United Steelworkers of America v. Canadian Corps of Commissionaires (Toronto and Region), 1994 CanLII 9906

[1994] OLRB Rep. April 353

3093-93-U United Steelworkers of America, Applicant v. Canadian Corps of Corn­missionaires (Toronto and Region), Responding Party

BEFORE: Judith McCormack, Chair, and Board Members J. A. Ronson and R. R. Montague.

APPEARANCES: P. Turtle, Omero Landi and Michael Arimah for the applicant; C. G. Riggs, Catherine Peters, Col. M. Rich and Capt. A. Griffiths for the responding party.

DECISION OF THE CHAIR, JUDITH McCORMACK, AND BOARD MEMBER R. R. MONTA­GUE; April 25, 1994

1. This is an application under section 91 of the Labour Relations Act in which the appli­cant alleges that the Canadian Corps of Commissionaires ("the Corps") has violated section 81 of that Act. Central to the applicant's case is the assertion that the circumstances before us fall within the ambit of section 64.2. The parties advised us that it would be helpful if we ruled on several of the issues in dispute with regard to section 64.2 first, and we have agreed to do so.

2. Many of the facts in this matter were not in dispute. In April of 1993, the applicant applied to represent employees of Metropol Security Services, a division of Barnes Security Ser­

vices Ltd. ("Metropol"). The employees who were the subject of the certification application worked at Century Plaza at 24 Wellesley Street West in Toronto, a building managed by Park Property Management. In July of that year, Park Property Management declined to renew the con­tract for Metropol, and instead engaged the services of the Corps.

3. We heard extensive evidence with respect to the nature of the services provided by Metropol and the Corps respectively. In large part, these services were either identical or similar. Both companies stationed a uniformed employee at the front desk in the lobby on a twenty-four hour basis. The front desk includes a bank of four television screens monitoring twenty-four cam­eras positioned inside and outside the building. The employee stationed at this location controls access to the building, since the doors are locked. Tenants have their own keys, but others includ­ing visitors, tradespeople, canvassers and so forth must identify themselves to the front desk employee. He will then check with the tenant. If no authorization is given by the tenant, or no advance authorization has been arranged, the person will not be admitted or allowed to remain in the building. Access is tightly controlled, as illustrated by the fact that even police officers may be denied entry in certain circumstances.

4. The employee staffing the front desk also monitors garage access, including issuing visi­tor parking permits. He will take delivery of parcels and other articles, and maintains various records with respect to keys, deliveries, and other matters. In addition, he controls the issuance of keys for a variety of purposes. Part of the job involves answering the telephone at the front desk, where tenants may file requests for maintenance or request assistance with respect to lost keys or other emergencies. Post orders for the front desk include a list of contact people in the event of a fire, bomb threat, injury, power failure, heat loss, or flood. If an incident occurs involving personal injury, damage to property or criminal activity, an incident report must be filed by the employee.

5. There are several minor differences between the services provided by Metropol and those provided by the Corps. However, there are only two distinctions of any significance. Firstly, on the evening and night shifts, Metropol posted two employees to Century Plaza, one to staff the front desk, and the other to patrol the building. Gn the day shift, there was only one employee sta­tioned at the front desk. The parties referred to the front desk duties as concierge services, and the other functions as patrol services. In contrast, the Corps provides only one employee for the front desk on all three shifts. There is no patrolling done, except for a very brief period at 1:00 a. m. and 6:00 a.m. when the employee locks and unlocks a number of doors in the building. The Corps orig­inally submitted a proposal to provide both concierge and patrol duties, but eventually contracted to provide the concierge duties. Secondly, Metropol employees put warning notices on cars in the visitors parking area and on occasion, arranged for them to be ticketed by police and towed away. The Corps employees do not perform this function. Another security company now tickets visitors cars, although it does not arrange for towing.

