[1992] OLRB Rep. November 1211
1321-91-R; 3098-90-R Ottawa-Carleton Public Employees Union, Local 503, Applicant v. Regional Municipality of Ottawa-Carleton and Carlington Community Services Centre and Daihousie Community Services Centre and Gloucester Community Services Centre and Lowertown Community Services Centre and Overbrook Community Services Centre and South East Ottawa Community Services Centre and Vanier Community Services Centre and Centretown Community Services Centre, Respondents; Ottawa-Carleton Public Employees Union, Local 503, Applicant v. Regional Municipality of Ottawa-Carleton and Pinecrest-Queensway Health and Community Services, Respondents
BEFORE: G. T. Surdykowski, Vice-Chair, and Board Members W. A. Correll and H. Peacock.
APPEARANCES: David Jewitt, Lorne Carter, Gwen Spencer and Richard Bigelow for the applicant; Russel Zinn and Dianna Jossa for Pinecrest-Queensway Health and Community Services, respondent; Donald W. Wilson, M. Rick O'Connor and Rob Kirwan for Regional Municipality of Ottawa-Carleton, respondent.
DECISION OF THE BOARD; November 13, 1992
Originally, these two matters were scheduled to be heard together. However, on the first day of hearing the parties agreed to adjourn Board File No. 1321-91-R pending the disposition of the application in Board File No. 3098-90-R. Having regard to the agreement of the parties, Board File No. 1321-91-R was so adjourned.
The name of the respondent Pinecrest-Queensway Community Services Centre is amended to: "Pinecrest-Queensway Health and Community Services
Board File No. 3098-90-R is an application for relief under section 1(4) and 64 [formerly section 63] of the Labour Relations Act. Section 1(4) provides that:
1.-(4) Where, in the opinion of the Board, associated or related activities or businesses are carried on, whether or not simultaneously, by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, the Board may, upon the application of any person, trade union or council of trade unions concerned, treat the corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and grant such relief, by way of declaration or otherwise, as it may deem appropriate.
Section 64 applies to what is commonly known as "successor employer" or "sale of a business" situations. The purpose of both provisions is to preserve a trade union's bargaining rights from being eroded as a result of corporate restructuring or commercial transactions.
In this application, the applicant trade union asserts that the respondent PinecrestQueensway Health and Community Services (the "P-Q Centre") and the respondent Regional Municipality of Ottawa-Carleton (the "Region") carry on related or associated business or activities in the provision of social services under common direction and control, and that the P-Q Centre and the Region therefore constitute one employer for purposes of the Labour Relations Act. Further, and in the alternative, the applicant submits that there has been a transfer from the Region to the P-Q Centre of the administration and the delivery of social services which constitute a sale of a business within the meaning of section 64 of the Act. The applicant asserts that its bargaining unit has already been eroded in that a number of bargaining unit positions have been lost and that there is a potential for further erosion in the future. The applicant seeks the usual declarations in that respect and relief for affected employees.
The respondents deny that they are engaged in associated or related activities under common control or direction or that there has been a sale of a business between them.
Section 1(4) applies to situations in which activities which generate employment relations governed by the Labour Relations Act are carried on through more than legal entity, whether or not at the same time. This provision gives the Board the power to pierce the corporate veil and declare two or more entities to constitute one employer for purposes of the Act where the Board is satisfied that they are engaged in associated or related activities under common direction or control. In that respect, section 1(4) modifies traditional common-law notions which are based upon the separation between legal entities and the privity of contract. It is a remedial provision intended to prevent the intentional or incidental frustration or erosion of established bargaining rights consequent upon changes in the structure or form of what is, for labour relations purposes, a single business or activity. To put it another way, whatever separation may exist between two or more entities for corporate, tax or other purposes, the Board is entitled to treat them as being one employer for labour relations purposes if they carry on associated or related activities under common control or direction. The purpose of section 1(4) is to protect the bargaining rights of a trade union and the rights of employees to bargain collectively with their employer through that trade union from being undermined by the form, or an alteration of the form, of a business or activity. In applications under section 1(4), the Board is concerned with the functional relationship between entities. Businesses or activities are "related" or "associated" because they are of the same character, serve the same general market, employ the same mode or the means of production, utilize similar employee skills, or are carried on for the benefit of related principals (see, for example, B rant Erecting and Hoisting, [1980] OLRB Rep. July 945 and October 1353). Where the Board is satisfied that two or more entities carry on associated or related activities or businesses under common control or direction, which may but does not necessarily include control over employees, the Board may declare that those entities constitute one employer for purposes of the Labour Relations Act. The effect of such a declaration is that the affected entities share the rights and obligations of an employer under the Act and any applicable collective agreement.
