Ensign Security Services Inc. v. United Steelworkers of America, 1994 CanLII 9999

[1994] OLRB Rep. October 1310

3770-93-R Ensign Security Services Inc., Applicant v. United Steelworkers of America and Canadian Security Union, Responding Parties v. Pinkerton's of Canada Limited and Burns International Security Services Limited, Intervenors

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

APPEARANCES: Brian P. Smeenk for Ensign Security Services Inc.; Robert Healey for United Steelworkers of America; Bernard Fishbein for Canadian Security Union and Canadian Union of Professional Security Guards; Richard Nixon for Burns International Security Services Limited and the Association of Professional Security Agencies.

DECISION OF LEE SHOULDICE, VICE-CHAIR, AND BOARD MEMBER, R. M. SLOAN; October25, 1994

I. Introduction

1. This is an application brought pursuant to sections 64 and 64.2 of the Labour Relations Act (hereinafter "the Act"). This application raises for consideration the labour relations conse­quences when a contract for services changes hands in the security guard industry, in circumstances where both the successor and the predecessor employers are subject to municipal-wide bargaining relationships with different trade unions. The applicant (hereinafter "Ensign") is the successor employer at three separate work sites in the Regional Municipality of Ottawa-Carleton; the responding parties Canadian Security Union and United Steelworkers of America (hereinafter "C.S.U." and "Steelworkers", respectively) are the two unions who assert bargaining rights at these three sites. Pinkerton's of Canada Limited and Burns International Security Services Limited (hereinafter "Pinkerton's" and "Burns" respectively) intervened in this proceeding (as the prede­cessor employers) but only Burns chose to participate in argument.

II. Intervention

2. At the outset of the hearing, Mr. Nixon and Mr. Fishbein requested standing to partici­pate in argument on behalf of two other entities - Mr. Nixon on behalf of the Association of Pro­fessional Security Agencies (hereinafter "APSA"), and Mr. Fishbein on behalf of the Canadian Union of Professional Security Guards (hereinafter "CUPS"). Both Mr. Nixon and Mr. Fishbein advised the Board that their legal arguments would not be affected by the intervention of these parties, inasmuch as they would be making identical submissions on behalf of Burns and the C.S.U. respectively. The Board reserved its decision on this request and counsel proceeded to argument based on an agreed statement of facts, which is set out below.

3. Rule 26 of the Board's Rules of Procedure provides that the Board may add any person as a party as it considers advisable. Accordingly, a great deal of latitude is provided to the Board to determine whether intervenor status should be provided to any particular entity. In essence, coun­sel for the proposed intervenors focused on the significance of this decision for the security guard industry when submitting that status should be provided to these entities. In our view, it is not appropriate in this case to grant status to these two entities. As has already been noted above, this proceeding was argued on an agreed statement of facts, and as both Mr. Nixon and Mr. Fishbein advised that their submissions would not be affected by the intervention of APSA or CUPS, there appears to be little (if any) value gained by granting APSA or CUPS intervenor status. Accord­ingly, we decline to do so.

III. Agreed Facts

4. As noted above, the parties argued this case on the following Statement of Agreed Facts. References to exhibits attached to the statement have been deleted.

STATEMENT OF AGREED FACTS

BARGAINING RIGHTS

1. The Responding Party, United Steelworkers of America ("USWA"), was certified as bargaining agent for certain employees of Pinkerton's of Canada Limited ("Pinker­ton's") in the Regional Municipality of Ottawa-Carleton on April 28, 1993.

2. The USWA was certified as bargaining agent for certain employees of Burns Interna­tional Security Services Limited ("Burns") in the Regional Municipality of Ottawa-Carleton on March 24, 1993.

3. The Responding Party, Canadian Security Union ("CSU") was certified as bargaining agent for all employees of the Applicant, Ensign Security Services Ltd. ("Ensign") in the Regional Municipality of Ottawa-Carleton, save and except site supervisors and persons above the rank of site supervisor, by Decision and Certificate of the Board dated March 25, 1993. The Certificate issued following a representation vote among the employees in the bargaining unit in which the majority of the ballots cast were in favour of the CSU. Contrary to paragraph 4 of Schedule A of the Response of the USWA, the USWA does have knowledge of the bargaining rights of the CSU. The USWA purported to intervene in the CSU's application for certification for employ­ees of Ensign, challenging the trade union status of the CSU, and also purported to file its own application for certification (O.L.R.B. File No. 3258-92-R). The Board dismissed the USWA's intervention and ultimately, after deferring it until determina­tion of the CSU certification application, also dismissed the USWA's application for certification.

4. Pursuant to that Certificate, the CSU and Ensign entered into negotiations culminat­ing in a collective agreement effective from July 30, 1993 until July 29, 1996. Subse­quent to the negotiation of that agreement, the relevant business operations of Ensign Security Services Limited were acquired by Ensign Security Services Inc., which is therefore the current name of the employer.

ACQUISITION OF SECURITY CONTRACTS

5. Prior to January 1, 1994, Burns held the contract for the provision of security services at 350 - 360 Albert Street in Ottawa ("Constitution Square"). Effective January 1, 1994, Ensign became the security contractor at that site.

6. Prior to January 15, 1994, Pinkerton's held the contract for the provision of security services at Heritage Place in Ottawa. Effective January 15, 1994, Ensign became the security contractor at that site.

7. Prior to January 22, 1994, Pinkerton's held the contract for the provision of security services at 45 - 99 Rideau Street in Ottawa. Effective January 22, 1994, Ensign became the security contractor at that site.

8. The changes of security contractors referred to paragraphs (5) to (7), above, each constitute a sale or transfer of a business within the meaning of Sections 64 and 64.2 of the Labour Relations Act.

CONFLICTING UNION CLAIMS

9. In several telephone calls and letters to Ensign, the USWA claimed bargaining rights for all employees that Ensign now employs at each of the three locations referred to above ("the Sites").

10. The CSU has also claimed bargaining rights for the Sites following the aforesaid sales or transfers.

11. On February 2,1994, Ensign received a Request for Appointment of Conciliation Officer filed by the USWA in respect of the employees employed at Constitution Square.

12. Ensign has objected to the appointment of a conciliation officer, pending the outcome of these proceedings. The Minister has determined that the request by the USWA for the appointment of a conciliation officer raises questions as to his authority to make the requested appointment. Accordingly, the Minister has referred this matter to the Ontario Labour Relations Board for advice on his authority to make the requested appointment. [The parties indicated that this Ministerial reference, Board file 4441-93-M, has been adjourned sine die pending the determination of this Board file].

ENSIGN ORGANIZATIONAL STRUCTURE

13. Ensign's operations in the Ottawa area are under the direction of its Vice President, Eastern Regions, Mr. William J. Murrell. Mr. Jack Robinson, Chief of Security, reports to Mr. Murrell and is responsible for managing all of the guards and Site Supervisors employed by Ensign in the Ottawa area.

14. Ensign employs sixty (60) guards and five (5) Site Supervisors in the Ottawa area. All of them are employed within the geographic scope of the CSU's bargaining unit. This includes four (4) guards at Heritage Place, two (2) guards at 45 - 99 Rideau Street and five (5) guards (plus one (1) Site Supervisor) at Constitution Square.

15. After obtaining the contracts for each of the Sites, Ensign instituted its own operating and reporting systems. For example, Ensign instituted usage of its own Daily Shift Reports, Incident Reports, Supervisor's Shift Reports and Monthly Current Summar­ies. Employees communicate with supervision through Ensign's centralized, province-wide Dispatch Office. Ensign employees at the Sites all now wear Ensign uniforms.

