Service Employees' International Union, Local 532 v. Saint Elizabeth Home Society, 1992 CanLII 6339

[1992] OLRB Rep. July 827

3156-89-R; 3157-89-R Service Employees' International Union, Local 532, Appli­cant v. Saint Elizabeth Home Society, Ontario Ministry of Health and Hamilton Jewish Home for the Aged Charitable Foundation operating as Shalom Village South, Respondents

BEFORE: Judith McCormack, Vice-Chair, and Board Members R. M. Sloan and B. L. Armstrong.

APPEARANCES: Dana Randall, Livio Piersanti and Emery Baldry for the applicant; Maureen Far-son, Cindy Biondi and Astrida Plorins for the Ministry of Health; Richard H. Shekter and Sheila Burman for Shalom Village.

DECISION OF JUDITH MCCORMACK, VICE-CHAIR, AND BOARD MEMBER B. L. ARM­STRONG; July 10, 1992

1. The name of the respondent Shalom Village is amended to read: "Hamilton Jewish Home for the Aged Charitable Foundation operating as Shalom Village South".

2. These matters are applications under section 64 [formerly section 63] and 1(4) of the Labour Relations Act and an application under the Successor Rights (Crown Transfers) Act ("the Crown Transfers Act") with respect to a series of events which took place between 1987 and 1990. By a letter dated April 24, 1990 counsel for the Saint Elizabeth Home Society advised that his client would not be participating in the proceedings. On the first day of hearing the applicant also withdrew its claim under section 1(4) of the Labour Relations Act.

3. At the time of these events, the Saint Elizabeth Nursing Home ("SENH") was a 184 bed nursing home located in Hamilton. During the winter and spring of 1987, it became apparent that the home was in serious difficulties with respect to the care provided to its residents. A num­ber of attempts by the Ministry of Health ("the Ministry") to bring these difficulties to the atten­tion of the Saint Elizabeth Home Society ("the Society") which operated the home met with little success. As a result, by August of 1987, the Ministry had decided to revoke the license of SENH and take control of the facility pursuant to the Health Facilities Special Orders Act, 1983, c. 43 as amended. That Act provides in part as follows:

4. The Minister may propose to revoke the license for a health facility where,

(a) the physical state of the health facility is causing or is likely to cause harm to or an adverse effect on the health of any person or impairment of the safety of any person and it is not practi­cable to correct the physical state of the health facility;

(b) the manner of operation of the health facility is causing or is likely to cause harm to or an adverse effect on the health of any person or impairment of the safety of any person and it is not practicable to correct the manner of operation of the health facility; or

(c) the conduct of the licensee or, where the licensee is a corporation, of the corporation or an officer or director of the corporation affords reasonable grounds for belief that the health facil­ity is not being or is not likely to be operated with competence, honesty, integrity and concern for the health and safety of persons served by the health facility.

7.-(1) Where the licence for a health facility is suspended under this Act and the Minister is of the opinion that the health facility should continue in operation in order to provide temporarily for the health and safety of persons in the community served by the health facility, the Minister by written order may take control of and operate the health facility for a period not exceeding six months.

4. Ron Sapsford, Director of the Nursing Homes Branch in the Ministry, was appointed as the Minister’s representative to manage and operate the nursing home. Mr. Sapsford in turn appointed Emery Baldry, one of his staff with extensive experience as a nursing home administra­tor, to be the administrator of SENH. The intention of the Ministry initially was to “get in and out” as soon as possible, because it did not wish to run the home on a permanent basis. As it turned out, the Ministry operated the home for over three years, until January of 1991.

5. On the day on which the Ministry entered the premises and took control, Mr. Baidry called employees together and informed them of the takeover. He advised them that they had the option of either working for the Ministry at SENH or continuing to work for the Society, presuma­bly somewhere other than in the home. All the staff opted to remain at the home and work for the Ministry.

6. Most of these employees were represented by the applicant union. Either on the day of the takeover or shortly thereafter, Livio Piersanti, a staff representative for the applicant, con­tacted Mr. Baldry to obtain more information. His main concern at that point was that SENH might close immediately. Mr. Baldry assured him that the home would continue to operate and that employees would be retained, at least for the short term.

7. On August 13^th, the Society notified the Ministry that it would not be appealing the revocation of its license. However, the Society also indicated that it would not grant any extensions after the six month period the Ministry was permitted under the Act to remain in the Home. Sister Elizabeth Manhertz, the President of the Society, informed the Ministry that it would have to transfer the residents to a new location no later than February 6, 1988, as the Society would require the return of the premises.

8. At this point, Mr. Sapsford and Mr. Baldry testified, the Ministry considered that it had several options, including operating the home as a going concern until replacement facilities were built, closing the home and transferring the residents to other homes, or winding down the opera­tion gradually until the home was vacated by attrition. There were a number of disadvantages to the latter two courses of action. The Hamilton-Wentworth area had an acute demand for nursing home beds which was not being met. As a result, the Ministry did not want to take the SENH beds out of service, even temporarily. Moreover, it did not want to move a frail resident population twice, that is, first to some other facility and subsequently to the replacement homes when con­struction was completed. In addition, although the Ministry might have been able to transfer a number of the residents to other homes on an “overbedding” basis, which involves temporarily increasing the number of beds beyond that in their licenses, the capacity to overbed in the area was already saturated. As a result, the Ministry would still have to care for a number of residents at the SENH premises in any event. Moreover, such transfers would create host of inequities for those on the waiting list for nursing home beds in the area. As a result, the Ministry decided to operate the home as a going concern and to lease the premises from the Society until the new facilities were built.

9. On August 18^th, the Minister wrote to Sister Elizabeth to the effect that if he heard nothing by August 25^th, he would be relying on her statement that the Society was not appealing the revocation of the license. At that point, he indicated, a request for proposals to build new facil­ities to replace the SENK beds in the Hamilton-Wentworth area would be issued. He also asked her to reconsider her position with respect to regaining possession of the premises, and stated that the Ministry wished to negotiate a lease at fair market value for a sufficient period of time to allow for the construction of the new nursing homes and the orderly transfer of residents to those new facilities. Eventually, the Ministry was able to negotiate not only a lease with the Society, but sev­eral extensions to that lease which were necessitated by the fact that completion of the new facili­ties was delayed by a number of problems beyond their control.

10. The Ministry immediately hired more employees, almost doubling the existing staff complement. More specifically, between August 6^th, 1987 and February 2^nd, 1988, the Ministry recruited eighteen registered nursing staff, twenty-four health care aides, fourteen kitchen staff, three laundry staff, one secretary and one bookkeeper, two receptionists and two activity staff. It also increased housekeeping coverage from five days to seven days a week. Both the existing employees and the new employees were now paid by the Ministry. Mr. Baldry undertook a staff training program and engaged a nurse consultant both for this purpose and to develop policies and procedures for the home. In addition, the Ministry continued to admit new residents, and even increased the resident census until at one point it was closer to 200. New admissions were not closed until the beginning of 1990. The Ministry also bought over $100,000 worth of new equip­ment for the home. Mr. Baldry had complete responsibility for its day-to-day operation including hiring, firing and disciplining staff, and entering into contracts for purchasing services and supplies, with the exception of major capital purchases which had to be approved by Mr. Sapsford. He also continued to fulfill other duties with the Ministry to some extent. In addition, he consulted regu­larly with Mr. Sapsford and with the Communications and Legal Branches of the Ministry on a variety of matters relating to the home.

11. During the period the Ministry operated SENH it treated itself as a licensee, although of course it did not actually issue a license to itself. According to Mr. Sapsford, the purpose of con­sidering the Ministry to be the licensee was to put a framework around the Ministry’s presence. One example of this approach is that when the resident population rose above 184 beds, the Minis­try issued itself written permission to overbed in the same manner it might do for another licensee. In addition, the licensee concept was used because the Ministry wanted its inspection staff to treat SENH like any other home.

12. Sometime in August of 1987, the applicant union gave the Ministry notice to bargain, since its then current collective agreement expired on November 17^th, 1987. On August 19^th, Mr. Baldry met with Mr. Sapsford to discuss a number of topics including arrangements for negotia­tions with the union, the job security of employees and whether or not the Ministry would help the latter to relocate. Mr. Sapsford told Mr. Baldry to make arrangements for negotiations and to con­sult with the Legal Branch in this regard. He also said that the Ministry would help staff to relo­cate, which Mr. Baldry understood to mean relocating to the replacement facilities. As a result, Mr. Baidry advised employees that the Ministry’s position was that it would help them to relocate to the replacement facilities that emerged from the request for proposals. Mr. Sapsford and Mr. Baldry also discussed whether employees had become civil servants as a result of the takeover, and they decided not to raise this with employees, but rather to “deal in good faith” with the applicant union. Throughout the fall, Mr. Baldry and Mr. Piersanti had regular contact on a weekly basis.

13. On September 11^th, the Ministry issued a news release announcing a request for pro­posals which included the following paragraphs:

The Ministry of Health is calling for proposals for the operation of 184 nursing home beds in Hamilton-Wentworth to replace the beds now located at St. Elizabeth Nursing Home in Hamil­ton, Health Minister Murray Elston announced today.

"The Health Ministry and St. Elizabeth Home Society are negotiating the use of St. Elizabeth Nursing Home beyond the six-month period of the order," Mr. Elston said. "This will allow suc­cessful applicants time to build additional space for the new nursing home beds."

Construction is expected to be completed in September of 1989.

"The Ministry and St. Elizabeth Home Society have agreed that the continued use of St. Eliza­beth Nursing Home until residents can be moved to the new accommodations will serve the best interests of the residents," Mr. Elston said.

14. The Ministry then placed advertisements in the local papers on October 1st, 1987, invit­ing requests for proposals for the 184 beds. The advertisements also announced that perspective proposers could obtain further information and any clarification at a public meeting on October 13th at the Royal Connaught Hotel, and that written instructions and copies of a detailed request for proposals document were available from the Ministry. Among other things, that package of material indicates that the successful proposer is selected from among the applicants, and that all written and oral representations are carefully considered in this regard.

15. The request for proposals process was used by the Ministry because the Society had chosen not to appeal the revocation of its license and thus there was no commercial transaction with a purchaser at the end of it. As a result, the request for proposals process, which is normally used for distributing newly created licensed beds, was the only route available to the Ministry to issue licenses to replacement facilities and yet maintain the existing beds in the area. Only twice before in the history of the legislation had the Ministry taken control of homes, and in both of those cases it had been able to transfer residents to other facilities within a number of weeks. As a result, this was a unique situation, according to Astrida Plorins, an official with the Nursing Homes Branch of the Ministry at the time in question. Some elements of the usual request for proposals process such as the time frames were modified to reflect both the fact that the Ministry was dealing with pre-existing, rather than newly created beds and the Ministry's concern that it not be required to operate SENH for any longer than was necessary.

16. On October 13th, a public meeting for the request for proposals was held at the Royal Connaught Hotel. According to Mr. Sapsford, he chose Mr. Baldry to chair the meeting and told him to raise two specific points in addition to the usual information provided at such a meeting: first, that the Ministry expected the successful proposers to take the SENH residents, and sec­ondly, that it expected them to consider hiring the SENH employees.

