Service Employees' International Union, Local 532 v. Saint Elizabeth Home Society, 1994 CanLII 9907

[1994] OLRB Rep. Apri. 418

0887-90-R; 0888-90-R Service Employees' International Union, Local 532, Appli­cant V. Saint Elizabeth Home Society, Ontario Ministry of Health and Heritage Green Senior Centre, Responding Parties

BEFORE: K. G. O'Neil, Vice-Chair, and Board Members J. A. Ronson and K. Davies.

APPEARANCES: L. A. Richmond, M. Rowlinson and L. Piersanti for the applicant; Maureen Far-son for the Ontario Ministry of Health; H. Keith Juriansz and Michael Neylan for Heritage Green Senior Centre.

DECISION OF K. G. O'NEIL, VICE-CHAIR AND BOARD MEMBER K. DAVIES; April 12, 1994

1. This is an application under the Successor Rights Crown Transfer Act (The Crown Transfer Act) and of section 64 of the Labour Relations Act, for a declaration that the bargaining rights of the applicant (sometimes referred to below as the union or SEIU) bind the responding party, Heritage Green Senior Centre, referred to below as Heritage Green.

2. The events which form the background to this dispute were considered by the Board, differently constituted, in Shalom Village, [1992] OLRB Rep. July 827. The applicant maintains that that decision should be applied to the facts of this case, while Heritage Green argues that the facts and arguments before this panel are significantly different than those before the earlier panel and warrant a different result.

3. Most of the background facts are not disputed by Heritage Green, and we will briefly summarize that aspect of the facts. More detail can be found in the Shalom Village decision.

4. As a result of difficulties with respect to the care of residents, the control of the Saint Elizabeth Nursing Home (SENH) in Hamilton was taken over by the Ministry of Health (the Min­istry) in 1987 under the authority of The Health Facilities Special Orders Act (HFSOA). The license under which the home had been operated was revoked in August, 1987, when SENH indi­cated it would not appeal the revocation of its license.

5. The Ministry ran the home for three years, and during that time, conducted itself in compliance with the collective agreement between SEIU and SENH. At one point, the issue of whether employees had become civil servants was raised between Ministry staff and the adminis­trator of the home, but it was decided not to raise it with the employees. While running the home, the Ministry called for and received proposals to build new facilities to replace the number of licensed beds that were lost to the Hamilton-Wentworth area because of the revocation of the SENH license. As a result of the proposal process, licenses for 184 beds were awarded as follows: Shalom Village (60 beds), Southrim Enterprises (60 beds) and Heritage Green Seniors' Centre (53 beds), and the remaining number of beds were distributed to existing licensees in small numbers.

6. On the facts and argument before the Board in relation to Shalom Village, the Board found that there had 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 the process which led to the issuance of the licenses described above.

7. Heritage Green relies on further facts and assertions relevant to its theory of the case, in addition to the background set out above which are summarized here:

(a) Prior to January 9, 1991 Heritage Green Senior Centre operated a nursing home in Stoney Creek pursuant to a 34 bed license, in conjunction with an 110 apartment building for seniors from which the nursing home rented space. No employees in either operation were represented by a union. From 1983, when it started off opera­tions in the nursing home, continuing until 1991, Heritage Green always had a signed document with an employee relations committee governing its relations with employ­ees. (There is no suggestion that that committee was a trade union or bargaining agent under the Act).

(b) With the revocation of the SENH license on August 25, 1987, that license ceased to exist. The process initiated after the revocation was for the issuance of new licenses. The Request for Proposals indicates the licenses contemplated are for new, additional beds for the Hamilton-Wentworth area. The Ministry of Health did not need to issue a replacement license to itself in order to operate the nursing home, nor did it do so.

(c) On July 18, 1988 the Ministry of Health undertook to award Heritage Green a new original license to operate 53 beds to be added to its previous 34 bed license. The Minister's undertaking was subject to certain conditions, but had no qualifications concerning the revoked SENH license. No written or oral representations related to SENH, whether taking of residents or staff or even considering staff, were made. The written undertaking was qualified as to one important matter, that a new nursing home would be constructed to accommodate the newly awarded and existing beds. Heritage Green was required to put the new license for 53 beds together with the 34 it already had.

(d) On January 9,1991, the Ministry issued an 87 bed license, representing the new 53 beds and the earlier 34 beds, unqualified as to the revoked SENH license. Heritage Green started operating the new nursing home business in the new premises immedi­ately after the issuance of the license. Immediately before moving to the new prem­ises, Heritage Green had 85 employees, most of whom were part-time, with the exception of management employees.

(e) Heritage Green was granted overbedding permission by the Ministry in the amount of 60 beds for about 6 months leading up to the opening of the new facilities to accom­modate residents from SENH who would otherwise have been part of the allocation to Southrim, whose construction had been delayed. This overbedding was lowered to 25 about a week after January 9, 1991 for a period to expire 2 1/2 years later when attrition would have removed the necessity for the additional beds.

(f) 87 beds were originally to have been filled, 34 from the previous facility, approxi­mately 30 (all the remaining residents) from SENH and the remaining 23 from other facilities in the community and the residents' homes. From January 9 to January 31, 1991, Heritage Green filled its new facilities pursuant to its licensed and overbedded capacity with 34 from the previous Heritage Green facility, 5 or 6 from community facilities, 28 from SENH, and the remainder from Hospitals, or directly from the homes of residents.

