International Union of Operating Engineers, Local 793 v. Stucor Construction Ltd., 1987 CanLII 3258

Ontario Labour Relations Board

File Numbers and Parties

[1987] OLRB Rep. April 614

1403-85-M; 1647-85-R International Union of Operating Engineers, Local 793, Applicant, v. Stucor Construction Ltd., Respondent; International Union of Operating Engineers, Local 793, Applicant V. Stewart & Hinan Construction Limited, Stewart & Hinan Contractors Limited, Stucor Construction Ltd., and Resource Equipment Limited, Respondents

Decision Makers and Appearances

BEFORE: N. B. Satterfield, Vice-Chair, and Board Members J. A. Ronson and P. V. Grasso.

APPEARANCES: S. B. D. Wahl and J. Redshaw for the applicant; Bruce Binning and Robin Stewart for the respondents.

Decision

DECISION OF THE BOARD; April 2, 1987

1. Having regard to the evidence before the Board, the name f the respondent in File No. 1403-85-M has been amended to: "Stucor Construction Ltd.".

2. The application in Board File No. 1403-85-M is a referral under section 124 of the Labour Relations Act of a grievance in the construction industry for final and binding arbitration. File No. 1647-85-R is a consolidated application made under subsection 4 of section 1 of the Act and section 63 of the Act. The applicant is seeking a declaration that Stucor Construction Ltd. and/or Resource Equipment Limited is/are bound to the Operating Engineers Provincial Agreement effective from May 1, 1984 until April 30, 1986, as a result of a sale of a business within the meaning of section 63 of the Act from Stewart & Hinan Construction Limited and/or Stewart & Hinan Contractors Limited or because Stucor Construction Ltd. and/or Resource Equipment Limited and Stewart & Hinan Construction Limited and/or Stewart & Hinan Contractors Limited carry on related activities or businesses under common direction or control and should be treated as one employer for purposes of the Act. The parties are agreed that the hearing into the grievance referral must await the resolution of the application in File No. 1647-85-R.

3. The names "Stewart" and "Hinan" appearing in the names of two of the respondents are the names of the persons Robin Stewart and Jack Hinan who were equal business partners engaged in a general contracting business in Ontario from early 1959 until late 1981. The corporate style and form of their business changed over the years, but throughout, Stewart and Hinan were equal owners and equal managers of their general contracting business. Their partnership ended only when Hinan decided in 1981 to retire from business. Stewart did not retire and continues to operate a general contracting business. The issue before the Board is whether there has been a sale of the partnership business to Stewart's business within the meaning of section 63 of the Act. To characterize the issue another way, has all or part of the business of the partnership been transferred to Stewart's business and continued by it, or is Stewart's business simply a continuation of a like business? If the partnership business does not survive in Stewart's business, the issue in the alternative is, have the partnership and Stewart carried on related activities or businesses under common direction or control within the meaning of section 1(4) of the Act, and, if so, should the board declare them to be one employer for purposes of the Act. A positive finding in either alternative would preserve in Stewart's business the bargaining rights which the applicant held for employees of the partnership's business.

4. The business which came to be operated as an equal partnership was started by Stewart in 1956 and was incorporated as Robin Stewart Construction Limited with Robin Stewart as the sole owner. Two months later, Stewart and Hinan entered into an agreement for Hinan to buy into the company and become an equal partner with Stewart. By February, 1959, they were equal partners and the name of the corporation was changed to Stewart-Hinan Corporation Limited. That company ceased doing construction work in August, 1969 and its corporate objectives were changed accordingly, as was its name. It became Stewart-Hinan Investments Limited (hereinafter 'investments"). A new corporation, Stewart & Hinan Construction Limited (hereinafter "Construction") had been formed in August, 1968. It took over the construction business employing working capital provided by Investments in return for preference shares in Construction. The preference shares were ultimately redeemed. At all times while Construction operated a general contracting business, Stewart and Hinan were equal owners directly and/or through their equal interests in Investments. The change in corporate form was made to protect the reserves which had built up in Stewart-Hinan Corporation Limited, now Investments. Construction underwent a similar restructuring in 1974. It ceased construction operations and the partners formed a new company, Stewart and Hinan Contractors Limited (hereinafter "Contractors") which was incorporated January 24, 1974. Its working capital was provided by Construction which took back preference shares in Contractors. Stewart and Hinan held the common shares equally. During all of these changes in corporate name and form, the business of the partnership continued uninterrupted. The employees in the business were doing the same work after each change as they had been doing immediately prior to the change. From 1974, the business was conducted from premises in Beams'ille, Ontario, owned by Investments. There were two other tenants, Resource Rentals Ltd., a wholly-owned subsidiary of Investments, and a third tenant unrelated to the Stewart & Hinan companies. Resource Rentals Ltd. (hereinafter "Resource") had been incorporated for the purpose of carrying on the business of renting construction equipment.