17. We heard considerable evidence with respect to what actually occurred at that meeting and what was said in this regard. In cross-examination, it became apparent that the differences between the various witnesses' recollection of the meeting were somewhat less than it first appeared. In any event, we prefer the account given by Eric McGinniss, a reporter for the Hamil­ton Spectator present at the meeting for several reasons. In the first place, all parties agreed in final argument that they could "live with" his evidence. Secondly, he had no legal interest in these proceedings or in the events involved. Thirdly, he has been involved in the newspaper business for approximately twenty years, and his purpose for being at the meeting was to accurately report on it, a purpose for which he has considerable training and experience. Finally, he took notes of what was said at the meeting in his capacity as a reporter.

18. Mr. McGinniss told the Board that during the question and answer period following Mr. Baidry's initial speech, Mr. Baidry said to the meeting that the license would likely be split among two or more applicants, with non-profit community groups getting preference. He also told those attending that the successful applicant or applicants would have to take the residents of SENH. Mr. McGinniss quoted Mr. Baldry as follows:

You won't have an option about that. Your first clients will be from St. Elizabeth. We will also look to you to look at staff presently employed at St. Elizabeth. There are very good staff there, we intend to give them very good training and they would be excellent candidates for you to consider as staff.

19. Mr. Baldry then said to the meeting that there were many staff who would like to trans­fer with the residents, and that they knew the residents and would be familiar with caring for them. One questioner referred to the fact that there was a union at SENH and another asked if that was a factor that the Ministry would consider in the proposals. Mr. Baldry replied that it was a factor that they would inject at the time the Ministry entered into a letter of understanding, and that it would be a condition of the license award.

20. The deadline for proposals was November 17th, 1987. On November 16th, 1987, the Hamilton Jewish Home for the Aged Charitable Foundation operating as Shalom Village South ("Shalom Village") filed a proposal for 80 beds. Shalom Village is a charitable organization which has operated a senior citizens' residence since 1981. This is an apartment complex designed to meet the needs of the frail elderly, which provides support services such as a dining room, recreational space, some housekeeping and home-making services, and some personal care. The apartment complex is oriented towards the needs of the Jewish community, and has a kosher kitchen.

21. At the time that the apartment complex was built, the Board of Directors for Shalom Village contemplated the possibility of adding a Jewish community centre and a nursing home at some point in the future. By 1987, the population of the apartment complex had become more elderly and residents were requiring a greater degree of medical care. In addition, there was a growing need within the Jewish community for nursing home beds. As a result, the Board of Directors decided to build a nursing home adjacent to the apartment complex. With this in mind, Shalom Village had previously filed a proposal in May of 1987 for 60 beds. This first proposal was submitted as part of a request for proposals process for newly created beds which were unrelated to SENH. At the time Shalom Village submitted its proposal with respect to the SENH beds, it had not yet been informed of whether it had been successful with respect to its first proposal. Ulti­mately, the first proposal was rejected. Shalom Village's new proposal, which was virtually identi­cal to its previous one, emphasized a philosophy and design centering on a family/village atmo­sphere, the rehabilitation and independence of residents, a Jewish environment~ and a special wing for Alzheimer's patients.

22. On January 14, 1988 there was a meeting to provide the public with an opportunity for comments on the various proposers and proposals filed. Interviews of seven proposers, including Shalom Village, took place on February 9th, 10th and 11th by an evaluation committee from the Ministry chaired by Ms. Plorins. Ms. Plorins testified that each of the proposers indicated at the interviews that they would be prepared to accept residents from SENH, and were willing to inter­view staff currently working there for positions at their respective proposed new facilities. After her testimony, a tape recording of the Shalom Village interview was produced by the Ministry which includes the following excerpt:

Sheila Burman [representative of Shalom Village]: The essential difference (between the first and second proposals] is that we have added, um, brought our funding up to date to what is now in place with the Ministry of Health and that has allowed us to increase the hours of nursing care over what we had before. We have also put an extra maintenance person half-time seven days a week into the facility and have included a full-time social worker if we're able to do that. At the moment, we have included a full-time social worker against part-time before, mostly because we felt if we're looking at St. Elizabeth that we're going to need more time in helping these people settle and so forth.

Astrida Plorins: You're quite prepared to accept people from Saint Elizabeth?

Doctor Ron Kaplan [representative of Shalom VillageJ: Our expectation is that's what we'd be doing. For sure. We look forward to it.

Shalom Village interpreted this exchange as referring only to residents, while the applicant appeared to suggest that it referred to both employees and residents.

23. In April, Ms. Plorins prepared a report to the Minister which evaluates the proposers, and which says as follows:

All of the proposers indicated at the interviews that they would be prepared to accept residents from St. Elizabeth and are willing to interview staff currently working at St. Elizabeth for posi­tions at their respective proposed new facilities.

Shalom Village disputes that it made a commitment to interview SENH staff at that particular point in the process.

24. The Minister then awarded the 184 beds to three major proposers, which we will refer to as the new licensees. These new licensees were Shalom Village, which received sixty beds, Southrim Enterprises which was awarded sixty beds, and Heritage Green Seniors Centre which received fifty-three beds. Like Shalom Village, Southrim and Heritage Green were planning to construct new buildings. In addition, three other facilities received minor awards of between two and five beds to expand the license capacity of their existing operations: Parkview Nursing Home received two beds, Hamilton Convalescent Centre received four beds and Victoria Nursing Home was awarded five beds. Mr. Baldry told the Board that the eleven beds that went to these other facilities did not have any conditions attached to them relating to residents or staff from SENH because these awards were intended to license existing excess capacity.

25. On May 5th, the Ministry of Health issued a news release which provided in part as fol­lows:

The Hamilton Jewish Home for the Aged (Shalom Village), a non-profit senior citizens apart­ment complex, has received Ministry of Health approval to build a new addition to accommo­date sixty nursing home beds.

The beds will replace some of the 184 St. Elizabeth Nursing Home beds, due to be closed soon.

26. On May 10th, the Ministry issued a news release with respect to the award to Southrim Enterprises. This release contained the following paragraph:

Today's awards plus sixty beds for Shalom Village announced last week and fifty-three for Heri­tage Green announced yesterday, complete the full complement of 184 beds to replace those being lost due to closing of the St. Elizabeth Nursing Home next year.

27. On May 20th, 1988 a letter advising Shalom Village of the award was sent from the Minister of Health. This included the following paragraphs:

It is understood that you have made certain written and oral representations herein referred to as the "proposal", and that these representations constitute part of the basis for my decision.

Before this award becomes final, you must agree to the following conditions:

A number of conditions are then set out, including a stipulation that the nursing home had to be ready for pre-licensing inspection on or before September 1st, 1989. There is no reference to any requirement to take residents or consider staff, although the applicant takes the position that this is covered by the reference to oral representations.

28. When the award letters to the three new licensees were drafted, Mr. Baldry was con­sulted as to their contents. He drew to the attention of the drafter that he thought it would be per­tinent to include the conditions regarding the transfer of staff and residents. The drafter declined to do so and referred Mr. Baldry to Mr. Sapsford. Mr. Baldry then telephoned Mr. Sapsford and argued that those two conditions should be included. Mr. Sapsford was not persuaded. Mr. Baldry told the Board that Mr. Sapsford did not deny that those commitments had been made by the license recipients but rather that he seemed to think that it would be wiser not to try and deal with them in the award letter. Mr. Sapsford testified that the commitments with respect to taking the residents and considering the staff for employment were part of the reasons for the awards to the particular license recipients. However, they were omitted from the award letters because of the dif­ficulty of quantifying the numbers involved at the time. It is fair to say, however, that there was some divergence of opinion between Mr. Baldry and Mr. Sapsford, with the latter being more sen­sitive to how the Ministry might be perceived in these circumstances. Mr. Baldry, who had the added pressure of attempting to hold on to sufficient staff at SENH until the home closed without a guarantee of subsequent employment was more concerned with this pragmatic problem and with his loyalty to SENH employees with whom he had greater contact.

29. Shortly before the award letters were issued, Mr. Baldry received a call from Sheila Burman, a representative of Shalom Village. She had been told that Shalom Village was one of the new licensees and she wished to know what to expect at that point in terms of the process. Mr. Bal­dry replied that she should expect an award letter that would be signed by the Minister, and that it would contain the conditions of the award. He then proceeded to indicate what he thought the conditions would be, including accepting staff and residents from SENH. Mr. Baidry was not sure whether his conversation with Mrs. Burman or Mr. Sapsford came first in time.

30. In the meantime, negotiations between the applicant and the Ministry with respect to a new collective agreement had been put on hold pending an interest arbitration award covering a number of nursing homes owned by Extendicare. That award was issued in April of 1988, and in a series of meetings between Mr. Piersanti and George Longo, a labour relations consultant hired to represent the Ministry, amendments were made to the SENH collective agreement to reflect the Extendicare award. During these negotiations, the union proposed that the following article be added to the collective agreement:

The Ministry of Health, when transferring the Nursing Home Licence of St. Elizabeth Nursing Home to the successful bidders, will guarantee succession rights within the meaning of section 63 of The Labour Relations Act and that the successful bidders will recognize Service Employees International Union, Local 532 as the exclusive bargaining agent of all the staff who will be transferred with the Licence and residents to the new Location.

In response to this, Mr. Longo told Mr. Piersanti that the Ministry, through Mr. Baldry, had ver­bally indicated that staff would be taken care of when the transfer of residents took place. He went on to say that the vendor could not grant succession rights in any event, since this was a matter for the purchaser to address. According to Mr. Baldry, there were a number of reasons for the Minis­try's refusal to agree to this provision, including the fact that this issue was seen as one involving legislation which was the province of another Ministry.

31. At that point, the successor rights provision was the only article holding up the signing of a renewal collective agreement, and Mr. Piersanti was persuaded to withdraw his proposal. As a result, on June 7th, 1988 a collective agreement was signed between the Ministry and the applicant with a term running from November 17th, 1987 to August 5th, 1989. This term was not consistent with the Extendicare award, but rather with the lease extension that the Ministry had been able to negotiate with the Society.

32. After the award letters were issued, Mr. Baldry and Mr. Piersanti discussed the transfer of both staff and residents to the new homes which were to be built. This included some discussion with respect to dividing up the heavy and light care residents equally between the three new licen­sees. Because the senior employees would be more costly to an employer, Mr. Piersanti also indi­cated to Mr. Baldry that employees should be divided into three groups of senior, middle and junior staff and that each of the three new facilities should get some employees from each cate­gory. Mr. Baldry responded that it was premature at that point to discuss the matter as the new homes would not be ready for quite some time.