Section 64 has the same purpose and a similar effect. Like section 1(4), it recognizes that a "business" is a concept which does not lend itself to precise definition. Rather, a business is an economic activity (whether for profit or not) which can be conducted through a variety of legal vehicles or arrangements. It is the activity, not its form, which give rise to employee-employer relationships which are regulated by the Act and to which bargaining rights attach. Consequently, under the Labour Relations Act, bargaining rights attach to an activity as an employer rather than to a particular employer name or form of employer, and so long as that activity continues bargaining rights continue to exist. As in section 1(4), common-law or commercial law concepts have limited application to section 64 applications. Indeed it is those very concepts which led to the problems which the two provisions are intended to remedy.
The term "business" is not limited to a commercial or profit making activity. Sections 1(4) and 64 apply equally to traditional commercial activity and to municipalities, school boards, hospitals and other non-profit undertakings which have employees. It is the labour relations aspect of a "business" which is the focus of sections 1(4) and 64. In that respect, it is the continuity of the "activity" which is significant. "Business" is not necessarily synonymous with a particular group or kind of employees or the "work" they perform. Concomitantly, bargaining rights do not necessarily attach to particular work or employees. Although a continuity of work may be significant, it is not always sufficient to justify a finding that that two or more entities constitute one employer, or that there has been a sale of a business. The focus of the inquiry under both section 1(4) and section 64 is the total economic organization, not just the employees or the work performed (see Metropolitan Parking Inc., [1979] OLRB Rep. Dec. 1193; British American Bank Note Co., [1979] OLRB Rep. Feb. 72; Kitchener- Waterloo Hospital, [1991] OLRB Rep. Oct. 1130).
The purpose of sections 1(4) and 64 of the Labour Relations Act is to preserve established bargaining rights, not to extend them or to create bargaining rights where there were none. Further, though they apply to any business or activity, neither provision can be applied mechanically, particularly where the activities under scrutiny are not traditional commercial activities, or where there are parties involved other than the particular entities with respect to which an application has been made. This is especially true when any of the parties involved in the overall picture are arms or agencies of a government or otherwise have statutory duties and responsibilities (see, for example, The Ontario Legal Aid Plan, [1989] OLRB Rep. Aug. 862, [1990] OLRB Rep. Jan. 118 (Div. Ct.); [1991] OLRB Rep. Nov. 1327, 1991 CanLII 7201 (ON CA), 6 O.R. (3d) 481 (Court of Appeal), in which the Court of Appeal emphasized, as did the original Board majority decision, that a funding control does not, by itself, amount to common direction or control within the meaning of section 1(4)).
In this case, the Board has before it hundreds of pages of documentary evidence and days of oral testimony. We do not intend to review the evidence or the representations of the parties. Suffice it to say that we have carefully reviewed and considered all of the evidence and representations before the Board.
The applicant trade union is the bargaining agent for certain employees of the Region; namely, all employees who have not been specifically excluded from the scope of the collective agreement between the applicant and the Region.
The Region is a municipality within the meaning of the Municipal Act, the Municipal Affairs Act, and the General Welfare Assistance Act. It is a second tier municipal government body with responsibilities for a number of Ottawa-area municipalities. As such, it provides a wide range of typical regional government services, including the delivery of social services as mandated by various pieces of legislation, including the General Welfare Assistance Act, the Homemakers and Nurses Services Act and the Day Nurseries Act.
The P-Q Centre is a non-profit corporation established to identify and meet local community needs by developing social services and co-ordinating the delivery of its own and social service agency social services within the Pinecrest-Queensway area of Ottawa. The boundaries of this area are the Ottawa River on the North, Baseline Road on the South, Woodroffe Avenue on the East and the Ottawa City Limits on the West.
The P-Q Centre is one of twelve community Centres in Ottawa. From their inception, the purpose of these Centres has been to facilitate and co-ordinate the delivery of social services on a local community basis and to provide an easily accessible source of information and advice in that respect at a neighbourhood level. The theory was (and is) that social services would be more accessible and more effectively delivered on a community service centre model managed and operated at the local neighbourhood level. In practice, this has meant a physical collocation of various social service agencies in the Centres from which their programs and the Centres' own programs are delivered to the community.
