Textile Processors, Service Trades, Health Care Professional & Technical Employees International Union, Local 351 v. R. V. Campbell Commercial Laundry Services (1985) Inc., 1991 CanLII 6074

[1991] OLRB Rep. May 691

3033-89-R; 0141-90-R Textile Processors, Service Trades, Health Care Professional & Technical Employees International Union, Local 351, Applicant v. R. V. Campbell Commercial Laundry Services (1985) Inc., Select Laundry Limited, Select Commercial Laundries Inc., Respondents v. Peter Goodall, Intervener; Peter Goodall, Applicant v. Select Commercial Laundries Inc., and Textile Processors, Service Trades, Health Care Professional & Technical Employees International Union, Local 351, Respondents

BEFORE: N. B. Satterfield, Vice-Chair, and Board Members W. A. Correll and R. R. Montague.

APPEARANCES: L. Steinberg and C. Sookram for Textile Processors, Service Trades, Health Care Professional & Technical Employees International Union, Local 351; Thomas A. Stefanik, A. Amin Marfatia and Lee Davey for R. V. Campbell Commercial Laundry Services (1985) Inc., Select Laundry Limited, Select Commercial Laundries Inc.; C. J. Abbass and Peter Goodall for the applicant/intervener.

DECISION OF N. B. SATTERFIELD, VICE-CHAIR, AND BOARD MEMBER W. A. CORRELL; May 9, 1991

1. The names of the respondents in Board File No. 3033-89-R are amended to read: "R. V. Campbell Commercial Laundry Services (1985) Inc., Select Laundry Limited, Select Commercial Laundries Inc.

2. For reasons given below, Peter Goodall was added as an intervener to the application in Board File No. 3033-89-R.

3. In File No. 3033-89-R, the Textile Processors, Service Trades, Health Care Professional & Technical Employees International Union, Local 351 ("the union") claims that there was a sale of a business from R. V. Campbell Commercial Laundry Services (1985) Inc. ("Campbell") to Select Laundry Limited ("Select") and/or Select Commercial Laundries Inc. ("SCL") and asks for a declaration that Select and/or SCL are bound by the collective agreement between Campbell and the union which was in effect at the time of the sale. In the alternative, the union asks for a declaration pursuant to subsection 1(4) of the Act that Campbell, Select and SCL be treated as constituting one employer for the purposes of the Act. Peter Goodall, the applicant in File No. 0141-90-R also claims that there was a sale of business which took place on December 1, 1989 when Campbell and Select were purchased by SCL and asks the Board to determine whether Goodall and other employees of SCL constitute one or more appropriate bargaining units and, if so, order that a representation vote be held.

4. The first application was scheduled for hearing, but that hearing date was adjourned so that notice could be served on the parties of the second application. Both applications ultimately were listed for hearing together before this panel of the Board. At that hearing, counsel for Goodall claimed that he and two other persons employed by him were dependent contractors of SCL and, therefore, should the Board find that there has been a sale of a business from Campbell and/or Select to SCL, there would be an intermingling of Goodall and the other two employees with the employees of SCL who were the former employees of Campbell and Select. Counsel for Goodall advised the Board that Goodall was interested only in the issue of intermingling and would call evidence, if needed, and make argument only in respect of that issue. Discussions between the two applicants and the submissions of the parties to the Board on how to proceed resulted in the Board making Goodall an intervener in the application in File No. 3033-89-R, and in counsel for Goodall agreeing that his application be stood down. He subsequently advised the Board that he would not be proceeding with that application. In those circumstances, the proceedings in File No. 0141-90-R are terminated.

5. With respect to the request in File No. 3033-89-R for a declaration pursuant to subsection 1(4) of the Act, prior to the commencement of argument, counsel for the union advised the Board it would not be pursuing that part of its application. Accordingly, the application for a declaration that the three respondents be treated as constituting one employer for purposes of the Labour Relations Act is dismissed.

6. Counsel for the respondents took the position in his pleadings and in his opening statement that, should the Board find a sale of a business within the meaning of section 63 of the Act, there had been intermingling of the employees of the businesses within the meaning of subsection (6) of section 63 and asked the Board to direct the taking of a representation vote of those employees to determine whether they wished to continue to be represented by the union.

7. The Board heard the evidence of Amin Marfatia, owner of Campbell and witness for the respondents. He was forthcoming and candid and discharged fully the evidentiary onus of the respondents under subsection 63(13) of the Act. The essential facts derived from his evidence are not in dispute.

8. The events giving rise to this application began in the latter part of 1989. Prior to December 1, 1989 Campbell and Select operated commercial laundry businesses serving similar kinds of customers. As between them, there was no common ownership, control or direction. Campbell operated its business out of premises at 25 Windsor Street, Etobicoke and Select operated its business out of 433 Homer Avenue, Etobicoke. Campbell's full-time laundry employees are represented in collective bargaining by the union. Select's employees are unrepresented. When Marfatia was unable to renew Campbell's lease, his search for new premises brought him into discussions with the owner of Select. Their discussions eventually led to the execution of a letter of intent on November 14, 1989 to incorporate a new company, Select Commercial Laundries Inc., and be its equal owners. Some terms of the letter are:

(1) An agreement that Campbell and Select shall transfer, assign and/or sell the following assets to SCL:

(a) goodwill, customer lists, business operations and the exclusive rights to the names of Campbell and Select;

(b) all business furnishings.

(2) Select shall convey to SCL all of its rights in its lease at 433 Homer Avenue.

(3) SCL shall have absolute rights to the use of all of the furnishings and equipment to be transferred from Campbell and Select.

(4) All equipment and furnishings transferred from Campbell and Select shall be physically located at 433 Homer Avenue.

9. SCL was incorporated by Articles of Incorporation effective November 28, 1989. Campbell and Select ceased operating their respective laundry businesses on November 30, 1989 and paid off all of their employees. On December 1, 1989 SCL commenced operations at 433 Horner Avenue, hiring all of the former employees of Campbell and Select and using the equipment, furnishings and premises formerly used by Select in the operation of its business. SCL continued serving the former customers of Campbell and Select from those premises using the equipment and furnishings formerly used by Select and the equipment and furnishings of Campbell as soon as they could be accommodated at that location. All of Campbell's and Select's former businesses were carried on by SCL on and after December 1st.