5. Stewart and Hinan operated under the terms of a partnership agreement, first for Construction and, after Contractors was incorporated, for both Construction and Contractors. The Igreement contained a buy/sell condition. When Hinan decided in 1981 to retire, he served notice in Stewart of his intent to withdraw from the businesses of Construction and Contractors and offered to sell his shares to Stewart, pursuant to the terms of the agreement. Stewart had the option to buy Hinan's shares or withdraw from the businesses. He chose the latter and, pursuant to the agreement, elected "...that the businesses of the said Companies be sold, liquidated or disposed of as we may mutually agree upon". The partners ultimately agreed to liquidate the businesses. Contractors ceased operations in October, 1981. Its salaried employees were given notice individually on October 5th, 1981, of the partners' decision to liquidate that company because of Hinan's wish to retire from business. They were also told that Stewart intended to continue in the general contracting business. Most of the salaried employees were terminated effective October 5th. They all received severance payments. Carpenters and labourers employed by Contractors were laid off pursuant to their respective collective agreements as the work of Contractors wound down. It last employed carpenters or labourers in November, 1981. Work performed during October and November was largely the wind-up of projects. Warranty work was subcontracted out, but not to Stewart's company. The fixed assets of Contractors were offered for sale to invited bidders. Contractors was formally dissolved on October 9, 1983 and Construction was formally dissolved on August 29, 1983.

6. Stewart and Hinan chose to liquidate the companies rather than sell them as going concerns for tax purposes. The assets of the two companies were converted to cash and the cash proceeds were distributed to the personal holding companies of Stewart and Hinan which had been set up for that purpose. Stewart's share went to D.R. Stewart Holdings Ltd. (hereinafter "Holdings").

7. As already mentioned, Stewart had announced his intention to remain in the general contracting business, but he wanted a smaller operation than the one which he and Hinan had operated as a partnership. That was why he decided not to buy out Hinan's interest in Contractors. To that end, Stewart incorporated Stewart & Hinan Contractors Corp. on September 28, 1981. Prior to incorporating the company in that name, he had tried unsuccessfully to get clearance on business names using either "Stewart" or "Stewart and Stewart". Hinan gave Stewart a release, without any consideration, to use the name "Stewart & Hinan". On May 15, 1984, the name of the corporation was changed to Stucor Construction Ltd. For ease of reference, the Board will use "Stucor" to refer to Stewart's business, unless the particular context requires the use of Stewart & Hinan Contractors Corp. or Stucor Construction Ltd. The working capital for Stucor came principally from the proceeds which were being held by Holdings from the dissolution of the partnership businesses. It held preference shares in Stucor and provided as well the guarantees for Stucor's bank credit and performance bonds.

8. All of the time while Stucor operated under its original corporate style of Stewart & Hinan Contractors Corp., it did so out of the same premises as Contractors had operated, but occupying less space. It continued to use the same telephone system as had been used by Contractors. Telephone callers for Stucor would have their calls answered by some of the same persons who had answered telephone calls directed to Contractors in the past. This was because Dave Harvey, Nancy Rossi, Dennis Kowalchuk, Vein Thorpe and Neil VandeLarr took employment with Stucor following their termination from Contractors. All but VandeLarr joined Stucor immediately on termination from Contractors. VandeLarr joined it after approximately a two week hiatus. Rossi had worked for Contractors as a secretary and continued in the same work with Stucor. Harvey was manager of field operations for Contractors and Kowalchuk and Thorpe were estimators, and all three of them continued in the same work for Stucor. VandeLarr had been a project co-ordinator for Contractors and continued in this work with Stucor but also worked in estimating and as a field superintendent. Earl Paterson, who had been one of Contractors' field superintendents joined Stucor in the same capacity approximately eight months after terminating from Contractors. Harvey had been working for the partnership's construction business since the 1960's. As manager of field operations for Contractors, he was responsible for the execution of the contracts which the business obtained. Part of his responsibility was to decide, in consultation with the project co-ordinators, how jobs were to be manned. The field superintendent would do the hiring according to those decisions. Harvey and the superintendents looked after grievances and Harvey handled other labour relations matters for Contractors. He performed the same kind of work for Stucor. Kowalchuck and Thorpe were the only estimators employed by Stucor when it first commenced business. They and Harvey eventually left in May, 1984 after Stucor moved its operation from the Beamsville location to St. Catharines. At that time, VandeLarr became manager of field operations for Stucor.

