[1988] OLRB Rep. November 1149
0586-88-R International Brotherhood of Painters and Allied Trades, Applicant v. Dant Industries Limited, Dunwoody Limited, Warratt Holdings Inc., and One-Vinyl Window Mfrs. Ltd., Respondents
BEFORE: Robert D. Howe, Vice-Chair, and Board Members R. W. Pirrie and C. McDonald.
APPEARANCES: Murray Gold, Andrea Wickham and Tony Neil for the applicant; Walter Thornton, David Borwick and Paul Karl Heusser for the respondent One-Vinyl Window Mfrs. Ltd.; L. Frank Molnar and Apolonia D'Sa for the respondent Dunwoody Limited.
DECISION OF THE BOARD; November 25, 1988
This is an application under section 63 of the Labour Relations Act in which the applicant (also referred to in this decision as the "Union") contends that the respondent One-Vinyl Window Mfrs. Ltd. ("One-Vinyl") is the successor of Dant Industries Limited ("Dant"). The applicant initially indicated that, in the alternative, it was seeking declaratory relief under section 1(4) of the Act. However, during the course of final argument on October 28, 1988, counsel for the applicant indicated that his client was no longer relying on section 1(4). Accordingly, the application is hereby dismissed in so far as it pertains to section 1(4).
On October 28, 1988, the Board made the following unanimous oral ruling dismissing the application in relation to Dunwoody Limited (also referred to in this decision as "Dunwoody"):
At the request of the respondent Dunwcody Limited and with the consent of the applicant, this application under sections 1(4) and 63 of the Labour Relations Act is hereby dismissed in so far as it pertains to the respondent Dun-woody Limited. We are not, however, prepared to award costs to Dunwoody Limited. It is doubtful that we have jurisdiction to do so in this context. Moreover, the Board has a well established policy of declining to award costs, and we are not persuaded that we should depart from that policy in the circumstances of this case: see, generally, Radio Shack, [19791 OLRB Rep. Dec. 1220; Luciano D'Alessandro, [1987] OLRB Rep. July 986; and the cases cited therein. Academy of Medicine, [19771 OLRB Rep. Dec. 783, the case on which Dunwoody Limited relies in support of its request for costs, is clearly distinguishable from the instant case and, in any event, does not reflect the approach which has been followed by the Board since the Radio Shack decision.
The hearing of this matter commenced on August 29, 1988, and continued on October 20 and 28, 1988. During those three days of hearing, the Board heard oral evidence given by Paul Heusser, the President of One-Vinyl, and Ewe Manski, a Chartered Accountant who is a VicePresident of Dunwoody. In addition to the testimony of those two witnesses, we have before us extensive documentary evidence which was entered during the course of these proceedings. In making the findings of fact set forth in this decision, we have carefully considered all of that oral and documentary evidence.
Mr. Heusser is the principal of Windoor Replacement Limited ("Windoor"), which is in the business of replacing windows in old houses and performing other minor retrofit work. Mr. Heusser also serves as a consultant. He provided extensive consulting services to Dant in respect of its vinyl window business. Dant was owned by an individual named Lany Reisman. It operated out of 3135 and 3165 Unity Drive in Mississauga. Dant imported extruded plastic strips from Europe. To produce vinyl windows, Dant's employees cut those strips to the appropriate lengths and fused them together to form a frame for the glass. Weatherstripping and hardware (for opening, closing, and locking the windows) were also added during the production process. Although its primary business was vinyl windows, Dant also produced doors and door frames. Dant's major customer was Great Gulf Homes, which is owned by other members of the Reisman family. Mr. Heusser was retained as a consultant (through Windoor) prior to the formation of Dant. He helped Dant's principal to set up a plant and to obtain the proper machinery for it. He was also involved in selecting the materials to be used in production. He trained some of Dant's employees, including supervisors, office staff, and sales people. In carrying out his functions as a consultant, Mr. Heusser had contact with a number of Dant's customers, including Great Gulf Homes. Since the vinyl window frame components that Dant was importing from Europe proved to be unsuitable for the Canadian market, Mr. Heusser redesigned them for Dant. He also travelled to Europe to assist Dant's supplier in attempting to modify the frame components for the Canadian market and alleviate the problem of delayed shipments. (He was paid by the European company and its Canadian subsidiary for some of that work.) Dant gave Mr. Heusser the title of "Vice-President" for the purposes of dealing with Dant's employees and European contacts.