10. At December 1st, SCL employed five full-time and five part-time former employees of Campbell and eight to ten full-time and ten part-time former employees of Select. The evidence about Goodall is limited and establishes little more than that he was an employee of Select until November 30th and beginning December 1st he took a subcontract from SCL to do the washing, using the same equipment on which he had worked as an employee of Select. He later hired two persons who were not employees of Select. From the date of its incorporation on November 28th to and including November 30th, SCL had no employees. The only employees hired by SCL during December were the former employees of Campbell and Select.

11. Campbell and the union were bound to a collective agreement in effect on the December 1st transaction date under which the union was the exclusive bargaining agent for Campbell's full-time laundry employees. As at December 1st, SCL employed five former full-time employees of Campbell and ten former full-time employees of Select. Approximately six months later, SCL's full-time employees consisted of four former employees of Campbell, six former employees of Select and one person hired to replace a former Campbell employee who left employment from SCL.

12. On those facts, the parties agreed that the letter of intent executed by Campbell and Select and the Articles of Incorporation issued to SCL are evidence that there has been a sale of Campbell's business to SCL within the meaning of section 63 of the Act, and the Board so finds. The remaining issue is whether there has been an intermingling within the meaning of subsection 63(6) of the Act of the employees of Campbell's business with those of any other business carried on by SCL. If so, the parties agree that the Board should direct the taking of a representation vote. The Board accepted their agreement, therefore it did not receive evidence or argument respecting any other form of remedy. Subsection 63(6) and other relevant subsections provide as follows:

63.-(1) In this section,

(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.

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

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

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

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

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

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

(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 business with those of another of the businesses, the Board may, upon the application of 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.

13. Counsel for the union argues that there has been no intermingling of employees within the meaning of subsection 63(6) of the Act on the following grounds. The subsection establishes three preconditions in order for there to be an intermingling of employees. These are:

(1) the person to whom the business is sold must carry on one or more other businesses;

(2) a trade union must be the bargaining agent for employees of one of those businesses; and

(3) the person to whom the business is sold must intermingle the employees of one of the businesses with those of another of the businesses.

Counsel takes the position that those conditions and the language of the subsection require the purchaser of the unionized employer (SCL) to have a pre-existing business in order for subsection 63(6) to apply. It cannot be an intermingling unless the employees of an employer who were represented by a trade union are intermingled with the employees of a company of the purchaser. On the facts of this application there is no intermingling; what has happened is more akin to an accretion to the bargaining unit inherited by the purchaser. Therefore, the Board ought to respect the fundamental purpose of subsection 63(2) and preserve the union's bargaining rights. This is so according to counsel, because there has been no sale of Campbell to Select. Campbell has been sold to SCL and SCL as purchaser is the "person" who, pursuant to subsection 63(6), must be carrying on one or more businesses. On November 28th when SCL was incorporated, it was nothing more than a corporate entity. It had no business and no employees. Section 63 preserves the union's bargaining rights as at the date of sale which, in this case, was at the moment of incorporation of SCL on November 28th. Since SCL did not have any business or any employees until December 1st, there could be no intermingling regardless of where the employees came from on December 1st. On those grounds, counsel concludes that there has been no intermingling within the meaning of subsection 63(6). Rather, there has been an accretion to the bargaining unit described in the collective agreement to which SCL became bound because of the sale and the union's bargaining rights should flow through to SCL.

14. Counsel referred the Board to the following decisions in support of his argument:

Bermay Corporation Limited, [1980] OLRB Rep. Feb. 166; Caressant Care Nursing Home of Canada Limited, [1984] OLRB Rep. Aug. 1060; Antonacci Clothes Inc., [1984] OLRB Rep. July 887; and Daynes Health Care Limited, [1985] OLRB Rep. March 387.

15. In Bermay Corporation Limited, a unionized business, Goldcrest, was purchased by Bermay, a non-union business. Bermay moved its employees into Goldcrest's premises. In a prior decision, the Board had found that to be an intermingling within the meaning of subsection 63(6) of the Act and directed that a representation vote be taken. The decision on which union counsel is relying deals with a later request of Bermay to have the vote set aside, which raised an issue of whether the union's collective agreement which had been binding on Goldcrest at the time of the sale was still binding on Bermay. Counsel relies substantially on the Board's comments at paragraph 26 which he submits are made in response to the argument that the collective agreement should be terminated:

16. ... The only part of [section 63] which specifically empowers the Board to declare that a collective agreement is no longer binding on a successor employer is subsection 6(a). That is to say that the discretion only comes into play when there has been an intermingling of employees. When a unionized business is transferred to an employer who does not introduce employees from another business into the bargaining unit of predecessor employees, the Board does not have a discretion to declare that a collective agreement no longer binds the successor employer. Nor does the Board have that discretion when the sale of a business has occurred and all of the employees are either newly hired by the successor employer or entirely transferred from another of its businesses. The discretion arises only when there has been a mixing of employees from another business with the employees of the transferred business. In that circumstance the ability to declare a collective agreement no longer binding is a necessary part of the Board's jurisdiction to resolve conflicts in bargaining rights. The intermingling of employees is the linchpin of the Board's jurisdiction to declare a collective agreement no longer binding....

[emphasis added]

Counsel points to the fact that the Board is saying that it only acquires a discretion under subsection 63(6) where there has been an intermingling. Counsel emphasizes that the Board in Bermay was recognizing that there is no intermingling when "... a unionized business is transferred to an employer who does not introduce employees from another business into the bargaining unit of predecessor employees, or when the sale of a business has occurred and all of the employees are either newly hired by the successor employer or entirely transferred from another of his businesses.". According to counsel, the latter of those two conditions describes this case on its facts. In order for there to be intermingling within the meaning of subsection 63(6), he contends, there must be a mixing of employees from the unionized business which was sold with the employees of the purchaser, as would have been the case on these facts had Campbell been sold to Select instead of to a new third company set up by them. That would have been a classic intermingling, but it does not arise where, as here, the unionized business was sold to a newly created entity which has no business and no employees.

