to bump other employees at that time.
[19]. In cross-examination, Mr. Laco explained that he had worked with the family of companies of American Brands, Inc. for over thirty years and that when it first became an operation in Canada it was called Wilson Jones in the 1960's. From that point, the name Wilson Jones became Swingline of Canada, Ltd. and as companies were added in the form of Canadian subsidiaries of American parents the name was changed to accommodate these moves. Divisions were added and sometimes discontinued. For example, the Canadian Staples Division used to distribute the Ace product line of staplers. Canadian Staples as a division has been included for some time in the Swingline Division. The witness also explained that in the early 1980's Swingline of Canada, Ltd. had included in its group of divisions a commercial lighting division. However, this division was not profitable and was closed on the recommendation of Mr. Laco. A line of products called Cook and Cobb were part of, and are still part of, the Wilson Jones Division. There was an association with parent companies in the United States before MCM Products, Inc. was brought in as a parent company in the late 1970's. Prior to that time, Swingline of Canada, Ltd. reported directly to Swingline Inc. At that time its parent was American Brands, Inc. The witness also explained that the Wilson Jones company in the United States was itself a parent in the 1950's before it became part of the family of companies under American Brands, Inc. Mr. Laco agreed that there had been a bargaining relationship with the USWA since 1973 and that this bargaining relationship included the Marson, Swingline, Wilson Jones and Canadian Staples divisions. In the 1970's and early 1980's, the Marson division might have shared a few packaged product lines with the other divisions and have distributed them to hardware stores. However, this practice has since disappeared and since 1983 Marson has not shared any product lines with the other divisions. There has not been an assignment of the lease on the premises on Ingram Drive to Marson Canada Inc. and Marson Canada Inc. has not entered into subleases with Swingline/ Rexel Inc. or Wilson Jones, Division of Acme Seeley Inc. Rather, Marson Canada Inc. has received letters of intent to pay the agreed rent on the premises. Mr. Laco informed the Board that the sales staff had not previously been covered by either the plant or office collective agreements between Swingline of Canada, Ltd. and the USWA. Mr. Laco agreed that he had sent a letter dated April 13, 1984, to Mr. Martin of the USWA in which he advised him on behalf of Swingline of Canada, Ltd. that approximately ten union employees would become employees of Marson Canada Inc., that approximately nineteen union employees would be transferred from the employ of Swingline of Canada, Ltd. to Wilson Jones, Division of Acme Seeley Inc. and that approximately nineteen employees would be transferred from the employ of Swingline of Canada, Ltd. to Swingline/Rexel Inc. Mr. Laco noted, however, that after May 1, 1984, he would have had no authority to speak on behalf of the other two companies. He agreed that no one from Swingline Inc. or Swingline/Rexel Inc. was on the boards of either Wilson Jones, Division of Acme Seeley or Marson Canada Inc. or the Marson Corporation.
[20]. Joseph Fitzpatrick testified that he is located in Renfrew and for approximately three years he has been the vice-president and general manager of Acme Seeley Inc. The employees of Wilson Jones at Ingram Drive report to him and he is responsible for the Wilson Jones Division. He reports directly to Acme Visible Records, a Division of Wilson Jones in Crozet, Virginia. Acme Visible Records is, in turn, a division of the Wilson Jones company which is located in Chicago. Acme Seeley Inc. has been located in Renfrew since September of 1971, where it has a manufacturing operation and office employees. Since 1973, it has been a party to successive agreements with the United Steelworkers of America, Local 8177. At the time of the hearing, the most recent collective agreement covered the period from January 2, 1984, to January 3, 1986. The recognition clause of the collective agreements provides that the company recognizes the union as the sole bargaining agent for all its employees at Renfrew, Ontario, save and except foremen, persons above the rank of foreman, office and sales staff and students employed during the school vacation period. In Renfrew, Acme Seeley Inc. makes office business systems and within its manufacturing facility of one hundred thousand square feet has full metal manufacturing and full printing facilities. Prior to the reorganization at Ingram Drive, Acme Seeley Inc. was making filing cabinets which were of a similar type to the ones made in Renfrew. Mr. Fitzpatrick explained that when the decision was made to split Swingline of Canada, Ltd., the Wilson Jones Division was the smallest of the three operations and it was decided to make it a division of Acme Seeley Inc., that is to say, a Wilson Jones Division of Acme Seeley Inc. It was the belief of the witness that the decision was made through Thomas Miller, who is the president of the Wilson Jones company in Chicago. In about mid-April of 1984, Mr. Fitzpatrick was called to a two-day meeting in Toronto in order to take part in the planned reorganization of Swingline of Canada, Ltd.