(g) By January 31,1991 Heritage Green was full with 112 residents, 25 above its licensed capacity, pursuant to the overbedding permission. It was then fully staffed with 106 employees, an increase of 21 over the staffing of the previous operation. Of these 21 most were part-time. Pursuant to the employee agreement referred to above, by which Heritage Green considered itself bound, Heritage Green filled positions after internal posting and consideration of internal qualified applicants first. Some new full-time positions were filled internally. Additional positions were filled through advertis­ing, and 8 or 9 employees from SENH came to Heritage Green by this route, 5 or 6 from the bargaining unit in question. Almost all applicants from SENH were offered positions and accepted them.

(h) During the relevant period, there was a long waiting list for nursing home beds in the Hamilton-Wentworth area. Thus Heritage Green asserts that when it received its 87 bed license, the fact that some residents were still at SENH did not affect the value of the licence, since Heritage Green did not need them to fill the licensed capacity. It could easily have filled them off the waiting list.

(i) Heritage Green also relies on the stipulated fact made during these proceedings, that the union has never applied for and thus never been granted representation rights from the Tribunal under The Crown Employees Collective Bargaining Act (CECBA).

8. The union relies on the factual findings in Shalom Village, and the fact that Ron Saps-ford, a Ministry official involved in these proceedings gave evidence confirming certain facts, which were not accepted by Heritage Green, such as that the Ministry treated itself as a licensee during the time of its operation of SENH, including having itself inspected like any other nursing home. As well, it was Mr. Sapsford's testimony that the Ministry dealt with SEIU in good faith and considered it to be the bargaining agent of the employees in the bargaining unit. The Ministry never objected to SEIU's rights and never required any confirmation by any tribunal. In fact, asserts the union, the Ministry operated as if it were under the Labour Relations Act.

9. Union counsel particularly emphasized the following facts from the Shalom Village decision. At the public meeting on the request for proposals the audience was told that the Minis­try expected the successful proposers to take the SENH residents, and to consider hiring SENH employees. Further, both Heritage Green and the Ministry understood that the license for 53 beds originated from the proposed closure of SENH, without which there would have been no available license. Rosemary Okimi, the former Director of Care for Heritage Green, testified that the old home was not economically viable. They were on the look-out for opportunities to expand their capacity. She answered quite candidly that Heritage Green knew they had to take the residents from SENH. These facts lead to the conclusion, in the union's submission, that the licenses were not new; they were replacement licenses. The new nursing home at Heritage Green would never have been built, would still be a plan of the Seventh Day Adventist Church, with which Heritage Green is associated, if the licenses had not been awarded. The licenses, authorizing the bed capac­ity which made that possible, came from SENH asserts the union.

10. Union counsel emphasizes as well that a license is something of great value. Ms. Okimi said a license was worth more than $10,000 years ago. As well it brings funding of 50% or more per resident, depending on the level of public assistance an individual requires. Heritage Green did not have to pay for the license when it came directly from the government. The most important fact, says counsel, is that without the license there is no nursing home, you don't even plan one.

11. As to the staff, union counsel observes that Heritage Green did hire a few staff from SENH, after advertising, although they retained the right to not hire. They took the SENH staff because they needed people, but also because it was a benefit to have continuity of care, because they were familiar with the SENH residents that Heritage Green knew it was going to be accept­ing. There was no wholesale transfer of employees; they took whom they wanted.

12. The union also relies on the fact that the church has, as it is entitled to, a creed that explicitly includes the aspect of not wanting unions. As a member of the faith, Ms. Okimi had always known this. She testified that it was her assumption that a prairie nursing home formerly owned by the church had been sold because it was unionized. Counsel asks the Board to infer that the message will be clear to employees of the home that adherents of the faith attempt to treat staff well to avoid unions. Counsel suggests that should be considered more significant when such a view is a matter of religious belief than if it were just a business point of view.

13. With that factual background, we will deal with each of the areas of argument, in turn.

I

14. Was the operation of the nursing home by the Ministry an undertaking?

15. The respondent's position was that the operation of the nursing home by the Ministry was not an undertaking within the meaning of the Crown Transfers Act, and thus the first precon­dition for successor rights under that Act could not be met. The parties to the Shalom Village deci­sion agreed that the operation by the Ministry was an undertaking under the Crown Transfer Act.

Heritage Green argues that it was not, and on that fundamental basis the earlier decision should not be applied.

16. Counsel urged us to accept the reasoning of the minority in Shalom Village, which was that the term Crown undertaking should not be given a significance beyond the Ministry's mandate under the HFSOA, which was temporary, and did not extend to a protracted running of the nurs­ing home. The Ministry did not, the minority found, operate the nursing home in their own right as owners or proprietors as in other Crown Transfer cases cited in the majority decision.

17. The word "undertaking" is defined in the Crown Transfers Act as follows:

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

18. The applicant relied on the discussion of the meaning of undertaking in Parnell Foods Limited, [1992] OLRB Rep. Dec. 1164. Undertaking in the applicant's submission is a broad term referring to a going concern, an economic activity, not just a collection of assets.

19. The undertaking here is, in the union's submission, the management and operation of the SENH for the purpose of providing care until alternative accommodation could be found for the residents remaining, in furtherance of the Ministry's role under the HFSOA.

20. Relevant provisions of the HFSOA include the following: 2.The purposes of this Act are:

21. To enable the Minister to act expeditiously to prevent, eliminate or reduce harm to any person, an adverse effect on the health of any person or impairment of the safety of any person caused or likely to be caused by the physical state of a health facility or the manner of operation of a health facility.

22. To enable the Minister to act expeditiously where the conduct of a licensee or of an officer or director of a corporate licensee 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 a written order may take control of and operate the health facility for a period not exceeding six months.

(2) Where the Minister takes control of and operates a health facility under subsection (1), the Minister has all the powers of the licensee of the health facility and the Minister may appoint one or more persons to conduct, manage, operate and administer the health facility and each person so appointed is a representative of the Minister.