9. Contractors had been bound to collective agreements with the United Brotherhood of Carpenters and Joiners of America, the Labourers' International Union of North America and the applicant. Stewart advised the local representatives of the carpenters and labourers that he had formed a new company to continue business as a general contractor. He did so because he had always been accustomed to employing carpenters and labourers on the work which Contractors and its predecessors had done and he expected to employ them in the work Stucor would be doing. In October, 1981, he bound Stucor to the provincial agreements of the carpenters and labourers at a time he was seeking to obtain a contract for concrete construction work. Stucor hired carpenters and labourers when it first began doing work in November, 1981. A significant number of the carpenters and labourers it hired had worked for Contractors, most of them having worked for Contractors within four to eight weeks prior to their hiring by Stucor.

10. The fixed assets of Contractors which were put up for sale included some construction equipment. Except for automobiles, that equipment included two dump trucks, four pick-up trucks, one deck trailer, three front-end loaders, eight office vans and six storage vans. Stucor bought one of the dump trucks, three of the pick-up trucks, six office trailers and four storage vans. Stucor did not buy any of the building materials, builders' hardware or hand tools sold by Contractors, except for two pieces of surveying equipment. It also bought some of Contractors' office furniture and fixtures. It is reasonable to infer from the evidence that Stucor acquired all of the office furniture and fixtures that it needed for its business.

11. Stucor had no contracts when it started business. It did not do any of the warranty work for Contractors after Contractors ceased its operations. Stucor got work in the same way that Contractors had, by bidding for it against other contractors, both through public and invited tenders. A significant amount of the contracts it obtained was by invited tender.

12. Respondent counsel argues that the liquidation of Contractors left nothing of its business to be transferred to Stucor which possibly could constitute a business in the hands of Stucor. The liquidation of Contractors was carried out for the sole purpose of permitting Hinan to retire and receive his 50 per cent share of the corporation's value. All of its assets were converted to cash and distributed to the two partners' personal holding companies. The employees were terminated and the salaried employees paid severance. All Stucor got was a few of Contractors' fixed assets for which there was no other buyer, some office furnishings, three of its 19 salaried employees, and, until Stewart could get clearance on a suitable name for his new business, the convenience of using the name "Stewart & Hinan". Stucor did not take over any of Contractors' contracts, rather it had to start afresh and secure its own contracts. The few elements of Contractors' business which can be found in Stucor by themselves cannot be said, counsel submits, to give Stucor the "dynamic quality" of a going concern referred to by the Board in Metropolitan Parking Inc., [1979] OLRB Rep. Dec. 1193, at paragraph 33, nor are they the essential elements of a business referred to in paragraph 34 of Metropolitan Parking, supra, and in Grand Valley Ready Mixed Concrete Supply Limited, [1981] OLRB Rep. June 663, at paragraph 19, which would allow the Board to find that Contractors' business or a viable part of it, survives in Stucor. Paragraphs 33 and 34 of Metropolitan Parking and paragraph 19 of Grand Valley Ready Mixed state, respectively, as follows:

13. There need not be a transfer of the entire business before section 55 [now section 63] comes into play. The successor rights provisions may also be triggered by the transfer of "part of a business." [See section 55(1).l This language suggests that bargaining rights continue when something considerably less than "the totality of the undertaking" has been transferred. Presumably the Legislature envisaged the preservation of bargaining rights where there is a severance and transfer of a discrete, cohesive portion of the economic organization or activities which comprise the totality of "the business." The Board has found a transfer of "part of a business", where one of a chain of retail stores has been sold to a competitor (Supercity Discount Foods, [1979] OLRB Rep. Apr. 119; Loblaws Groceterias Ltd., [19731 OLRB Rep. Jan. 73); where there is a transfer of the right and means to produce one of the products formerly produced by the predecessor's business; (Canac Shock Absorbers, [1973] OLRB Rep. Oct. 508); where there was a transfer of certain milk delivery routes in a particular geographic area (Borden Co. Ltd., [1970] OLRB Rep. Jan. 1244), and where there was a transfer of the oil burner installation and service branch of a firm which was primarily engaged in the sale and delivery of fuel oil (Automatic Fuels Ltd., [1971] OLRB Rep. May 515). In each of these cases the Board found that the predecessor had transferred a coherent and severable part of its economic organization - managerial or employee skills, plant, equipment, "know how" and goodwill - thereby allowing the successor to serve the market formerly served by the predecessor. This economic organization undertook activities which gave rise to employment, and the terms of employment, together with the union's right to bargain about them, were preserved. The part of the predecessor's business which it no longer wished to continue provided the business opportunity which the successor was able to pursue to its own advantage. It was otherwise in Woodway Structural Components, [1971] OLRB Rep. Nov. 732, Canada Cement LaFarge Ltd., [1975] OLRB Rep. Dec. 905, and Dufferin Steel, [1976] OLRB Rep. Mar. 81. In these cases there was a significant change in the character of the work, product or market so that the Board concluded that what had been transferred was not the predecessor's business. The successor had merely incorporated incidental elements of that business into his own economic organization - even though each of the elements acquired could previously be found in the predecessor's business organization and, in that sense, were "part" of the predecessor's business. What was transferred lacked that dynamic quality which distinguishes an idle collection of surplus assets from an active, severable and coherent part of a going concern.

14. This distinction is easily stated, but the problem is, and always has been, to draw the line between a transfer of a "business", or "a part of a business" and the transfer of "incidental" assets or items. In case after case the line has been drawn, but no single litmus test has ever emerged. Essentially the decision is a factual one, and it is impossible to abstract from the cases any single factor which is always decisive, or any principle so clear and explicit that it provides an unequivocal guideline for the way in which the issue will be decided. Thus, an apparent continuity of the business may not be significant if the alleged successor has already been engaged in a similar business, or has set up a "new" business which resembles the "old" one in many respects. In Ralph Ford Electrical, [1974] OLRB Rep. June 388, for example, several key employees of the alleged predecessor became dissatisfied and struck out on their own in competition with their former employer. In that case the Board found that there was not a transfer of a business, but rather the creation of a new "parallel" business which only incidentally made use of some of the tangible elements of the predecessor's business organization. Similarly, in Sunnybrook Food Mkt., [1974] OLRB Rep. Jan. 47 the continuation of a grocery business on the same premises, and with some of the same fixtures, was not enough to support a successorship finding. The Board was not satisfied that there had been a transfer and continuation of the predecessor's business (i.e., the business that he owns and operates) but simply the continuation of a like business. It is recognizable that so long as there is a market for a product, some entrepreneur is likely to appear who will produce for that market and, in so doing, he may share many of the characteristics of his alleged predecessor.

15. Did the alleged successor in this case obtain a part of the predecessor's business as would cause section 55 [now section 63] to operate? The answer is to be found in an examination of the two business organizations which existed prior to the transaction. In most section 55 [now section 63] applications, whether involving the alleged sale of the whole business or a part thereof, the nature of the alleged predecessor's business organization provides the ultimate answer. The Board identifies its essential elements and determines if sufficient of these have been transferred to the successor as to allow the business and the employment which it generates to continue. See Thunder Bay Ambulance Service, [1978] OLRB Rep. May 467 and Culverhouse Foods Limited, [1976] OLRB Rep. Nov. 691. However, if as in Canada Cement LeFarge, [1977] OLRB Rep. Jan. 5, and Darrigo Consolidated Holdings, [19801 OLRB Rep. Jan. 29, assets have been disposed of which are peripheral or unrelated to the business organization to which the bargaining rights at issue attach, the Board will not find that there has been a sale of a business within the meaning of the section.