The first Centre, Lowertown East, was begun in 1965 on the initiative of some direct service agencies working in that particular community. A second, first known as the Rochester Unit, then as the Dalhousie Health and Community Services and now as "Somerset West", was formed at the request of residents of the community it serves a year or two later. From the very beginning, funding was a major concern. Initially, the Region and the Children's Aid Society contributed approximately 60 per cent and 40 per cent respectively towards the "administrative and supervisory" costs, and direct services were provided by seconded workers from participating agencies. From somewhat modest beginnings, the Centres have developed into a sophisticated social services development and delivery network.
The Children's Aid Society of Ottawa-Carleton, the Region, the Ottawa-Carleton Regional Area Health Unit, the Family Service Centre, the Catholic Family Service, the Ontario Ministry of Community and Social Services, the Ontario Ministry of Health, and the Youth Services Bureau have all played a prominent role in the development of the community centres. In effect, the centres have brought together a number of agencies including, in this context, the Region.
The P-Q Centre had its beginnings in the late 1970's. From very early on, the Region played a significant supporting role. The applicant asserts that the Region's "support" for the P-Q Centre was such that it was really being run and administered by the Region, or, in the alternative, that the Region transferred part of its social service function to the P-Q Centre. The applicant points to the role played by the Region in procuring the various premises from which the P-Q Centre has operated over the years, to the furniture and equipment provided by the Region, and to the P-Q Centre access to the Region's mail and purchase order systems. The applicant submits that the Region's internal documents, public pamphlets, and the telephone directory all identify the P-Q Centre as a Region-administered community centre and demonstrate the nature of the relationship. Further, and most importantly from its point of view, the applicant relies upon the presence of and work performed by Region employees, particularly the "Co-ordinator", at the P-Q Centre. All of this, argues the applicant, serve to show that the P-Q Centre was integrated into and controlled by the Region. In the alternative, the applicant points to the activities of the P-Q Centre and submits that the Region has transferred responsibility for delivery of the social services it is responsible for to the P-Q Centre.
With respect, we do not agree.
The Region has indeed played a significant role in the development of the community social service centres in Ottawa, including the P-Q Centre. More specifically, the Region played a prominent role in procuring the various premises from which the P-Q Centre has operated. Indeed, the P-Q Centre's first premises was leased in the Region's name. It is also true that much of the P-Q Centre's original start-up and administration costs were covered by the Region, through both funding and in-kind contributions. It is true that there are Region documents which suggest that the "Region has launched and sustained a remarkable service delivery structure capable of integrating the funding initiatives of all levels of government with the programs and services of public and private agencies and with the involvement of local residents", that the Centres were bound by the Region's policies, and that centre autonomy was a Region initiative. It is also true that there are Region documents which refer to the P-Q Centre, among others, as being "Regionally administered" and which discuss an "autonomy" program for the P-Q Centre and other Centres so that they can become "independent from the Social Services Department".
It is also true that it is unlikely that the P-Q Centre would be what it is today without the Region's assistance, both initially and over the years.
However, there is also little doubt that there would indeed be a P-Q Centre which would not look terribly different either. Further, the Region's assistance and participation did not, in our view, ever translate into control or direction of the P-Q Centre. Nor did the Region ever delegate or transfer to the P-Q Centre responsibility for the social services which the Region is charged with delivering.
On the contrary, whether it be a dictionary definition or the Region's own definition of autonomy (that is: "the quality or state of being self-governing") which is applied, the P-Q Centre always was autonomous in the sense that, through its Community Board of Directors, it assumed responsibility for the co-ordination of the delivery of social services from the P-Q Centre and control of its own programs and operations.
The idea for the P-Q Centre came from a diverse group consisting of community residents, local politicians and social service professionals working in the Pinecrest-Queensway community. Borrowing somewhat on the earlier community experience in Lowertown East and what is now Somerset West, they sought to create a community based social service delivery scheme which would enable the community to help itself. As the idea which came to manifest itself as the P-Q Centre developed, the Region was identified as the most readily available source of the funding which was so crucial to its early development. The Region recognized the merit in the idea and responded positively, though somewhat tentatively at first, to the community groups' overtures in that respect. The Region agreed to provide a co-ordinator, a receptionist and office space. With time, the Region became satisfied that the community resource centre model was a viable and useful concept, and increased its commitment, both generally and specifically to the P-Q Centre.
However, since its initial important infusion of resources, the Region's sustaining role, though still important, has diminished in relative terms. In any event, the Region's role has always been that of a supportive funder, not a directing or controlling one.