(3) The Board, upon application with notice by the Minister, by order may extend the period of time during which the Minister may retain control of and operate the health facility for succes­sive periods of not more than six months each, where the Board is satisfied that a hearing or an appeal has been commenced under this Act and the proceedings have not been finally disposed of and the Minister continues to be 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.

(4) An order under subsection (1) or (3) takes effect immediately and is final and binding on the licensee.

(5) An order under subsection (1) or (3) continues in force,

(a) until terminated by the Minister;

(b) where the licence for the health facility has been suspended under this Act, until the suspension is removed; or

(c) where the Minister has proposed under this Act to revoke the licence for the health facility, until the time for requiring a hearing or an appeal has expired or until the proceedings have been finally disposed of and, where persons are cared for in the health facility, until every person cared for in the health facility has found alternative accommodation.

21. Under the Nursing Homes Act, Ministry officials are required to oversee the running of nursing homes and the transition period where licenses are revoked. See, in particular section 19 [formerly section 12] which provides as follows:

19.-(1) Where the licensee's licence is revoked and the revocation becomes final or where the nursing home is otherwise being operated without a licence, the residents or their representa­tives shall arrange to vacate the premises as soon as it is practicable and the Director shall assist in finding alternative accommodation.

(2) For the purposes of arranging alternative accommodation under subsection (I), the Minister may, despite sections 25 and 39 of the Expropriations Act, immediately occupy and operate the nursing home or arrange for the nursing home to be occupied and operated by a person or orga­nization designated by the Minister, for a period not exceeding six months, but all the rights of the licensee under that Act, except the right to possession, are preserved.

(3) Where the licensee's licence is revoked and the revocation becomes final or where the nurs­ing home is otherwise being operated without a licence, the licensee and the administrator shall hand over to the Minister, or a person designated by the Minister, all the records that are in their possession or control and that pertain to the residents of the nursing home.

As well, section 6 of the Ministry of Health Act provides that it is the duty of the Ministry of Health to maintain nursing homes.

22. We have considered the broad meaning of the word undertaking and the fact that the running of the nursing home, which went on for three and a half years, was in furtherance of statu­tory mandates given to the Ministry itself under the Ministry of Health Act, the Nursing Home Act and the HFSOA. It was at the very least part of a program or project of the Ministry, terms found in the definition of undertaking. We have concluded that, on the facts of this case, the preferable view is that the operation of the nursing home by the Ministry was part of a Crown undertaking, and we so find.

II

23. Was there a transfer of the Crown undertaking? Transfer is defined in the Crown Trans­fers Act as follows:

"transfer" means a conveyance, disposition or sale.

24. Heritage Green argued that no transfer occurred from SENH or the Crown when Heri­tage Green was issued its license for 53 beds. Rather they argue that what took place was the issu­ance of a new license, unconnected to SENH.

25. Counsel for Heritage Green submits that any attempt to relate the issuance of licenses to Heritage Green back to the no longer existent SENH licenses confuses the issue, and mixes the

questions which would exist under the Labour Relations Act with the proper one under The Crown Transfer Act. Counsel says there were two distinct transfers if any. Counsel says that in answering the question as to whether there was a transfer of part of an undertaking from the Crown to Heri­tage Green, in 1991, it does not matter that SENH had those beds in 1987. Counsel replies to the union s reliance on Parnell Foods, cited above, saying that nothing at all in the way of an economic vehicle was transferred from the Crown.

26. Counsel for Heritage Green referred to the portion of the Shalom Village decision where the events surrounding the issuance of the licenses to Shalom Village, Heritage Green and others, were compared to a commercial transaction involving the sale of a nursing home license. Counsel did not accept the validity of the comparison and detailed the differences between a usual commercial transaction and the process involved in this case:

• there was no right of anyone to designate who would be the recipient as there would have been with a commercial vendor, where the surrender of the license would be conditional on the issuance to the purchaser. And there was no license for SENH to surrender at the time of the issuance of the new license to Heritage Green.

• there was no commercial transaction at all here, and no involvement of any third party. There was a 3 1/2 year hiatus between the time when SENH's license was revoked and ceased to exist and the time Heritage Green's began to exist. No such hiatus would occur in a commercial transaction.

27. By contrast, union counsel relies on the finding in Shalom Village that there was a trans­fer. He submits that in terms of the transfer of this undertaking, what was transferred was the entire core of the nursing home operation: the license and the residents. Responsibility for the care of the residents, together with the funding for those residents was passed to the new licensees. Three new nursing homes were built as a direct result of the promises of the licenses involved here.

28. Union counsel argues that in the nursing home field, the Board has recognized the transfer of the license as the key element. Counsel refers to both Shalom Village and decisions such as Parnell Foods Limited, cited above and Riverview Manor, [1983] OLRB Rep. Sept. 1564, for a discussion of the Board's efforts to interpret the section in a manner sensitive to the particular business sector involved.

29. In answering Heritage Green's argument that the license, the piece of paper possessed by SENH, is gone, union counsel refers to the fact that a change of license always has to go through the Ministry and is never handed over the table. The jurisprudence has not found that a business disappears when the vendor surrenders its license to the Ministry. It survives the process necessary to get the new license issued to the purchaser.

30. Union counsel submitted that whether or not the staff is transferred is irrelevant, because one could just avoid successor rights by refusing to hire the employees of the predecessor. However, the union argues that on the facts in this case, the fact that Heritage Green hired some of the SENH employees tends to reinforce the idea that the business came from SENH, through the Ministry. The SENH staff were a benefit to Heritage Green in order to provide continuity of care to the SENH residents. The Ministry was just the vehicle.