Dant experienced financial losses throughout its period of operation. In 1987 it lost approximately $900,000. Those financial difficulties culminated in Dant being put into receivership on February 15, 1988, with Dunwoody becoming Receiver and Manager pursuant to a security instrument held by The Royal Bank of Canada (the "Bank").
During the eight month period which preceded the receivership, Mr. Heusser spent approximately thirty-five hours per week providing consulting services to Dant. In addition to providing expert advice with respect to design and technical matters, he also became involved in labour relations matters on behalf of Dant; he disciplined employees, and assisted Dant in dealing with the application for certification that was filed by the Union in the fall of 1987. That application resulted in a certificate being issued by the Board (differently constituted) on November 24, 1987, for the following bargaining unit:
all employees of [Dant Industries Limited] in the City of Mississauga, save and except foremen, persons above the rank of foreman, office, clerical and sales staff, persons regularly employed for not more than 24 hours per week and students employed during the school vacation period.
Mr. Heusser was also involved in negotiations between Dant and the Union following certification.
The Bank petitioned Dant into bankruptcy on February 23, 1988, and a receiving order was made on March 3, 1988. During the period preceding the receivership, Dant had fifty-nine employees. In order to keep the business in operation so as to maximize its selling price, Dunwoody rehired thirty-five of them on a day to day basis, and paid them their regular hourly rate, plus the arrears of wages and vacation pay owed to them by Dant. Dunwoody also wished to rehire other Dant employees, but some of them were not interested in returning to work at Dant as a result of the manner in which they had been treated by Mr. Reisman, and as a result of other employment opportunities available to them. Dunwoody used the rehired employees to repair deficiencies and to complete some of the work which customers had ordered from Dant prior to the receivership. Dunwoody also entered into a major new contract with Great Gulf Homes, under which it agreed to produce $150,000 worth of vinyl windows for that customer.
For three or four years prior to Dant's receivership, Mr. Heusser had been in the process of designing his own vinyl windows. His windows differed in exterior width from Dant's windows, used different hardware (for opening, closing, and locking), and featured weatherstripping that was extruded with the frame, instead of being inserted later in the production process. Mr. Heusser's design also called for a harder vinyl to be used as framing, and for the glass to be installed right into the frame, without a sash. Prior to the receivership, Mr. Heusser had been negotiating with Dant with a view to having Dant manufacture his new windows. However, those negotiations ended without success, due to the receivership.
Mr. Heusser knew that Dant's facilities could be used to manufacture the vinyl windows which he had designed. However, he did not have the financial resources necessary to purchase them on his own. Consequently, he approached the principals of United Windows (an established manufacturer of wooden framed windows) to seek financial backing. United Windows then contacted Mr. Manski at Dunwoody. Subsequent discussions resulted in the arrangements described below. Warratt Holdings Inc. ("Warratt") was incorporated in February of 1988 by United Window's corporate lawyer. Warratt's name was subsequently changed to One-Vinyl Window Mfrs. Ltd. A shareholders' agreement provided for thirty of One-Vinyl's one hundred shares to be owned by Mr. Heusser, with fifty of them being owned by Mapledene Investments Inc. (a corporation owned by members of the DeBiasio family, who also own United Windows), and the remaining twenty shares being owned by Otterpond Holdings Inc. (a company owned by three persons employed by United Windows in finance and sales). It also provided for Mr. Heusser to be the initial President and Secretary of One-Vinyl. To purchase his thirty shares in One-Vinyl, Mr. Heusser made a financial investment in the company and also granted it the right to produce the vinyl windows which he had designed.
On March 11, 1988, One-Vinyl (under the name of Warratt) entered into an agreement with Dunwoody for the purchase of most of Dant's assets, including its goodwill and virtually all of its machinery, equipment, furniture, and work in progress, as well as some of its inventory and supplies. A nominal value of $1.00 was assigned to Dant's goodwill. Mr. Manski testified that this is quite standard. He also observed that "[tihere's not much goodwill in a company that just went bankrupt with a million dollar loss." The transaction between Dunwoody and One-Vinyl was completed on March 30, 1988. Dunwoody terminated all of the employees prior to that time.
One-Vinyl arranged to lease (from The Em Mills Development Corporation) the premises which had previously been occupied by Dant at 3165 Unity Drive ("3165"). Entering into such a lease was a condition precedent specified in the asset purchase agreement. 3135 Unity Drive ("3135") was not leased by One-Vinyl as it did not need that space. The equipment from 3135 was moved to 3165. The equipment which Dant had used at 3165 was also rearranged by One-Vinyl. This required some changes in the electrical, plumbing, and air handling systems. Some equipment modifications were also necessary to accommodate the new frames designed by Mr. Heusser. A mezzanine was added to the premises, and the offices were partitioned. One-Vinyl also arranged to use the same telephone number as had been used by Dant.