16. In Caressant Care, supra, the Board was dealing with a situation where one nursing home operator, Caressant Care, took over the license of a prior nursing home, Willson, and combined the licenses of Caressant Care and Willson in a new facility. The former employees of Willson were intermingled in the new facility with the employees of Caressant Care. The Board found that to be a subsection 63(6) intermingling. Counsel relies in particular on the following extract from paragraph 32 of the decision in support of his argument that the purchaser must have one or more businesses which pre-exist the sale in order for there to be an intermingling under subsection 63(6):

17. ... The applicant relies chiefly on the comments of the Board in Bermay Corporation Limited, [1980] OLRB Rep. February 166. At paragraph 26 of that decision, the Board commented on the discretion given it under section 63 (then 55) subsection (6) as follows:

……the discretion only comes into play when there has been an intermingling of employees. When a unionized business is transferred to an employer who does not introduce employees from another business into the bargaining unit of predecessor employees, the Board does not have a discretion to declare that a collective agreement no longer binds the successor employer. Nor does the Board have that discretion when the sale of a business has occurred and all of the employees are either newly hired by the successor employer or entirely transferred from another of its businesses. The discretion arises only when there has been a mixing of employees from another business with the employees of the transferred business....

We agree with that statement. All three examples referred to by the Board do not deal with cases of two businesses being merged or "intermingled". They deal with the staffing and operation of one business only. The first example is the simplest, where no new employees whatever are used to staff the purchased business. The second example is where all employees are hired "off the street", as it were, to staff the purchased business. And the third is where the purchased business, once again, is not being run in an integrated way with another business owned by the purchaser, but the purchaser uses employees from that other business to staff the new business nonetheless. None of these are cases of "intermingling", within the meaning of section 63(6), and none of these give rise to the forms of relief which that subsection provides. Indeed, where a business covered by a collective agreement is purchased and is not expanded by or integrated with the work provided by a second existing 'business', it is difficult to see how the provisions of section 63(6) can be meant to apply at all, irrespective of where the employees may be drawn from. A purchasing employer does not, in other words, create a situation where the bargaining rights attaching to a single, newly-acquired business are called into question simply by supplementing the bargaining unit with employees not previously covered by the collective agreement, whether those employees are selected from "off the street", or from an entirely different location of the employer. A purchaser dealing with a single business is in the same shoes as the vendor vis-a-vis the collective agreement....

[emphasis in the original]

Counsel focuses in particular on the Board's comments that there is no intermingling within the meaning of subsection 63(6) "... where the purchased business, ..., is not being run in an integrated way with another business owned by the purchaser, but the purchaser uses employees from that other business to staff a new business nonetheless." [emphasis in the original], and the further comment that, "... where a business covered by a collective agreement is purchased and is not expanded by or integrated with the work provided by a second existing 'business', it is difficult to see how the provisions of section 63(6) can be meant to apply at all, irrespective of where the employees may be drawn from.".

17. Counsel reads both Bermay and Caressant Care, supra, to stand for the proposition that, if the Board is to have the discretion to grant relief under subsection 63(6), it requires the purchaser to intermingle employees of the purchased business with employees of a pre-existing business run by the purchaser. In other words, in order for there to be intermingling within the meaning of subsection (6), the purchaser must have carried on one or more businesses prior to the sale and, after the sale, mixed one or more of them with the business and employees of the purchased company. There is no intermingling where the purchaser has no pre-existing employees and business. Therefore, on our facts, counsel contends that there is no intermingling because the employees of Campbell and Select are new employees entering the existing bargaining unit inherited by SCL from Campbell with the purchase of Campbell's business.

18. In Antonacci , supra, there was a sale of the production function of a clothing supplier to Antonacci, a company incorporated for the purpose of acquiring that part of the vendor's business. The purchaser Antonacci hired some of the vendor's former employees and some new employees and merged them. It was argued that this was an intermingling pursuant to subsection 63(6). The Board found that there was no intermingling and, on the way to that conclusion, commented as follows at paragraphs 27 and 28:

19. ... We do not understand the quoted references to "new employees" as suggesting that the Board will order a representation vote whenever a successor employer hires, at or shortly after the time of a sale, persons who were not previously employed by the predecessor employer. The "new employees" referred to by the Board in Bermay Corporation Limited were employees hired simultaneously with the consolidation by Bermay of its existing furniture business with the business it purchased from Goldcrest and the consequent intermingling of Bermay's former employees with employees formerly employed by Goldcrest. The Board's resort in Bermay Corporation Limited to its powers under section 63(6) did not depend on the presence or absence of "new employees", but on the intermingling of employees identified with the two pre-existing bargaining units. It may not have been possible, and in any event was not necessary, for the Board to determine whether the "new employees" represented an accretion to one or other or both of those pre-existing bargaining units. The important fact was that the merger of businesses had made it necessary to redefine bargaining units and, as a result, bargaining rights; it was that exercise, and not the hiring of "new employees", which created the representation issue to which the Board responded by ordering a representation vote.

20. In this case, the respondent Antonacci Clothes came into existence for the purpose of engaging in the transaction which we have found constituted a sale of business within the meaning of section 63. The only business in which this respondent has engaged is the business it purchased from British Brand. All its employees can therefore be described as falling within the "like" bargaining unit in respect of which the applicant's bargaining rights are preserved by our finding that there has been a sale of business. If one disregards the change in ownership of the business in question, the situation here is this: a small number of the employees employed in the business prior to February 1st are no longer employed in it, and another, larger, number have since been hired to work in the business. Those circumstances would not normally give rise to a question of representation, unless it were a question raised in a timely manner by the employees themselves. The fact that some employees are new to the unit is of no more consequence than it would have been had the ownership of this business remained unchanged. The change of ownership does not change that result where, as here, the sale of business has not itself created circumstances which give rise to a question of representation.

Counsel points out that the Board in Antonacci found that there was no intermingling when the purchaser, Antonacci, hired some of the vendor's former employees and brought them together with employees newly hired by Antonacci after the bargaining rights of the union for the predecessor's employees had transferred to Antonacci as a result of a section 63 sale of the business. SCL, like Antonacci, was created to be the purchaser of the businesses of Campbell and Select. As a result of the purchase of Campbell's business, the union's bargaining rights for Campbell's employees had transferred to SCL pursuant to section 63. The former employees of Campbell and Select were hired by SCL and merged in its business. According to counsel, that is no different than what took place in Antonacci and, like Antonacci, does not constitute an intermingling within the meaning of subsection 63(6).