31. We have carefully considered whether we should depart from the Board's finding in Shalom Village (see paragraph 85) that the tendering process involved in the closing of SENH fell within the definition of a transfer in the Crown Transfers Act, and that what was transferred was a portion of an asset which the Board has said is the essence of a nursing home business. The main

arguments made to us against this finding are that the transaction in issue here does not resemble a commercial transaction and that nothing of an economic vehicle was transferred.

32. Assuming for the sake of argument that the transfer of the license does not resemble a commercial transaction, the fact that part of the running of the nursing home passed from the Min­istry to Heritage Green by means other than a commercial transaction is not determinative given the definition of transfer in the Crown Transfers Act. To find otherwise would be to import info the definition some requirement that the conveyance be for financial consideration or follow some pre­scribed commercial expectation, which we have no power to do. We find that the words "convey­ance" and "disposition" in particular are sufficiently broad to cover the issuance of the license to Heritage Green and the transfer of the responsibility to care for the patients together with access to funding therefor, from the Crown to Heritage Green.

33. As to the idea that nothing passed from the Crown to Heritage Green which could con­stitute the kind of economic vehicle referred to in Parnell Foods, we do not agree with Heritage Green's submission. In the circumstances, where the Crown was actually operating the Home, it transferred not only a portion of the license which is an essential part of the economic vehicle of a nursing home - At the same time, the patients, responsibility for them, and the right to substantial funding also passed. (This is not to be taken as a suggestion that a transfer of residents between institutions without more, constitute a Crown Transfer). As well, we do not consider the fact that Heritage Green could have undoubtedly filled its new beds without the transfer of the residents of the former SENH, which the Ministry was running, to be terribly significant. The fact is they did come from there. As to whether or not the Crown got anything in return (which may not be rele­vant in any event) we view the relief from the responsibility of providing the care of the residents as a not insignificant consideration.

34. For the above reasons, the arguments made do not convince us that a finding similar to that in Shalom Village should not be made on the somewhat different, but extremely similar, facts before us. Thus, we find that the same process which resulted in a transfer of part of a Crown undertaking to Shalom Village also resulted in the transfer of part of a Crown undertaking to Heri­tage Green.

III

35. Were there valid bargaining rights to be transferred? Heritage Green argues in the fur­ther alternative, that SEIU was not a bargaining agent as that term is defined in the Crown Trans­fers Act for the purpose of transfers from the Crown to employers. Thus it takes the position that there was no valid and enforceable collective agreement with the Crown, as SEIU was not capable of being a valid partner to a collective agreement with the Crown. It would follow then that Hen­

• tage Green is not bound by the document alleged to be a collective agreement between the Crown and SEIU; no successor rights would flow.

36. Further statutory provisions referred to in this portion of the argument not already set out above include the following:

From the Crown Transfer Act.

"Board" means the Ontario Labour Relations Board; ("Commission")

"Tribunal" means the Ontario Public Service Labour Relations Tribunal; ("Tribunal")

2.-(1) Where an undertaking is transferred from the Crown to an employer and a bargaining agent has a collective agreement with the Crown in respect of employees employed in the under­taking, the employer is bound by the collective agreement as if a party to the collective agree­ment until the Board declares otherwise.

(3) Where an undertaking is transferred from the Crown to an employer and a bargaining agent has been granted representation rights under any Act and has given or is entitled to give written notice of desire to bargain to make or renew a collective agreement in respect of employees employed in the undertaking, the bargaining agent continues, until the Board declares other­wise, to be the bargaining agent in respect of the employees and is entitled to give to the employer written notice of desire to bargain to make or renew, with or without modifications, a collective agreement, as the case requires.

3.-(i) Where an undertaking is transferred from an employer to the Crown and a bargaining agent has a collective agreement with the employer in respect of employees employed in the undertaking, the Crown is bound by the collective agreement as if a party to the collective agreement until the Tribunal declares otherwise.

(2) Where an undertaking is transferred from an employer to the Crown while an application is before the Board for certification or termination of bargaining rights in respect of employees employed in the undertaking, the application shall be transferred to the Tribunal and the Crown is the employer for the purposes of the application as if named as the employer in the applica­tion until the Tribunal declares otherwise.

(3) Where an undertaking is transferred from an employer to the Crown and a trade union or council of trade unions has been certified by the Board as bargaining agent or has given or is entitled to give written notice of desire to bargain to make or renew a collective agreement in respect of employees employed in the undertaking, the bargaining agent continues, until the Tribunal declares otherwise, to be the bargaining agent in respect of the employees and is enti­tled to give to the body representing the Crown or to the Crown, as the case requires, written notice of desire to bargain to make or renew, with or without modifications, a collective agree­ment, as the case requires.

7.-(i) An application may be made to the Tribunal or to the Board and,

(a) the Tribunal may declare whether or not a trade union or council of trade unions qualifies as an employee organization under the Crown Employees Collective Bargaining Act; and

(b) the Board may declare whether or not an employee organization qualifies as a trade union or council of trade unions under the Labour Relations Act.

(2) Where the Tribunal is not satisfied that the trade union or council of trade unions is so quali­fied or the Board is not satisfied that the employee organization is so qualified, the Tribunal or the Board, as the case may be, may specify the steps necessary to so qualify and when satisfied that the steps have been taken,

(a) the Tribunal shall declare that the trade union, council of trade unions or the successor of either of them is so qualified; or

(b) the Board shall declare that the employee organization or its successor is so qualified.