16. Personnel functions for the Ottawa area, including the new Sites, are handled primar­ily by Mr. Robinson and Mr. Murrell. They handle recruitment and hiring, discipline and discharge. Mr. Robinson approves schedules prepared for his review by the site supervisors. Mr. Robinson also submits the hours worked by each guard to Ensign's Mississauga office, which then processes this information for payroll purposes. Mr. Robinson also prepares all seniority lists, job postings and transfer documents. He is assisted from time to time by Francine Murrell, who works as a clerical/administrative employee on a part-time/casual basis. Most of the clerical and payroll functions are performed at Ensign's Mississauga office.

17. Ensign's practice in the Ottawa area is to post vacancies in order to allow employees at one building to bid on jobs available in another building. Jobs in different buildings often have different rates of pay and different hours of work. Movement between buildings is therefore common.

18. From time to time, a customer will instruct Ensign that it will not allow a particular guard to continue working in its building. This is called a ~'DO NOT RETURN" or ~'DNR" order. This occurred recently with a guard by the name of Jamie Martin, in respect of whom a DNR was issued by the customer at the World Exchange Tower. If the guards' conduct which caused the DNR does not constitute just cause for dis­missal, in the opinion of Ensign's management, Ensign's practice is to transfer such an employee to another building. Accordingly, Jamie Martin was transferred from the World Exchange Tower to the Royal Bank Centre.

STAFFING AT THE THREE SITES IN QUESTION

19. Pursuant to the Employment Standards Act, Ensign made offers of employment to all employees of Pinkerton's and Burns, respectively, employed at the Sites.

20. At 45 - 90 Rideau Street, the single incumbent security guard, Terry Klovan, who had been employed by Pinkerton's for approximately twenty-one years, declined Ensign's offer of employment and continued working elsewhere for Pinkerton's. Ensign replaced him with two part-time security guards, John Eisnor and Akka Smies, both of whom had previously been employed by Ensign at other sites in the Ottawa area at which the employees are covered by CSU's collective agreement. John Eisnor com­menced employment with Ensign on January 13, 1994 and worked at the Metropoli­tan Life Building, the Royal Bank Centre and the Orleans Town Centre prior to being transferred to 45 - 99 Rideau Street. Akka Smies commenced employment with Ensign on December 31, 1993 and worked at the Metropolitan Life Building, the Orleans Town Centre and Constitution Square before being transferred to 45 - 99 Rideau Street.

21. At Heritage Place, two of the four incumbent security guards accepted Ensign's offer of employment and have been employed since January 15, 1994. One of the guards who did not accept Ensign's offer was replaced by Alderin Guiste who, before com­mencing work at Heritage Place, had worked for Ensign at the World Exchange Plaza in Ottawa, a site at which the employees are covered by CSU's collective agreement. The second employee who declined Ensign's offer was replaced by Kevin Stewart, who was hired for that purpose. Later, a third incumbent employee, Stephen Ryan, quit effective February 11, 1994. He was replaced by Garth Bourgaize who moved from part-time to full-time on February 18, 1994. Alderin Guiste quit on January 26, 1994 and was replaced by Phillipe Gagnon. Gagnon had also worked at the World Exchange Plaza and Metropolitan Life buildings (which are covered by the CSU agreement) and Constitution Square. Garth Bourgaize, has also worked at the Metro­politan Life and Royal Bank buildings (which are covered by the CSU agreement) as well as at Heritage Place.

22. At Constitution Square, all five of the incumbent security guards accepted Ensign's offer of employment and have been employed there since January 1, 1994.

23. The previous supervisor of security at Constitution Square, Paul Kovak, who worked for the property management company, retired just before Ensign commenced its contract there. He was replaced, on the day shift, by Wayne Bigelow, a Site Supervi­sor. Before being transferred to Constitution Square, Bigelow had previously worked for Ensign at the Royal Bank Centre in Ottawa as a Site Supervisor, supervising employees in CSU's bargaining unit.

24. In addition to Bigelow's supervision, Ensign now has a CSU bargaining unit employee, Patrol Officer Avril Cunningham (who works the majority of his time at the Orleans Town Centre, a site covered by the CSU's collective agreement), per­forming shutdown patrols and post inspections at Constitution Square six nights per week. At Tower I, he does a post inspection and at Tower II, he does a shutdown patrol. He also does post inspections at Heritage Place three times per week. During these inspections, he inspects the work of the security guards at those locations and completes a document entitled "Supervisor Shift Report" in respect of such inspec­tions.

25. Patrol Officer Avril Cunningham also does post inspections three (3) nights per week at Heritage Place, and six (6) nights per week at the Royal Bank Centre and the World Exchange Plaza.

26. On the seventh day of the week, Sunday, the Shift Supervisor who is on duty at the World Exchange Plaza building (who are represented by the CSU) does morning and evening patrol inspections at Constitution Square. Four (4) different individuals rep­resented by CSU perform this function by rotation.

27. When there is a single security guard on duty at Constitution Square, the Applicant implements its "buddy system" whereby the security guard is in contact by two-way radio with the security guard on duty at another location, the Royal Bank Centre. Under this "buddy system", the security guards are required to check with one another by radio at least once every thirty (30) minutes, or in the case of emergencies. The guards at the Royal Bank Centre are represented by CSU.

28. Ensign has within its work force a group of approximately twelve part-time security guards who fill in for absent guards, those on vacation or in the event of temporary vacancies, at each and every site in the Ottawa area for which it has security con­tracts. These part-time guards are included in the CSU bargaining unit. Up to this time, four of them have worked one or more shifts at Constitution Square, since Jan­uary 1, 1994 and it is expected that this will continue as needed. Up to this time, four of them have worked one or more shifts at Heritage Place and it is expected that this will continue, also as needed.

BURNS' ORGANIZATIONAL STRUCTURE

29. The Ottawa office of Burns is one of 7 regional offices across Canada. The Canadian head office of Burns is in Toronto where the General Manager of Canadian opera­tions is located. Burns' operations in the Ottawa area are under the direction of a Regional Operations Manager. In the Ottawa office five people report directly to the Regional Operations Manager. One of these five people is a Client Service Manager. In Ottawa four Field Supervisors and four Site Supervisors report directly to the Cli­ent Service Manager. The Field Supervisors and Site Supervisors supervise all of the security guards in Ottawa.

30. Burns employs approximately 150 security guards in Ottawa. These security guards work at approximately 24 sites in Ottawa.

Burns' Ottawa Office Structure

31. The office staff in the Ottawa office consists of:

one Client Service Manager;

one Hiring and Training Supervisor;

one Business Development Representative; one Administration Clerk/Timekeeper;

one full time and one part time Communications Officer; and

the four Ottawa Field Supervisors who report into this main office.

Duties of Ottawa Office Personnel

32. The Client Service Manager supervises, motivates and trains the security guards to ensure quality of service during regular business hours. They deal directly with the cli­ents. The Field Supervisors who work evenings and nights also supervise and motivate the security guards as well as attend at the job sites in order to verify that the security guard on duty is performing his duty and is following the operational orders. They check in at the Ottawa office but spend most of their time visiting the various sites under their supervision and responding to emergencies. In case of any emergency a Field Supervisor or Client Service Manager is contacted. Field Supervisors have lim­ited client contact and have less authority than Client Service Managers.