[21]. Mr. Fitzpatrick gave evidence that the prime concern regarding the Wilson Jones operation was that it had a very good sales record in the United States and a very poor one in Canada. There was concern about not getting good representation in Canada. At the meeting the concern of Mr. Fitzpatrick and other representatives on the Wilson Jones team from the United States there was concern about the layout of the building on Ingram Drive and they wanted to have some input into which parts of the building they were going to rent. At the meeting negotiations were held and decisions were made to establish values in connection with the reorganization. As a result of the two-day meeting, Wilson Jones decided to establish a full division of Acme Seeley Inc. and have it controlled out of Renfrew. Acme Seeley Inc. purchased the assets and inventory of the Wilson Jones Division of Swingline of Canada, Ltd. The witness explained that the Wilson Jones Division acquired employees from Swingline of Canada, Ltd. based upon a list submitted by Mr. Laco. The Wilson Jones Division maintained the same wage rates in effect in the collective agreement at that time. Mr. Fitzpatrick testified that the Wilson Jones Division of Acme Seeley Inc. had never signed a collective agreement with the USWA in Toronto because it had never been approached to do so. He explained the office split took place in two stages because the Wilson Jones Division did not have facilities available at that time and that during that time Swingline/Rexel Inc. handled their billings during the period from May through July of 1984. While the Wilson Jones Division had three or four office people at Ingram Drive, they were primarily working in sales and were not engaged in the billing side of the business. During that time Swingline/Rexel Inc. had six or seven office employees doing the work for the Wilson Jones Division. At the end of the three-month period, the Wilson Jones Division had its own office prepared and it hired employees to pick up some of the functions. Part of the functions were moved to Renfrew, such as accounts payable and the payroll matters. Of the seven office employees of the Wilson Jones Division at Ingram Drive, three of them are regarded by Mr. Fitzpatrick as managerial. The Wilson Jones Division did not consider hiring former office employees of Swingline of Canada, Ltd. It was the evidence of Mr. Fitzpatrick that the USWA never approached him about hiring former office employees of Swingline of Canada, Ltd. It was the position of Mr. Fitzpatrick that while there was no collective agreement in effect covering the hourly paid production employees of the Wilson Jones Division at Ingram Drive, he was following the terms and conditions of the appropriate plant collective agreement between Swingline of Canada, Ltd. and the USWA.
[22]. The witness gave evidence that the Wilson Jones Division spent about thirty-one thousand dollars on office renovations and that the cost of walls and fencing had been paid for and the portions distributed therefor at the time of the reorganization. He informed the Board that the Wilson Jones Division has its own private entrance, telephone, telex, inventory storage and manufacturing areas. Mr. Fitzpatrick informed the Board that he had never seen the office collective agreement between Swingline of Canada, Ltd. and the USWA. However, he became aware of it some time after the reorganization. When questioned about the difference between Acme Seeley Ltd. and Acme Seeley Inc., the witness explained that this was simply a change of name in 1980, in order to have a bilingual name and accommodate Quebec. He stated that none of the directors on the board of Acme Seeley Inc. were directors on any other boards of the other companies at Ingram Drive. In concluding his testimony, Mr. Fitzpatrick testified that he had no idea why the USWA had not approached him with regard to the hourly employees in the plant on Ingram Drive because he had such good relations with the USWA in Renfrew.
[23]. In cross-examination, Mr. Fitzpatrick stated that he had been with Seeley Systems and then with Acme Seeley Inc. since January of 1947. He explained that Wilson Jones has been the parent of Acme Visible Records for a little over a year, that Acme Visible Records is the direct parent of Acme Seeley Inc. and that Acme Visible Records is, in turn, owned by the Wilson Jones company. At the time of the reorganization, the question of good will was never discussed and the accounts receivable and inventory of the Wilson Jones Division of Swingline Canada, Ltd. was purchased by Acme Seeley Inc. The capital equipment was allocated at the reorganizational meeting and some of it was sent to Toronto and some remained in Toronto. Not all of the capital equipment was satisfactory and some of it had to be scrapped. The witness agreed that the shared space with Swingline/Rexel Inc. included the shipping bay, the employees entrance and time clock. The Wilson Jones Division has its own washrooms in the front of the building but shares washrooms for the plant employees in another part of the building. At one time employees who worked for one of the other divisions worked for the Wilson Jones Division part-time. However, this ended when Mr. Fitzpatrick discovered it. These employees were not paid overtime for the time spent working for the Wilson Jones Division.