(3) A trade union, council of trade unions or successor of either of them that is declared by the Tribunal to be so qualified shall be deemed to have been qualified as an employee organization under the Crown Employees Collective Bargaining Act from and including the day of the trans­fer to the Crown of the undertaking to which the declaration relates.

(4) An employee organization or its successor that is declared by the Board to be qualified.shall be deemed to have been qualified as a trade union or council of trade unions under the Labour Relations Act from and including the day of the transfer to the employer of the under­taking to which the declaration relates.

10. For the purposes of the Crown Employees Collective Bargaining Act and the Labour Rela­tions Act, notice given under this Act of desire to bargain to make or renew, with or without modifications, a collective agreement or a declaration by the Board or the Tribunal that an employee organization, trade union or council of trade unions is the bargaining agent in respect of the employees in a bargaining unit has the same effect as the granting of representation rights or certification as bargaining agent.

From the Crown Employees Collective Bargaining Act:

"employee organization" means an organization of employees formed for the purpose of regu­lating relations between the employer and employees under this Act, but does not include such an organization of employees that,

(a) receives from any of its members who are employees any money for activities carried on by or on behalf of any political party,

(b) handles or pays in its own name on behalf of members who are employees any money for activities carried on by or on behalf of any political party,

(c) requires as a condition of membership therein the payment by any of its members who are employees of any money for activities carried on by or on behalf of any polit­ical party,

(d) supports or requires its members who are employees otherwise to support any politi­cal party, or

(e) discriminates against any employee because of age, sex, race, national origin, colour or religion; ("association d'employ~s")

6. The Tribunal shall not grant representation rights to any employee organization in the forma­tion or administration of which there has been or is, in the opinion of the Tribunal, participation by the employer or any person acting on behalf of the employer of such a nature as to impair the employee organization's fitness to represent the interests of employees in the bargaining unit.

NEGOTIATION OF AGREEMENTS

7. Upon being granted representation rights, the employee organization is authorized to bargain with the employer on terms and conditions of employment, except as to matters that are exclu­sively the function of the employer under subsection 18(1), and, without limiting the generality of the foregoing, including rates of remuneration, hours of work, overtime and other premium allowance for work performed, the mileage rate payable to an employee for miles travelled when he or she is required to use his or her own automobile on the employer's business, benefits pertaining to time not worked by employees including paid holidays, paid vacations, group life insurance, health insurance and long-term income protection insurance, promotions, demotions, transfers, lay-offs or reappointments of employees, the procedures applicable to the processing of grievances, the classification and job evaluation system, and the conditions applicable to leaves of absence for other than any elective public office or political activities or training and development.

8.-(1) Upon being granted representation rights under section 4, the employee organization.may give the employer written notice of its desire to bargain with the view to making a collective agreement.

(2) The parties shall meet within fifteen days from the giving of the notice or within such further period as the parties agree upon and they shall bargain in good faith and make every reasonable effort to make a collective agreement.

37. Counsel for Heritage Green observes that the Crown Transfers Act applies to both transfers from a "private sector" employer to the Crown and transfers from the Crown to another employer. When one looks at how the statute defines its terms, counsel for Heritage Green main­tains it is important to keep that in mind. The definition of bargaining agent is as follows:

"bargaining agent" means an employee organization that has representation rights under the Crown Employees Collective Bargaining Act or a trade union or council of trade unions that is certified as a bargaining agent under the Labour Relations Act;

38. However, the Crown Employees Collective Bargaining Act (CECBA), does not apply to employers other than the Crown, and it defines "bargaining agent" to mean "an employee organi­zation that has representation rights under this Act, i.e. CECBA. Counsel for Heritage Green argues that the Crown Transfers Act should be read consistently with the CECBA definition. This would mean that when it refers to a bargaining agent dealing with the Crown, it should be taken to mean only an organization that has been granted representation rights under CECBA. If this is applied when deciding if the agreement which the Ministry and SEIU treated as a collective agree­ment is one which flows with the transfer we have found above, the result would be that it is not a valid collective agreement under the Crown Transfers Act.

39. The Crown Transfers Act defines "collective agreement" as follows:

An agreement in writing between the Crown or an employer and an employee organization, trade union or council of trade unions covering terms and conditions of employment.

Counsel for Heritage Green submits that when dealing with the Crown, this wording refers to an agreement with an employee organization under CECBA, and when dealing with any other employer, it means an agreement with a trade union under the Labour Relations Act. Counsel says that the term employee organization has no meaning under the Labour Relations Act and "union or council of trade unions" has no meaning under CECBA. The employer's position is that collec­tive agreement as defined in the Crown Transfers Act does not mean an agreement between the Crown and a trade union or between an employer and an employee organization, because those terms do not apply; they would be a statutory mismatch. Thus, unless SEIU had been granted rep­resentation rights under CECBA, it was not capable of entering into a valid collective agreement with the Crown.

40. Counsel for Heritage Green argues that section 2 of the Crown Transfers Act supports his interpretation of the term "bargaining agent", in that it uses the same word as in CECBA when it could have used the word trade union. Counsel argues that the sections of CECBA (6 and 7) that enable an employee organization, council of trade unions or a trade union to apply for a declara­tion that they have successor rights would not have been put there if it was intended that a union that was not a bargaining agent as defined in CECBA had been contemplated. Counsel argued that, for example, if OPSEU was the bargaining agent on a transfer from the Crown to an employer other than the Crown, there would be no need for OPSEU to make application. The reverse would be true concerning a trade union or council of trade unions applying to the Public Service Labour Relations Tribunal (the Tribunal). In sum, counsel argues that section 2 of the Crown Transfers Act requires that the applicant be a bargaining agent with rights granted under

CECBA. Since the evidence is clear that no such rights have been granted, Heritage Green argues that the applicant does not qualify for successor rights.