33. The Hiring and Training Supervisor is in charge of the hiring and training of new security guards as well as providing uniforms to all security guards. He/she orders the uniforms and ensures that every guard has the appropriate uniform. Security guards at Burns are provided with their shirts at cost and are loaned the balance of their uni­form. The Hiring and Training Supervisor also screens all application forms, inter­views potential employees and provides the necessary training.

34. The Administration Clerk/Timekeeper inputs the payroll and invoicing as well as administers the benefits for all the employees. All data entry with respect to invoicing is done in the Ottawa office. All invoices are mailed from the Ottawa office to clients. AtI accounts receivable are received in the Ottawa office and deposited in Ottawa.

35. The Communications Officers look after the movement of the security guards. They are in charge of the POCO system which is an automated guard reporting system. If a guard does not report in at his allocated time the system automatically contacts the guard. If the guard does not answer, the system then notifies the Communications Officer who would then notify the Field Supervisor or Client Service Manager. The Communications Officer is also responsible for scheduling and for maintaining time sheets for guards. It is the Communication Officer who schedules replacement work­ers in the case of absences or illnesses.

Ottawa Office Activities

36. In order to apply for a job with Burns an individual must apply at the Burns Ottawa office. An interview is held at the Ottawa office. The potential candidate then attends an orientation program at the Burns Ottawa office or occasionally at an outlying site location. If it is decided to hire the individual~ Burns would apply for a security guard license through the Ontario Provincial Police and the new security guard would likely be placed at a site temporarily or on an availability list until an appropriate posting is found.

37. The central dispatch office is located in the same administrative office in Ottawa. It is from this office that the Communications Officers maintain contact with the guards in the field and administer the POCO system. It is also through this office that guards are scheduled, replacements scheduled where needed and time charts are maintained.

38. .Any discipline with respect to a guard will take place at the Ottawa office. The Regional Operations Manager and the Client Service Manager together meet with a guard if there is a serious infraction. For some infractions, such as lateness~ the guard will only be issued an infraction report which will be put on his file. However, if it is a more serious infraction or there are a number of infractions the guard will be called into the office for a meeting with the Regional Operations Manager and the Client Service Manager. In case of a serious infraction on site such as the intoxication of a guard, the Field Supervisor has the authority to replace the guard at the time of the incident. The next day the guard would then be summoned to the office to meet with the Regional Operations Manager and the Client Service Manager. The Regional Operations Manager is the only person with authority to terminate the employment of a guard.

39. All personnel files are kept in the Ottawa office. The Administration Clerk/Timekeeper, the Client Service Manager, the Hiring and Training Supervisor and the Regional Operations Manager have access to these files. The files are locked after hours.

40. Burns security guards are paid wages based on the provincial minimum wage and the contract negotiated by Burns with each client.

41. Burns security guards are provided with the same benefits as outlined in the "Security Officer Benefit Plan"

42. Burns security guard seniority is based on the date of hire, is considered by Burns for the purposes of assigning employees to sites, lay offs, recalls and is recognized by an awards program.

Transferring of Employees

43. Attached as Exhibit 15 is a list of all the employees employed by Burns as security guards who report to the Ottawa office during the calendar year 1993. The list includes the following information from left to right on the chart:

• Site Number

• Employee Name and Site Name (Blacked out for client confidentiality reasons)

• Category number which categorizes the employee at that particular site

• Week number (1 to 52)

• Unbillable (03 is unbillable time for training)

• Rate of pay

• Day one of that particular week

• Straight hours

• Overtime hours

• Number of sites that particular employee worked at in 1993

Training of Employees

44. Employees working at Constitution Square were trained at the Burns office in Ottawa under the Burns Hiring and Training Supervisor. When they were first employed by Burns, each of these employees completed 6-8 hours of security orientation training including access control, report writing, limits of authority, patrol rounds and proce­dures, public relations, and responding to emergencies. As well these employees were instructed in the use of fire extinguishers and WHMIS. Each of these employees then passed the security officer training final examination. Subsequently each of these employees received between 4 and 28.5 hours of training at Constitution Square. The first employee on the site was trained by the client and the Client Service Manager. All other employees were trained by guards with experience at the site. As well, all employees were required to follow post orders which were drafted by the client and Client Service Manager and kept at the site.

45. The collective agreement between Pinkerton's and USWA is attached and marked as Exhibit 16.

46. It is apparent from the Statement of Agreed Facts that there currently exists competing claims to representation of the security guards who work at the three sites in question. The com­peting claims are the result of the broader-based bargaining rights held by the parties in the Regional Municipality of Ottawa-Carleton, in conjunction with the effect of section 64.2 of the Act which deems a sale of a business in certain circumstances. The Board must decide which union will ultimately represent the employees at the three sites in question. Ensign, Burns and the C.S.U. submitted that the workers at these three sites should ultimately be governed by Ensign's collective agreement with the C.S.U. The Steelworkers disputed this conclusion, submitting that the nature of section 64.2 of the Act necessitates the conclusion that Ensign's workers at these sites should be governed by its collective agreement with Pinkerton's and its bargaining rights with Burns. The Board heard detailed and helpful argument from counsel, and will outline and consider the posi­tions of the parties directly below.

IV. Statutory Framework

6. The statutory provisions of the Act applicable to this application are the following:

64.(1) In this section,

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

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

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

(2) If the predecessor employer is bound by a collective agreement, the successor employer is bound by it as if the successor employer were the predecessor employer, until the Board declares otherwise.

(2.1) If the predecessor employer is a party to any of the following proceedings, the successor employer is a party to the proceeding as if the successor employer were the predecessor employer, until the Board declares otherwise:

1. A proceeding before the Board under any Act.

2. A proceeding before another person or body under this Act, the Hospital Labour Disputes Arbitration Act, the Crown Employees Collective Bargain­ing Act, 1993 or the Agricultural Labour Relations Act, 1994.

3. A proceeding before the Board or another person or body relating to the collective agreement.

(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.

(4) An interested person, trade union or council of trade unions may apply to the Board to determine,

(a) a question concerning the scope of bargaining rights of the trade union referred to in subsection (3); or

(b) a conflict in the bargaining rights of the trade union referred to in subsec­tion (3) and another trade union representing employees of the successor employer.

(4.1) On an application under clause (4)(a), the Board may alter the composition of the bargain­ing unit for which the trade union referred to in subsection (3) holds bargaining rights.

(4.2) On an application under clause (4)(b), the Board may alter the description of a bargaining unit in a certificate issued to any trade union or the definition of a bargaining unit in a collective agreement.

(5) An interested person, trade union or council of trade unions may apply to the Board within sixty days after the predecessor employer sells the business for the termination of the bargaining rights of the trade union referred to in subsection (3).

(5.1) On an application under subsection (5), the Board may terminate the bargaining rights of the trade union only if it considers that the successor employer has changed the character of the business so that it is substantially different from the business of the predecessor employer.

(6) This subsection applies if the successor employer carries on one or more other businesses and the successor employer intermingles the employees of the business sold to him, her or it with those of another business. On application, the Board may,

(a) declare that the successor employer is no longer bound by the collective agreement to which the predecessor employer was bound;

(b) determine the unit or units of employees that are appropriate for collective bargaining;

(c) declare which trade union or council of trade unions, if any, becomes the bargaining agent for the employees in each of the bargaining units;

(d) amend, to the extent the Board considers necessary, any certificate issued to a trade union or council of trade unions or any bargaining unit defined in any collective agreement; and

(e) define or redefine the seniority rights under any collective agreement of the employees concerned.