[24]. It was the recollection of the witness that the Wilson Jones Division did not have a lease with respect to the building on Ingram Drive and that it had not signed a letter of intent with Marson Canada Inc. However, he agreed that the Wilson Jones Division would pay its allotted rental share of the building to Marson Canada Inc. Mr. Fitzpatrick candidly stated that the building on Ingram Drive was a detriment to Acme Seeley Inc. and that he did not particularly like the building. This was particularly true because Acme Seeley Inc. owns its own premises in Renfrew. It was the view of Mr. Fitzpatrick that the decision was made to continue using the building on Ingram Drive because of a long-term lease on that building. He agreed that the Wilson Jones Division reimbursed Swingline/Rexel Inc. with respect to the office work performed by them on behalf of the Wilson Jones Division. There is no interchange of employees between Swingline/Rexel Inc. and the Wilson Jones Division. He agreed that some of the directors of Acme Visible Inc. are also directors of American Brands, Inc. Mr. Fitzpatrick is involved in setting the budget and capital expenditures of Acme Seeley Inc. Once the budget and capital expenditures are prepared they are sent to Vernon Schroeder of Acme Visible Records for his approval. Mr. Schroeder is also a director of the Wilson Jones company. With reference to a letter dated April 23, 1984, from Richard Bowden, the director of marketing of Swingline of Canada, Ltd., Mr. Fitzpatrick gave evidence that while he knew that Mr. Bowden would be working for the Wilson Jones Division, he was not speaking on behalf of the Wilson Jones Division when he stated that that division would not be having any office employees. Mr. Fitzpatrick noted that in that letter it was stated that the Wilson Jones Division would be honouring the plant collective agreement formerly in effect with Swingline of Canada, Ltd.
[25]. In re-examination the witness stated that he had not authorized the letter of April 23, 1984, and that at that time Mr. Bowden was still working for Swingline of Canada, Ltd. and was reporting to Mr. Laco. As far as the witness was aware, no one in the Wilson Jones Division had given Mr. Bowden the authority to write this letter. The witness re-emphasized that there had been no meetings with the USWA and the Wilson Jones Division with respect to a plant collective agreement. The witness repeated that Acme Seeley Inc. was one hundred per cent owned by Acme Visible Records, which was, in turn, one hundred per cent owned by the Wilson Jones company in Chicago, which was itself, in turn, one hundred per cent owned by American Brands, Inc.
[26]. David Martin, a staff representative with the USWA, took over responsibilities for the collective bargaining with Swingline of Canada, Ltd. in the Fall of 1983. Bargaining also occurred at that time and on the other side was counsel for Swingline of Canada, Ltd., Mr. Laco and other representatives of that company. Collective agreements for the plant and office were eventually settled during these negotiations. In January of 1984, a memorandum of settlement which applied to both the plant and office collective agreements was signed between Swingline of Canada, Ltd. and the USWA. However, a formal collective agreement was never entered into. The witness testified that he made attempts to have formal collective agreements signed with Swingline of Canada, Ltd., but that no attempts were made to sign collective agreements with the individual new companies which emerged after the reorganization. The witness stated that he did not negotiate with anyone on behalf of the new companies with a view to signing collective agreements with them. Mr. Martin also stated that he had never negotiated with Mr. Laco as president of Marson Canada Inc. After a series of unsatisfactory contacts from the point of view of the USWA and Mr. Laco, Mr. Martin put the matter in the hands of counsel for the USWA. He informed the Board that he had not solicited the letter from Mr. Bowden dated April 23, 1984, and that, in his view, the matter was in the hands of his counsel. He did not know Mr. Bowden and believed he was speaking on behalf of the Wilson Jones Division. He informed the Board that he had never received a letter on behalf of the Wilson Jones Division with respect to honouring the collective agreement for the plant.