41. Counsel further observes that SEIU has had six years since they knew of the Crown's involvement to apply for representation rights, but they have never applied or been granted repre­sentation rights. Even if one granted that both the Ministry and the union thought they were oper­ating under the Labour Relations Act, it does not advance the argument in counsel's submission. In any event, counsel suggests that Ministry officials were aware that the employees might have become Crown employees. Further, counsel observes there is no reference to voluntary recogni­tion in CECBA as there is in the Labour Relations Act.

42. Underlying the above is the submission that for an employee organization to have rights under CECBA, it has to be granted them. A deal with the Crown is not enough. Counsel for Heri­tage Green suggests there are a number of very good reasons for that expressed throughout CECBA. For instance, the concept of employee organization excludes certain organizations, such as those who give money to political parties or discriminate against employees on various grounds such as race. Counsel says these are two essential reasons for giving the Tribunal the right to decide who should have bargaining rights and that it should not be enough for a union to just come and make a deal with the Crown. Counsel says one can assume that SEIU chose not to apply for representation rights because they would have had to notify OPSEU if they did.

43. Counsel suggests that a reading of CECBA in its entirety reinforces the notion that the Tribunal was intended to have control over the process, which is another reason why employee organizations have to get their bargaining rights from the Tribunal. Furthermore, a collective agreement under CECBA looks quite different from one under the Labour Relations Act because of the various statutory provisions as to its contents.

44. It is the Ministry's submission, adopted by the applicant, that the relevant legislation does not remove the option of voluntary recognition. Ministry counsel referred to section 3(1) of the Crown Transfers Act. She said the critical words are "until the Tribunal declares otherwise". She also refers to section 3(3) to support the idea that the statute contemplates a process that may take place without the intervention of a quasi-judicial body. Counsel observes that section 6(1)(a) provides that a trade union shall not exercise representation rights unless it qualifies under CECBA. It does not say unless it "is granted" rights. Counsel describes what follows as a mecha­nism for sorting out challenges. If someone challenged whether SEIU was a bargaining agent under CECBA, then under section 7 an application may be made. However, it is not mandatory that an application be made before any normal bargaining takes place.

45. Counsel points out that the sections which contain the words "upon being granted rep­resentation rights", sections 7 and 8, appear to refer to new bargaining agents and the rest of CECBA supports the argument that it is not the only option. Ministry counsel refers to section 10 as critical, and in line with section 3(3). Section 10 provides that a notice to bargain has the same effect as a declaration by the Tribunal that an organization has representation rights. It clearly con­templates the option of an organization not proceeding to the Tribunal. This makes sense, counsel submits, as it contemplates an orderly continuation of collective bargaining with access to a tribu­nal if disputes arise, including disputes as to whether or not the union qualifies as a bargaining agent under CECBA. Counsel describes this as a reasonable protocol, as there is no sense requir­ing parties to litigate if they do not have a dispute. When SENH was taken over, there was an orderly transition from SENH to the Ministry. They recognized SEIU and voluntarily negotiated renewal of the collective agreement.

46. Union counsel adopted Ministry counsel's submissions on this point and made some fur-

ther points. The union says that under the Crown Transfers Act, "bargaining agent" is a neutral term since when the bargaining agent goes to a new employer, it does not change its status while it is in transition. Union counsel suggests the definition means exactly what it says: either or both of a union under the Labour Relations Act or an employee organization under CECBA.

47. The union argues further that it has perfectly good status under CECBA, since the Crown is bound until the tribunal declare otherwise. No one needed the Tribunal to declare any­thing, because the parties were content. The employer accepted SEIU and the successor is "stuck" with that, in counsel's submission; what the Ministry did was entirely practical and in furtherance of good labour relations. Counsel underlines that if the Ministry had only been operating SENH for a short period, as it would have preferred, it would have made no sense to go to the Tribunal to rule on a very temporary situation. Counsel further observes that a union only has to qualify as an employee organization and that if you do not qualify, the tribunal allows organizations to take steps to qualify. (See section 7(2) of the Crown Transfer Act). Referring to Hughes Boat Works Inc., 79 CLLC para. 14,230, counsel submits that were there are two possible interpretations, the Board should emphasize what is practical and encouraging of settlements rather than litigation.

48. As to the differences between CECBA and the Labour Relations Act as to the contents of the collective agreement and permissible bargaining subjects, counsel notes that there is nothing to indicate any violation of CECBA. As to the deemed provisions, they are present automatically, whether they appear in writing in the collective agreement or not.

49. The union argues that Heritage Green's argument should be rejected as not legally sound, and because the successor should not be in a better position than the predecessor. Despite having had notice of SEIU's claim since 1988, Heritage Green never raised this issue until 1993, at which time there was no point in going to the Tribunal as SENH was long closed.

50. Counsel for Heritage Green argues in reply that the sections (such as 3 and 10) on which the other two parties rely in the Crown Transfers Act should only be held to apply once SEIU is granted rights by the Tribunal under CECBA.

51. We have carefully considered the arguments of the parties and are of the view that the interpretation advanced by the Ministry and the union is the more sustainable interpretation of the statutes read together. In addition to the points made by counsel, we would add that, within the Crown Transfers Act, where the legislature wished to make a distinction between a union and an employee organization as opposed to the term bargaining agent, which serves for both, it did so, as in section 7. When the plain meaning of the words suggests that it serves for both, and the distinc­tion is made within the four corners of the statute as desired, we do not find sufficient basis for coming to the conclusion that Heritage Green urges upon on us. We also agree that where there is a correct interpretation that avoids a finding that parties must litigate where there is no issue between them, it is the preferable one.