The Region could have simply provided funding to the P-Q Centre. However, it chose to provide people and other "in-kind" assistance in addition to funding, not because it wanted to control or direct the P-Q Centre (though it was obviously concerned with how the P-Q Centre would use the resources it provided to it), but because it was more economical to do so as a result of a 50-50 cost sharing with the Province available with respect to the people provided and the availability of in-kind resources.
Even prior to incorporation, the P-Q Centre had, as it does now, a Board of Directors which was heavily dominated by community representatives and aggressively independent. However, the Board of Directors had to find its feet and until it did so, it leaned rather heavily upon the Region and the personnel supplied by the Region. This resulted in a certain tension between the P-Q Centre and the Region, and between the Board of Directors and the first co-ordinator, until the parameters of the relationship, and the P-Q Centre's independence were more clearly established.
As we have already indicated, the P-Q Centre's first co-ordinator was a Region employee who came to the P-Q Centre as part of the Region's funding contribution to it. In those early days, everyone, and no one less than the Board of Directors, recognized that the P-Q Centre needed a co-ordinator to assist the Board of Directors. The Board of Directors saw the co-ordinator as being an advisor and resource person whom it could consult as part of its decision- making process, and as the person who would oversee the implementation of the decisions and initiatives of the Board of Directors. The first co-ordinator did not see things quite this way. She viewed the P-Q Centre as a kind of adjunct to the Region's social services department and herself as a representative of the Region. A conflict quickly developed and came to a head. In the result, the Board of Directors secured the removal of this first co-ordinator.
The Region then moved unilaterally to assign a new co-ordinator to the P-Q Centre. The Board of Directors quickly and effectively voiced its displeasure and concern. After some discussion, and only after the Board of Directors was satisfied that this second co-ordinator, and the Region, understood and accepted the co-ordinator's role as the Board of Directors saw it, did the P-Q Centre accept the second co-ordinator.
The P-Q Centre's actions were inconsistent with the suggestion that it was subordinate to the Region. Further, the dispute and its resolution established, at a very early stage, the relationship between the P-Q Centre and the Region. Since then, the P-Q Centre's various co-ordinators have been responsible for overseeing the development of the Centre's services to the community and for co-ordinating and administering the affairs of the Centre, under the direction of the PQ Centre's Board of Directors. The co-ordinators have functioned in the manner of a typical executive director of a non-profit agency. Indeed, the position has recently been retitled "Executive Director". Until recently, the person in that position has been a Region employee for administrative purposes and has maintained the requisite administrative links with the Region in that respect.
The individual co-ordinators have always wielded a significant amount of influence at the P-Q Centre. This is inherent in the position. However, the Board of Directors has not always followed a co-ordinator's lead or advice. On the other hand, the co-ordinator has always taken his/her lead from the Centre's Board of Directors and has operated within its mandate. The P-Q Centre has always had a rather well-developed agenda, and since the departure of the first co-ordinator it was clear that the co-ordinator was there to assist and carry out the directions of the P-Q Centre, and was not there as an instrument or representative of the Region or its policies. All co
ordinators since the first one, have understood that their first obligation was to the P-Q Centre. The Region has also understood and accepted this.
The Region also accepted the Centre's overall supervisory role over other Region administrative employees at the Centre. While at the Centre, these other Region employees performed Centre work as part of the P-Q Centre's facilitating and co-ordinating role. The situation with these employees was not quite as clear as with the co-ordinator, particularly since their role with respect to Region programs run out of the P-Q Centre was not readily distinguishable from that of Region employees not located at the P-Q Centre.
Taken as a whole, the situation demonstrates a number of things. First, it shows that the Region recognized very early on that it had a supporting role which it accepted in part because of the P-Q Centre's insistence, and in part because it recognized that the independent community based model for delivery of social services was desirable even from its perspective. Second, it was inevitable that the Region's participation in the Centre would evolve to one of a more traditional funder (that is, the infusion of money only, rather than money and other resources) and collocated agency. Third, it shows that the P-Q Centre was not directed or controlled by the Region and that, notwithstanding the suggestions in some of the Region's documents, the P-Q Centre was an independent entity.
Indeed, from the beginning, the P-Q Centre has struggled against the controls which others, including the Region, have imposed or sought to impose on it. The Centre has always had its own agenda which is, general terms, to identify community social service needs and to facilitate and co-ordinate the delivery of a comprehensive package of social services to meet those needs. In that respect, the various participating agencies, including the Region, while retaining the kind of control and expectations which any funder particularly a public funder, have submitted to the Centre's co-ordinating role and to the incorporation of their particular social services program(s) into the delivery network developed by the P-Q Centre, though not into the Centre as such. In the result, the various social service agencies, including the Region and the Children's Aid Society, are active participants in the P-Q Centre which both plays an overall co-ordinating role and provides complimentary and supplementary services. Consequently, the P-Q Centre is neither a mere collocation of existing social service agencies or programs, nor a mere extension of one or more of these agencies.