6. It also appears that since the Corps took over, tenants holding a large party in the recre­ation area will sometimes arrange for other security services as well to screen visitors at the party door. It is not clear what role Metropol employees had previously in these situations. The Corps employees continue to monitor the premises through the cameras and screen visitors at the front door on these occasions. They also lock up the recreation area at the designated time.

7. It is in these circumstances that the Corps argues that it does not provide services that are related to servicing the premises under section 64.2, that the services provided are not security services, and that the services are not substantially similar to those which were provided by Metro­pol.

8. Section 64.2 provides as follows:

64.2-(i) This section applies with respect to services provided directly or indirectly by or to a building owner or manager that are related to servicing the premises, including building cleaning services, food services and security services.

(2) This section does not apply with respect to the following services:

1. Construction.

2. Maintenance other than maintenance activities related to cleaning the

premises.

3. The production of goods other than goods related to the provision of food services at the premises for consumption on the premises.

(3) For the purposes of section 64, the sale of a business is deemed to have occurred,

(a) if employees perform services at premises that are their principal place of work;

(b) if their employer ceases, in whole or in part, to provide the services at those premises; and

(c) if substantially similar services are subsequently provided at the premises under the direction of another employer.

(4) For the purposes of section 64, the employer referred to in clause (3)(b) is considered to be the predecessor employer and the employer referred to in clause (3)(c) is considered to be the successor employer.

(5) This section shall be deemed to have come into force on the 4th day of June, 1992.

9. The effect of section 64.2 is to extend the reach of the sale of business provisions under section 64 to cases where there is a changeover in contracted services, whether or not there is a transaction or nexus between a predecessor and successor employer. The purpose of section 64 was described in Metropolitan Parking Inc., [19791 OLRB Rep. Dec. 1193 in the following manner:

10. The legislative history in this jurisdiction reveals an unbroken trend towards increased pro­tection for employees and their union, and a concomitant increased obligation imposed upon successor employers. Legal doctrines such as "the corporate veil" or "privity of contract" have been de-emphasized, modified or eliminated so that a collective bargaining framework can be developed which will be in accord with industrial relations realities. Not surprisingly, the Board decisions follow a similar trend and, as a result, early decisions do not provide an unfailing guide to the results in later ones. Not only has there been a change in the statutory framework, but as the Board has accumulated experience and encountered more sophisticated business arrange­ments, there has been a development of its jurisprudence. It is important to emphasize, how­ever, that section 55 of the Act has never been regarded merely as an "unfair labour practice" provision, directed at "schemes" designed to subvert bargaining rights. The section is also intended to preserve bargaining rights in the case of bona fide business transactions (i.e., trans­actions undertaken for purely commercial reasons and untainted by any anti-union motivation) which incidentally undermine the industrial relations status quo. This two-fold purpose was dis­cussed by the Board in Aircraft Metal Specialists Ltd., 11970] OLRB Rep. Sept. 703:

"The purpose of section 47a [now section 551 becomes important in assessing the vari­ous fact situations that arise. Section 47a operates on a number of levels. The first level, of course, is to prevent the subversion of bargaining rights by transactions which are designed to get rid of the union. We have encountered situations where there are transactions between various corporate entities which are in effect "paper transactions", and are a form of corporate charade engaged in for the purpose of eliminating the trade union. In this type of case the Board has liberally interpreted section 47a to preserve the bargaining rights and has attempted to look beyond"paper transactions" to achieve that purpose. See e.g. Kem's Masonry, [1964] OLRB Monthly Rep. December 382 and Trenton Riverside Dairy, September 1964 (1964) 2 C.L.S. 76-1005.

A further and important purpose of section 47a is to preserve the bargaining rights with respect to work which has accrued to the benefit of the employees as a result of their union becoming the bargaining agent through certification or voluntary recogni­tion. Once the union had been recognized with respect to a particular business the union then obtains a right to bargain with respect to wages, hours and other condi­tions of employment in that business. The right to participate in the business and its functions in that manner is in the nature of a vested right and section 47a allows the union to pursue that bargaining right when all or part of the business is sold. In mak­ing determinations under section 47a therefore, the Board is interested in maintaining the bargaining rights where the sale involves a continuum of the business."