With respect to Stucor not taking over any of Contractors' contracts, respondent counsel contends that Stucor, in having to start afresh to get contracts, was in the same predicament as the alleged successor business was in the Board's decision in Raymond Cote, [1968] OLRB Rep. March 1211. The Board saw that circumstance as an important factor in giving meaning to the word "business" in what is now section 63(2) of the Act. The Board's comments are at paragraph 6 of the decision and it is the emphasized, last sentence of the paragraph from which counsel draws his parallel with Stucor's circumstances:

The meaning to be attached to the word "business" depends to a great extent on the nature of the facts and circumstances in each particular case. It cannot be said that any one facet of an enterprise taken by itself necessarily comprises a business. It has been expressed that a business is "the totality of the undertaking". The physical assets of buildings, tools and equipment used in a business are not necessarily the undertaking per se but are, along with management and operating personnel and their skills, necessary in the operations to fulfill the obligations undertaken with a hope of producing a profit to assure its success. The total of these things along with certain intangibles such as good will constitute a business. In the instant case the equipment which Raymond obtained are the necessary tools for the performance of his contractural obligations but the equipment alone in this type of undertaking is not the business. It is essential in this particular type of endeavour to have the right to cut wood and a right to dispose of it. When Raymond obtained the contracts covering both of these ingredients he was in business and then was in a position to determine the ways and means of its operation. In this regard an important consideration is that Raymond did not take over his father's contracts but negotiated and obtained contracts for his own account and on the representation that he had commenced his own business.

In short, counsel argues that section 63 of the Act gives the Board jurisdiction to decide if there has been a sale and if what has been sold is a business. The cash proceeds from the liquidation of a business used to start a new business is not a sale of a business, and the section does not give the Board discretion to say that a liquidation of a business is a sale of the business.

13. The Board will not attempt to set out the detail of applicant counsel's argument, suffice to say the clear thrust of his argument may be stated briefly as follows. Stucor's entire capacity to carry on a business in the construction industry from its incorporation originated with Contractors. This is because of the following attributes of Contractors' business which counsel contends flowed through to Stucor. The reserves which had built up in Contractors were freed by its liquidation and provided Stucor with its starting working capital and the guarantees essential for its line of credit at the bank and for performance bonds which it needed in order to satisfy bid tender conditions. Stucor used the same bank branch as Contractors had used. The equipment which Stucor acquired from Contractors was sufficient for it to start business without acquiring more, having regard for the fact it continued Contractors' practice of renting most of its equipment requirements. Stucor also acquired all of the office furnishings needed to start business, leased some of the same space previously leased by Contractors and used the same telephone system as had been used by Contractors. The office staff, estimating capacity, field supervision and field forces with which Stucor started in business also came from Contractors and gave Stucor all of the management, technological and skill components needed to carry on the same kind of business, general contracting, as Contractors had at the scaled down level which Stewart said was his preference in remaining in the construction business. Most important of all, in applicant counsel's view, was the fact that Stucor got Stewart's personal reputation in the industry and with it the ability to attract business. Counsel submits that, on its facts, the instant case is a direct parallel to the Base Electric Co. Ltd., [1978] OLRB Rep. Feb. 140, and closely analogous to the Board's decision in Construction P. H. Grager Inc., [1985] OLRB Rep. Feb. 233. The Board found in both decisions, that there had been a sale of a business within the meaning of what is now section 63 of the Act. The first case was one in which the prior business was wound up because the four brothers who owned the corporation and operated the business no longer wanted to conduct business together. The new and old businesses were that of electrical contracting. Counsel relies on it, in part, for the proposition that the reason for cessation of the prior business is irrelevant to a finding that there has been a section 63 sale of a business. He relies on the second case for the same reason and, as well, for the proposition that there is no special significance to the fact that one of the parties to the alleged sale is a partnership. In P. H. Grager, the prior company, a sole proprietorship, had been taken out of business, as a condition of the owner entering into a three-way partnership in Construction P. H. Grager Inc., the new corporation. The old and new businesses were in heavy construction.

14. The relevant provisions of section 63 of the Act are as follows:

(I) In this section,

(a) business" includes a part or parts thereof;

(b) "sells" includes leases, transfers and any other manner of disposition and "sold" and "sale" have corresponding meanings.

(2) Where an employer who is bound by or is a party to a collective agreement with a trade union or council of trade unions sells his business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if he had been a party thereto and, where an employer sells his business while an application for certification or termination of bargaining rights to which he is a party is before the Board, the person to whom the business has been sold is, until the Board otherwise declares, the employer for the purposes of the application as if he were named as the employer in the application.