33. On May 18th, 1988 Emery Baldry wrote a memo to Mr. Sapsford as follows:

Following the announcements of the bed awards to Heritage Green, Shalom Village, and South-rim Enterprises, I have been busy reassuring residents and their families and especially staff of St. Elizabeth Nursing Home of our repeated commitments to them: the Ministry of Health will use its good offices to help each relocate at the replacement facilities. The process will involve extensive consultation, which will begin a few months in advance of planned openings, to ensure an orderly transition.

Moreover, I have reminded all concerned that the awards are conditional on acceptance of both our residents and our staff. I suggest a meeting at an early opportunity with all three proposers to examine how we might proceed collectively to minimize problems.

I suggest mid-June for such a meeting. Please advise.

Mr. Sapsford agreed, and a meeting was arranged for June of 1988.

34. In the meantime, Mr. Baidry sent a letter to the residents and their families which included these paragraphs:

You will know from recent press statements that Shalom Village, Heritage Green and Southrim Enterprises have been selected to build the new facilities which will eventually replace this nurs­ing home. Each is known to be a fine operator. I am writing to let you know that it will likely take about one and a half years before these new homes will be ready to open.

Well in advance of their openings, however, the Ministry of Health will contact each resident and/or responsible party to begin making the necessary arrangements for everyone's relocation. Every effort will be made to honour individual relocation requests, although some may have to settle for their second choice. Staff also will be relocating to the new homes. A similar process will be followed to assist in their transfer as well.

When we have a firm idea when the new buildings will in fact be ready to open, we will take the initiative to contact you (presumably about a year or so from now) to begin discussions on the prospective transfers. In the meantime, we will continue with our efforts to provide the best pos­sible care. Your patience and understanding in this matter are appreciated.

35. The June meeting was attended by Mr. Sapsford, Mr. Baldry and representatives from the three new licensees. According to Mr. Baidry, before the meeting started there was some dis­cussion of the wages being paid to staff at SENH. When Sheila Burman was told what those wages were and the fact that these were union rates, she was shocked at the amount. Although Mrs. Bur­man initially did not remember that there had been any reference to the union, she subsequently recalled this exchange, which was also confirmed by Leon Price, another representative of Shalom Village.

36. At the meeting, Mr. Sapsford emphasized to the new licensees the need to meet the deadlines for construction, as the Ministry did not wish to operate SENH for any longer than was necessary. Three or four months prior to the opening of the new homes, the Ministry would begin planning the transfer of residents, which would include soliciting their preferences as to which home they wished to move to. The three new licensees expressed concerns about equity in the dis­tribution of heavy care and preferred pay patients, as the latter pay extra fees for private or semi­private accommodation. Mr. Sapsford and Mr. Baldry assured them that they would co-ordinate the logistics involved in the transfer of residents, and that the Ministry would be responsible for soliciting and sorting out individual preferences. Mrs. Burman asked how many of Shalom Vil­lage's sixty beds would be required for SENH residents. Shalom Village wished to have as many beds as possible vacant so that it could admit residents from the Jewish community. Mr. Sapsford indicated that he thought ten to fifteen beds might be available. This was apparently based on the plan to close admissions sometime before the transfers, with the result that attrition would reduce the total number of SENH residents and thus the number each home was expected to take. The number of beds available to Jewish residents had been an ongoing concern for Shalom Village, whose representatives had raised this issue as early as the October 13, 1987 public meeting.

37. There was also some discussion about the transfer of staff from SENH to the new homes. The new licensees stated that they were prepared to consider SENH staff and Mr. Baldry indicated that he would make sure the mechanics of SENH employees receiving application forms and so forth were co-ordinated. Mr. Baldry also said that he thought the process would be difficult in terms of logistics. For example, SENH would need kitchen staff up until the end, and thus if kitchen staff were transferring to a particular facility, it would be advantageous from the Ministry's point of view for them to transfer to Southrim Enterprises which, it was anticipated, would be the last home to open. Dan Skully, one of the representatives of Southrim Enterprises, expressed some encouragement to the other two licensees with respect to their co-operation on the transfer of staff. The other two licensees were more non-committal. Mr. Baldry also agreed to draw up a list of the equipment purchased by the Ministry for the new homes to review, as the Ministry was making it available to them for purchase.

38. In October of 1988 Mr. Baidry wrote to Mr. Sapsford the following memo:

You may already be aware, but Shalom Village and Heritage Green are questioning whether they should continue to try to meet the original deadline for opening. This is in response to local press coverage and rumour that Southrim Enterprises has yet to acquire their site and, more­over, are not even planning to open when the other two are.

I have advised the first two to proceed with due diligence to complete the architectural plan review and approval phase, once that will be essential in any event. However, the prospect that Southrim will not be ready as originally scheduled presents particular problems for them and us at St. Elizabeth.

The questions which have arisen to-date include:

Do they start construction only to sit empty waiting for Southrim? (This holds significant cost implications.)

Or, will we transfer to Shalom & Heritage on schedule and run St. Elizabeth with only a third occupancy?

If staff are to transfer with the residents, as originally contemplated, how do we operate their two facilities and St. Elizabeth with only one staff. (Obviously we could share some nursing staff, but it would be very difficult with dietary and environmental staff.)

How does Shalom Village attempt to obtain fund-raising pledges amid the present uncertainty? What do we do about extending our lease?

Perhaps Southrim needs to re-assess their commitment and their ability to fulfil it. In any event, if we could come to some common understanding it would be helpful. Without some careful planning now, we could face insurmountable logistical problems next year.

Please advise.

39. Mr. Baldry testified that he had written this memo because he had received a phone call from Mrs. Burman the day before. She had read in the newspaper that Southrim Enterprises had not even acquired its site yet, and as a result the construction schedule for that home would be delayed. Mrs. Burman was concerned that if all three new licensees were not ready at the same time, those that were ready might have to sit empty until all were ready. This had serious implica­tions for Shalom Village's fund-raising. Mr. Baldry told the Board that Ben Hort, a representative from Heritage Green, had raised similar concerns. Mr. Sapsford told Mr. Baidry that Shalom Vil­lage and Heritage Green would not be required to remain vacant until Southrim Enterprises was ready, and that they should proceed post haste with their construction. If it was necessary, the Ministry would continue to operate SENH with only one-third occupancy until the last home was ready.

40. In November of 1988, Mr. Baidry wrote to Heather Boon, by then acting Director of the Nursing Homes Branch, indicating that he had arranged a meeting with the new licensees and attaching briefing notes. Those briefing notes include the following paragraphs:

It should be remembered that, at the direction of the Ministry, I have informed the unions, S.E.N.H. employees and the general public alike that the Ministry will use its good offices to assist S.E.N.H. staff to relocate to the new facilities.

Moreover, these matters were publicly stated as conditions of the R.F.P. - to accept the resi­dents and staff of S.E.N.H. However, neither condition was inserted in the award letter, despite my protest over their conspicuous absence.

The licensees have received substantial benefit (the award of a large number of beds); their co­operation will enable everyone to "win".

The receiving facilities should obtain expert legal counsel before proceeding and should be obliged to inform us as to how they intend to proceed.

41. Under the heading of "Transfer Logistics" and the sub-heading "Staffing" the briefing notes include the following paragraphs:

With the possible exception of a few HCA's, all staff could be relocated to the 3 new facilities. We do not have personnel sufficient to staff dietary and laundry departments at all three facili­ties (i.e., we have only 3 cooks - Southrim alone will need 3 cooks).

The receiving facilities seek assurance that they will not be obliged to accept poor - performing employees, more employees than they can handle, or employees for positions for which they already have staff. They want to be consulted and screen staff in advance.

The unions want to be consulted. Staff also are asking to have their preferences honoured. Much negotiating will be required.

42. The briefing notes also included the following paragraphs under the heading "Transferring":

Staffing at time of transfer will not be simple! (e.g. SENH will need cooks and laundry aides at the same time the receiving facilities will!).

It would be simpler if residents from each nursing unit could be transferred ensemble, as well as the attending nursing staff. But preferences would have to be negotiated away.

43. In the spring of 1989, Mr. Baldry began to hear through various sources that represen­tatives of Shalom Village were indicating that they would not be taking up to sixty residents from SENH but rather something less. In addition, Heritage Green was no longer keeping development pace with Shalom Village in terms of its construction schedule. Moreover, there was still some con­cern about the progress of Southrim Enterprises' construction. As a result, he recommended as fol­lows:

My own sense of the situation leads me to recommend two things. One, we get the special obli­gations in writing and agreed to by each perspective licensee (reference section 4(a) of the Nursing Homes Act). Secondly, we negotiate a lease extension which will enable the status quo to be maintained until the replacement facilities are ready. Making allowance for staying up to another year seems prudent to me; we can always leave earlier, if we're ready. Moreover, we are on the public record assuring all concerned that there will be no interim relocations, because of the severe trauma relocation presents for residents.

44. The Ministry subsequently entered into further lease negotiations with the Society. At the time the Ministry took control of SENH, Sister Elizabeth had retained possession of some adjacent premises. During the tenure of the Ministry, there had been friction between Sister Eliza­beth and Mr. Baldry both with respect to the use of those premises and with respect to some of her staff not employed at the nursing home. As a result, one of the conditions that she stipulated to the renewal of the lease was that Mr. Baldry be replaced as the administrator of SENH. The Ministry agreed, and in August of 1989, Mr. Baldry was recalled from the home to resume his other duties. Shortly thereafter, Mr. Baldry resigned from the Ministry to start a private consulting business. In these proceedings, he testified on behalf of the applicant.

45. Negotiations commenced for the renewal of the applicant's collective agreement in August of 1989. Again, the applicant proposed that a successor rights provision be included in the collective agreement, and again, the Ministry declined to agree. A new collective agreement was signed in December of 1989 which did not include such a provision.

46. In September of 1989, there was a meeting between the new licensees, Mrs. Boon, and Joyce Caygill, the executive director of the Hamilton-Wentworth Placement Co-ordination Service which administers the waiting list for nursing home beds. Leon Price~ one of Shalom Village's rep­resentatives~ testified that the meeting was called by the Ministry because of a crisis occasioned by the fact that Society did not want to renew its lease. As a result~ the Ministry had to seriously con­cern itself with the construction deadlines, and the Ministry representatives asked each licensee when they expected to be ready and when SENH residents would be able to move in. At that meeting, Ben Hort suggested that Heritage Green was prepared to overbed to solve the problem of the lease negotiations. On December 7th, the Ministry advised Mr. Hort that it had approved overbedding at Heritage Green by sixty beds. The purpose of this overbedding was to accommo­date the sixty beds awarded to Southrim Enterprises which would not be ready in time. The term for the overbedding was to be an initial period of six months, with the possibility of extending this time frame until Southrim Enterprises had completed their facility. Mr. Hort places this meeting in December of 1988 rather than September of 1989.