In recent years most of the litigation before the Board has involved increasingly complex, but bona fide, business transfers which result in the same kind of dislocation as a simple bilateral sale. Collusive arrangements, or transactions explicitly designed to subvert bargaining rights have become much less common; and can, in any event, be dealt with under sections 56, 58 and 61 of the Act. (See, for example: Sun Parlour Greenhouse [1964] OLRB Rep. Jan. 94; Intermountain Industries Ltd., [1975] 1 Can. LRBR 257 (B.C.L.R.B.); Academy of Medicine, [1977] OLRB Rep. Dec. 783; and, more recently, Humber College, [1979] OLRB Rep. June 820.)

10. In Marvel Jewelry and Danbury Sales (1971) Ltd., [19751 GLRB Rep. Sept. 733 the Board made these observations:

Section 55 [now section 64] recognizes that collective bargaining rights, once attained, should have some permanence. Rights created either by the Act or under collective agreements, are not allowed to evaporate with a change of employer. To provide permanence, the obligations flowing from these rights are not confined to a particular employer, but become attached to a business. So long as the business continues to function, the obligations run with that business, regardless of any change of ownership.

11. More recently, the Board made these comments with respect to section 64.2 itself in Accomodex Franchise Management Inc., [1993] OLRB Rep. April 281:

12. Finally, if there is any doubt that the concept of successorship is a rather unique, policy-laden creature of statute, one need only consider section 64.2 which came into force on January 1,1993. It deems a "sale of a business" to have occurred between independent suppliers of ser­vices, even though there may be no sale or disposition of anything between them at all, and the legal successor acquires from its predecessor none of the assets, equipment, etc. needed to sup­ply the services. Bargaining rights attach to a relationship between employees, their work, and their workplace, regardless of who happens to be employing them from time to time. Under sec­tion 64.2 bargaining rights are maintained so long as there is a continuity of work done by unionized employees in that particular location.

Thus the effect of section 64.2 is to protect the stability of bargaining rights even where the con­tract for certain work changes hands.

12. The Corps urged us to interpret section 64.2 in a more restrictive and technical way than the Board has approached section 64. In counsel's view, the language of section 64.2 was com­promissory, and the fact that it dealt with deeming provisions made a broad or holistic approach inappropriate. He conceded, however, that section 10 of the Interpretation Act applied to our inter­pretation of this provision. Thus it seems to us that we are required to construe section 64.2 in the same fair, large and liberal manner that is mandated by that section:

13. Every Act shall be deemed to be remedial, whether its immediate purport is to direct the doing of anything that the Legislature deems to be for the public good or to prevent or punish the doing of any thing that it deems to be contrary to the public good, and shall accordingly receive such fair, large and liberal construction and interpretation as will best ensure the attain­ment of the object of the Act according to its true intent, meaning and spirit.

Of course, to the extent that section 64.2 may be more specific than section 64, its application may also be more specific, but that would result from its language and intent, rather than a different interpretative approach.

13. With this in mind, we turn to the other arguments advanced by the Corps. All three of those arguments are related to a characterization of its operations as reception functions, which provide only a personal service to tenants. We do not think such a characterization accurately reflects the facts before us. There is undoubtedly a personal service component to some of the ser­vices provided. However, it is often related to a security function. For example, a tenant may leave a key with the front desk to be delivered to an identified tradesperson to work in his or her suite. Although it is a reasonable inference from the evidence before us that it is convenient for tenants to be able to arrange for entry to their suites during their absence, it is also part of the access con­trol exercised by Corps employees for security purposes.