19. In Daynes, supra, Daynes was a nursing home operator which acquired the nursing home license of another operator whose employees were represented by a trade union. The license was used for a new nursing home facility operated by Daynes. It hired employees from another of its nursing homes to staff the facility. The Board found that the transfer of the license was a section 63 sale of a business and, as a result, Daynes was obligated to staff the new facility with employees of the predecessor nursing home operator. That gave rise to an issue of whether the mixing of those employees with the employees of another nursing home business of the purchaser who were already employed at the new facility was an intermingling under subsection 63(6). The Board found it was not because there had not been an intermingling of two or more businesses, only an intermingling of employees. That circumstance did not satisfy subsection 63(6) and it was distinguishable from the circumstances in Caressant Care, supra, where the Board had found intermingling.

20. The argument of counsel for the respondents runs as follows. SCL did three things which make this application a classic case of intermingling. These were:

(1) it bought the businesses of both Campbell and Select;

(2) it hired the employees of both Campbell and Select; and

(3) it put the businesses and the employees physically together at Select's former premises and operated the merged businesses from there.

Counsel argues further that there was no sale on November 28th, as argued by counsel for the union. A section 63 sale is about a sale, transfer or other disposition of a business. All that happened on November 28th was SCL's incorporation. That is simply an historical event and not a sale, transfer or other disposition of a business. On December 1st, there was at least a sale of part of a business with the hiring by SCL of the former employees of Campbell and Select and the commencement of laundry operations at 433 Homer Avenue. On the basis of that sale, subsection 63(6) falls into place because Campbell and Select each sold its business to SCL and the employees of one business, Campbell, had a trade union as their bargaining agent and SCL intermingled those employees with the employees of Select who were not represented by any trade union. SCL then carried on those businesses under one corporate umbrella. The fact that SCL was newly incorporated for purposes of the purchase does not prevent the Board from finding an intermingling of the businesses and employees of Campbell and Select within the meaning of subsection 63(6). Counsel asked the Board to consider what would be the result if Select's employees had been represented by a trade union, but not the same one which represented Campbell's employees. It would be said in those circumstances that the bargaining rights of those employees flow through to SCL and it would have two unions claiming bargaining rights for the former employees of both employers. That would cause the Board to direct the taking of a representation vote. It should be no different when, instead of two competing bargaining agents, there is a group of employees represented by a trade union and another group of employees unrepresented. In either situation subsection 63(6) would apply. The second situation is the case at hand, counsel submits.

21. Turning to the case law, counsel points out that the example of "no intermingling" cited in Caressant Care, supra, on which union counsel is relying is not the instant case. This is because SCL owns the businesses formally owned by Campbell and Select and is running them in an integrated way. Counsel submits that the instant case matches the example given in the following extract from paragraph 32 of that decision where there is a union business and a non-union business and both are bought and integrated by the purchaser:

The focus of section 63 is on the business, and it is the practical problem of running two integrated businesses, either each ostensibly under a different collective agreement, or one under a collective agreement and one "non-union", which would appear to have prompted the Legislature to provide the relief contemplated by subsection (6). And consistent with this rationale behind the subsection, it is only the employees of the business that was sold which continued to be covered by the collective agreement, just as in subsection 3 a trade union "continues 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.

22. Counsel points out that, at paragraph 19 of Bermay, supra, the Board states that section 63(6) is designed to deal with the need to make adjustments when the non-union employees of the successor employer are intermingled with employees whose terms and conditions of employment have been regulated under the collective agreement handed down from a predecessor employer. Counsel submits that, if union counsel is correct in his argument that there is no intermingling when a new entity is the purchaser, there could never be intermingling when a new entity is created to be the purchaser.

23. Counsel for the respondents distinguishes Daynes and Antonacci, supra, on their facts. Counsel claims that this can be seen from the Board's reasoning at paragraph 12 of Daynes and at the middle of paragraph 28 of Antonacci.

24. In summary, counsel for the respondents argues that the creation of SCL as the purchaser of a union business and a non-union business cannot take this case out of subsection 63(6) when the businesses are still carried on after the sale.

25. Counsel for the intervener adopts the argument of counsel for the respondents. In addition, counsel submits that section 63 deals with businesses and in this case there was no period when businesses were not being carried on. Campbell and Select operated their businesses until November 30th. Campbell's employees moved to SCL and worked along side of Select's employees, using Select's equipment at first and then their own equipment after it was transferred to Select's former location. Were the Board to allow the union's argument in those circumstances, it would result in a grab of bargaining rights by the union which the Legislature did not intend section 63 to allow. Allowing the union's argument would also have the effect of denying Goodall and other employees the chance to say whether they want the applicant to represent them and that would be contrary to the purpose of subsection 63(6).

26. Union counsel's rebuttal argument runs as follows. First, subsection 63(4) of the Act provides a remedy for the problems created by the facts of the hypothetical situation posed by counsel for the respondents. Therefore, in circumstances where two unionized businesses are purchased by a newly created entity, there would be no need to rely on subsection 63(6). Instead, the remedy would be provided by subsection 63(4). Second, with respect to the Board's observation at paragraph 19 of Bermay, supra, that subsection 63(6) is designed to deal with the need to make adjustments when the non-union employees of the successor employer are intermingled with employees whose terms and conditions have been regulated under the collective agreement handed down from the predecessor employer, the Board's cases say that the subsection can only operate when the purchaser has a pre-existing business and pre-existing employees who are not represented by a trade union. In the instant case the purchaser, SCL, had neither a business nor employees to intermingle with Campbell's business and employees, whether the transaction is examined at November 28th or December 1st. Finally, subsection 63(6) is there to protect existing employees of the purchaser, not new employees, therefore it does not come into play in the circumstances of this application, according to union counsel.

27. As the Board stated at the outset of this decision, the application in File No. 3033-89-R sought a declaration of a sale of a business from Campbell to SCL pursuant to section 63 of the Act, or alternatively, a declaration under subsection 1(4) that they be treated as constituting one employer for purposes of the Act. The two sections are commonly pleaded in that manner, whether in a single application like this one, or in separate applications. This is not surprising because, to a certain extent subsection 1(4) and section 63 are complementary. See The Charming Hostess Inc., [1982] OLRB Rep. April 536, at paragraph 40, wherein the Board observed that "...[b]oth sections are designed to preserve the collective bargaining status quo despite commercial transaction[s] which alter the legal identity of the employing entity, and would consequently undermine established bargaining rights.". While subsection 1(4) gives the Board a broad discretion to remedy mischief in the form of the frustration or erosion of bargaining rights which might result where two or more entities carry on associated or related activities or businesses under common control or direction, section 63 operates to preserve the effects of certification or collective agreements when the legal identity of the employer has changed because of a sale of a business within the meaning of subsection 63(1) of the Act until the Board otherwise declares. The Board described that effect of section 63 as follows in Marvel Jewellery Limited and Danbury Sales (1971) Ltd., [1975] OLRB Rep. Sept. 733:

Section [63] recognizes that collective bargaining rights, once attained, should have some permanence. Rights created either by the Act, or under collective agreements, are not allowed to evaporate with a change of employer. To provide permanence, the obligations flowing from these rights are not confined to a particular employer, but become attached to a business. So long as the business continues to function, the obligations run with that business, regardless of any change of ownership.