(7) Where a trade union or council of trade unions is declared to be the bargaining agent under clause (6)(c) and it is not already bound by a collective agreement with the successor employer with respect to the employees for whom it is declared to be the bargaining agent, it is entitled to give to the employer a written notice of its desire to bargain with a view to making a collective agreement, and the notice has the same effect as a notice under section 14.

(8) Before disposing of any application under this section, the Board may make such inquiry, may require the production of such evidence and the doing of such things, or may hold such rep­resentation votes, as it considers appropriate.

(9) Where an application is made under this section, an employer is not required, despite the fact that a notice has been given by a trade union or council of trade unions, to bargain with that trade union or council of trade unions concerning the employees to whom the application relates until the Board has disposed of the application and has declared which trade union or council of trade unions, if any, has the right to bargain with the employer on behalf of the employees con­cerned in the application.

(10) A declaration under subsection (6) has the same effect as a certification under section 9.1, for the purposes of sections 5 (application for certification), 58 (application for termination), 60 (termination of bargaining rights), 62 (application for certification or termination) and 125 (ap­plication for termination).

(11) Where one or more municipalities as defined in the Municipal Affairs Act is erected into another municipality, or two or more such municipalities are amalgamated, united or otherwise joined together, or all or part of one such municipality is annexed, attached or added to another such municipality, the employees of the municipalities concerned shall be deemed to have been intermingled, and,

(a) the Board may exercise the like powers as it may exercise under subsections (6) and (8) with respect to the sale of a business under this section;

(b) the new or enlarged municipality has the like rights and obligations as a person to whom a business is sold under this section and who intermingles the employees of two of the person's business; and

(c) any trade union or council of trade unions concerned has the rights and obligations as it would have in the case of the intermingling of employees in two or more businesses under this section.

(12) Where, on any application under this section or in any other proceeding before the Board, a question arises as to whether a business has been sold by one employer to another, the Board shall determine the question and its decision is final and conclusive for the purposes of this Act.

(13) Where, on an application under this section, a trade union alleges that the sale of a business has occurred, the respondents to the application shall adduce at the hearing all facts within their knowledge that are material to the allegation.

64.2-(l) 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.

Also of pertinence is section 56.6 of the Employment Standards Act which reads as follows:

56.6-(1) If a successor employer replaces a previous employer who is providing services at the premises, the successor employer shall make reasonable offers of available positions to those persons,

(a) who are in a continuing or a recurring and cyclical employment relationship with the previous employer immediately before the successor employer begins providing the services at the premises; and

(b) whose principal place of work with the previous employer is the premises affected by the change in the employer providing the services.

(2) The successor employer shall make offers to the persons employed by the previous employer in descending order of each person's seniority with the previous employer until all positions are filled.

(3) The successor employer is not required to offer positions to persons who are not qualified to perform the services required of them or would not become qualified to do so with a reasonable period of training.

(4) The successor employer shall use every reasonable effort to fill all positions at the premises with persons who were employed by the previous employer before the successor employer offers a position to any other person.

(5) The position offered must consist of performing, at the same premises, the same work that the person did for the previous employer, if such a position is available.

(6) If such a position is not available, the position offered must consist of alternative work that is comparable having regard to compensation, hours and schedule of work, perquisites, quality of working environment, degree of responsibility, job security and possibility of advancement.

V. Determination

7. As was observed by all counsel who appeared before the Board, the fundamental differ­ence between the positions of Ensign, Burns, and the C.S.U., on the one hand, and that of the Steelworkers on the other, is the importance attributed by those parties to the nature of section 64.2 of the Act. Ensign, Burns, and the C.S.U. view section 64.2 of the Act as a provision which merely facilitates the application of section 64 of the Act (and the case law which has been devel­oped by the Board interpreting that section); that is, these parties view s.64.2 of the Act as a "doorway" through which bargaining agents representing workers previously precluded from rely­ing upon section 64 can now enter in order to take advantage of the protections provided by that section. The Steelworkers, in contrast, view section 64.2 of the Act as more than just a "doorway", and submit that section 64.2 of the Act and related revisions to the Act must be understood as a legislative scheme to provide site specific bargaining rights to employees in what was described by counsel as the "contract service sector". Counsel for the Steelworkers posited that any consider­ation of the substantive provisions of section 64 must be made in light of the provisions of section 64.2 of the Act. It appears to the Board that there is no better place to begin this decision than with a consideration of this most critical issue.

8. We have carefully considered all of the submissions of the parties, and all of the case authorities relied upon during argument (many of which will be discussed in detail below). In our view, section 64.2 of the Act does not have the effect which counsel for the Steelworkers urged upon us. We view the provision as one which permits unions and employers in certain circum­stances to access the protections provided by section 64 of the Act. We set out our reasons for this conclusion immediately below.

9. Section 64.2 was added to the Act as part of the Bill 40 amendments which came into effect on January 1, 1993 (although section 64.2 of the Act is deemed by section 64.2(5) of the Act to have come into force on June 4, 1992). Section 64.2 of the Act is clearly a new point of depar­ture for the Board. The Board's experience with section 64.2 of the Act, and with the interaction of that section with section 64, is still in its infancy. Accordingly, the blind application of prior Board jurisprudence or principles applicable to section 64 of the Act or its predecessors would be inappropriate. However, particular principles which have been established by the Board under its section 64 jurisprudence may, in any one case, be appropriate for application.

10. It is important at the outset to recall the historical perspective which prompted the pas­sage of section 64.2 of the Act. The protections contained in section 64 of the Act have, tradition- ally, been unavailable to trade unions which have organized employees of contractors in the "con­tract service" sector - i.e. building cleaning services and food services (see, for example, Metropolitan Parking Inc. [1979] OLRB Rep. Dec. 1193 and Federated Building Maintenance Company Limited. [1985] OLRB Rep. Nov. 1585). As a result of the Board decisions referred to above, and others like them, bargaining rights enjoyed by employees of subcontractors were not continued in (typically non-unionized) successor subcontractors, notwithstanding that in most situ­ations the employees of the former subcontractor would be hired by the successful tenderer. We concur with the observation of the Board in Canadian Corps of Commissionaires (Toronto and Region) [1994] OLRB Rep. April 353, at paragraph 9, where it was noted that the effect of section 64.2 of the Act "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".

11. It is in this historical context that we consider both the substance and effect of section 4.2 of the Act. Section 64.2(1) of the Act defines the circumstances in which section 64.2 will apply, and section 64.2(2) of the Act stipulates certain exclusions to the application of section 64.2 (it was agreed that these exclusions were not applicable to this proceeding). Section 64.2(3) of the Act identifies three prerequisites which must be established before a "sale of a business" is deemed to have occurred "for the purposes of section 64" of the Act. Section 64.2(4) of the Act defines, once again "for the purposes of section 64", who is the "predecessor employer" and who is the "successor employer". As a general observation, it is fair to say that section 64.2 of the Act stand­ing on its own contains no protections for trade unions which have organized employees in the "contract service" sector and which face circumstances in which s.64.2 of the Act applies. To obtain the protections of the Act in these circumstances, the legislation deems the transaction to be a "sale of a business" and directs the attention of the parties to section 64 of the Act. It is under section 64 of Act that trade unions find the protections contained in the Act. It is, in our view, accurate to describe section 64.2 of the Act as a provision which grants access to section 64 of the Act: that is, that s.64.2 acts as a "doorway" through which trade unions can proceed to protect their bargaining rights in certain circumstances.