14. There are some functions which appear to be purely personal services, such as accepting maintenance requests over the telephone. These are a relatively small portion of the overall responsibilities of the Corps employees, and do not suggest to us that the services as a whole are not security services. Among other things, we observe that the language of section 64.2 is inclusive rather than exhaustive, and that it does not stipulate that the services provided by a company must be exclusively directed at security. There is nothing to prevent a company from providing more than one kind of service to a client. As well, we do not doubt that employees are expected to be courteous to tenants and that "people skills" are required of these employees, as the Corps~ evi­dence indicated. It was apparent, however, that the delivery of security services is likely to involve a public relations aspect, and this alone does not indicate that the services provided are not secu­rity services.

15. Counsel for the Corps appeared to suggest that the fact that the Corps employees were not expected to intervene aggressively in situations which might arise in the building was indicative in defining the kind of services provided. It is clear that generally speaking, employees were instructed to contact police or other authorities when problems arose. However, the evidence indi­cates that surveillance through the television monitors and access control amounted to a significant portion, if not the majority of the position functions. It would be difficult to say that these are not security services. The fact that all possible security services are not being provided does not change the character of the ones that are. An overall view of the Corps' operations at Century Plaza sup­ports the conclusion that the services provided, whether described as concierge duties or not, are in fact security services.

16. Another argument made on behalf of the Corps was to the effect that the services were directed towards the tenants rather than the building, and that as a result, they do not relate to ser­vicing the premises within the meaning of section 64.2(1). We note, however, that although section 64.2 is inclusive, it goes on to make specific reference to building cleaning, food and security ser­vices. This provides us with some clues as to some of the kinds of services it was contemplated would attract the application of these provisions. While cleaning services may be administered to a building structure, the purpose is to provide clean offices or residences to people. Food services are entirely directed towards people, who may work, live or wish to eat at a particular location. Security services may extend protection to people, their possessions and/or the building. In other words, the nature of the services will determine to some extent what is involved in servicing the premises". In this context, we do not find a distinction between the physical structure and the activities carried out in it to be particularly useful. There is no question that the language of section 64.2 reflects an intention that the premises will provide some kind of physical anchor for the appli­cation of the section. At the same time, the use of the wording "related to servicing the premises" suggests the connection to the premises may be considerably less specific than that urged upon us by the Corps.

17. This brings us to the argument that the Corps' services are not substantially similar to those provided by Metropol, an argument which rests largely on the two differences between the services described above. The first involves the absence of a patrolling employee on the evening and night shifts. We think, however, that there is some merit to the applicant's contention that the patrolling employee provided by Metropol operated in essence as an additional set of eyes and ears for the front desk employee. As noted previously, the evidence indicated that if the patrolling employee encountered a problem, he generally radioed to the front desk employee, who would then take the appropriate steps such as calling the police. It was clear as well that the main func­tions of the patrol were to monitor the building and to lock and unlock various doors. Both of those functions are still being carried on to a significant extent by the front desk employee, who monitors the twenty-four building cameras and locks and unlocks doors at certain points in the night shift.

18. There is no doubt that there are some differences, however, both in the extent of the surveillance function and with respect to the ticketing of cars in the visitor parking area. In addi­tion, the patrolling employee seems likely to have had a greater degree of interaction with tenants away from the lobby. Nevertheless, section 64.2 requires only that the services be "substantially similar" to those provided previously. This is in contrast even to the phrase "substantially the same" found in the Employment Standards Act cases submitted by the Corps. It is also quite dis­tinct from the language of section 64(5.1) which provides that the Board may terminate bargaining rights if a successor employer has changed the character of the business so that it is "substantially different". We do not find it necessary for the purposes of this case to analyze the relationship of section 64.2(3)(c) to section 64(5.1). Suffice it to say that both the plain meaning of the phrase "substantially similar" and the context in which it operates suggests a breadth of application which would encompass the facts before us.