28. Unlike the Board's broad discretion under subsection 1(4) to deal with the consequences of a finding that two or more entities carry on associated or related activities under common direction or control, when the Board finds that there has been a section 63 sale of a business, the successor employer is bound until the Board declares otherwise. Subsections (4), (5), (6) and (8) provide particular bases on which the Board might declare that a collective agreement or collective bargaining rights no longer bind a successor employer. The issue in this application is whether, because of the circumstances of the sale, the Board has the discretion which comes with a finding that there has been an intermingling of employees within the meaning of subsection (6). If it has that discretion, since the Board has accepted the agreement of the parties that the appropriate relief would be to direct the taking of a representation vote, a discretion it has under subsection (8), the Board would exercise its discretion in clause (a) of subsection (6) to declare that SCL is no longer bound to the union's collective agreement with Campbell should a majority of the eligible voters who cast ballots express the wish not to be represented any longer by the union in their employment relations with SCL. Should a majority express the contrary wish, the union's bargaining rights under the collective agreement would continue in force until terminated by operation of other sections of the Act, for example, by a successful application made under subsection 57(2) by bargaining unit employees for termination of the union's bargaining rights. Such an application can be made during the "open" period of the collective agreement. However, upon the application of any "... person, trade union or council of trade unions concerned,...", under subsection 63(6) the Board can direct the taking of a representation vote under subsection 63(8) in order to decide whether the remedy in clause 63(6)(a) should be granted, and in effect, this advances the time when the union's bargaining rights otherwise could be challenged under the Act. See Antonacci, supra, at paragraph 24.

29. The legislative rationale for subsection (6) was discussed by the Board in Caressant Care, supra, at paragraph 32. The discussion follows immediately upon the passage quoted above at paragraph 16 on which union counsel relies and part of the discussion appears at the start of the passage relied on by counsel for the respondents which is quoted at paragraph 21 above. Therefore, the Board will set out the entire paragraph in order to put the discussion in context. The discussion is the text between the [ ]:

30. But the applicant argues that any and all employees of Caressant Care in the City of St. Thomas were covered by the scope clause of the collective agreement it "inherited", so that no "intermingling" of union and non-union businesses or employees could be said to have taken place subsequently. The Willson agreement states that it applies to:

All employees of the Willson Nursing Home Limited at St. Thomas, Ontario, save and except supervisor, persons above the rank of supervisor, registered nurses, persons regularly employed for not more than twenty-four hours per week, students employed during the school vacation period and office staff and,

All employees of the Willson Nursing Home Limited at St. Thomas, Ontario, regularly employed for not more than twenty-four hours per week and students employed during the school vacation period, save and except supervisors, persons above the rank of supervisor, registered nurses and office staff.

The applicant relies chiefly on the comments of the Board in Bermay Corporation Limited, [1980] OLRB Rep. February 166. At paragraph 26 of that decision, the Board commented on the discretion given it under section 63 (then 55) subsection (6) as follows:

……the discretion only comes into play when there has been an intermingling of employees. When a unionized business is transferred to an employer who does not introduce employees from another business into the bargaining unit of predecessor employees, the Board does not have a discretion to declare that a collective agreement no longer binds the successor employer. Nor does the Board have that discretion when the sale of a business has occurred and all of the employees are either newly hired by the successor employer or entirely transferred from another of its businesses. The discretion arises only when there has been a mixing of employees from another business with the employees of the transferred business....

We agree with that statement. All three examples referred to by the Board do not deal with cases of two businesses being merged or "intermingled". They deal with the staffing and operation of one business only. The first example is the simplest, where no new employees whatever are used to staff the purchased business. The second example is where all employees are hired "off the street", as it were, to staff the purchased business. And the third is where the purchased business, once again, is not being run in an integrated way with another business owned by the purchaser, but the purchaser uses employees from that other business to staff the new business nonetheless. None of these are cases of "intermingling", within the meaning of section 63(6), and none of these give rise to the forms of relief which that subsection provides. Indeed, where a business covered by a collective agreement is purchased and is not expanded by or integrated with the work provided by a second existing "business", it is difficult to see how the provisions of section 63(6) can be meant to apply at all, irrespective of where the employees may be drawn from. A purchasing employer does not, in other words, create a situation where the bargaining rights attaching to a single, newly-acquired business are called into question simply by supplementing the bargaining unit with employees not previously covered by the collective agreement, whether those employees are selected from "off the street", or from an entirely different location of the employer. A purchaser dealing with a single business is in the same shoes as the vendor vis-a-vis the collective agreement.

[It is true that the subsection speaks of the purchaser intermingling the employees of one business with those of another. But that appears to be simply a more precise way of referring to the intermingling of the businesses themselves: it is in fact the "employees" of the businesses who are capable of being "intermingled". The focus of section 63 is on the business, and it is the practical problem of running two integrated businesses, either each ostensibly under a different collective agreement, or one under a collective agreement and one "non-union", which would appear to have prompted the Legislature to provide the relief contemplated by subsection (6). And consistent with this rationale behind the subsection, it is only the employees of the business that was sold which continue to be covered by the collective agreement, just as in subsection 3 a trade union "continues 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". That subsection provides:

(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.

Were it otherwise, i.e., if the collective agreement or bargaining rights immediately applied to the employees of both businesses upon an intermingling, the language of subsection (6) would mean in a "two-union" situation that both collective agreements would apply to all employees of both businesses "until the Board otherwise declares", with whatever conflicting liabilities might arise from that for the employer pending a determination by the Board. We do not think that that is what the Legislature intended.]