12. Counsel for the Steelworkers placed before the Board a number of propositions which he submits establishes his theory regarding the nature of section 64.2 of the Act. The propositions were described in argument as follows:

(a) section 64.2(1) and (3) of the Act are predicated on site specific employment;

(b) section 64.2 of the Act must be understood as part of a larger legisla­tive scheme to provide site specific rights to "contract service" sector employees;

(c) Board decisions to date indicate that the intention of section 64.2 is to protect rights of employees on a contract specific/site specific basis.

(d) the conditions of s.64.2 of the Act must be satisfied before s.64 applies; and

(e) the Board's decision to depart from section 64(2) or (3) must be made in light of s.64.2 of the Act.

These propositions are considered immediately below.

13. With respect to counsel's first proposition, it is evident from a reading of section 64.2 of the Act that a pivotal concept critical to the applicability of the section is that of "premises". The concept of "premises" is referred to in both section 64.2(1) and section 64.2(3) of the Act. Counsel for the Steelworkers submitted in argument that the concept of "premises" in the security guard industry was synonymous with that of a "site" and therefore concluded that section 64.2(1) and (3) were predicated on site specific employment. We do not entirely agree. Although section 64.2 may, in certain cases, apply with respect to what in the "contract service" sector would be consid­ered as a particular work "site", it is conceivable that there may be situations where more than one such "site" would constitute "premises" for the purposes of section 64.2.

14. In Medieval Times Dinner & Tournament (Toronto) Inc. (Board File 2367-93-R, July

11, 1994, as yet unreported) [now reported at [1994] OLRB Rep. July 865] the Board considered in detail the concept of "premises". In that decision, the Board determined that the term "prem­ises" incorporated the entirety of the grounds of Exhibition Place rather than just the Arts, Crafts and Hobbies Building and an attached arena, which was the narrow focus of attention. As was observed by the Board in that decision, at para. 61, there is nothing contained in s.64.2(1) of the Act which precludes the conclusion that the concept of "premises" could be smaller or larger in geographical size than a particular "building". Likewise, there is nothing contained in that same subsection which precludes the conclusion that the concept of "premises" could be smaller or larger in geographical size than a particular "site" at which security guards work.

15. In further support of his proposition, counsel for the Steelworkers noted during argu­ment that the parties had agreed that section 64.2 of the Act applied to the circumstances before us, and submitted that, as a result of s.64.2(3)(a), the parties had agreed that the security guards in question were performing work at premises which constitute "their principal place of work". In our view, this conclusion does not permit for the further conclusion that section 64.2 of the Act is predicated upon site-specific employment. We note in passing that in the circumstances of any par­ticular case it may well be that one's "principal place of work" could consist of more than one spe­cific physical location, although that issue is not raised for determination before us as there is a coincidence between the sites and the "premises" on the facts of this case.

16. In support of the second proposition referred to above, counsel referred us to Part XIII.2 of the Employment Standards Act, R.S.O. 1990, c.E.14, as amended ("the ESA"), and reviewed the terms of the successor employer provisions which were enacted to the ESA in tandem with those contained in section 64.2 of the Act. Counsel focused on the "site specific" nature of the language contained in sections 56.3 to 56.6 of the ESA in support of his proposition. The observa­tions made by the Board directly above apply to this proposition as similar, almost identical con­cepts such as "premises" and "principal place of work" are contained in the ESA. The ESA, inas­much as it requires successor employers to make "reasonable offers" of available positions to employees of the previous employer, does not mandate offers made on the same terms and condi­tions of employment enjoyed by those employees. Accordingly, the ESA does not appear to sup­port the argument made by Steelworkers counsel, which implicitly would require identical terms and conditions of employment as were previously enjoyed at the "site" to be imposed on successor employers. The provisions of the ESA do not advance the argument made by counsel.

17. In support of his third proposition, counsel relied upon a number of Board decisions which have touched on, to a lesser or greater extent, the substance of section 64.2 of the Act. counsel drew the Board's attention to the decisions of Canadian Corps of Commissionaires Toronto and Region), sup ra; Accomodex Franchise Management Inc. [1993] OLRB Rep. April 81; Group 4 C.P.S. Limited [1994] OLRB Rep. April 400; Ogden Allied Building Services Inc. [1993] OLRB Rep. Dec. 1346 and Meadowvale Security Guard Services Inc. (Board file 2404-93-R, February 14, 1994, unreported). It was submitted that each of these cases, to some extent, sup­ported the proposition that the Board had recognized s.64.2 of the Act as intending to protect employee rights on a contract specific/site specific basis.

18. Having carefully reviewed these cases, we do not agree that they establish that the Board has protected the representational rights of workers and trade unions with particular emphasis on the specific site. In Canadian Corps of Commissionaires (Toronto and Region), supra, the trade union (there, like here, the Steelworkers) had applied under section 91 of the Act, alleg­ing a breach of section 81 of the Act. One of the issues before the Board was the applicability of section 64.2 of the Act in the circumstances, and the Board dealt with that issue at the outset. The Board ultimately found that section 64.2 of the Act applied to the circumstances of that case. In doing so, at paragraph 16, the Board made the following observation:

"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".

In Accomodex Franchise Management Inc., supra, the Board, at paragraph 51, observed that:

"Under s.64.2 bargaining rights are maintained so long as there is a continuity of work done by unionized employees in that particular location"

Similarly, in Group 4 C.P.S. Limited, supra, the Board noted at paragraph 42 that:

"[Section 64.2] is unique because it attaches or anchors bargaining rights to work at particular premises".

Counsel for the Steelworkers submitted that the effect of s.64.2, as described by these decisions, is to protect the rights of bargaining agents and employees on a site specific basis.

19. In our view, the authorities referred to above serve to emphasize that the concept of premises" is of paramount importance to the applicability of s.64.2. None of the case authorities cited to us in argument support the proposition that the nature of the "location" where the work was being performed was critical to the determination made by the Board. It is true that the Accomodex Franchise Management Inc. and Group 4 C. P.S. Limited decisions make reference (in the former case) to a "particular location" and (in the latter case) to an "[attachment of] rights to work at particular premises". This does not, however, have the widesweeping effect submitted by Steelworker counsel. The particular issue before this panel of the Board, that being the nature of s.64.2 of the Act, was not directly in issue in either Accomodex or Group 4 C.P.S.. In our view, as noted above, the critical concept for the purposes of the application of s.64.2 is that of "premises". The "premises" may, again as noted above, be geographically smaller or larger than a "site" as commonly known in the security guard industry. The decisions, in our view, are equally consistent with the positions taken by Ensign, Burns, and the C.S.U.. Quite simply, there has been no authority placed before us which suggests that the provisions of section 64.2 of the Act, because of their particular nature, somehow override, preclude or otherwise qualify the ability of the Board to apply the provisions of section 64 of the Act.

20. We will deal briefly with the final two propositions submitted by counsel. First, we agree that s.64.2 of the Act deems there to be a sale of a business only when the 3 preconditions contained in subsections 64.2(3)(a) to (c) are satisfied. This is evident from a plain reading of s.64.2(3) and is not controversial. Finally, with respect to counsel's final proposition, it would fol­low from our observations above that the specific nature of s.64.2 of the Act is not sufficiently sig­nificant, in and of itself, to affect whether the Board will or will not, in any particular case, depart from the protections dictated by s.64(2) and (3) of the Act, although that is not to say that on the specific facts of any case the nature of the bargaining rights held by a trade union could never be of importance to the Board. The nature or structure of the bargaining rights governing the successor and/or the predecessor employer will be one factor weighed by the Board in determining the appropriate result under section 64 of the Act.