47. In December of 1989, Mr. Piersanti wrote to all three new licensees indicating that the applicant was taking the position that they were successor employers pursuant to the provisions of the Labour Relations Act and the Crown Transfers Act and that as a result, they were required to recognize the union as the bargaining agent and were bound by the collective agreement entered into by the applicant and the Ministry. Mr. Piersanti told the Board that he wrote the letter because he had received the impression that the Ministry was "backing off' its commitment with regard to relocating employees. He told the Board that Louise Bell, the administrator who had replaced Mr. Baidry, had said to him that if she were in his shoes, she would not count too much on the commitment that he perceived had been made. Mr. Piersanti had previously requested meetings with the new licensees but Mr. Baldry had declined to arrange them at the time. He repeated this request to Ms. Bell. She declined as well but provided him with their names and addresses, and he then wrote the letters.

48. These letters understandably created some concern on the part of the three proposers, and on February 8th, 1990 there was a meeting between Mr. Sapsford, who had returned to the Ministry in the position of Acting Director, other Ministry staff and Shalom Village representa­tives. The purpose of the meeting was to discuss several issues, according to Mr. Sapsford. Firstly, there was the number of Shalom Village's sixty beds that the Ministry would require for SENH res­idents. At that time, the Ministry expected Shalom Village to open in May or June of 1990. As a result, it had stopped admitting new residents to SENH at the beginning of 1990. Shalom Village sought and obtained a firmer commitment from Mr. Sapsford that at least ten to fifteen of its sixty beds could be filled by new admissions from the Jewish community. Mr. Sapsford also agreed that if the number of SENH residents declined further, fewer beds might be required for them at Sha­lom Village. According to Mr. Price, Shalom Village representatives then confronted Mr. Sapsford with Mr. Piersanti's letter and asked whether there was any truth to it and whether they had to take union personnel. They were particularly concerned about whether hiring SENH staff was a condition of the award. Mr. Sapsford assured them that this was not a condition of the award, but that the Ministry wanted them to at least interview SENH staff for positions. Ron Kaplan testified that Mr. Sapsford made it clear at this meeting that there was no obligation to hire SENH employ­ees who did not meet Shalom Village's criteria, and that Mr. Sapsford had said that successor rights did not apply. Mr. Sapsford told the Board that this statement was his own personal opinion, and not the position of the Ministry. Mrs. Burman testified that Mr. Sapsford had said that this was the position of the Ministry. Pat Morden, Shalom Village's Director of Nursing, gave evidence that during the meeting Rosemary McColl, the manager of the Nursing Homes Branch left the room to find the award letter. Ms. Morden testified that Mr. Sapsford then said that the Ministry wrote the award letter specifically with the intent that there would be no connection to SENH.

49. In January of 1990, residents and their families and friends were sent a three page infor­mation package by Ms. Bell. This package allowed residents to state their preference for either Heritage Green, or Shalom Village, or any other home in Ontario. The Ministry witnesses indi­cated that although every effort would be made to accommodate the choice of residents, in fact there was a waiting list of some five hundred people for nursing home beds in the area, and that as a result there were limitations on the extent to which preferences could be accommodated.

50. On October 29th, 1990, Shalom Village opened. At that time, as a result of closed admissions, attrition and some other transfers, there were approximately eighty-nine residents left at SENH. Of those, thirty-five transferred to Shalom Village. Eight of the Shalom Village beds were filled by residents from the apartment complex, and the remainder of its sixty beds were filled from other nursing homes or the waiting list.

51. Shalom Village interviewed everyone who applied for employment both from SENH and elsewhere. Mrs. Burman was in contact with Mr. Baidry, and Ms. Morden spoke with her counterpart at SENH, Elaine Twaddle, to ensure that SENH employees knew that Shalom Village was hiring. Ms. Morden testified that she was told by the Board of Directors that Shalom Village did not want it to look like it had not given SENH staff a chance, and that it wished to appear fair both because of its reputation in the community and because of this application before the Board. There were twelve applications for employment from SENH staff, all involving health care aides. Positions were offered to eight, one of whom declined. All twelve passed an initial interview but three did not pass a role playing exercise and one did not wish to attend for it. All those who accepted positions commenced employment with Shalom Village on October 22nd, 1990. The seven health care aides from SENH made up a portion of the total of twenty-five health care aides at Shalom Village. The remainder were hired from elsewhere, together with six registered nursing assistants and six registered nurses.

52. In the early summer of 1990, Mr. Piersanti was presented with a severance package by the Ministry for SENH employees. He told the Board that it was a very generous arrangement, involving almost double the benefits to which employees would be entitled under the Employment Standards Act. He was not prepared to approve this package as he was concerned that it might jeopardize the applicant's successor rights position, but the Ministry proceeded to implement its terms in any event. One of the conditions of the arrangement was that employees had to remain at SENH until it closed before they would be eligible for the benefits. Ms. Bell did allow one employee who had been hired by Shalom Village to accept a lay-off out of seniority so that she would qualify for the severance package. SENH closed in January of 1991.

53. Based on this sequence of events, the applicant advanced two main arguments. Firstly, counsel argued, the takeover by the Ministry of SENH amounted to a transfer of an undertaking to the Crown within the meaning of the Crown Transfers Act, and subsequently, the Crown transfer­red part of that undertaking to Shalom Village. In the alternative, the applicant took the position that the events described above represented a sale of a business within the meaning of section 64 of the Labour Relations Act from SENH to Shalom Village through the Ministry as a third party intermediary. The Ministry and Shalom Village agreed in final argument that SENH had became a Crown undertaking after the takeover by the Ministry. However, they disputed that the subse­quent events amounted to a transfer of part of an undertaking from the Crown to Shalom Village, or that the entire sequence represented a sale of a business through a third party intermediary.

54. The Crown Transfers Act has its legislative roots in a decision by the Board in 1975 to the effect that the successor rights provisions of the Labour Relations Act did not apply to the Crown. Shortly after the Board's decision in Municipality of Metropolitan Toronto, [1975] OLRB Rep. Oct. 777, the Crown Transfers Act was passed, addressing a number of scenarios involving transfers to and from the Crown and the labour relations consequences which flow from them. This Board and the Ontario Public Service Labour Relations Tribunal are assigned a variety of func­tions and powers in the legislation. The respective jurisdictions of these two bodies are not as pre­cisely delineated as they might be. However, a common sense reading of the statute suggests that the primary jurisdiction to make declarations and provide ancillary relief in the case of a transfer from an employer to the Crown rests with the Tribunal, while a reciprocal jurisdiction in the case of a transfer from the Crown to an employer lies with the Board. Since it was common ground between the parties that SENH had become a Crown undertaking after the takeover by the Minis­try, it was not necessary for us to make any findings in this regard or to consider whether we had any residual or concurrent jurisdiction to do so.

55. Starting from the parties’ agreement in this regard, we must determine whether a part of that Crown undertaking was transferred to Shalom Village by virtue of the events described above. The relevant definitions of “transfer” and “undertaking” are set out in the Crown Transfers Act at subsections 1(f) and (h):

(f) “transfer” means a conveyance, disposition or sale;

(h) "undertaking" means a business, enterprise, institution, program, project, work or a part of any of them.

56. The Board considered the application of these provisions in a number of cases including The Ministry of Natural Resources, [1986] OLRB Rep. Mar. 331 and KBM Forestry Consultants Inc., [1987] OLRB Rep. Mar. 399 aff'd Ontario High Court of Justice, April 25, 1988), in which it observed that although the Crown Transfers Act was modelled after the successor rights provisions in the Labour Relations Act, the former used broader language. In KBM Forestry, supra, the Board noted that this more expansive wording reflected the nature of certain of the wide range of activities engaged in by government, and described the purpose of the Crown Transfers Act in these terms:

Underlying the legislation is the recognition (a recognition also underlying section 63 of the Labour Relations Act) that "the continuity of the work performed before and after the transfer [is of "particular significance"], 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 [63] is to preserve both the bargaining relationship and the collective agreement": Metropolitan Parking Inc., [1979] OLRB Rep. Dec. 1193, paragraph 32, cited in The Ministry of Natural Resources, supra. More specifically in the context of the Successor Rights (Crown Transfers) Act, the gains achieved by the union with respect to the jobs which are integral to a particular government program are not to be lost through the govern­ment's transferring that program (and those jobs) to a private entity (and vice versa). From another perspective, it may be said that whatever protections or conditions accrue to those jobs through representation by the union are not to be threatened through the government's trans­ferring the program or portion of a program, of which they are a part, to a private entity.

57. In both cases, the Board observed that the form of the Crown Transfers Act and the context in which it was enacted made it apparent that it was intended to apply at least to those cir­cumstances in which the Board has found a sale of a business under the Labour Relations Act. As a result, a brief look at some of the jurisprudence under the Labour Relations Act is helpful.

58. In a number of cases, the Board has emphasized the significance of the continuity of the work before and after the sale in assessing whether a business has been sold. In Culverhouse Foods Limited, [1976] OLRB Rep. November 691, the Board said as follows:

59. In the Dufferin Steel case, supra, the Board itemized factors which the Board might consider in determining whether or not there has been a section 55 sale: goodwill, described at p. 86 as "the attractive force which brings in customers", and its sources, i.e. good name, reputation and business connections, good relations with employees, favourable commercial contractors, fran­chises, good financial relationships and good management, and the continuation of employees.

Notwithstanding the importance of the above, the Board was very clear to emphasize that these factors are only significant to the extent that they resolve the more important question of whether or not the business sold continued after the sale. The Board indicated that the most rel­evant factor for determining this question is whether the nature of the work performed subse­quent to the transaction is the same as the work performed prior to the transaction.

59. Similarly, in Metropolitan Parking Inc., [1979] OLRB Rep. Dec. 1193, the Board elabo­rated upon this proposition:

60. 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. This approach has not only been taken by the Board in a number of cases (see, for example, Culverhouse, supra, and Dennis Moran (1977] OLRB Rep. Apr. 277) but also appears to have been adopted by the Brit­ish Columbia Supreme Court in R. v. B.C. Labour Relations Board ex pane Lodum Holdings Ltd., 1968 CanLII 586 (BC SC), 3 D.L.R. (3d) 41. In that case, the Court was considering an application for certiorari in respect of a decision involving what was then the successor rights section of the British Columbia Labour Relations Act (it has since been amended.) At page 52 Dryer. J. char­acterized the question before the Board as follows:

"One must keep in mind that the problem before the Labour Relations Board was one of labour relations and consequently, though as pointed out above the whole law must be considered, the weight to be assigned various factors and the interferences to be drawn from certain evidentiary facts are not necessarily the same as would be the case if the problem were one of, say, taxation or control of assets. The importance of the 'business' in its labour relations aspect is the jobs it provides for the employees. One factor to be considered therefore, is whether the same or substantially the same jobs are being performed. That depends on a number of factors such as whether the jobs are being performed at the same or substantially the same times and places, in respect of the same or substantially the same goods or services, and for the same or substantially the same customers or patrons. etc. These matters are, in my opinion, more important than the form of transfer." [Emphasis added]

Unless there is a continuation of the work and jobs, it would make little sense to preserve the collective agreement. Accordingly, the continuity of the work done is an important indicium of a transfer of a business.