[27]. In cross-examination, the witness stated that he had never seen a copy of a formal collective agreement with the name of Marson on it. A draft collective agreement was filed with the Board with the name "Marsen Canada Ltd." on it. There was no explanation for this variation in the name or as to the authorship of that name. In this draft collective agreement the company, namely, Marsen Canada Ltd., purported to recognize the USWA as the bargaining agent of all office and clerical employees at its plant in Metropolitan Toronto, with certain exceptions and subject to the qualifications referred to in the decision of this Board dated March 14, 1973. The witness agreed that at a meeting on April 19, 1984, which was attended by the witness, Mr. Laco and counsel accompanying Mr. Laco, he was advised that they were speaking on behalf of Swingline of Canada, Ltd. and Marson and that there was no authority to speak on behalf of the other two companies. Mr. Martin acknowledged that he first became aware that Swingline/Rexel Inc. and the Wilson Jones Division of Acme Seeley Inc. were not going to recognize the office bargaining units when Mr. Epstein's secretary advised him of a meeting. He attended on Mr. Epstein in Mississauga only to find that the latter was in hospital. However, instead he met Mr. Vota and it was at that point that Mr. Vota made it quite clear that Swingline/Rexel Inc. was not going to recognize any bargaining rights claimed by the USWA for office employees. He acknowledged that although it was his position that the divisions of Swingline of Canada, Ltd. were still part of the same corporate entity after the reorganization, this view of the companies was not accepted by those companies. Mr. Martin acknowledged that the office employees of Swingline of Canada, Ltd. had been laid off in the winter of 1983 and 1984 and that there had been no attempt by the USWA to have those employees hired by Swingline/Rexel Inc. or the Wilson Jones Division of Acme Seeley Inc. He pointed to the fact that he had reason to believe from the correspondence that the Wilson Jones Division of Acme Seeley Inc. would not require office employees and it was also his position that Swingline/Rexel Inc. had said that they were going to bring non-unionized employees from Mississauga to work at Ingram Drive.
[28]. The evidence before the Board establishes a highly plausible reason for the reorganization. The reason was in order to better utilize the resources and to improve the marketing techniques of the companies within the fold of American Brands, Inc. The reorganization was caused by a legitimate desire to improve the performance of certain core industries which American Brands, Inc. has been developing for the past two decades. The USWA accepts the reasons for the organization and has conceded that there has been no antiunion animus on the part of the corporate respondents. It is helpful to review the positions of the relevant corporate respondents with respect to the bargaining rights claimed by the USWA. Marson Canada Inc. is prepared to sign collective agreements with respect to both its plant employees and its office employees. Marson Canada Inc. regards itself as the true successor of Swingline Canada, Ltd. with merely a change in name. Swingline/Rexel Inc., on the other hand, is prepared to acknowledge that an argument may be made that it has acquired certain of the business of Swingline of Canada, Ltd. with respect to certain manufacturing facilities. Swingline/Rexel Inc. is therefore prepared to sign a collective agreement with USWA with respect to its plant employees. It is not, however, prepared to sign a collective agreement with USWA with respect to its office employees. Swingline/Rexel Inc. takes the position that these are non-unionized employee which, for the most part, were brought in from Mississauga. The position of the Wilson Jones Division of Acme Seeley Inc. is somewhat similar to the position of Swingline/Rexel Inc. The Wilson Jones Division is prepared to sign a collective agreement for the hourly-rated employees in the plant who are performing work formerly performed by Swingline of Canada, Ltd. However, the Wilson Jones Division of Acme Seeley Inc. is similarly not prepared to sign a collective agreement with respect to what are, in its view, an entirely new and small unit of office employees at Ingram Drive. The attitude of the USWA has been to not enter into new collective agreements out of a concern that perhaps such conduct would be seen as resulting in compromising their position of claiming to represent employees in six bargaining units and not four bargaining units.
[29]. In our view, Marson Canada Inc. is the legal successor of Swingline of Canada, Ltd. and came into existence as a result of a change in name. The Board agrees with the position of Marson Canada Inc. that the USWA has bargaining rights with respect to two bargaining units of plant and office employees, respectively. With respect to the argument under section 1(4) of the Labour Relations Act, the Board has frequently stated that one of the purposes of that subsection is to prevent the erosion of bargaining rights. See Industrial Mine Installations Ltd., [1972] OLRB Rep. Dec. 1029 and B rant Erecting and Hoisting, [1980] OLRB Rep. July 945. In Walters Lithographing, [1971] OLRB Rep. July 406, the Board set forth certain criteria for the purpose of determining whether there is common control or direction between two or more employers. In that decision the Board considered these criteria: a) common ownership or financial control; b) common management; c) interrelationship of operations; d) representation to the public as a single integrated enterprise; and e) centralized control of labour relations. With respect to the corporate respondents in this matter, there is ultimately common ownership and ultimate financial control through American Brands, Inc. However, with respect to the other four criteria, the Board notes that there is not common management, there is not an interrelationship of operations and there is not a representation to the public as a single integrated enterprise. Moreover, any claim of centralized control of labour relations is negated by the different positions taken by the corporate respondents in this matter. The Board notes that the three corporate respondents who are most closely connected with this application have gone to considerable pains to distance and separate their operations one from the other. In these circumstances, it may not be said that the three corporate respondents in question are under common control and direction. Moreover, in our view, it may not be said that they are in related or associated activities and businesses. As the Board stated in Brant Erecting and Hoisting, supra, businesses or activities are "related" or "associated" because they are the same character, serve the same general market, employ the same mode and means of production, utilize similar employee skills and are carried on for the benefit of related principals. In the present case, even though it may be argued that American Brands, Inc. is a distantly related principal, there is quite clearly nothing of an associated or related business or activity between these three corporate respondents. The Board therefore dismisses this application in so far as it relates to a claim for relief under section 1(4) of the Act.