Indeed, this precise point was one of the early ones which the Board had to decide under the 1970 amendments preserving collective agreements in addition to bargaining rights, in the case of Bryant Press Limited, [1977] OLRB Rep. April 301. There similar businesses of the vendor, McCorquodale and Blades, and of the purchaser, Bryant Press, were merged at one location, and the Board wrote:

5. Counsel for the [trade union] submits that the collective agreement between the Itrade union] and McCorquodale & Blades bound not only the former composing room and proof room employees of the latter company, but also was binding upon the composing room and proof room employees of Bryant, since Bryant, by the provisions of subsection (2) of section 55, in effect, became a party to the collective agreement and its composing room and proof room employees fall within the recognition clause of the agreement. This being so, counsel submits there has not been an "intermingling" of employees as contemplated by subsection (6) of section 55 and accordingly there is no basis for the Board to make any other declaration than that the [union] acquired the bargaining rights for the composing room and proof room employees of both the vendor and purchasing companies as a result of the sale by virtue of the [union's] collective agreement with the vendor.

6. Subsection (2) of section 55 provides that the purchaser of a business is bound by a collective agreement entered into by the vendor as if he had been a party thereto. The parties to the collective agreement in the instant case were the respondent and McCorquodale & Blades and the employees bound by the agreement prior to the sale were the composing room and proof room employees of McCorquodale & Blades. As we read subsection (2), it is implicit in the language of the subsection that the employees bound by the collective agreement subsequent to a sale are only those employees who were bound by the collective agreement prior to the sale. [Emphasis added] In the instant case this means the former composing room and proof room employees of McCorquodale & Blades. The above interpretation of subsection (2), moreover, is consistent with the purpose of section 55 which is to preserve existing bargaining rights held by a trade union as a result of the sale of a business. The intent of the section was not to give to a trade union bargaining rights which it had not previously held. We would further point out that subsection (3) lends support to the above interpretation of subsection (2). More particularly, subsection (3) provides that a trade union which holds bargaining rights for a unit of employees of a vendor continues to hold those bargaining rights for the employees of the purchaser in the like bargaining unit. By analogy with subsection (3), the unit of employees covered by a collective agreement which becomes binding upon a purchaser under subsection (2) would also be the employees in the like bargaining unit. For the foregoing reasons, we cannot accept the interpretation placed on subsection (2) of section 55 by counsel for the [Union]. We find rather that as of the date of the sale of the business of McCorquodale & Blades and Bryant on March 15, 1971, the collective agreement to which Bryant became a party by reason of the sale only remained binding on the former employees of McCorquodale & Blades. Accordingly, once the intermingling of the employees of the two companies commenced, Bryant was entitled to make the instant application and to apply for the remedies available under subsection (6) of section 55.

This appears to us after further experience to be the only conclusion consistent with the language and objectives of section 63, and to the extent that the Board in Bermay Corporation Limited felt compelled to cast doubt on the correctness of Bryant Press, we find ourselves not able to agree with that portion of Bermay. It should be noted that the Board in Bermay had before it a situation where the business of the purchaser was poured into the location covered by the collective agreement of the vendor, and the Board may well have viewed the circumstances before it as more akin to an "accretion". It might also be noted that the comments of the Board in Bermay came only after the Board had already taken a representation vote because of the "intermingling".

[emphasis in the original

except where noted otherwise]

30. The intermingling question which was before the Board in Caressant Care, supra, arose when Caressant Care acquired the nursing home license of another nursing home operator, Willson, and transferred the license, together with Willson's nursing home residents, to a new nursing home facility which Caressant Care had constructed for its existing business. The Board found that transaction to be a section 63 sale of a business. The Willson nursing home employees had been covered by a collective agreement, the Caressant Care employees were not. The Willson employees were transferred to the new Caressant Care home along with the former Willson residents. The union's argument that Caressant Care and its employees were bound by the union's collective agreement with Willson as a result of the sale is referred to at the beginning of paragraph 32. The Board disagreed and, for the reasons given in paragraphs 33 and 34 quoted below, found that Caressant Care had intermingled Willson's business and employees with Caressant Care's business and employees.

31. It follows from Bryant Press that the bargaining rights extended to a purchaser by the operation of the province's "sale of business" legislation are somewhat more particularly defined than are bargaining rights obtained either through certification or voluntary recognition: i.e. by the business itself. Like section 1(4) of the Act, in other words, section 63 is remedial legislation designed to preserve, but not extend, the status quo. Section 63(2) states that the purchaser becomes bound by the collective agreement "as if he were a party thereto". What it comes down to is the effect the Legislature had in mind for the legal fiction created by those words. As can be seen in the passage quoted above, the Board in Bryant Press looked for guidance in that regard to subsection 3 of section 63, which was the original "successor rights" provision in the statute, and which provided the lesser remedy of preserving a union's bargaining rights only. That original subsection made it explicit that such bargaining rights were, on a "sale", being made to run only with "the like bargaining unit in that business". The Board in Bryant Press found it to be the intention of the Legislature that the legal effect of the employer being deemed to be a party to the collective agreement under subsection 2 is circumscribed in exactly the same way. That is, under section 63(2) the scope clause into which the purchaser is inserted remains specific to the business initially covered. If, for example, an employer operates six Nursing Homes in the City of St. Thomas, the employees of none of which had ever indicated a desire to be represented by a trade union, and that employer purchases a seventh Nursing Home which is unionized and has a collective agreement, the other six Nursing Homes do not on the day of the "sale" become covered by the collective agreement, even if it is stated in its scope clause to apply to "all employees [of a named company] in the City of St. Thomas". That is the thrust of the union's submission on the effect of the earlier sale here.

32. We do not so find. Rather, we find that, commencing July 4, 1984, the employees of a business covered by a collective agreement (the 75-beds of the Willson Nursing Home) were intermingled with the employees of a business not covered by a collective agreement (the 41-bed Nursing Home and the 40-bed Rest Home that Caressant Care had on its own). The provisions of section 63(6) must therefore be applied, and this normally is done on the basis of comparative numbers. In Bryant Press, for example, one-third of the combined employees came from the operation covered by the collective agreement, and two-thirds were unrepresented by any trade union. The Board directed the taking of a representation vote....

33. The decision in Caressant Care fits with union counsel's interpretation of subsection (6) because Caressant Care intermingled its pre-existing, non-union business and its employees with the business and employees of the "unionized" business purchased from Willson. In that respect, counsel acknowledged that, had Select purchased Campbell and intermingled the two businesses and their employees at Select's 433 Homer Avenue premises, subsection (6) would apply. In the Board's view, an analogous situation would exist had SCL bought Select the day before it purchased Campbell's business and intermingled Campbell's business and employees with the former business and employees of Select. Section 63 would have no application to the sale of Select to SCL, but the sale of Campbell to SCL would be the sale of a business within the meaning of section 63 and, if the former business operations and employees of Select and Campbell were merged into a single operation by SCL, there is no doubt that the factual foundation would exist for a finding that there has been intermingling within the meaning of subsection (6).