52. Thus, we are of the view that there were valid bargaining rights to be transferred. They did not expire because the Tribunal was not asked to confirm them. Further, even if the collective agreement did not conform to the requirements of CECBA, on which we make no finding, we are of the view that it would not affect the existence of bargaining rights.

IV

53. Was there Intermingling? This question is relevant because of the provisions of section

5(1) of the Crown Transfers Act which provides as follows:

5.-(1) Despite section 2, where an undertaking is transferred from the Crown to an employer who intermingles the employees employed in the undertaking immediately before the transfer with employees employed in one or more other undertakings carried on by the employer or an undertaking is transferred from an employer to the Crown and employees employed in the undertaking immediately before the transfer are intermingled with employees employed in other undertakings of the Crown and an employee organization, trade union or council of trade unions that is the bargaining agent in respect of employees employed in any of the undertakings applies to the Board, in the case of the transfer of the undertaking to an employer, or to the Tri­bunal, in the case of the transfer of the undertaking to the Crown, the Board or the Tribunal, as the case requires,

(a) may declare that the employer or the Crown, as the case may be, is no longer bound by the collective agreement referred to in section 2 or 3;

(b) may determine whether the employees concerned constitute one or more appropriate bargaining units;

(c) may declare which employee organization, trade union or council of trade unions shall be the bargaining agent in respect of each such bargaining unit;

and

(d) may amend, to such extent as the Board or the Tribunal considers neces­sary,

(i) any certificate issued to any trade union or council of trade unions,

(ii) any bargaining unit defined in any collective agreement,

(iii) any unit of employees determined by the Tribunal to be appro­priate for collective bargaining purposes in respect of any of the

undertakings, or

(iv) any unit of employees that is designated by the Lieutenant Gov­ernor in Council as an appropriate bargaining unit for collective

bargaining purposes in respect of any of the undertakings.

54. Heritage Green argues that there has been an intermingling of bargaining unit employ­ees in an exact business carried on by it immediately before the transfer, which was operated with­out a union, and that the Board is entitled to and should declare that Heritage Green is no longer bound by the collective agreement. Counsel refers to and relies on Caressant Care, [1984] OLRB Rep. Aug. 1060. Although that decision was made under the successor rights provisions of the Labour Relations Act, counsel urges us to find that the situation is comparable. In that case a new facility had been opened and there were a number of people in the nursing home immediately before the transfer. The sale to the purchaser was such that a number of the employees of the ven­dor ended up "mixed up" with the employees of the purchaser and intermingling was found.

55. The union's argument was that the fact that 6 or 7 employees from SENH went to Heri­tage Green does not amount to intermingling under the Act. Counsel submits they were hired as any one would be hired "off the street". The fact that they had worked for SENH was simply a fac­tor in their favor. The employer did not purport to apply the collective agreement in considering their applications, and their hiring was not in accordance with the collective agreement. favour of the employer. Under those circumstances, the union

56. Counsel for the union submits that the interpretation of intermingling urged by Heri­tage Green should be rejected, because if the hiring of one person from the old bargaining unit triggers a finding of intermingling and a vote, the numbers could be arranged to always be in would be better off if no one was hired, and that is not a result the Board should encourage.

57. Union Counsel refers to Emrick Plastics Inc., [1982] OLRB Rep. June 861 at para. 17 for the proposition that the employer cannot pick and choose employees from the predecessor business. Counsel suggests that for true intermingling to have occurred, Heritage Green would have had to take all the employees and apply the collective agreement to them. Counsel argues that the employer's own decision to "pick and choose" should not be allowed to defeat the union. Counsel refers to para. 32 of Caressant Care, to the effect that it is only where intermingling is found that the Board will exercise its discretion.

58. Counsel argues that on January 9, 1991, a new Heritage Green business started, not the old one. They took employees from their old business and hired off the street. Counsel submits that for the Board to find that to be intermingling, is to say that a person hired off the street is from the old business. The union submits that they were all new to the new Heritage Green.

59. In reply on this issue, counsel for Heritage Green refers to the analysis in Caressant Care, cited above, which emphasizes that intermingling does not require the presence of the for­mer employees as individuals. What it refers to is the employees of the two businesses, whoever they might be. He emphasizes that it is the practical problem of running two integrated businesses that underlies the intermingling provisions of both the Crown Transfers Act and the Labour Rela­tions Act. Counsel urges us to find that even if Heritage Green had hired no employees from SENH, there was an intermingling because there was a pre-existing business of the exact same type as the one transferred.

60. The Board is of the view that these facts are analogous to Caressant Care, and that an intermingling of the employees of two businesses has occurred within the meaning of the Crown Transfer Act. This is true, even though it is worded somewhat differently than the Labour Rela­tions Act and may in fact require the presence of employees employed in the previous business. As in Caressant Care, the fact that the successor employer did not acknowledge the collective agree­ment at the time of the transfer, and thus did not employ SENH employees as a matter of right, does not change the fact that it did intermingle the two businesses and at least some of their employees at the time of the transfer. The fact that we are now at least three years past the trans­fer, and that the employees from SENH did not move in numbers proportional to the number of beds for which the license was transferred, poses remedial problems with which we will deal below, but it does not mean that no intermingling occurred. See also Kitchener-Waterloo Hospital, [1991] OLRB Rep. Oct. 1130 at para. 44, where a finding of intermingling (albeit on the agreement of the parties) followed the transfer of a department from one hospital to another, which had previously also had a similar department, arguably an analogous situation.

V

61. What should the remedy be? Heritage Green argued that if the Board found a transfer and intermingling, there were grounds for the Board to find that the collective agreement did not apply.