[30]. As the Board stated earlier, in our view, Marson Canada Inc. is clearly the legal successor of Swingline Canada, Ltd. As the Board stated in Pitts Engineering Construction, [1983] OLRB Rep. June 938. the Board has interpreted section 63 in a manner so as to protect the bargaining rights and not extend or create new bargaining rights. If the provisions of section 63 were applied to the facts in this application, it would have the effect of conferring representation by the USWA on two bargaining units of office employees who have never previously been represented by a trade union. In Mountain view Dairy Ltd., [1967] OLRB Rep. Feb. 911, the Board declined to effect such a purpose. The purpose of section 63 has been described by the Board in Aircraft Metal Specialties Ltd., [1970] OLRB Rep. Sept. 702 in these terms at page 705:
The purpose of section [63] becomes important in assessing the various fact situations that arise. Section [631 operates on a number of levels. The first level, of course, is to prevent the subversion of bargaining rights by transactions which are designed to get rid of the union. We have encountered situations where there are transactions between various corporate entities which are in effect "paper transactions", and are a form of corporate charade engaged in for the purpose of eliminating the trade union. In this type of case the Board has liberally interpreted section [63] to preserve the bargaining rights and has attempted to look beyond "paper transactions" to achieve that purpose.
In the instant case the purpose of the reorganization has been referred to earlier. In our view, the position taken by the three corporate respondents has not resulted in the loss of any bargaining rights by the USWA, nor is it an attempt to undermine and erode the bargaining rights of the USWA.
[31]. The definition of a sale in section 63 includes a lease, transfer and any other manner of disposition. As the Board stated in Westeel-Rosco Limited, [1966] OLRB Rep. Dec. 718, the words in the definition section of "other manner of disposition" includes resuming a business pursuant to a reorganization of a business under the same corporate umbrella. This is an omnibus provision and as the Board also stated in Thorco Manufacturing Ltd., 65 CLLC ¶16,052, the word "transfer" is a term of wide significance and is capable, as on the facts before us, of describing a multitude of transactions. The Board notes that Swingline/Rexel Inc. was prepared to sign a collective agreement with respect to the plant employees and the Board finds that with respect to the new manufacturing facilities there has been a sale of a business to Swingline/Rexel Inc. from Swingline of Canada, Ltd. Such employees, it appears, formerly worked for Swingline of Canada, Ltd. and are now doing the same work as they used to do for Swingline/Rexel Inc. This, however, is not true with respect to the office and sales staff. Therefore, the Board finds that there has not been a sale of a business with respect to the office and sales staff. Moreover, with respect to the office and sales employees, they are still selling and marketing products from Ofrex and Rexel and have added additional product lines from Swingline. In our view, it is merely the acquisition of a new product line for sale and is not in any sense of the word a sale of a business as contemplated by section 63.
[32]. With respect to Wilson Jones, Division of Acme Seeley Inc., the main operations are in Renfrew and the present position that the Wilson Jones Division finds itself in is due to the reorganization over which it had little control and which led to the employment for the first time of office staff at Ingram Drive. On the evidence before the Board, we find that there were no such office employees formerly employed by Swingline Canada, Ltd. and accordingly, it may not be argued that there has been a sale of a business with respect to such employees. It appears that with respect to the manufacturing activities carried on by the Wilson Jones Division at Ingram Drive that there has been an acquisition of capital equipment from Swingline of Canada, Ltd. and that there is, in our view, a sale of a business from Swingline of Canada, Ltd. to Wilson Jones, Division of Acme Seeley Inc. with respect to the manufacturing facilities.
[33]. In brief, the Board dismisses the application under section 1(4) of the Labour Relations Act and finds that there has been a sale of a business under the provisions of section 63 of the Labour Relations Act with respect to the plant employees of Marson Canada Inc., the plant employees of Swingline/Rexel Inc. and the plant employees of Wilson Jones, Division of Acme Seeley Inc. With respect to the office employees, the Board finds that there has been a sale of a business with respect to the office employees of Marson Canada Inc. but not with respect to the office employees of either Swingline/Rexel Inc. or the office employees of Wilson Jones, Division of Acme Seeley Inc.