(3) Where an employer on behalf of whose employees a trade union or council of trade unions, as the case may be, has been certified as bargaining agent or has given or is entitled to give notice under section 14 or 53, sells his business, the trade union, or council of trade unions continues, until the Board otherwise declares, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union or council of trade unions is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement or the renewal, with or without modifications, of the agreement then in operation and such notice has the same effect as a notice under section 14 or 53, as the case requires.

15. The Board's decision in The Tatham Company Limited, [1980] OLRB Rep. Mar. 366, which issued between the Base Electric and P. H. Grager decisions relied on by applicant counsel, offers a thorough review of the Board's approach to and interpretation of section 63 up to that time. The analysis is found in paragraphs 19 through 26. While the analysis demonstrates application of the section to a broad array of circumstances, the Board in that case was dealing, in the end, with its application in a construction industry setting. It is not necessary to recite all of those paragraphs, but the last one nicely sets out the Board's dilemma every time it must decide whether what was sold, within the broad definition of "sale" in section 63, was a business. Therefore, it is useful to quote paragraph 26 of the decision:

16. All of the cases to which we have referred recognize that there are no easily administered mechanical tests which permit the Board to readily distinguish between a "mere sale of assets" and a sale of "part of a business." As the Board commented in Metropolitan Parking, Inc., 119791 OLRB Rep. Dec. 1194 at paragraph 34:

This distinction is easily stated, but the problem is, and always has been, to draw the line between a transfer of a 'business' or 'a part of a business' and the transfer of 'incidental' assets or items. In case after case the line has been drawn, but no single litmus test has ever emerged. Essentially the decision is a factual one, and it is impossible to abstract from the cases any single factor which is always decisive, or any principle so clear and explicit that it provides an unequivocal guideline for the way in which the issue will be decided.

The issue of employer successorship arises out of a seemingly endless variety of factual settings, with each new case presenting some of the factors considered relevant to the resolution of prior cases while raising other materially altered, entirely omitted, or newly-added facts which arguably should affect the decision on the merits. Much of the confusion which attends successorship results from the facility with which each case can be distringuished [sic] on its facts from all former cases; but to dismiss the confusion so lightly would be to disregard the fundamental differences inherent in the various business contexts in which the successorship issue arises. Factors which may be sufficient to support a "sale of business" finding in one sector of the economy may be insufficient in another. In some industries, particular configuration of assets - physical plant machinery and equipment - may be of paramount importance; while in others it may be patents, "know-how", technological expertise or managerial skills which will be significant. Some businesses will rely heavily on the goodwill associated with a particular location, company name, product name or logo; while for other businesses, these factors will be insignificant. The Labour Relations Act applies equally to primary resource industries, manufacturing, the retail and service sector, the construction industry and certain public services provided by municipalities and local authorities. In each of these sectors the nature of the business organization is different, yet in each case section 55 must be applied in a manner which is sensitive to both the business context and the purpose which the section is intended to accomplish.

16. It is evident also from the Board's analysis that the statutory purpose of section 63 has been a paramount influence on what inferences and conclusions are to be drawn from the factual context of a particular case and, ultimately on how subsection 1 of section 63 has been interpreted. Paragraph 20 of Tatham describes the purpose of section 63 thus:

17. Section 55 [now section 63] prevents the destruction of bargaining rights or a dislocation of the collective bargaining status quo, by transforming the institutional rights of the union and the collectively bargained rights of the employees into a form of "vested interest" which becomes rooted in the business entity, and like a charge on property, "runs with the business." To accomplish this objective, the statute gives a very special meaning to the word "sale", envisages that bargaining rights can be continued in a severable "part" of a business, abrogates the notion of privity of contract, and eliminates the significance of the separate legal identity of the new employer.

It can be seen from that decision as a whole, some of the case references in it and its analysis of how the Board has interpreted the section, that its purpose has caused the Board to give the definition of a sale of a business a liberal rather than narrow interpretation.