60. The Board has had particular experience in applying this approach to the nursing home sector. Some of those cases have similar aspects to that before us, and as a result, it is useful to set out their facts in more detail than usual. In Riverview Manor, [1983] OLRB Rep. Sept. 1564, a purchaser bought a nursing home license and another piece of land from a vendor on which the purchaser intended to build a new facility to which the license would be applied. The license was approximately 18 per cent of the total cost of the new home. The contract of sale was conditional upon the Ministry of Health approving the transfer. In this regard, the purchaser had to submit a management package to the Ministry detailing its experience in the industry, the activities planned for the residents, the design of the home and financial data. The purchaser's operations manager, administrator/director of nursing, food supervisor, activity director and accountant were then inter­viewed by Ministry officials, and in the fall of 1982, the Ministry authorized the transfer of the license.

61. Construction started in October of that year and was completed in August of 1983. Of fifty-one residents from the vendor's nursing home, eighteen were transferred to an Extendicare home in February of 1983. Thirty-three residents transferred to the new home, which had a capac­ity for fifty-one residents, and five of those who had moved to Extendicare eventually transferred to the new home. Residents of the vendor's home were under no obligation to transfer to the new home, although, as in the instant case, the demand for beds exceeded the supply in the area. In addition, those residents that transferred to the Extendicare home were not obliged to transfer again to the new home. The employment of all of the vendor's employees was terminated in August of 1983. All were interviewed by the purchaser, and three members of a bargaining unit of thirty-one were hired, in addition to four or five non-bargaining unit personal. The management team for the new home was drawn from other nursing homes owned by the purchaser, and the remainder of the staff was hired from elsewhere.

62. In these circumstances, the Board found that there had been a sale of a business. Although the only assets transferred were a piece of land and the license, and although the home's premises were not part of the transaction, the Board found that the license was the essence of the business, and its transfer was particularly significant because it led most of the residents of the prior home to move to the new home:

63. The same criteria ought to be applied to the case at hand, and lead us to the conclusion that a business has been sold. As to customers, the vast majority of the former residents of Balmoral Lodge are now residing at Riverview Manor. That is not surprising. An employer who gives up a licence or government contract, voluntarily or otherwise, can no longer service its former cli­entele. Along with the licence or contract, the successor often receives a captive market that is free of competition, not only from the predecessor, but also from others who lack the necessary authorization to carry on business. Riverview obtained two major assets from Balmoral, the licence and the land. The transfer of the licence is particularly significant, because it led most Balmoral residents to move to Riverview Manor. (Both parties to the transaction contemplated residents would move from one home to the other, as evidenced by the contract that ties the date from which interest runs to the transfer of patients.) In this sense, the licence is the essence of the business. There was little else Balmoral could have conveyed to Riverview. Balmoral Lodge could no longer be used as a nursing home, and Balmoral's only other assets were equip­ment and supplies. The transfer of the licence was subject to the approval of the Ministry of Health. But the role of this third party is of no relevance: see the cases referred to at paragraph 33, supra.

64. In Caressant Care Nursing Home of Canada Limited, [1984] OLRB Rep. Aug. 1060, the purchaser owned a number of nursing homes across the province. It had entered the local scene previously by submitting a bid on fifty-six new nursing home beds for which the Ministry of Health had called for tenders. The purchaser's proposal was to build a new home for the beds. The Minis­try invited the purchaser to re-tender for forty-one beds as it wished to have a broader distribution of the fifty-six beds, and the purchaser did so. On March 7, 1983, the purchaser was awarded the forty-one beds and drew up plans for a new building which would include forty-one nursing home beds and forty-one rest home beds. The latter are not funded by the Ministry and do not require Ministry approval.

65. Just prior to the award, the purchaser became aware that another home was being put up for sale by its receiver/manager. On March 14th, 1983, the purchaser submitted a tender to buy the home, subject to it receiving the new beds tendered for earlier. The receiver/manager sug­gested that the purchaser re-tender for the license alone as there were problems with the premises and other assets. In any event, it was never the purchaser's plan to occupy the building of the pre­vious home but rather to add its seventy-five licensed beds to the forty-one new beds for which it was constructing a new facility. The evidence in that case indicated that acquiring a license could be valued at between $8,000 and $12,000 a bed. The purchaser acknowledged that the value of the beds were higher if they were already occupied. The transaction was again conditional upon the Ministry's approval. The purchaser then took over the management of the previous home until the new facility was ready and the sale could close. The Ministry issued a tentative approval to the pur­chaser for the seventy-five beds in August of 1983, conditional upon the final inspection and approval of the new facility. All of the residents of the previous home were to be transferred, except for a small number of special care patients.

66. The receiver/manager terminated the employment of all its employees when the new facility was ready and the purchaser advised them that it was taking applications for employment. The purchaser also advertised for staff and received some two hundred and fifty applications, including those of the receiver/manager's employees. All of the latter employees who expressed an interest were offered jobs. Of thirty employees who had worked for the receiver/manager, eight eventually were employed by the purchaser, some for the nursing home and some for the rest home.

67. In coming to the conclusion that these events represented the sale of a business under the Labour Relations Act, the Board noted two significant facts. First, the purchaser had purchased the license which was the government-restricted right to operate the seventy-five nursing home beds. (In this sector, the license and the beds are synonymous.) Second, there was a finding of sale even though the vendor's beds formed only a portion of the purchaser's facility, and the purchaser was firmly established in the nursing home business prior to the transaction.

68. The Board also commented on the evidence that licenses are not actually "transferred" between operators:

69. Dealing with counsel's first point, the evidence of the Ministry makes it clear that licenses cannot technically be "transferred" from one operator to another. Rather, one operator agrees to surrender its licence on the condition that the other be granted comparable one and it is then up to the second operator to satisfy the Ministry that it is an appropriate replacement. If it does, it is ultimately issued a new licence in its own name. The evidence further discloses that the Ministry can on its own initiative only relieve an operator of its licence on limited and narrow grounds, and after lengthy proceedings. That circumstance, plus the fact that the provincial gov­ernment tightly controls the number of nursing care beds it will make available in an area (the Ministry pays two-thirds of the cost of each bed), makes an agreement by an existing operator to voluntarily relinquish its rights in favour of another operator an extremely valuable one. The respondent paid just under a million dollars to secure that agreement in the present case.

70. Against this background, we turn to the specific facts before us. In considering whether there has been a transfer of the Crown undertaking of SENH to Shalom Village, we must distin­guish in this case between the function of the Ministry in issuing the license to Shalom Village and the role of the Ministry in operating SENH. It is the latter with which we are concerned here. It was not suggested that the Ministry's normal functions with respect to the request for proposals process and the awarding of the licenses alone would lead to a characterization that the recipients of the licenses had been involved in a transfer from the Crown. Rather it was the fact that one-third of the licensed beds previously operated by the Ministry at SENH were awarded to Shalom Village which gave rise to the applicant's position.

71. The fact that the licensed beds passed to Shalom Village by means of a request for pro­posals process rather than a direct commercial transaction is not particularly indicative of whether a transfer has occurred in the specific circumstances of this case. The Board has dealt with similar kinds of dispositions in cases both under the Labour Relations Act and under the Crown Transfers Act. In Thunder Bay Ambulance Services Inc., [1978] OLRB Rep. May 467, the Board addressed an application under section 64 of the Labour Relations Act [then section 55]. In that case, ambu­lance service had been provided to the Municipality of Thunder Bay by two local hospitals. When those operations were discontinued, the Ambulance Services Branch of the Ministry of Health conducted a request for proposals to operate a new ambulance service. The director of one of the two former hospital services submitted a proposal which was accepted by the Ministry. The Board noted that the successor rights provisions did not require that there be a direct transfer between the predecessor and the successor, and found that there had been a sale of a business despite the fact that there was no direct contact between the predecessor hospitals and the successful bidder and that no consideration had passed between the two:

72. In a strict commercial or corporate sense, it is clear that there has been no transfer between the predecessor hospitals and the respondent as would constitute a sale. Indeed, the predeces­sors had no assets, inventories (other than sheets, towels and other toiletries), accounts receiv­able or customer lists which could have been transferred and they were prohibited by law from transferring their licenses to operate. The predecessors depended upon the maintenance of their relationship with the Ministry and not on customer goodwill. As discussed in para. 13 herein however, the Board must look beyond the form of the transaction in determining if there has been a "sale of a business" within the meaning of Section 55 of the Act. Notwithstanding the absence of contact between the hospitals and the Thunder Bay Ambulance Service, and not­withstanding the lack of consideration given and received between the two, the Board is satis­fied that the essential elements of the predecessors' businesses were transferred to Thunder Bay Ambulance Services Inc. so as to constitute the sale of a business within the meaning of Section 55 of the Act.

Similarly, the Board has found Crown transfers in a number of cases where contracts for services were let by a tendering process of one kind or another, including requests for proposals. (See KBM Forestry, supra; The Ministry of Natural Resources, supra; Charmaine's Janitorial Services, [1988] OLRB Rep. Sept. 871; Dunning Paving Limited, [1989] OLRB Rep. July 714 and Agassiz Forestry/Environmental Services, [1990] OLRB Rep. June 633).

70. Considerable evidence was led with respect to the nature of the request for proposals process which is normally used for the awarding of newly licensed beds, and the licensing proce­dure in the case of a commercial transaction which involves pre-existing beds. In fact, the form of the request for proposals process in this case, which involved previously licensed beds, was not so very different from the licensing procedure when there is a direct commercial transaction. In both cases, the license reverts to the Ministry and a new one is issued; in both cases the prospective licensee or licensees are scrutinized by the Ministry with respect to their ability to operate a nurs­ing home, and in both cases, approval is largely, if not entirely, contingent upon the prospective licensee or licensees accepting the residents of the predecessor home. In either case, it is not neces­sary for a license recipient to take over physical premises, although a license is only granted when physical premises, either new or pre-existing are equipped with staff and pass a pre-licensing inspection. According to Mr. Sapsford, licenses can be marketed commercially without any kind of premises or facility, as long as the purchaser eventually takes the residents and the Ministry approves. In other words, any distinctions between the licensing process here and that in a direct commercial transaction are not particularly helpful, and the Board's jurisprudence indicates that neither the form nor the nature of the transaction in this case negate the possibility of a transfer within the meaning of the Crown Transfers Act.

71. However, the only physical asset that passed between the Ministry and Shalom Village was the sixty licensed beds. There was no dispute that although Shalom Village contemplated the possibility of purchasing some of the equipment the Ministry had acquired during its tenure, it decided not to do so. Nevertheless, the Board has found a sale of a business under the Labour Relations Act where a license was the only asset transferred, because the license is the essence of the business in the nursing home industry and because it tends to bring with it a captive market of residents (Caressant Care, supra, Riverview Manor, supra). And in this case, a significant number of residents did transfer with the license. Of course, in Caressant Care, supra, the purchaser had paid almost a million dollars for the license, reflecting its relative value. In this case, no such con­sideration was paid. However, as the Crown transfer cases cited above make clear, this is not unusual given that the role adopted by the Crown is that of providing services, rather than running a business for profit. In this case, there was no question that the SENH license was extremely valu­able. Indeed, Mr. Sapsford testified that the Ministry was surprised that the Society chose not to appeal the revocation of the license for that very reason. As a result, it is clear that Shalom Village obtained a valuable asset when it was awarded one-third of the SENH beds, even though in the unusual circumstances of this case there was no direct commercial transaction.