62. Heritage Green submits that the evidence is unclear as to the number of employees at SENH, and as to the date of the alleged transfer. Counsel suggests that the transfer cannot be said to have occurred when the license issued in January, 1991. At that time there were only 30 resi­dents at SENH, which would indicate there were not many employees. Some took severance pack­ages and were discharged prior to the time Shalom Village took on residents from SENH on or after October 29, 1990 (See para. 50 of the Shalom Village decision which states that at that point

in time there were eighty-nine residents left at SENH.) As of January 9, 1991, the evidence shows Heritage Green had 85 employees, some of whom were managerial. The evidence does not estab­lish how many employees were in the bargaining unit at SENH immediately before the transfer or how many would be in a similar bargaining unit at Heritage Green.

63. Relying on Caressant Care, cited above, employer counsel says that the appropriate way to analyse the numbers is to look at the bargaining unit in the vendor's organization and compare it with the number of employees in the purchaser's business after the sale. Counsel suggested that it is clear that the overwhelming preponderance is of Heritage Green's employees. Counsel says that the jurisprudence is clear that where the numbers are not close, the Board should declare, pursu­ant to section 5 of the Crown Transfers Act, that Heritage Green is not bound.

64. Alternatively, we are urged to hold a representation vote to determine if Heritage Green should be bound by SEIU's collective agreement.

65. The union's position on remedy was that the collective agreement should apply as of the date of transfer and no vote should be held. It argues that a vote is a completely discretionary rem­edy and none should be awarded because of the circumstances of this case. These include the extreme passage of time as the parties left this matter in abeyance pending the outcome of the Shalom Village matter. After the Shalom Village decision issued, settlement discussions and vari­ous delays to accommodate the schedules of the three parties followed. The union says that a vote would now be a foregone conclusion. There has been no contact since 1991 with the employees because of these proceedings. Counsel argues that the union should not be penalized by the pas­sage of time. Counsel maintains that the most fair result in the circumstances is to order that Heri­tage Green was bound by the expired collective agreement, and that SEIU has the right to serve notice to bargain. If the employees are not content with the union's representation, they can com­mence proceedings to terminate those rights, submits counsel. Counsel says that the employer and the union never had an opportunity to work things out at Heritage Green because of the position that it was not bound by the collective agreement. Counsel says that a vote should only be ordered on the basis of some active presence of the union in the workplace. In these circumstances, without the transfer of the collective agreement or employees from SENH in numbers pursuant to its provi­sions, that context does not exist, as a result of the employer's actions. Counsel refers to Caressant Care and Emrick Plastics, cited above, on those points as well.

66. As to the relative numbers, counsel for the union argues that because of the unusual cir­cumstances of these facts no one ever knew when the transfer actually occurred but Heritage Green knew of SEIU's claim since at least December, 1989. If the construction of the expanded Heritage Green facilities had been ready earlier, the numbers would have been different too. In any event, there are more employees attributable to the transferred business than to the old Heri­tage Green operation. The union submits that these too are unusual facts which are not adequately addressed by a vote.

67. The union's last point deals with the Seventh Day Adventist creed. Counsel submits that where the employer opposes unions as a matter of religious belief, a vote would be a foregone conclusion. He observes that the employer did not attempt to rebut Ms. Okimi's presumption that the prairie home owned by the Church was closed because it was unionized. Counsel queried: what employee would vote to close the home?

68. Heritage Green asked us to find that there was no evidence of anti-union animus before the Board. Counsel underlined that Ms. Okimi's assumption that a Saskatchewan institution was sold because it was unionized was not based on personal knowledge. The only evidence was that the Church prefers not to deal with a union, which should not be found to constitute anti-union animus. Thus, Counsel says that the Board should not give effect to the union's submissions on a representation vote, especially since the employer is not permitted to do anything to affect the out­come of the vote. Counsel also referred to evidence showing there was no anti-union animus, such as the fact that the employer interviewed and offered jobs to almost all staff from SENH who applied.

69. Heritage Green's pleadings suggest that the character of the business was changed such that bargaining rights should be terminated. This was not pursued in argument, and there is no basis for such a finding within the Board's jurisprudence.

70. The purpose of a remedy here should be, as far as possible, to put the parties in the positions they would have been had the Act been applied as we have found it should be. In this respect we find, on the facts of this case, that the appropriate way to determine the balance from a labour relations point of view is to compare the proportion of the business from the successor busi­ness as opposed to that from the predecessor at the time the successor Heritage Green started the combined operation (January 9, 1991). We find it appropriate to count the total licensed bed capacity at that time, including the overbedded capacity, which Heritage Green had for a period of two and half years after that. Comparing this to the bed capacity prior to the transfer, produces an appropriate proportion from which one can approximate the proportion of staff which would have been from one business as opposed to the other. This results in 112 total capacity, compared to 34 before the transfer, indicating 78 came from the transfer. On those numbers, the Board finds that the collective agreement would have applied at the date of the transfer January 9, 1991, without a vote. Given its expiry, the union has the right to give notice to bargain.

71. Given our findings above, it is unnecessary to deal with the parties submissions on suc­cessor rights under the Labour Relations Act or other points made in the parties' pleadings, with the exception of Heritage Green's assertion that by virtue of delaying until December 21, 1989 in asserting its claim to successor rights and or by its members accepting severance packages, SEIU abandoned its bargaining rights. We do not find a basis in the evidence for such a finding, given that it was actively engaged in representing its members up until that time, as evidenced by its deal­ings with the Ministry.

72. For the reasons set out above, the application is allowed. The dissent of Board Member J. A. Ronson will follow at a later date.