34. Should the result be any different here because the section 63 sale of Campbell to SCL took place simultaneously with the sale of Select to SCL and the merging of Campbell's and Select's former businesses and employees? As the Board herein understands the purpose of section 63 and the effect of a finding that there has been a section 63 sale, whether under subsections (2) or (3), and the rationale behind subsection (6) as discussed in Caressant Care, supra, and in the Bryant Press decision referred to therein, the practical results of the two hypothetical situations posed above and the facts of the sale herein are the same. Campbell's business has been sold to SCL and, by operation of section 63, the union's bargaining rights and collective agreement have followed the business (Marvel Jewellery, supra). Had SCL been dealing only with Campbell's business, SCL would stand in Campbell's shoes respecting the employer's obligations under that agreement (Caressant Care, supra, at 1084). SCL, however, was not dealing just with one business. It is an inescapable fact that SCL bought two businesses, Campbell's and Select's, and that SCL carried on both of these businesses. Both businesses pre-existed the sale. The business attributes of each pre-existing business are present in SCL. That fact is not altered merely because SCL put the two businesses and their employees together in a single, integrated operation at the time of its purchase of each business. Campbell's business and employees came with all of the obligations, for SCL, of the collective agreement between the union and Campbell. Select's business and employees came without any collective bargaining obligations. In the result, SCL is faced with the practical problem of integrating two businesses, one under a collective agreement and the other "non-union", which appeared to the Board in Caressant Care, supra, paragraph 32 at 1084, to be the practical problem that "... prompted the Legislature to provide the relief contemplated by subsection 6.".

35. Union counsel argues that there is no basis under section 63 on which the Board can deal with SCL's problem because there has been no intermingling within the meaning of subsection (6) on counsel's reading of it. Counsel reads the words "... where a business was sold to a person who carries on one or more other businesses ..." to require the purchaser itself to have carried on another business or other businesses prior to the section 63 sale. Were counsel's interpretation adopted here, it would have the effect of saying that Campbell's sale to SCL was not a sale "... to a person who carries on one or more other businesses ..." and, therefore, the integration of Campbell's and Select's businesses and employees coincident with SCL's acquisition of those businesses is not an intermingling of employees within the meaning of subsection (6). The Board disagrees. While the Board's decisions on which union counsel relies appear to support his reading of the subsection, that can be accounted for, at least in part, by the simple fact that, in each case, the purchaser had operated the non-union intermingled business prior to the section 63 sale. That does not mean that subsection (6) cannot and ought not be interpreted so as to include the facts of this application. SCL bought two existing businesses and, from the start of its operations after the sale, carried on both of them; albeit, they were integrated. Clearly, SCL is carrying on the businesses of both Campbell and Select, and in these circumstances, is "... a person who carries on one or more other businesses ..." within the meaning of subsection (6). Thus, having regard to the remedial purpose of subsection (6), the Board finds that when Campbell's business was sold to SCL, it was sold to "... a person who carries on one or more other businesses ...". That satisfies the first requirement of the subsection. The second requirement is met by SCL having intermingled the two businesses and their employees on December 1st, the date of the sale. Therefore, the Board finds that the employees of R. V. Campbell Commercial Laundry Services (1985) Inc., a business covered by a collective agreement with Textile Processors, Service Trades, Health Care Professional & Technical Employees International Union, Local 351 were intermingled with the employees of Select Commercial Laundries Inc. (the former employees of Select Laundry Limited) who were not covered by a collective agreement. Thus, having further regard to the purpose of subsection 63(6), its provisions can be and ought to be applied.

36. The Board has had the opportunity to consider the dissent of Board Member R. R. Montague. It is clear from the Board's decision that it agrees with him that section 63 obliged SCL to employ Campbell's former employees, but did not oblige SCL to employ Select's former employees. The fact is, however, SCL did employ Select's former employees, and did so simultaneously with its acquisition of all of the other attributes of Select's former business which SCL continued to operate. Then SCL integrated its "Select" business and employees with its "Campbell" business and employees. That makes the former Select employees different from employees which Select might have hired off the street. It also makes this case different from those Board cases, like Antonacci, supra, in which the Board has found that there has been no subsection (6) intermingling when a section 63 purchaser hires new employees and intermingles them with the employees who came with the purchased business.

37. The Board takes no issue with the analysis at paragraph 7 of the dissent of subsection 13(2) of the Employment Standards Act. However, as the Board reads that subsection as it applies to the former Select employees, it did not oblige SCL to hire them, but, having done so SCL is obliged to recognize their total period of employment with Select for purposes of their entitlement to public holidays, vacations, pregnancy leave, notice of termination and severance pay. See Re Small and Equitable Management Ltd. et al, (1990) 1990 CanLII 6973 (ON CTGD), 74 D.L.R. (4th) 422, a judgement of the Ontario Court (General Division), Divisional Court. That obligation might be viewed as another distinction between the former Select employees hired by SCL and employees which it might hire off the street.

38. The Board, having found that the provisions of subsection 63(6) ought to be applied in all of the circumstances of this application, and having accepted the parties' agreement that the taking of a representation vote would be the appropriate remedy if subsection (6) applied to the sale, directs that a representation vote be taken amongst all employees of Select Commercial Laundries Inc. of Metropolitan Toronto, save and except foremen, foreladies and persons above the rank of foreman and forelady, office and sales staff, persons regularly employed for not more than 24 hours per week and students employed during the school vacation period.

39. All those employed in the bargaining unit on the date hereof who are so employed on the date the vote is taken will be eligible to vote.

40. Voters will be asked to indicate whether they wish to be represented by the applicant in their employment relations with the respondents.

41. In summary, the Board has dismissed the application in File No. 0141-90-R for reasons given earlier in the decision and a representation vote has been directed in File No. 3033-89-R.