21. The position put forward by the Steelworkers was weakened by the terms of its own col­lective agreement with Pinkerton's, which provides, in Article 12.06, that the terms of the contract will apply to all sites acquired by Pinkerton's within the geographic scope of the agreement. Opposing counsel noted the contradictory position argued in this case and questioned rhetorically whether this was an attempt by the Steelworkers to comply with or contract out of the Act. Coun­sel for the C.S.U. submitted that all that the provision really did was reflect the desired industry practice, which was on all fours with the position adopted by Ensign, the C.S.U. and Burns, and which made labour relations sense. It does appear to the Board that the inclusion of the clause in the collective agreement may reflect what the parties thought made labour relations sense, at the very least.

22. In our view, section 64.2 of the Act is, in substance, a provision which facilitates the ability of bargaining agents to protect their representational rights in the event that the entity with which those rights are held loses the contract for services at a particular location. The Legislature has chosen to protect those rights by, in effect, creating an attachment or nexus between the bar­gaining rights and the physical location where the contracted services are performed. The Legisla­ture has not, by enacting section 64.2, evidenced an intention to provide an unassailable superior­ity of site-specific bargaining rights when those rights conflict with broader-based rights such as in the case before us, nor has it determined that the Board's traditional responses to the sale of a business as reflected by Board jurisprudence under section 64 of the Act have in any way been ousted or qualified.

23. Accordingly, we will proceed to consider this case as one in which the provisions of sec­tion 64 of the Act apply.

24. There is no doubt that section 64 of the Act provides the Board with broad discretion to respond to an application under that section of the Act. Section 64(2) of the Act provides that, until the Board declares otherwise, the successor employer (here, Ensign) is bound by the collec­tive agreement between the Steelworkers and Pinkertons, and section 64(3) of the Act provides that the Steelworkers continue to represent the former Burns employees. Section 64(4)(b) of the Act permits "an interested person" to apply to the Board (such as Ensign has done here) for a determination of the appropriate response to a conflict in bargaining rights. Should such a conflict of bargaining rights exist, section 64(4.2) of the Act provides the Board with the authority to "alter the description of a bargaining unit in a certificate issued to any trade union or the definition of a bargaining unit in a collective agreement". This authority is crafted in broad language and permits the Board to respond to innumerable circumstances in a manner which makes labour relations sense.

25. Furthermore, section 64(6) of the Act also provides the Board with broad powers in the event that the successor employer carries on one or more other businesses and intermingles the employees of the business sold to it with those of another business. Enumerated in subsections 64(6)(a) to (e) are the various powers provided to the Board to respond to the circumstances before it. Once again, the powers set out therein are broadly worded, permitting the Board to respond to the situation before it in a manner that makes labour relations sense. These powers nclude the ability to declare that the successor employer is no longer bound by the collective agreement to which the predecessor was bound, to determine the unit or units of employees appro­priate for collective bargaining, to declare which trade union becomes the bargaining agent for employees in each of the bargaining units and to amend, to the extent necessary, any certificate issued to a trade union.

26. Some argument was entertained respecting the proper basis for Board intervention in this application; that is, whether the appropriate authority for Board intervention is s.64(4.2) or s.64(6) of the Act. Counsel for C.S.U. asserted that these two subsections were independent and that either provision authorized the Board to remedy the conflicting bargaining rights. Counsel for Ensign (supported by counsel for Burns) asserted that, in situations where intermingling of employees and/or businesses is established, s.64(6) is the exclusive basis of authority for Board intervention. Having reviewed the provisions in question, we are of the view that this application can be determined pursuant to s. 64(6) of the Act, and it is unnecessary to consider the interaction between s.64(4.2) and s.64(6) of the Act.

27. In Caressant Care Nursing Home of Canada Limited [1984] OLRB Rep. Aug. 1060, the Board noted at paragraph 32 that:

The focus of section 63 [now 64] is on the business, and it is the practical problem of running two integrated businesses, either each ostensibly under a different collective agreement, or one under a collective agreement and one "non-union", which would appear to have prompted the Legislature to provide the relief contemplated by subsection (6)...

Similarly, in Loeb Inc. [1985] OLRB Rep. May 697, the Board stated at paragraph 2 the following:

Every existing collective agreement represents negotiated and entrenched rights and obliga­tions on the part of all parties involved, and the Board's jurisdiction to restructure the scope clauses of existing collective agreements, or otherwise affect the entrenched and negotiated rights of the parties, is to be found under the narrower provisions of section 63(6) of the Act. That subsection requires that an intermingling of the two or more operations in question has taken place, and as the Board articulated in, for example, Caressant Care Nursing Home of Canada Limited ... the Board for this purpose looks at whether the work or job opportunities themselves have been intermingled in the new form of operation.

28. It is clear on the facts before us that an intermingling of both the employees and the "businesses" has occurred within the meaning of s.64(6) of the Act. The facts described in para­graphs 20, 21 and 23 to 28 inclusive of the Agreed Statement of Facts establish beyond any doubt that an extensive intermingling has occurred since the contracts for security services relating to the three sites in question were obtained by Ensign. Accordingly, the Board must determine what remedial response pursuant to s.64(6) of the Act is appropriate in the circumstances.

29. Counsel for the parties identified during argument a number of considerations which the Board ought to weigh in exercising its authority under section 64(6) (or, for that matter, s.64(4.2)) of the Act. As noted above, it is our view that the overriding consideration in determin­ing an application under section 64(6) of the Act is that the Board craft a response which takes into account the labour relations realities and which, at the end of the day, makes good labour relations sense. The Legislature, realizing that conflicts in bargaining rights will, on occasion, occur as a result of sales of businesses, has left the resolution of those conflicts to the Board. In our opinion, little of practical value would be accomplished by an exercise of discretion which creates or leaves in place labour relations dilemmas for the parties. The overriding goal of the Board in fashioning a remedial response under section 64(6) of the Act is to minimize, if not completely eradicate, the conflict in bargaining rights in a manner which best protects the bargaining rights of the employees and which permits for a final resolution of the conflict then in existence.

30. On the facts before the Board, one option available to resolve the conflict of bargaining rights is to "carve out" of the municipal-wide bargaining rights currently held by the C.S.U. with Ensign the three sites which are in question, and permit the Steelworkers to continue to represent the employees at these sites. Not surprisingly, counsel for the Steelworkers strongly urged such a response by the Board. In addition to the argument counsel made regarding the primacy of sites in the contract service sector (which has been outlined and dealt with above), counsel observed that the employees at the former Burns and Pinkerton's sites had voluntarily chosen the Steelworkers as their bargaining agent, and submitted that that choice should be tampered with only in rare and narrow circumstances. Furthermore, counsel relied upon the decision of the Board in Bermay Cor­poration Limited [1980] OLRB Rep. Feb. 166 as authority for the proposition that the Board is reluctant to interfere with existing bargaining relationships, and that vested rights are not to be easily disturbed. Counsel questioned whether the continuation of the Steelworkers' bargaining rights at the particular sites would work "immediate and substantial harm" to Ensign.