During its first few weeks of operation, One-Vinyl completed some of the work in progress and delivered it to former customers of Dant. It also performed deficiency work for a number of Dant's former customers, thereby facilitating the collection of some of Dant's accounts receivable, for which One-Vinyl received a commission of ten per cent from Dunwoody. After the vinyl windows designed by Mr. Heusser had been approved for use in construction, One-Vinyl solicited orders from a number of companies, including former customers of Dant. In its first four months of operation, One-Vinyl had sales of approximately $900,000, of which $600,000 came from former customers of D~ nt. Of the approximately $625,000 worth of work on order or completed as of August of 1988, over $375,000 came from former customers of Dant, with Great Gulf Homes remaining the major customer (accounting for about $260,000 of the $625,000).
One-Vinyl hired many persons who had been employed by Dant, including two of Dant's foremen (who were given additional responsibilities by One-Vinyl), Dant's plant manager (who, along with another of Dant's former foremen, joined One-Vinyl's sales staff), Dant's shipper (who continued to work as a shipper but was also given some quality control responsibilities), and many other bargaining unit employees. One-Vinyl also hired some of the office employees formerly employed by Dant, and Dant's stockroom worker (who became One-Vinyl's accounts receivable/accounts payable clerk). Sixteen of the nineteen persons who worked for One-Vinyl during its first payroll period (i.e., the period ending April 8, 1988) were former employees of Dant. As of July 28, 1988, twenty-two of One-Vinyl's forty employees were former employees of Dant. The employee turnover rate continued to be quite high, as it was while Dant was in operation.
Although the manufacturing process has been modified somewhat to reflect Mr. Heusser's new design, much of the work involved in producing the windows has not changed materially. Strips of extruded plastic are still cut to the appropriate length and fused to form a frame for the glass. Hardware (for opening, closing, and locking the window) is still added during the production process. Weatherstripping, on the other hand, is no longer added as it is now extruded with the frame. One-Vinyl also produces doors and door frames. The only difference between Dant's and One Vinyl's operations in that regard is that Dant used sub-assembled components to produce them, whereas One-Vinyl makes its own components.
It is the applicant's position that there has been a sale of a business, within the meaning of section 63 of the Act, from Dant to One-Vinyl (through Dunwoody), as a result of which the applicant was entitled to give One-Vinyl written notice of its desire to bargain with a view to making a collective agreement. Counsel for One-Vinyl, on the other hand, contends that his client merely purchased some of the assets of a bankrupt company, and did not acquire a functional economic vehicle. Thus, he asked the Board to dismiss this application on the basis that there has not been a sale of a business.
Metropolitan Parking, [1979] OLRB Rep. Dec. 1193, contains a detailed exposition of the history, purposes, and application of section 63 (then section 55). In that decision, the Board wrote, in part, as follows:
A more difficult question is whether it is the predecessor's "business" which has been transferred and continued by the successor or, alternatively, there has merely been a transfer of assets or other incidental elements of the business. Unlike The Successor Rights (Crown Transfers) Act, The Labour Relations Act does not contain a statutory definition of "business", and it is the Board, therefore, which must develop an appropriate meaning. In Raymond Cote, [1968] OLRB Rep. Mar. 1211 the Board commented:
"The meaning to be attached to the word 'business' depends to a great extent on 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 profit to assume its success. The total of these things along with certain intangibles such as goodwill constitute a business."
A business is a combination of physical assets and human initiative. In a sense, it is more than the sum of its parts. It is a dynamic activity, a "going concern", something which is "carned on." A business is an organization about which one has a sense of life, movement and vigour. It is for this reason that one can meaningfully ascribe organic qualities to it. However intangible this dynamic quality, it is what distinguishes a "business" from an idle collection of assets....