72. The nature of the undertaking in the case of SENH was the operation of a nursing home, and according to the Board in Caressant Care and Riverview Manor, supra, the essence of that operation is the license. Shalom Village received what amounted to a portion of that license when it was awarded the license for sixty of the SENH beds. There was no question that those beds came from SENH. Indeed, the Ministry's witnesses often referred to them during their testimony as the "St. Elizabeth beds" or the "replacement beds". If the Ministry had continued to operate SENH, Shalom Village would not have received the license that it did. The only reason that that portion of the license became available for tender was because the Ministry wished to close SENH. Mr. Sapsford testified that if the Society had appealed the revocation of its license, the Ministry would not have issued the request for proposals for the SENH beds, presumably because there was a chance the Society might have been successful in retaining the beds. Similarly, Shalom Village did not even start construction of its new facility until it received the award, for obvious reasons. In other words, the asset that was transferred was not only valuable but absolutely critical to Shalom Village's operation and it was unequivocally tied to transferring the residents.

73. It is true that only between one-third and one-half of the residents of SENH transferred to Shalom Village when the latter opened. Moreover, this is not a case where the fact that the licensed beds were occupied increased their value, at least to Shalom Village. On the contrary, its concern throughout was that at least some of the sixty beds awarded to it be vacant so that it could admit its own clientele. Nevertheless, it is quite clear from the evidence that Shalom Village was committed to taking as many residents of SENH as the Ministry required, although it was hoped and indeed expected, that that number would be something less than sixty. Because construction was delayed for a variety of reasons, admissions at SENH were actually closed approximately nine months before Shalom Village opened, rather than the anticipated three or four months. This had the effect of reducing further the number of SENH residents it ultimately received. Nevertheless, over half of Shalom Village's beds were occupied by SENH residents when it opened, and it was apparent from the evidence of Mr. Sapsford that Shalom Village would not have received the award it did unless it had agreed to take the SENH residents. Whether or not this could be charac­terized as a formal condition of the award, it is clear from the evidence of Dr. Kaplan that Shalom Village was aware of this requirement. Although the guaranteed SENH clientele may not have been considered "assets" from the point of view of Shalom Village, this fact does tend to highlight the continuity of the undertaking before and after the transfer.

74. A great deal of evidence was also led with respect to the nature of the commitment made by Shalom Village with respect to SENH employees. In addition, Shalom Village witnesses testified at some length with respect to the importance of allowing them to select their own staff in accordance with their criteria and philosophy. It was evident that the Ministry wished the three new licensees to take the majority of the SENH staff between them, and in fact expected that they would. It was equally apparent that the Ministry was not prepared to extract any commitment from the licensees stronger than that of "considering" the staff for employment, and was not prepared to make even that a condition of the award, at least explicitly. This lack of clarity enabled Shalom Village to minimize its commitment to SENH employees in favour of its concerns about the impor­tance of selecting its own staff.

75. However, the Board has noted previously under section 64 that the failure of a succes­sor to hire a predecessor's employees will not negate a finding of a sale because of the potential that parties have for structuring their transactions to minimize or avoid the movement of employ­ees and the temptation to do so if the Board were to rely on this. (See, for example, Zehrs Markets Limited, [1974] OLRB Rep. May 331; Sisman's of Canada Limited, [1980] OLRB Rep. July 1059.) The Board has also found Crown transfers where there is little or no transferring or re-employment of employees. (See, for example, KBM Forestry, supra; Charmaine Janitorial Services, supra and Dunning Paving, supra.) Moreover, as the Board pointed out in Riverview Manor, supra, many successors would prefer to be free to select their employees according to their own standards, but to this preference would effectively undermine successor rights. In this case, we accept that the commitment made by Shalom Village to the Ministry was very limited, that is, only to "consider" SENH staff for employment. However, the fact that even that commitment was made, regardless of when it was made and whether the license was actually contingent upon it, tends to reinforce the links between SENH and Shalom Village. This is particularly so in light of the co-operative arrangements between the Directors of Nursing of each home with respect to application forms and references and the number of SENH staff who were ultimately hired.

76. Some of Shalom Village's evidence was directed at the fact that it was already estab­lished in the operation of the apartment complex, and that the nursing home, which had been con­templated from the outset, was in the nature of an expansion of its pre-existing operation. We do not think that the existence of the apartment complex suggests that Shalom Village was operating a parallel enterprise, and that the roots of the nursing home were in that enterprise rather than in SENH. As noted previously, Shalom Village would not have received the license it did if it were not for the fact that the Ministry wished to close SENH and redistribute the beds. Moreover, in Caressant Care, supra, the Board highlighted the fact that the purchaser was already established in the nursing home field in the relevant geographic area. This did not prevent the Board from find­ing that a sale had occurred, even though the beds from the predecessor formed only a portion of the subsequent operation. In this case, while the Shalom Village beds were only one-third of the SENH total, they formed the entire nursing home operation for Shalom Village. Although there is some minor degree of interchange between several of the staff of the nursing home and the apart­ment complex, they are significantly different types of operations, and the proposition that the SENH beds represented only an expansion of a pre-existing operation is simply not persuasive on the facts before us. Moreover, the Board has found Crown transfers even where previously estab­lished operations contracted with the Crown to perform certain services. (See, for example, KBM Forestry, supra.)

77. There is some analytical tension between the fact that the Crown Transfers Act captures transfers of a part of an undertaking, and the proposition that if too small a portion is transferred, it may no longer represent the transfer of an undertaking at all. The line between these two situa­tions is particularly difficult to discern in the case of a Crown undertaking, given the Board's obser­vation in Charmaine Janitorial Services, supra, that the notion of a coherent and severable part of the business is not necessarily appropriately transferred to the Crown Transfers Act. We were not asked to comment on the minor awards from the SENH pool to pre-existing homes to increase their licensed capacity by two to five beds in this context, and we do not find it advisable to do so except to say that they represent different fact situations from that before us.

78. Both the Ministry and Shalom Village argued that this situation was more analogous to a case where an enterprise had failed or gone bankrupt, and that as a result, there was no continua­tion of the enterprise. However, the Board has found that there has been a sale of a business even in business failure or bankruptcy circumstances, including the pertinent example of Caressant Care, supra. In any event, the bankruptcy analogy is not particularly apt. There is no doubt that SENH was in serious trouble at the point at which the Ministry took over the enterprise, at least with respect to the kind of care it was providing to residents. Nevertheless, it is clear that matters improved immediately with the increased resources and expertise the Ministry was able to bring to bear on the situation. There was no evidence that the Ministry was required to close SENH for business or other reasons; rather the evidence is that it wanted to close SENH because it did not wish to operate a nursing home, the same reason that many predecessors have disposed of their operations.

79. Shalom Village led a considerable amount of evidence to the effect that its operation could be distinguished from that of SENH by virtue of its unique ethnic orientation, and certain other features such as the division of Shalom Village into modules to avoid an institutional atmo­sphere, its emphasis on independence and rehabilitation on the part of its residents, and so forth. To its credit, Shalom Village did not argue that it required its staff to be Jewish and indeed of the current employees, only Ms. Burman is Jewish. In response, the applicant took the position that the nursing home industry was so heavily regulated with respect to hours of various types of nurs­ing and other care, nutritional standards, and other requirements, that nursing homes were much more standardized than other operations might be. As a result, any distinctions which might be drawn between SENH and Shalom Village were minor in terms of the overall continuity of the undertaking.

80. The evidence led before us was sufficient to persuade us that Shalom Village was a good nursing home with a progressive philosophy and a specifically Jewish ambience. Nevertheless, the essence of its operation was to provide geriatric residential care to an ailing and elderly clientele, and in this respect, it was no different than any other nursing home including SENH. In other words, the nature of the work performed before and after the license transfer was the same, and the differences between Shalom Village and SENH amounted to minor nuances on this central theme of running a nursing home. Counsel for Shalom Village acknowledged that in light of the Board's jurisprudence with respect to section 64(5) of the Labour Relations Act, he was not sug­gesting that Shalom Village had changed the character of the undertaking so that it was substan­tially different within the meaning of section 4(2) of the Crown Transfers Act. As a result, we note in passing only that the Board said in Caressant Care, supra, that moving a nursing home operation to upgraded facilities does not represent the kind of change envisioned by section 64(5).

81. Shalom Village also emphasized the fact that it had previously applied for new beds unrelated to those at SENH. Counsel appeared to suggest that because Shalom Village had no interest in the source of the beds but simply wished to acquire a license, it should not be subject to successor obligations. In his view, Shalom Village had a right to pursue its dream of a nursing home for the Jewish community in Hamilton without interference.

82. It is quite true that Shalom Village might have obtained a license in circumstances from which no statutory labour relations consequences would flow. In this case, however, it did not. The licensed beds which Shalom Village received came from SENH, a fact Shalom Village representa­tives knew from the outset. And in this legal context, the source of the undertaking or a relevant portion of the undertaking is crucial. This is because the underlying purpose of the Crown Trans­fers Act, like that of section 64 of the Labour Relations Act, is to protect the continuity of bargain­ing rights and the benefits and obligations which flow from them. (See, for example, KBM Forestry, and Charmaine's, supra). If the source of the transferred undertaking is subject to such rights, those rights will transfer as well, in the manner set out in and subject to the provisions of the Crown Transfers Act, regardless of the transferee's or successor’s wishes. Moreover Shalom Village appeared to be suggesting that collective bargaining and its own worthy and laudable goals were incompatible. Even assuming, without finding, that we would be prepared to entertain such an argument, there is nothing before us which would support such a proposition.

83. Some of the evidence led by Shalom Village appeared to be directed at a sort of estop­pel argument, to the effect that because the Ministry had not expressly required the new home to take the SENH staff, it would be unfair to Shalom Village at this point to make a declaration from which this result might flow. Emphasis was placed on Mr. Sapsford's statement to Shalom Village representatives in February of 1990 that successor rights did not apply. However, even if we assume, without finding, that it is possible to apply an estoppel-like concept either to the Crown or in these circumstances, this suggests that the Board should decline to provide a remedy which is otherwise necessary or appropriate because one of the parties did not sufficiently inform itself with respect to its legal obligations. We do not find this persuasive, particularly in light of the fact that Mr. Sapsford represents the Ministry, not the applicant. Nor can Shalom Village accurately charac­terize itself as an innocent victim of these circumstances. Indeed, it is clear from the evidence that shortly after the award, Shalom Village became aware that Mr. Baldry and Mr. Sapsford had somewhat different views with respect to the nature of its obligation toward the SENH staff, and that it preferred to rely on the Ministry's ambivalence in the hope that its ultimate obligation would be minimal. Moreover, given Mr. Baldry's assurances to Mr. Piersanti, it may be said that the equities in this case are fairly evenly divided.