31. Counsel for the Steelworkers found further support for this conclusion by noting that the Board had, in prior, unrelated applications for certification in the security guard industry, determined that a site-specific bargaining unit was appropriate (see, for example, Burns Interna­tional Security Services Limited [1994] OLRB Rep. Apr. 347, a decision involving two of the par­ties to this application). This, he submitted, made the continued existence of these sites as "Steel­worker" sites less troubling than might otherwise be suggested by the other parties. Counsel submitted that such a result would be well within the norm contemplated by the Act.

32. Counsel for Ensign, Burns and the C.S.U. resisted the option that the bargaining rights of the C.S.U. be altered by the Board, and submitted that the Board should, instead, alter the bar­gaining rights of the Steelworkers. Much of the argument of counsel for Burns focused on what was described as the "administrative nightmare" which would result should the Board adopt the approach urged by counsel for the Steelworkers. Counsel carefully reviewed the agreed facts and submitted that the evidence regarding Burns' operations in the Ottawa area (which he submitted was representative of the industry) disclosed a highly centralized organization, with many if not most of the operational decisions being made at the Ottawa regional office. Counsel analogized the organizational structure of Burns to that of a wheel, describing the regional office as the "hub" of the wheel, and the sites staffed by Burns employees as its "spokes". Counsel noted that the Steel­workers represented almost all employees at the 24 sites where Burns employees work in Ottawa. Counsel further noted that Burns security guards can and do transfer from site to site on a regular basis, and reviewed company records which demonstrated that many employees worked at more than one site in 1993. It was suggested that the motivation for such transfers was to take advantage of higher wage rates at certain sites, to obtain an improved working environment, to obtain better hours and/or shifts, and/or to work closer to home.

33. Counsel for Burns submitted that, in the long run, the consequences of finding in favour of the position adopted by the Steelworkers would be to create a balkanization or fragmentation of the Burns operations. Over time, it was suggested, Burns would, through the typical tendering pro­cess, gain some sites in the Regional Municipality of Ottawa-Carleton, lose some sites, and main­tain other sites. If each of the sites gained through the tendering process were subject to bargaining rights held by a different trade union, there would be a large number of collective agreements to which Burns would become bound, with different terms and conditions of employment applicable to each site. Even if a large proportion of those "new" sites were subject to Steelworkers bargain­ing rights, there is no guarantee that the collective bargaining obligations at the sites would be identical. Counsel submitted that administration of the various agreements, with their different terms and conditions of employment, would be a nightmare for the industry employers. Multiplied throughout Ontario, the result would, suggested counsel, be "catastrophic". In the Regional unicipality of Ottawa- Carleton alone there would be numerous "islands" of bargaining rights, without connecting "bridges" linking the sites.

34. It was argued that such a result would be inappropriate both from the perspective of the successor employer and from the perspective of the employees working at the "new" sites. From the viewpoint of the successor employer, it would be unable to transfer guards throughout the vari­ous sites, as numerous problems would arise from such transfers. Even if a number of the new sites were represented by one bargaining agent, and assuming further that contracts were negotiated for all of those sites which permitted transfers between sites, counsel submitted that a number of Burns sites would nonetheless be ineligible for transfer and there would be no certainty that the sites that employees could be transferred to would be attractive to those employees.

35. Other rhetorical questions were raised by counsel, on the assumption that a mobility provision could be negotiated into site-specific collective agreements to permit movement of all employees to all sites. Counsel asked which union would represent the employees at any particular time. Would they need to join different unions to work at different sites? To which union (or unions) would dues be remitted? If benefits were different at different sites, under which agree­ment or agreements could benefits be claimed? How would seniority issues be resolved? How will the employer determine vacation entitlement if site contracts contain different obligations and/or rights? Overtime calculation and the appropriate hourly rate was raised as a potential problem, as would be the co-ordination of hours of work and shift schedules. Which union would represent a disciplined employee? What prior discipline would be relevant or admissible before an arbitrator? In addition, counsel observed that the employer would be burdened with negotiating innumerable, site-specific collective agreements, and would be potentially subject to constant labour disputes at these sites.

36. From the perspective of the employee, counsel for Burns submitted that the position taken by the Steelworkers undermined the ability of employees to move between sites, and to obtain the benefits of so doing. Counsel suggested that the right of the employees of the predeces­sor to move to the successor employer~ s "new~~ site upon the predecessor's loss of the security ser­vices contract (which is ensured as a result of section 56.6 of the ESA) would, as a practical matter, become worthless to the employee because he or she would, effectively, be "stranded" on an "is­land". The result would be that no employee would ever want to accept an offer of employment made by the successor employer, defeating the intention of the provision.

37. Counsel for the C.S.U. noted, amongst other things, that the circumstances of this case did not disclose the possibility that the employees at the three sites in question would lose union representation should the application be successful; rather, the situation before the Board merely calls for the determination of which bargaining agent should represent the employees at these 3 sites. Counsel noted that those employees who choose to stay with the predecessor employer upon loss of the contract will be entitled to be governed by the predecessor's collective agreement. Counsel also focused on the introduction of section 7 of the Act, submitting that the Legislature, at the same time as it introduced section 64.2 of the Act, expressed some support for the existence of broader-based bargaining units. Counsel for the C.S.U. concurred with counsel for Burns and Ensign, suggesting that the Board should reach a conclusion that makes sense from a labour rela­tions perspective. Counsel submitted that the result of adopting the position outlined by the Steel workers would be a labour relations "disaster".

38. Counsel for Ensign reinforced many of the arguments outlined above. Particular atten­tion was focused on what counsel referred to as the "practicalities" of the situation. It was sug­gested that to accede to the Steelworkers' position would be to condone or encourage undue frag­ mentation in the industry. Counsel submitted that the only rational conclusion that could be reached by the Board would be to determine that the C.S.U. should represent the employees at the 3 sites in question.

39. In many regards, this case exhibits similarities to the decision of the Board in The Municipality of Metropolitan Toronto, [1992] OLRB Rep. March 315. That case involved an appli­cation by the Municipality to the Board for an order resolving a conflict of bargaining rights. The Municipality was bound to a municipal-wide collective agreement with CUPE, and the nursing home purchased by the Municipality was bound, amongst others, to a collective agreement with O.N.A. The issue before the Board was the resolution of the patent conflict of bargaining rights and the Board resolved the matter by reference to the powers granted to it pursuant to what were then sections 63(4) and 63(6) of the Act.

40. The resolution of the conflict of bargaining rights in The Municipality of Metropolitan Toronto was one which required the Board to recognize the reality of the new business situation which had been presented to it. The Board acknowledged that "appropriate weight" must be given to the status quo, but observed that it was necessary to consider "the desirability of modifying the bargaining structure and representation rights" to reflect the new business reality. The Board noted, at paragraph 68, that the realignment of the bargaining structure in a "two union situation" does not raise concerns regarding access to collective bargaining that might well be significant in other contexts, and concluded as follows:

Accordingly, in two-union intermingling situations like the one here, the Board may be disposed to give less weight to the pre-existing status quo and employee preferences, and exhibit more concern about the problems of fragmentation and the establishment of coherent, sensible bar­gaining arrangements in the new business context.