In determining whether a "business" has been transferred, the Board has frequently found it useful to consider whether the various elements of the predecessor's business can be traced into the hands of the alleged successor; that is, whether there has been an apparent continuation of the business - albeit with a change in the nominal owner. The Board in Culverhouse Foods Ltd., [1976] OLRB Rep. Nov. 691 (application for judicial review dismissed) commented:
"In each case the decisive question is whether or not there is a continuation of the business ... the cases offer a countless variety of factors which might assist the Board in its analysis; among other possibilities the presence or absence of the sale or actual transfer of goodwill, a logo or trademark, customer lists, accounts receivable, existing contracts, inventory, covenants not to compete, covenants to maintain a good name until closing or any other obligations to assist the successor in being able to effectively carry on the business may fruitfully be considered by the Board in deciding whether there is a continuation of the business. Additionally, the Board has found it helpful to look at whether or not a number of the same employees have continued to work for the successor and whether or not they are performing the same skills. The existence or non-existence of a hiatus in production as well as the service or lack of service of the customers of the predecessor have also been given weight. No list of significant considerations, however, could ever be complete; the number of variables with potential relevance is endless. It is of utmost importance to emphasize, however, that none of these possible considerations enjoys an independent life of its own; none will necessarily decide the matter. Each carries significance only to the extent that it aids the Board in deciding whether the nature of the business after the transfer is the same as it was before, i.e. whether there has been a continuation of the business."
- Of particular significance for a labour relations statute is the continuity of the work performed before and after the transfer, since the trade union is certified to represent certain work groups, the collective agreement regulates the conditions of work for employees in those groups, and the purpose of section 55 is to preserve both the bargaining relationship and the collective agreement. If the work performed subsequent to the transaction is substantially similar to the work performed prior to the transaction, there is normally a strong inference that there has been a transfer of the business within the meaning of section 55....
See also Krush, [1987] OLRB Rep. June 859; Shiffer-Hiliman Clothes, [1983] OLRB Rep. May 764; Grand Valley Ready Mixed Concrete Supply Limited, [1981] OLRB Rep. June 663; Sisman's of Canada Limited, [19801 OLRB Rep. July 1059; British American Bank Note Company Limited, [19791 OLRB Rep. Feb. 72; Dufferin Steel Company, Awico Division, [1976] OLRB Rep. March 81; and Aircraft Metal Specialists Limited, [1970] OLRB Rep. Sept. 702.
- The interposition of a third party such as a receiver acting as an agent or conduit does not preclude the Board from finding that a sale of a business has occurred: see Metropolitan Parking Inc., supra, at paragraph 28; Big Bear Storage, [1979] OLRB Rep. March 164; and Hughes Boat Works Incorporated, [1977] OLRB Rep. Dec. 815; application for judicial review dismissed (1979), 1979 CanLII 1853 (ON HCJ), 26 O.R. (2d) 420 (Div. Ct.). However, as indicated by the Board in Metropolitan Parking Inc., at paragraph 34, previous cases are of limited value in resolving the issue of whether or not a sale of a business has occurred, since it is essentially a question of fact:
.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 s 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.
Having regard to all of the evidence and the able submissions of counsel, we have concluded that there has been a sale of a business from Dant to One-Vinyl through Dunwoody. As noted above, One-Vinyl purchased most of Dant's assets, including virtually all of its machinery, equipment, furniture, and work in progress, and some of its inventory and supplies. It also purchased Dant's goodwill, although this was of minimal value in the circumstances of this case. The asset purchase agreement was made conditional upon obtaining a lease of part of the premises which Dant had occupied prior to being put into receivership. From those premises, One-Vinyl, with the assistance of a workforce initially comprised almost entirely of former Dant employees, generated revenue by completing work in progress and selling it to former customers of Dant. It also performed deficiency work for a number of Dant's former customers, thereby facilitating the collection of some of Dant's accounts receivable, for which One-Vinyl received a commission from Dunwoody. After the vinyl windows designed by Mr. Heusser had been approved for use in construction and the plant and equipment had been modified to produce them, One-Vinyl solicited orders from a number of companies, including former customers of Dant. Two-thirds of One-Vinyl's sales during its first four months of operation came from such customers. Other elements of continuity between Dant and One-Vinyl include the technical, product:ion, sales, and labour relations expertise of Mr. Heusser; the managerial skills of two of Dant's former foremen; and the telephone number of the business.
As contended by counsel for One-Vinyl, the right to produce the vinyl windows designed by Mr. Heusser is a valuable asset which One-Vinyl acquired not from Dant, but directly from Mr. Heusser. However, as submitted by Union counsel, innovation and product improvement are normal aspects of a business. In this regard we note that prior to the receivership, Mr. Heusser had been negotiating with Dant with a view to having Dant manufacture the new windows. But for the receivership, those negotiations might well have resulted in Dant gaining the right to manufacture the windows which are now being made by One-Vinyl. Dant's acquisition of that right from Mr. Heusser would not have terminated the Union's bargaining rights, and we are not persuaded that section 63 should be construed in such a manner that One-Vinyl's acquisition of that right from him will have that effect.