19. Nor do we find the distinction between concierge and patrol services particularly helpful in this context. There appears to be some overlap in the actual duties performed by the concierge and patrol employees, such as the locking and unlocking of doors. More importantly, however, there is a significant overlap in function. The patrolling employee monitors the building on foot; the concierge employee monitors the building through cameras. In both cases, the service provided is surveillance. We observe as well that there was no patrolling employee provided by Metropol previously on the day shift. In other words, we do not think the extent of the differences between the services provided by Metropol and those provided by the Corps support the proposition that they are not substantially similar.

20. In conclusion, then, we find that the services provided by the Corps were security ser­vices, that they were related to servicing the premises at 24 Wellesley Street West, and that they were substantially similar to those provided previously by Metropol. As a result, it is not necessary for us to address the applicant's alternative argument that section 64.2 incorporates by reference to section 64 a deemed sale of part of a business.

DECISION OF BOARD MEMBER JAMES A. RONSON; April 25, 1994

1. From humble beginnings as a remedial measure to combat the practice of "double breasting" in the construction sector, section 64 of the Labour Relations Act is now apprehended by some as the panacea for successor rights demands. But to anyone familiar with the legislative and jurisprudential history of section 64 the recent amendments to that section, (embodied in sec­tion 64.2), will appear as being rather oddly worded.

2. The Board has never used a mechanical, legalistic or commercial approach in its appli­cation of section 64. It has always used a large and liberal rather than a narrow interpretation. In that spirit I approach the interpretation of section 64.2 carrying a broad brush. And it is thus with some surprise that I find that the Legislature has not confirmed the Board's liberal approach in the enactment of section 64.2.

3. I find that section 64.2 takes away rights that would otherwise not be caught by section

4. It is a "deeming" provision, creating the paradox of a fact situation which is not a "sale" under section 64 being deemed to be a "sale" covered by that section. It seems to me that since it takes away rights that would not otherwise be caught by section 64 the Board is forced by the Legislature to approach section 64.2 with a stricter, more focused attitude. I do not think anyone would argue that the Legislature wanted the Board to strip away more rights than what was intended by the clear wording of the section.

5. When I focus on the three conditions found in section 64.2 (3) that are necessary for a deemed sale, I find that the Legislature has chosen to emphasize substance and not form. It does so by requiring that the services provided by the new ("another") employer in section 64.2(3)(c) be "substantially similar" to those services which the old employer has ceased to provide as defined in section 64.2(3)(b). It would appear that, consciously, the Legislature chose not to say "the same services" in section 64.2(3)(c) for, as experience has shown, that would involve future fights over trivial differences. By its choice the Legislature has decided not to have the Board enquire into the character of the business as would normally be required by the pre-existing wording of section 64. Rather than being told to analyze the character of the services (which would require a whole range of options), the Board is told to focus straightly and simply on the "services" no longer provided and newly provided by the old and the new employer respectively and decide if they are substan­tially similar. And if they are not, then there cannot be a deemed "sale".

6. The responding employer ("the Corps") provides concierge or receptionist services at the front door of a residential condominium. The previous employer ("Barnes") provided the same service together with a wide range of security services. Barnes' employees patrolled the perimeter of the building and the parking garage. They patrolled the electrical and boiler rooms. They patrolled the games and party room and the floors and stairwells. They were constantly checking locks and checking strangers to the building. The Corps does not provide these services. In fact some of them are provided now by a third employer which was not a party before the Board in this matter.

7. To me it is clear that a substantial part of Barnes' services that ceased pursuant to sec­tion 64.2(3)(b), are not being performed by the Corps. (We were told that the Corps did not want that work.) And if a substantial part of the services by Barnes that ceased are not done by the Corps then it cannot be said that the Corps is providing "substantially similar services" so as to bring it within the ambit of section 64.2(3)(c).

8. Therefore there is no deemed "sale" under section 64.2 and no need to deal with the other issues raised by the Corps. This application must fail and I would order that it be dismissed.