42. The application is referred to the Registrar for the conduct of the vote.

DECISION OF BOARD MEMBER RENE R. MONTAGUE; May 9, 1991

1. The facts of this case are simple and are laid out in the majority's decision. However, I feel the majority has missed the point in this case. Both R. V. Campbell Commercial Laundry Services (1985) Inc. ("Campbell") and Select Laundry Limited ("Select") ceased operations on November 30, 1989. As indicated at paragraph 9 of the majority's decision, Select "paid off all of their employees". Campbell also purported to have paid all of their employees. However, this is wrong in law as the Board has consistently ruled that when there is a sale of business, the predecessor employer has no right to lay off the employees unless in accordance with the collective agreement and the successor employer is bound not only by the collective agreement but is also the employer of the former employees of the predecessor. Secondly, I believe that the Board, because of a delay since the hearing of July 9, 1990 till May, 1991 to issue a decision is a denial of natural justice and has seriously prejudiced the trade union as it does not have a hope in hell of winning a vote as the majority has ordered. This is a clear case, in my opinion, of justice delayed is justice denied that has sadly been caused by the Board in its unconscionable delay of issuing a decision.

2. Jurisprudence regarding the obligation of a purchasing employer is scant but clear.

3. In Emrick Plastics, [1982] OLRB Rep. June 861 at paragraph 17, the Board stated:

Collective bargaining legislation is designed primarily for the benefit of employees, not trade unions. Can it really be said that the Legislature in enacting section 63 of our own Act intended that the rights of the bargaining agent selected by the employees would "run with the business" that the collective agreement bargained for and ratified by those employees would run with the business, but that the very employees who had made these choices would not? The Board would need unmistakable language in its statute to come to that conclusion.

At paragraph 18, the Board was clear:

We conclude, similar to the British Columbia Labour Relations Board, that section 63(2) of our own Act continues the effect of a collective agreement over a sale transaction without hiatus,and that the purchaser stands literally in the shoes of its predecessor with respect to any rights or obligations under that agreement. The purchaser, in other words is given no opportunity to "weed out undesirable employees" contrary to the provisions of the collective agreement, nor to decline to recognize any of the seniority or other rights accrued by employees under the collective agreement during their tenure with the predecessor employer. We agree with counsel for the respondent that the purchaser takes the business exactly as he receives it from the vendor. Even if, for example, employees have been given notice of termination by the vendor, the purchaser is no more entitled to start that business up without regard to recall rights of employees under the collective agreement than the vendor would have been. The obligations of neither employer are determined by whether the employer on its own chose to treat a severance at a given point in time as a termination or lay-off.

4. Emrick was followed in Daynes Health Care Limited, [1984] OLRB Rep. Aug. 1091. This was a follow-up case to Riverview, supra, as the successor employer did not employ the employees of the predecessor. At paragraph 35, the Board stated:

When Daynes acquired the business, it stood precisely in the shoes of its predecessor. It inherited an established complement of employees with established contractual rights. Some of these employees were on layoff and had recall rights which they could assert before there could be any new hires. More importantly, there was a much larger group of employees who had been actively employed right up to the date of the sale. Those employees were not, and could not have been, terminated without just cause-which cause could not be based solely on the impending sale. Nor could they be "laid off" from their jobs when those jobs and their work continued. If it were otherwise, the purpose and intended effect of section 63 would be substantially undermined.

At paragraph 38, the Board specifically found that the employees of the predecessor employer were employees of the successor employer.

5. In Caressant Care, supra, [1984] OLRB Rep. Aug. 1060, at paragraph 34, the Board stated:

…….the Board's declaration of a "sale" of the Willson beds means that Caressant Care was obliged to offer to continue the employment of "Willson" employees in accordance with the terms of that collective agreement, as the Board noted in Bermay. ... To the same effect, see Emrick. ...

6. As indicated at paragraph 12 of the majority's decision, the parties are agreed that Campbell was sold to SCL. Accordingly, on December 1, 1989 when SCL commenced operations, by operation of section 63(2) of the Labour Relations Act SCL had as its employees those of the predecessor Campbell. The employees of Select had no status at all under the Act, especially section 63. They were non-union and therefore their employment relationship was covered by the common law and the Employment Standards Act. As indicated in paragraph 9 of the majority's decision, Select ceased operating and "paid off' their employees. When SCL hired the former employees of Select they were in no better position than employees hired off the street for purposes of the Labour Relations Act.

7. The Employment Standards Act, section 13(2) states:

Where an employer sells his business to a purchaser who employs an employee of the employer, the employment of the employee shall not be terminated by the sale, and the period of employment of the employee with the employer shall be deemed to have been employment with the purchaser for the purposes of Parts VII, VIII, XI and XII.

[emphasis added]

Nowhere does it state the period of employment of employees shall be deemed to have been employment for the purposes of the Labour Relations Act. As the majority notes, Parts VII, VIII, XI and XII covers "Public Holidays", "Vacation With Pay", "Pregnancy Leave" and "Termination of Employment" respectively. Nothing in these Parts provides rights under the Labour Relations Act. Further, the evidence before this panel was that the employees were terminated by Select. Consequently, the Employment Standards Act is irrelevant to this case.

8. In order for section 63(6) of the Act to come into effect, two factors must be present:

(1) a business must be sold to a person who carries on one or more businesses where there is a bargaining unit in one of the businesses; and

(2) the purchaser must "intermingle" the employees of one of the businesses with those of another business.

9. As I have indicated in paragraph 6, for purposes of the Act the employees of Select ceased being employees on November 30, 1989. These individuals were then hired by SCL which was, by virtue of the Act, a unionized employer. They were terminated by one employer and hired by another employer: that is not intermingling, that is expansion of the workplace by a unionized employer. There were no employees of another business to intermingle because Select ceased operations and terminated its employees. That is the evidence.

10. The majority at paragraph 32 of its decision states:

……Select's business and employees came without any collective bargaining obligations…….

Both the evidence and the law beg to differ. Select's business came without any collective bargaining obligations and without any employees.

11. It is for these reasons that there cannot be intermingling as per section 63(6) when there was a sale of a business from a unionized employer to an employer with no incumbent employees and the successor employer hires new employees. It is admirable that the majority wishes to grant legal rights which arise out of unionization and the Labour Relations Act to non-union employees. However, there is no legislative authority to do so. When a non-union employer terminates its employees and sells the business, the only rights those employees have, if they are hired by the purchasers, are those enumerated in the Employment Standards Act. It is not admirable, indeed it is preposterous and beyond the Board's jurisdiction, to apply to non-unionized employees a collective bargaining concept and then to use that application to defeat the collective bargaining relationship.