The facts of the present case are clearly distinguishable from those to which counsel for One-Vinyl referred in argument, including Dufferin Steel Company, Awico Division, supra, on which he placed considerable reliance. In that case, a change from production of ornamental iron and miscellaneous steel for a number of customers to production of plate for a single customer was found to support the contention of the alleged successor employer that there had been no sale of a business within the meaning of section 63, in a situation in which the alleged successor did not purchase raw materials, inventories or receivables from the predecessor; refused $700,000 worth of work on the books of the alleged predecessor; and did not employ persons in on-site erection and installation (i.e., the persons represented by the applicant trade union in that case) as the predecessor had done. Where (as exemplified by that case) contemporaneously with or immediately after completion of a transaction which is alleged to constitute a sale of a business, the alleged successor employer changes the character of the enterprise such that it is substantially different from the business of the alleged predecessor employer, this may result in a finding that no sale of a business has in fact occurred. However, to support such a finding, the change must be of a substantial nature, as indicated by the Board decisions in Provincial Fruit Company (Ottawa) Limited, [1975] OLRB Rep. Nov. 830 (in which the Board stated that a variation in the type of fruits and vegetables sold did not preclude a finding that there was a continuation of the business since both before and after the sale the employers were engaged in the sale by wholesale of fruit and vegetables); Culverhouse Foods Limited, [1976] OLRB Rep. Nov. 691 (in which the Board found successorship to have occurred despite an alteration in the type of vegetables canned); and Hughes Boat Works Incorporated, supra (in which the nature of the business was held to continue to be that of construction and sale of boats notwithstanding that there had been some design changes).
If a substantial change in the character of a business is made after the business has been sold but within the time frame specified in section 63(5) of the Act, that provision gives the Board a discretion to terminate the bargaining rights which have become binding upon the purchaser as a result of subsection (2) or (3). However, counsel for One-Vinyl expressly indicated that his client does not rely upon section 63(5), no doubt in recognition of the narrowness of that provision as described by the Board in Vaunclair Meats Limited, [1981] OLRB Rep. May 581, at paragraph 31:
Section 55(5) [now section 63(5)] provides for the termination of bargaining rights only where there has been a substantial change in the character of the business occurring within sixty days of the sale. Both the language and the context suggest that this exception to the general rule is intended to be an exceedingly narrow one. The temporal limitation also suggests that section 55(5) should only be applied to exceptional situations in which a person purchases a business organization then turns it into something quite different operating in an entirely unrelated labour and product market (a restaurant into a bowling alley, for example; or a tavern into an emporium for oriental rngs). In those circumstances, the successor is unlikely to have any intention of retaining the predecessor's employees, and it would make little sense to impose upon a new group of employees doing substantially different jobs, the wages and conditions negotiated with an entirely unrelated predecessor. In Winco Steak and Burger Restaurant Limited, [1974] OLRB Rep. Nov. 788, the Board suggested that any change which would make a business "substantially" different from the business of the predecesor, must necessarily involve "a fundamental difference, affecting the nature of the work requirements and skills involved in the business to the extent that continued representation by the trade union would be inadequate, inappropriate, or unreasonable in all the circumstances". We adopt that view.
In the instant case, a workforce which includes a substantial number of former Dant employees is using equipment that was formerly Dant's to manufacture vinyl windows, under the direction of some former members of Dant's management, at premises formerly occupied by Dant. As noted above, although the manufacturing process has been modified somewhat to reflect Mr. Heusser's new design, much of the work involved in producing the windows has not changed materially. Moreover, One-Vinyl also produces doors and door frames of the type produced by Dant, albeit by a process which requires some additional manufacturing of components which Dant purchased in subassembled form. Viewed as a whole, the evidence clearly indicates that One-Vinyl did not merely purchase assets, but rather acquired from Dant (through Dunwoody) a "business" within the meaning of section 63 of the Act. The evidence further indicates that there has not been a substantial change in the character of the business.