17. Against that background, the Board cannot agree with respondent counsel that the particular manner in which Contractors was liquidated precludes the Board from finding that there has been a sale of its business, or part of it, to Stucor. For similar reasons, the Board disagrees with applicant counsel that the reason why the prior business ceased is irrelevant to whether there has been a section 63 sale. Clearly, these are factors which the Board must weigh and, if nothing else, they may properly influence how the Board interprets the evidence before it and the inferences it will draw from the factual context of a particular case. This particular case is one where both the predecessor employer and its alleged successor carried/carry on a general contracting business, primarily in the industrial, commercial and institutional sector of construction. They obtained business by being the successful bidder in either public or invited tender situations. As the Board commented at paragraph 10 of P. H. Grager, supra, "..., the essence of a 'business' in a bid-oriented sector of the construction industry frequently resides in the experience and expertise of its management personnel, rather than, for example, in the physical assets such as tools or a specific location". This is because, to be financially successful, the business needs not only the ability to price and bid jobs successfully, but it must be able to execute the jobs within the self-imposed limits of the bid price. If it lacks expertise in either element, it is unlikely to be successful. Stucor, at its onset, obtained persons who had a proven track record with Contractors and, of course, Stewart knew precisely the quality of the skills he was getting. Kowalchuk and Thorpe provided Stucor with the expertise in estimating what a job would cost. If a job was successfully bid, Harvey, as manager of field operations in both businesses, had the overall expertise for organizing the materials, equipment and manpower to execute the job pursuant to the bid price. He also held the expertise to deal with the labour relations requirements of the business. VandeLarr provided the specialist skills of a project co-ordinator to see that these elements came together as planned and within the terms of the business contract with the client.

18. In P. H. Grager, supra, the Board found a sale of a business within the meaning of section 63 primarily on the transfer of management skills in the person of the sole proprietor of the unionized prior business to the new business formed by him and two other partners. Pierre Gratton, the sole proprietor who had shown some success in attracting jobs in the heavy construction sector, shelved his company in return for becoming one of three partners in a new enterprise in heavy construction. One of the other two partners provided all of the capital and his own expertise as an owner and operator of heavy construction equipment. The third partner was an expert in concrete forming construction. It was agreed they would be equal partners in the profits of the business. Except for the use of Gratton's home address to have the business registered in the Province of Quebec and the temporary use of his home telephone until a business telephone could be arranged, Gratton was the sole asset of the prior business acquired by the new one. In spite of the expertise which the other two partners brought to the new venture, the Board concluded the presence of Gratton's experience and expertise in bidding in the new business of which he is a partner, was a transfer to it of the chief assets of his prior company and enough to find ". . .that what has occurred on the facts of this case is a 'sale' of Mr. Gratton's 'business' to the new company... within the meaning of section 63 of the Labour Relations Act".

19. In the instant case, in addition to acquiring the experience and expertise of the four persons named above, Stucor got the experience and expertise of Stewart who gives direction to how the others' talents will be used by the business and who brings with him the ability to attract business and expertise in how to package job bids in order to do so. Stucor also acquired some of Contractors' fixed assets useful to a general contracting business, office furniture and fixtures, the use of its telephone system, and it operated its business out of part of the premises from which Contractors had operated its business. Furthermore, for the first two and one-half years, Stewart's new corporation benefitted from the use of the name "Stewart & Hinan" for the conduct of its business. In short, the elements of Contractors' business which were transferred to Stucor and are identifiable in its business were sufficient to enable Stucor to begin immediately to carry on substantially the same kind of general contracting business, although scaled down in size, involving performance of the same kinds of jobs and in the same market as had been the case with Contractors.

20. Having regard to the facts of this case, to the purpose of section 63 and the Board's established jurisprudence, the Board is satisfied that, within the meaning of section 63 of the Act, there has been a sale of part of the business of Stewart & Hinan Contractors Limited to Stewart & Hinan Contractors Corp., now operating as Stucor Construction Ltd.

21. In the result, Stucor Construction Ltd. is bound to the Operating Engineers Provincial Agreement which was in effect from May 1, 1984 to and including April 30, 1986, to the extent of the bargaining rights held at that time by the applicant.

22. In view of the Board's disposition of the application as it relates to section 63 of the Act, it is unnecessary for the Board to determine the application as it relates to section 1(4). Therefore, the application, insofar as it relates to section 1(4) of the Act, is dismissed with respect to Stewart & Hinan Construction Limited and Stucor Construction Ltd. There is no evidence that Resource Equipment Limited or Resource Rentak Ltd. has ever carried on business in the construction industry within the meaning of the Act. Therefore, the application, as against them, is dismissed.

23. The Registrar is directed to list the grievance referral in File No. 1403-85-M for hearing on its merits.