At present, the Centre receives funding from a variety of sources, including the Ministry of Health (approximately 49%), the Region (approximately 21%), the Ministry of Community and Social Services (approximately 24%), Employment and Immigration Canada (approximately 3%), the Children's Aid Society (approximately 2%), City of Ottawa (approximately 1%) and Health and Welfare Canada (approximately 1%). At the time this application was made, the P-Q Centre ran ten programs of its own:
a) A nursery school program in its own name in which 48 spaces are 100% subsidized. The Region funds 90% and the Ministry of Community and Social Services funds 10%.
b) A Settlement Language Program which is Federally funded and is offered in collaboration with the Ottawa Board of Education which provides the teachers to deliver the actual program.
c) The Crescendo Program which has been operating since 1980. Funded by the Ministry of Community and Social Services, it is designed to address the needs of low income isolated parents and care givers.
d) Health and Welfare Canada funded a one year program designed to provide support victims of domestic violence (this program ended in July, 1991).
e) The Community Development Program funded jointly by the City of Ottawa and the Region.
f) A Primary Help Care Program funded by the Ministry of Health.
g) A Crisis Intervention Program funded by the Ministry of Health.
h) A Health Promotion Program funded by the Ministry of Health.
i) A Mental Health Program funded by the Ministry of Health.
j) A Minorities Outreach Program funded by the Ministry of Health.
There were also four collaborative programs running out of the centre.
a) An ACT (Action for Careers and Training) program. This is an employment initiatives program operated by the Region.
b) A Home Support Services program operated by the Region. It provides short-term home making services and home management counselling.
c) The West End Team of the Children's Aid Society of Ottawa-Carleton has operated from the P-Q Centre since the Centre's inception.
d) The west end office of Housing Help, a community based housing information service for needy persons.
In the past, other centres and collaborate programs have operated from the P-Q Centre including:
a) Deja Vu, a job training and placement program for women developed by the Centre and funded by Employment and Immigration Canada (1983 to 1989).
b) P-Q Ventures, a centre program directed at community owned and directed economic development which now operates separately from the Centre.
c) The West End Legal Aid Clinic. Now independent of the Centre, it began as an Ontario Legal Aid Plan funded service of the Centre.
d) The Youth Services Bureau provided a worker to help assess the needs of young people in the community (1989).
e) Family Services Counsellors worked out of the P-Q Centre from the early 1980's to July 1990.
In our view, a review of the programs run out of this centre indicates several things. First, it shows that the Region has been an important contributor to the P-Q Centre but also that it is not the only one. Second, it shows that the P-Q Centre has developed and continues to develop its own social service programs and that it co-ordinates those programs with needed existing programs from other agencies. Third, the fact that the Region continues to operate its own programs out of the centre helps to explain why the name of the P-Q Centre appears on Region pamphlets and why it is listed in the telephone directory under the Region's Social Services Department, since the Region does itself deliver social services from the P-Q Centre. All of this also demonstrates that the P-Q Centre has not been either solely dependent on, or subordinate to the Region, and that the Region has not transferred any of its social service responsibilities to the Centre. The Region continues to deliver the social services it did before. The difference is that Region now delivers some of the services through the P-Q Centre as part of a co-ordinated delivery scheme.
In the result, we are not satisfied that the P-Q Centre and the Region operate an activity or business under common direction or control within the meaning of section 1(4) of the Act. Nor are we satisfied that the Region has "sold", within the meaning of section 64, any part of its "business" to the P-Q Centre.
We also find it appropriate to note that the mischief against which sections 1(4) and 64 of the Act are directed does not appear to us to be present in this case. No Region employees lost their jobs. Nor have any Region positions or employees been "transferred" to the P-Q Centre. What has occurred is that the Centre's positions previously staffed by what were nominally Region employees are now staffed by people who are in every way Centre employees. Although the positions which were previously located at the P-Q Centre are no longer there and in a sense no longer exist as Region positions, these were at best, temporary and artificial accretions to the applicant's bargaining unit and were not part of any natural bargaining unit growth or expansion. Further, to the extent that P-Q Centre employees are doing what was "bargaining unit work", the applicant's bargaining rights do not attach to it.
The application in Board File No. 3098-90-R is therefore dismissed.