A petition has been filed with the Board by a group of employees in opposition to this application. In the context of an application for certification or an application for termination of a trade union's bargaining rights, such a petition generally prompts the Board to direct that a representation vote be taken, where the petition is numerically relevant and is duly proven to be voluntary (by means of oral evidence of the type contemplated by section 73(5) of the Board's Rules of Procedure). No one appeared on behalf of the group of employees at the hearing of this matter, nor did anyone seek to adduce evidence concerning the origination and circulation of the petition. Had anyone done so, the Board would not have permitted such evidence to be adduced, because a simple sale of a business such as the one which occurred in this case does not give employees an opportunity to terminate a trade union's bargaining rights. In declining to enquire into the voluntarmess of such a petition, the majority of another panel of the Board wrote, in part, as follows in Collingwood Fabrics Inc., [1985] OLRB Rep. Feb. 228 (after setting forth the facts of the case):
These facts disclose a section 63 "sale of a business" in its simplest form, and the respondent company, once it had retained the services of qualified labour counsel, was quick to acknowledge that. Since that time, however, a group of employees employed in the transferred operation, have flied a petition with the Board, indicating that, under the new management, they no longer wish to be represented by the applicant trade union. The only issue at the hearing before the Board, therefore, was the relevance and timeliness of that statement from employees.
Section 63 provides:
63.-(1) In this section,
(a) "business" includes a part or parts thereof;
(b) "sells" includes leases, transfers and any other manner of disposition, and "sold" and "sale" have corresponding meanings.
(2) Where an employer who is bound by or is a party to a collective agreement with a trade union or council of trade unions sells his business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if he had been a party thereto and, where an 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.
(6) Notwithstanding subsections (2) and (3), where a business was sold to a person who carries on one or more other businesses and a trade union or council of trade unions is the bargaining agent of the employees in any of the businesses and such person intermingles the employees of one of the businesses with those of another of the businesses, the Board may, upon the application of the any person, trade union or council of trade unions concerned,
(a) declare that the person to whom the business was sold is no longer bound by the collective agreement referred to in subsection (2);
(b) determine whether the employees concerned constitute one or more appropriate bargaining units;
(c) declare which trade union, trade unions or council of trade
unions, if any, shall be the bargaining agent or agents for the
employees in such unit or units; and
(d) amend, to such extent as the Board considers necessary, any certificate issued to any trade union or council of trade unions or
any bargaining unit defined in any collective agreement.
(8) Before disposing of any application under this section, the Board may make such inquiry, may require the production of such evidence and the doing of such things, or may hold such representation votes, as it considers appropriate.
(10) For the purposes of sections 5, 57, 59, 61 and 123, a notice given by a trade union or council of trade unions under subsection (3) or a declaration made by the Board under subsection (6) has the same effect as a certification under section 7.
Employee "petitions" are normally verified by the Board by conducting a representation vote, and as can be seen, subsection (8) provides the Board with a power to order the taking of a representation vote. As pointed out, however, in the recent case of Antonacci Clothes Inc., [1984] OLRB Rep. July 887, the Board has never considered it appropriate to have resort to such a vote other than in circumstances where subsection (6) (or, in the public sector, subsection (11)) applies. A simple sale of a business by itself, in other words, has not been viewed by the Board as an appropriate circumstance to place in question a trade union's bargaining rights. This is particularly so in light of the express terms of section 63(10), which create an over-ride of, inter alia, the "termination of bargaining rights" provisions of section 57 of the Act. Section 57 enables the Board, upon receipt of a voluntary "petition" signed by at least 45 per cent of the employees in the bargaining unit, to ascertain the current wishes of employees by way of conducting a representation vote. To give effect to the present petition by ordering a similar representation vote would seem to fly in the face of section 63(10).
See also Antonacci Clothes Inc., [1984] OLRB Rep. July 887, at paragraph 26:
On its face, section 63(8) gives the Board an unfettered discretion to direct a representation vote in the course of disposing of an application under section 63 of the Act; however, there are some logical limitations on the exercise of that discretion. A representation vote is intended and designed to determine representation issues. The existence of a sale of business settles the question of representation dealt with by subsections (2) and (3); a representation vote is of no assistance in determining whether a sale has occurred (see Vaunclair Meats Limited, supra, at ¶33) and the mere existence of a sale does not raise or make timely a reappraisal of representation rights....
Our conclusion concerning the irrelevance of the petition filed in this case does not, of course, preclude any employee in the bargaining unit from filing a termination application under section 57 of the Act when such application becomes timely.
- For the foregoing reasons, the Board hereby declares that a sale of a business from Dant to One-vinyl (through Dunwoody) occurred on or about March 30, 1988.