84. The Ministry argued that if we found a transfer in these circumstances, it would make life more difficult for it with respect to other takeovers under the Health Facilities Special Orders Act. However, we note that the Ministry agreed that SENH had become a Crown undertaking sub­sequent to the takeover. We also observe that the Tribunal has already found that a takeover under the Health Facilities Special Orders Act can amount to a transfer to the Crown (See Ontario Public Service Employees Union, T/0027/85 March 6, 1987). Counsel for the Ministry indicated that its agreement in this regard would not necessarily be forthcoming in a situation which more closely approximated the circumstances contemplated in that Act, that is, where the Ministry takes over the operation of a facility on an emergency basis for a much more limited period of time. Mr. Sapsford also testified that the Ministry had a number of options available to it in these circum­stances. As a result, and given the inchoate and vague nature of the difficulties cited, we are not convinced that this should deprive the applicant of relief to which it would otherwise be entitled.

85. In summary then, a portion of an asset which the Board has said is the essence of a nursing home business passed from the Crown undertaking of SENH to Shalom Village by means of a tendering process which falls within the definition of a transfer. SENH's undertaking was that of a nursing home and Shalom Village entered into the operation of a nursing home as a result of receiving part of SENH's licensed beds. In addition, there were a number of links between SENH and Shalom Village with respect to the residents and employees which reinforced the continuity between the two operations and the fact that the nature of the work performed before was the same as that performed subsequent to the transfer. For all the reasons set out above, we find that there has been a transfer of a part of an undertaking from the Crown to Shalom Village within the meaning of the Crown Transfers Act. As a result of our analysis and conclusions, it is not necessary for us to address either the applicant's alternative argument with respect to section 64 of the Labour Relations Act, or several rulings on which we had reserved.

86. The parties asked that we issue only this declaration and allow them an opportunity to agree on any other remedy. At their request, we remain seized both of any other relief and with respect to implementation.

87. We have now had an opportunity to review our colleague's comments, many of which appear to be directed at whether SENH became a Crown undertaking as a result of the Ministry's takeover under the Health Facilities Special Orders Act. We would note merely that this is not an issue which we have decided. As a result of the parties' agreement that SENH became a Crown undertaking after the Ministry's takeover, we have addressed only whether the subsequent events amounted to a transfer of a portion of that undertaking to Shalom Village.

88. A number of our colleague's other comments, including those with respect to abandon­ment, notice to employees and the Ministry's conclusion that SENH's staff had become civil ser­vants, were not argued or relied upon by the parties. In this regard we would note only that since Shalom Village had no employees when these proceedings commenced, it was not possible for the Board to notify them of the proceedings. The hearings in this matter took place over a period of a year and one-half, during which time this issue was never raised, even by our colleague. There was no evidence with respect to whether Shalom Village advised any employees it subsequently hired of the on-going litigation.

DECISION OF BOARD MEMBER R. M. SLOAN; July 10, 1992

I Introduction

1. With respect, I dissent from the majority decision, the net result of which imposes union representation upon a group of employees at Shalom Village, depriving them of their rights under Section 3 of the Ontario Labour Relations Act which reads, in part:

2. Every person is free to join a Trade Union of his own choice ..." (emphasis added).

3. The issue of whether a sale of a business or a Crown Transfer has occurred depends very much on the facts in each case. In this case, in addition to the aforementioned issues, there are a number of considerations which individually or cumulatively, warrant the dismissal of the application or at the very least the ordering of a representation vote, and they include: the Ontario Ministry of Health's (MOH) mandate on the St. Elizabeth Nursing Home (SENH) site; the issue of hiring SENH staff, the MOH decision re SENH employees representation; the Crown Transfers Act matter; the sale of a business consideration, and the timeliness of the application.

II The Ontario Ministry of Health's Mandate

3. It is worthwhile noting that the circumstances that arose and unfolded with respect to the Ministry's presence at the SENH site were indeed novel and unique. In his opening remarks, counsel for the applicant acknowledged to the Board, on two occasions, that the facts relating to this case are "novel" and that a similar case had not previously been adjudicated by the Board.

4. As stated in paragraph 3 of the majority decision, the Ministry assumed operation of the SENH by virtue of its rights and obligations under the Health Facilities Special Orders Act. (HFSOA). The actions taken by the Ministry were motivated, according to the testimony of Mr. Ron Sapsford, out of concern for "... the health, safety and well-being of the residents". Indeed, the exercising of its obligations to residents is the "raison d'etre" for the HFSOA itself.

5. The Ministry's mandate is clearly set out in the HFSOA and does not include the option of operating the SENH on anything but a temporary basis - the Ministry did not purchase nor did it assume ownership of any of the business, assets, property, buildings, plant, equipment, or facilities that made up the SENH complex. The majority decision refers, in a number of instances, to the fact that it was not the intention of the Ministry to operate the home on a continuing basis - under its mandate the Ministry did not have a choice in this respect.

6. The HFSOA makes it quite clear under Section 7 (1) that where the Minister takes con­trol of and operates a health facility it does so on a temporary basis, initially "... for a period not exceeding six months" and under Section 7 (2) the HFSOA is very specific in detailing the respon­sibility of the Minister under this Act "... to conduct, manage, operate and administer the health facility", quite clearly this is an "undertaking" on the part of the Crown.

7. This being the case - the Ministry in keeping with its legislated obligations and prime responsibility - assumed, temporarily, the administrative control of the St. Elizabeth Home for purposes of safe-guarding the well-being of its residents.

8. It is important to make the clear distinction in this case that while the Ministry took over the operation of the SENH it did not assume ownership. Significantly absent from the HFSOA is the right of the Ministry to assume such ownership. It was abundantly clear from the outset - and this is indeed what eventually occurred - that once the last resident left the SENH, the Ministry was history there - it no longer had any presence at the SENH site.

9. With the absolute revocation of the SENH licence, any licence to operate beds for the

184 residents ceased to exist. In paragraph 11 of the majority decision it is acknowledged that the

Ministry did not issue a licence to itself. The authority to operate the facility was acquired under

the HFSOA.

10. The Ministry did not need to issue a replacement licence to itself under the provisions of the HFSOA, nor did it do so. Therefore there was no transfer of any part of the SENH licence - it could not have taken place because the original license with SENH became non-existent, and was not replaced and, this is a fact that is incontrovertible. In a letter dated November 4, 1988, from Mr. Emery Baldry to the Ontario Nurses Association, Mr. Baidry wrote "The nursing home licence which had been granted to the St. Elizabeth Home Society was revoked last year by the Ministry and will not be reissued (emphasis added).

11. There was no transaction to connect the SENH with any of the six (6) nursing homes that eventually acquired residents from the SENH. (There are the three nursing home involved in the bids for new licenses, viz., Shalom Village; Southrim Enterprises; and Heritage Green – and the three (3) nursing homes that were not involved in the bidding process but nevertheless received a number of SENH residents.

12. In essence and in fact it was not a take-over (with all that may imply) of an operation but the revocation of a licence and the temporary operation of a facility. There was, in my view, an absolute and unequivocal separation in all material aspects of the SENH and the six (6) nursing homes which acquired residents from the former SENH facility.

13. The SENH licence was revoked, became non-existent and a process was instituted to issue new licenses, not transfer the licenses to the three main bidders the Ministry undertook to issue new, original licenses, (unqualified as to the revoked SENH licence).

14. The Ministry was not a successor to the SENH and could not legally become so under the HFSOA. In paragraph 15 of the majority decision it is acknowledged significantly I contend, that "... there was no commercial transaction with a purchaser at the end of it".

15. In Riverview Manor, supra, the Board emphasized at paragraph 38 that the transfer of the licence was particularly significant because it led most of the residents of the first nursing home to move to Riverview Manor. (The majority acknowledges this in para 73.) In that case, the vast majority of residents followed the licence.

16. The instant case is quite different on the facts. First of all, Shalom Village only obtained 60 licenses, where SENH had 184, and well over half of SENH'S former residents went to other nursing homes. Secondly, Shalom Village had wished to fill the new beds with members of the Jewish community and had previously applied for licenses for empty beds. The former SENH resi­dents which the MOH required Shalom Village to take as a condition of the new licence were not in that sense a valuable asset to Shalom Village.

17. Unlike the facts in Riverview Manor, in this case, none of the assets and a small minor­ity of the residents of SENH ended up with Shalom Village. In addition, and this bears emphasis in Riverview Manor the licence was sold to Riverview as part of a business and its "transfer" was approved after the fact by the Ministry.

18. Furthermore, residents of the SENH facility were asked to express their preferences with respect to their placement. Presumably, had none requested Shalom Village, the majority and the Board would not have found that a Crown Transfer had occurred.

19. To support the view that the licence issued to Shalom Village was entirely distinct and separate from any that may have been in effect at SENH we need only refer to the language con­tained in the May 20, 1988 letter from Elinor Caplan the then Minister of Health to Mr. L. Price President of the Hamilton Jewish Home for the Aged which reads, in part:

Para 1. "I am pleased to advise you of my decision to award 60 nursing beds..." (emphasis added).

Para 5. "...The Ministry of Health undertakes to grant you a licence... (emphasis added).

III The Hiring of SENH Staff

20. It is unequivocally clear to me that the evidence before the Board supports the respon­dent's and the Ministry's views that there was absolutely no requirement for Shalom Village to hire staff from the SENH. Further, there is an even more compelling case to be made that any "trans­fers" of such staff was never a condition of the bidding process, or the final award.

21. The majority of the Board, in paragraph 75 of its decision, concedes that while the MOH "wished" and "expected" the new licencees to take the SENH staff, it was not prepared to insist on anything more than that the licencees "consider" the SENH staff, and even that was not a condition of the award.

22. With the exception of internal MOH memos and letters, none of which were made available to Shalom Village, none of the documentation entered as evidence, including: the Minis­try's August 6,1987 letter to the St. Elizabeth Nursing Home Society (SENHS); the Ministry's August 18, 1987 letter to the SENHS; the September 11, 1987 Ministry's "News Release"; the Ministry's request for proposals published October 1, 1987; the Ministry's tender documents; the Ministry's May 20, 1988 letter to Mr. L. Price, Hamilton Jewish Home For The Aged; the Minis­try's May 5, 1988 "News Release"; - makes any reference whatsoever to the hiring of staff from the SENH, but is concerned in every instance with the issuing of new licenses and the placement of residents. It is abundantly clear that the hiring of staff was never a condition of the issuing of the award of a licence to Shalom Village.

23. Why the respondent attempted, in the face of unequivocal evidence and testimony to the contrary, including that of Mr. Ron Sapsford - an eminently credible witness - to elevate the words "expect", "consider" and "interview" to the status of a legal and binding commitment, is disturbing, to say the least.

24. Paragraphs 36 and 37 of the majority decision refer to a meeting convened by Messrs. Sapsford and Baldry at which meeting Mrs. Borman of Shalom Village was present - no mention was mad either before or during that meeting of the successor rights issue.

