United Steelworkers of America v. Lencan Investigation Services Inc.

[1994] OLRB Rep. November 1547

2288-94-R United Steelworkers of America, Applicant v. Lencan Investigation Services Inc., Responding Party

BEFORE: K. G. O'Neil, Vice-Chair, and Board Members S. C. Laing and R. R. Montague.

DECISION OF THE BOARD; November 29, 1994

1. This is an application under section 64.2 of the Labour Relations Act which provides for a deemed sale of a business to have occurred in certain industries including the security services industry.

2. This application was filed by the union on September 29, 1994. In the normal course, notice was given to both the predecessor employer Pinkerton's of Canada Ltd. ("Pinkerton's") and the alleged successor employer Lencan Investigation Services Inc. ("Lencan"). Along with the notice of the application and hearing the Board sent a notice for posting by the employer to give the affected employees notice of the application and the terminal date. This was apparently received by Lencan Investigation Services Inc. because on October 12, 1994, the Board received back from Len Tremblay, President of Lencan Investigation Services Inc. a form indicating that Lencan had received for posting the notice to employees and that it had indeed been posted. The fact of posting was also confirmed by the union.

3. The notice to the responding party indicates clearly, at paragraph 10 that if they wish to participate, a response must be filed by the terminal date which in this case was October 14, 1994. As well, the form includes at the bottom in bold type a section called "Important Note". The sec­ond paragraph of that note reads as follows in bold faced-type:

"If you do not file your response and other documents in the way required by the rules the Board may not process your application and documents, you may be deemed to have accepted all of the facts stated in the application, and the Board may decide the case on the material before it without any further notice to you".

[emphasis added]

4. On November 18, 1994 the Board received a letter dated November 15, 1994 from the union asking for the Board to apply Rule 19 of the Rules of Procedure and grant the relief sought in the application without a hearing.

5. Rule 19 reads as follows:

6. If a party receiving notice of an application does not file a response in the way required by these Rules, he or she may be deemed to have accepted all of the facts stated in the application, and the Board may decide the case upon the material before it without further notice.

It will be readily seen that it is this Rule that is paraphrased in the portion of the "Important Note" section of the notice to the employer set out above.

6. We have considered the union's request in light of Rule 19 and are of the view that the application should be granted. Our reasons follow.

7. Sections 64 and 64.2 provide, in relevant part, as follows:

64.(1) In this section,

“business" includes one or more parts of a business; ("entreprise")

"predecessor employer" means an employer who sells his, her or its business; ("employeur precedent")

"sells" includes leases, transfers and any other manner of disposition; ("vend")

"successor employer" means an employer to whom the predecessor employer sells the business. ("employeur qui succede")

(1.1) This section applies when a predecessor employer sells a business to a successor employer.

(2.2) If the predecessor employer has given or been given a notice relating to bargaining for a collective agreement or has requested the appointment of a conciliation officer or mediator, the successor employer is considered to have given or been given the notice or to have made the request, until the Board declares otherwise.

(3) If, when the predecessor employer sells the business, a trade union is the bargaining agent for any employees of the predecessor employer, has applied to become their bargaining agent or is attempting to persuade the employees to join the trade union, the trade union continues in the same position in respect of the business as if the successor employer were the predecessor employer.

64.2-(1) 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.

8. The union has pleaded material facts sufficient to ground an application under section 64.2. It outlines a situation in which it gained bargaining rights for the affected employees in 1993. In attempting to exercise those rights, it was informed by Pinkerton's that they no longer held a contract and that Lencan had taken over the contract to provide security services on May 1, 1993.

9. Notice to bargain was given to Lencan on February 1, 1994 and various kinds of contact occurred between the parties resulting in a conciliation meeting on August 19, 1994 at which the responding party Lencan advised the applicant that they did not recognize them as the bargaining agent for the employees at the site.

10. The application pleads that the employees in question work at the same site at 701 Bax­ter Road, Ottawa, as they did for Pinkerton's and that the work is substantially similar.

11. We are satisfied that the facts as pleaded fall within the ambit of section 64.2 in that a sale of a business would be deemed to have occurred on those facts as Pinkerton's the employer of the employees performing the security services at the site in question ceased to provide those ser­vices and substantially similar services were subsequently provided under the direction of another employer, Lencan at the same site.

12. Rule 19 has been in the Board's Rules of Procedures since January 1993. One of its pur­poses is the avoidance of time and expense to all parties and the public, when an application is undisputed.

13. In the circumstances of this case, we are satisfied that Lencan received notice of the application as it responded with its return of posting that was sent with that notice. The notice is clear as to the consequences of not responding. The facts as pleaded appear straight-forward and would entitle the applicant to the relief claimed. In these circumstances, and in light of the material before us, we find no reason not to apply Rule 19 and substantial reason to apply it.

14. Accordingly, based on the undisputed material before us, the responding party is deemed to have accepted the facts as set out in the application and the Board declares that a sale of a business has occurred from Pinkerton's to Lencan and that the applicant continues in the same position in respect of the employees at the site at 701 Baxter Road, as if Lencan were Pinkerton's.

15. The Board will remain seized if there are any problems implementing this decision.