25. In paragraph 38 reference is made to the fact that Shalom Village was non-committal with respect to staff. One wonders why Mr. Baldry would not have pressed the issue of their "obli­gation".

26. As indicated in paragraph 41 of the majority decision Mr. Baldry "... informed the unions, S.E.N.H. employees and the general public ...". Significantly he did not inform Shalom Village that the MOH would help staff relocate.

27. A further meeting between Ministry representatives and the new licensees was held, as referred to in paragraph 47 of the majority decision - and once again there is no mention of succes­sor rights or union representation.

28. If the obligation to take staff was in fact imposed upon nursing homes to whom SENH residents were assigned then why didn't Mr. Baidry require the three (3) "other" nursing homes to take staff? The attempt to explain this by saying that they already had staff is not acceptable - so did Shalom Village have existing staff for its other resident care interests.

29. In paragraph 75 the majority decision refers to a "lack of clarity..." with respect to the hiring of SENH staff and suggests that Shalom Village took advantage of this to minimize its com­mitment. This reference puzzles me as I believe that as outlined above this issue was very clear in the minds of the principals of Shalom Village. They made no commitment nor indeed were they ever asked to make such a commitment to hire SENH staff and that it was not, in any respect whatsoever, a condition of the licence award.

30. A clear distinction must be made between the accommodation of residents and the placement of staff.

a) The first official written indication of Ministry's position with regard to transfers was contained in Murray J. Elston's letter of August 18, 1987 (Minister of Health) to the St. Elizabeth Home Society in the fourth paragraph which reads, in part, "... the orderly transfer of residents to these facilities". (emphasis added).

b) The September 1987 Ministry's News Release (Para. 5) until residents can be moved to the new accommodations.. " (emphasis added).

c) The October 1,1987 newspaper advertisement inviting proposals for nursing home beds was restricted to just that - "nursing home beds" no mention was made of staff, let alone any requirement to hire them.

d) At the October 13 public meeting those people in attendance, were informed according to Mr. Baidry, that the Ministry "... expected them to consider hiring the SENH employees".

This is the first recording of a direct instruction given to Mr. Baidry by his superior Mr. R. Sapsford in which the issue of staff was cov­ered, and the clearly discretionary terms of "expect" and "consider" were employed.

e) Paragraph 34 of the majority decision refers to the Ministry's offer to "... use its good offices" - surely such an offer would not be made if the respondent was obligated to take staff.

f) The "obligation" to accept staff was significantly absent from the award documents because there was clearly no such obligation or condition.

31. A further indication that the Ministry did not have a commitment from Shalom Village (and the two other successful bidders) to transfer staff was the offering by the Ministry of a sever­ance package to SENH employees.

32. Ultimately, Shalom Village interviewed everyone who applied, whether from SENH or elsewhere. Of the total number of employees hired at shalom Village, 7 were from SENH. Those employees who were hired by Shalom Village who happened to have also worked for SENH previ­ously, accounted for a significant minority of the total number of employees hired.

IV The Ministry of Health's Position with Respect to Union Representation

33. Here we have what I believe to be a rather critical issue. Mr. Baldry testified that he and others at the Ministry considered the status of the staff at the SENH following the Ministry take-over and they concluded that the staff were indeed civil servants and should properly be represented by a union other than the SEIU. Notwithstanding this Mr. Baldry decided "....we would not disclose this to the staff' and he continued to deal with SEIU Local 532, including the renewal of a collective agreement with a union, which to his clear knowledge and understanding did not have bargaining rights for the subject group of employees.

34. Neither Mr. Baldry nor the Ministry has the authority to decide the bargaining status of the employees which come under the Crown Employees Collective Bargaining Act (CECBA), and the decision taken by Mr. Baldry and his subsequent actions raises serious questions about the legality of the Collective Agreement and the right of the applicant to claim successor status. I expect that the SEIU President, Mr. Piersanti, given his long experience and his close association with Mr. Baldry, was well aware of the circumstances but chose, for reasons best known to him­self, to ignore the important representation status issue.

V The Crown Transfers Act

35. The majority decision in Paragraph. 55 states that "...since it was common ground between the parties that SENH had become a Crown undertaking..." The parties agreed - and in my view this is all that they agreed to - that the Ministry clearly operated the former SENH - as indeed is required by Section 7 (1) and (2) of the HFSOA. In this respect I would suggest that the term "Crown undertaking" in these circumstances should not be given a significance beyond the Ministry's mandate under the HFSOA", and the ordinary meaning of the word "undertaking".

36. There was clearly no transfer of anything or anyone from the Ministry to Shalom Vil­lage:

a) No personnel either management or bargaining unit employees were transferred.

b) No equipment or other physical facility was either sold or transferred from SENH to Shalom Village. This fact is uncontradicted.

c) No licence(s) was either sold or transferred. New licenses were uncon­nected in any direct manner with SENH issued to the three successful nurs­ing homes following a formal bidding process. This fact is uncontradicted.

d) All of the personnel hired by Shalom village were required to apply for positions at that facility and were treated as new applicants - those people who formally worked for SENH and were hired by Shalom Village were new hires, not transfers from SENH. Shalom Village clearly had the right to accept or reject applicants. These facts are uncontradicted.

e) It is abundantly clear that there was no connection whatsoever between the SENH licence revoked by the Ministry - and the new licence issued by the Ministry to Shalom Village to accommodate the placement of SENH res­idents in other facilities. Indeed at the time that the licence was granted to Shalom Village there was no licence in existence for the SENH residents.

f) It is again in my view, abundantly clear that their was no transfer of a licence and no vendor or purchaser relationship between the SENH and the Ministry.

37. As noted in paragraph 49 of the majority decision we note that Mr. Sapsford did indeed tell Shalom Village that successor rights did not apply. Shalom Village had every right to rely upon this statement considering its source. If Mr. Sapsford, in retrospect, believes that he was in fact giving a "personal opinion" this cannot diminish in any way the reliance placed upon that state­ment at the time it was made by him to Shalom Village.

38. The one overwhelming factor that distinguishes this case from other Crown Transfer cases cited in the majority decision is that the various Ministries, in those cases, operated the undertakings in their own right as owners or proprietors and they disposed of their assets and equipment through normal commercial transactions.

39. In paragraph 70 the majority decision states that "The fact that the licensed beds passed to Shalom Village by means of a request for proposals process rather than a direct commercial transaction is not particularly significant".

40. With the greatest respect I beg to differ - and as I stated earlier, the absolute separation of the SENH, its take-over by the Ministry, and the ultimate granting of new licenses under the Ministry bidding procedure is the crux of the whole matter.

41. The situation described in paragraph 68 of the majority decision is not relevant to this case. It refers to circumstances where, "... one operator agrees to surrender its licence on the con­dition that the other be granted a comparable one . .". In the case of the SENH the nursing home licence was revoked not surrendered.

42. Again, I would respectfully differ with the majority decisions comments in paragraph 86 and I would find that there were no relevant or pertinent links between SENH and Shalom Village with respect to the former's employees.

VI Sale of a Business

43. The applicant did not pursue their initial claim that a sale of a business had taken place

between so the Board did not have to adjudicate this matter.

VII Timeliness of the Application

44. There was an inordinate delay between the time the SEIU became aware of the identity of Shalom Village as one of the three (3) successful bidders and its notice to Shalom Village of its claim to bargaining rights.

45. Evidence shows that Mr. Piersanti and Mr. Baidry were in personal and regular contact from the day (or the very next day) that the Ministry took over the operation of the SENH. It can be safely assumed from the nature of this close contact that Mr. Piersanti was made privy, by Mr. Baldry, to his decision with regard to the union representation rights matter. What possible expla­nation can there be as to why Mr. Piersanti maintained a low profile and did not make his "Crown Transfer" views known to Shalom Village until his letter to them of December 21,1989, other than the fact that he did not want this Crown Employees Collective Bargaining Act matter to become an issue.

46. Shalom Village was advised by the Ministry in a letter dated May 20, 1988 that its bid for a licence was successful. In view of his close association with Mr. Baidry, Mr. Piersanti would surely have been aware of this but he those to wait nineteen (19) months before notifying Shalom Village of his claim to union representation under the Crown Transfers Act.

47. Having tried, unsuccessfully, on two occasions to have a successor rights clause written into the collective agreement, first with SENH and then with the Ministry there can be no accept­able reason for the inordinate delay in contacting Shalom Village on the successor rights issue.

48. I would find that the SEIU abandoned any right it might have had - I maintain that they had no right at all - by unnecessarily delaying notice to Shalom Village as to their claim. The appli­cant clearly sought to extend its bargaining rights rather than to preserve them, a proposition which has not met, in the past, with the Board's approval.

49. The lengthy delay by the applicant in attempting to assert its rights with respect to rep­resentation was clearly prejudicial to Shalom Village and the Board should exercise its discretion and dismiss the application. In testimony before the Board a member of Shalom Village's manage­ment stated that had they been aware of the claim, and after evaluating its potential for success, they could have considered withdrawing their bid for a licence, on the basis that the collective agreement that would accompany the SEIU could contain restrictive provisions which having been negotiated under different circumstances might not be compatible with Shalom Village's "Philoso­phy and Mission Statement".

VIII Summary

50. A dismissal of the application in no way deprives the employees of the right to be repre­sented by a union of their choice - this they can do freely. There would be nothing to stop the SEIU from attempting to organize the employees at Shalom Village. If, as Mr. Piersanti testified, the SEIU represents the appropriate bargaining units "in most of the nursing homes" in the area, they obviously know what they have to do in this regard. The majority decision, in effect, gives special rights and privileges to the SEIU.

51. Most importantly the majority decision denies to the affected employees their legal right to choose to be represented or to not be represented by a trade union - a right unequivocally accorded to them by Section 3 of the Act.

52. The implication that arises from this decision, in my respectful view, is that the preser­vation of union bargaining rights takes precedence over the freedom to make a choice. Much is written in Board decisions about employee rights to organize when it is found that those rights have been denied or challenged by another party - it is ironic that the Board as guardian of the employees' right to choose denies them - in this instance - those very rights.

53. Another matter which causes me concern is the fact that the employees who will be affected by the majority decision were not given the usual Board notice of the application. The reason for this is that there were no employees working in the proposed bargaining unit at the time this application was filed. The Board has long held that parties who could be fundamentally effected by the outcome of a matter being adjudicated before the Board should be given notice and be permitted to participate in the hearing process. In this case that did not happen and the employ­ees were denied the right to present their views had they wished to do so. This is one more reason why I support the use of the Board's discretion to order a vote.

54. It is important to note that quite apart from the serious deficiency of formal notice of the application not having been given the employees~ union representation is being imposed on all those employees in what will become the Shalom Village bargaining unit despite the fact that the number of former SENH bargaining unit employees hired by Shalom Village likely represent under 20% of the subject group. Surely this facet alone warrants the exercise of the Board's discre­tion to order a representation vote.

55. In conclusion, I would dismiss the application outright, alternatively, I would have the Board exercise its discretion and order a representation vote in order that the affected employees will be permitted to participate directly, as is their right, in this important aspect of their lives.