41. The Board in The Municipality of Metropolitan Toronto also considered the issue of fragmentation to be of great significance. In that case, the Board observed, at paragraph 72, that the potential for fragmentation made ONA's position untenable:

We simply do not consider it "appropriate" for collective bargaining purposes to sub-divide Metro's organization in the manner urged upon by ONA. From an operational point of view, we do not think that Metro should be required to deal separately with a tiny minority of its employ­ees (which is also a tiny minority of its nurses), with separate negotiating processes, separate interest arbitration, separate grievance procedures, separate representation on employer/employee committees, separate salary administration, separate seniority lists, sepa­rate pay equity plans, separate seniority promotion and transfer arrangements, etc. Any such barrier erected around the nurses at Carefree Lodge would be totally artificial, impractical, and would impede orderly collective bargaining. This is not a matter of mere administrative conve­nience, but rather an illustration of the kinds of labour relations problems which flow from frag­mented bargaining structures, and to which the Board should be sensitive (see again: Kitchener- Waterloo Hospital, supra, at paragraphs 47-48). We do not consider these problems to be trivial, nor is it relevant that it is the employer that has raised them. It is precisely because these problems are real that the Board will not usually consider classification or departmental employee groupings to be appropriate for collective bargaining, and has been exceedingly reluc­tant to subdivide an integrated work force into a number of small bargaining units.

The concerns raised in The Municipality of Metropolitan Toronto are also raised on the facts before us.

42. As noted above, the Steelworkers relied upon the decision of Meadowvale Security uard Services Inc. (Board file No. 2404-93-R, February 14, 1994, unreported) in support of its position. It would appear from a reading of the decision that Meadowvale successfully tendered for security service contract encompassing 310-330 Front Street in Toronto. The employees of Mea­ [1994] dowvale working at the "site" were represented in their employment with the predecessor (Burns) by the United Plant Guard Workers. The parties agreed that s.64.2 of the Act applied to make Meadowvale a successor, but Meadowvale urged that a representation vote be held as a result of what it asserted was an intermingling which had resulted since it had assumed the contract. The Board ruled orally that, even if there were an intermingling on the facts, it was insufficient to war­rant the ordering of a representation vote, particularly given the effect of section 64.2 of the Act.

43. The Board subsequently dismissed an application for reconsideration of the decision. In doing so the Board dealt briefly with the merits of Meadowvale's position. In the course of its deci­sion, the panel made the following observations:

44. The employer has similar contracts at other locations. Employees at a number of those other locations are represented by another union, others are not unionized. Some of those other bargaining rights are referable to "site specific" bargaining units; others represent bargaining units that include a combination of sites.

45. While we acknowledge that having different sites represented by different unions might result in greater administrative work for the employer, we noted that the intent of section 64.2 of the Labour Relations Act was clear, that is, to ensure that existing bargaining rights continue at specified premises where services continue to be pro­vided albeit by a new employer.

46. The administrative problems created are not substantially different from problems created by the fact that some locations may be unionized and others not. The employer would no doubt prefer to have to deal with only one union. The clear intent of section 64.2 to provide that the applicant's bargaining rights continue outweighed the somewhat greater administrative difficulties presented to the employer by virtue of the effect of that section.

47. The Meadowvale Security Guard Services decision is easily distinguishable from the case before this panel. Meadowvale Security Guard Services was not a case in which the Board dealt with a conflict of bargaining rights. It is apparent from the decision that Meadowvale, although unionized at other "locations", some of those locations being "site specific" and others consisting of a combination of sites, was not governed by a collective agreement which could apply to the site in question prior to the assumption of the contract. In fact, it would appear that the employer in Meadowvale Security Guard Services did not raise the issue of altering the bargaining structures as a result of the deemed sale of a business pursuant to s.64.2 of the Act. In that case, Meadowvale was, in essence, asserting that notwithstanding the existence and applicability of s.64.2 of the Act, a vote ought to be ordered because it had sent certain of its employees to work at the acquired site. The Board's response to that proposal was to observe that s.64.2 of the Act "(ensures) that exist­ing bargaining rights continue at specified premises where services continue to be provided albeit by a new employer". In the particular context of Meadowvale Security Guard Services, where there is no conflict of bargaining rights raised, we agree with the approach taken by that panel of the Board. Here, of course, the circumstances are significantly different and other considerations apply.

48. In situations where s.64(4.2) or 64(6) of the Act provide an opportunity for the Board to weigh "administrative difficulties", the weight attributed to such difficulties will depend upon the circumstances of the case before the Board. As was noted by the Board in Burns International Security Services Limited [1994] OLRB Rep. April 347, at paragraph 17, the security guard indus­try is characterized by a wide range of bargaining unit descriptions:

It is not disputed that, in the security guard business, the Board has found quite a variety of bar­gaining unit descriptions to be appropriate. Those units have been as narrow as a single client site (the client's address) and as broad as the Regional Municipality of Ottawa-Carleton. in between, the Board has found to be appropriate municipal units of various sizes, and even com­binations of municipalities. There is no evidence before us of any particular labour relations problems flowing from one or other of these configurations - although one might hypothesize that broader units are more stable, while narrower units more closely reflect particular employee terms and conditions of employment, which, as noted above, are linked to the client's service contract.

Accordingly, there are a potentially large number of situations in which the re-tendering of a secu­rity services contract may result in a conflict of bargaining rights, with or without intermingling.

46. The Board's response to an application under s.64 of the Act (whether it be pursuant to s.64(4.2) or 64(6) of the Act) depends upon all the circumstances of the case before it. The weight accorded to the type of "administrative difficulties" found in this case may well depend, in part, upon the nature of the bargaining unit descriptions in conflict. The security services industry is one which may often reflect a fragmented bargaining structure. In the case before us, the municipal-wide nature of the bargaining rights in conflict reflect a desire by the parties to maintain a stable relationship. One must keep in mind that, in an application for certification, the Board grapples with two conflicting goals - the desire to facilitate collective bargaining (which often encourages applications relating to smaller bargaining structures) and the desire to establish stable bargaining relationships (which often results in the adoption of broader-based bargaining structures). The approach to bargaining unit determination described in Hospital for Sick Children [1985] OLRB Rep. Feb. 266 reflects this inherent tension. But once collective bargaining is established, there are good labour relations reasons for deciding cases such as that before us in a manner which promotes stable bargaining relationships. The Legislature, by enacting what is now s.7 of the Act permitting for consolidation of bargaining units in certain circumstances, has recently reflected the desirability of establishing and maintaining stable bargaining relationships.

47. In our view, it would be inappropriate to adopt the position advocated by the Steel­workers in this case. Many of the concerns raised by counsel for Burns, Ensign and the C.S.U. are legitimately taken and are of significance to the Board. In Canadian Labour Law (2nd Edition, Canada Law Book) former Board Chair (now the Hon. Mr. Justice) G. W. Adams makes the fol­lowing observations at p 8-27 regarding the approach taken by Canadian Labour Relations Boards in circumstances similar to those reflected by this case:

When intermingling involves the merger of two groups of unionized employees, a board will look to the existing bargaining structure to decide if maintaining these separate units can be jus­tified. The boards note that the choice of employees regarding their bargaining agent should be honoured, unless to do so would undermine rational collective bargaining. Balanced against this recognition of the employees' wishes is the preference for single, all-employee units. Where a conflict arises between these two policy goals, the interest of maintaining industrial peace prevails and undue fragmentation is avoided. (footnotes omitted and emphasis added)

One questions how "rational" collective bargaining could proceed should the significant fragmen­tation occur that would be the result of the approach adopted by the Steelworkers. To accede to that approach would result, initially, in a few fragmented bargaining units which, if the circum­stances then remained static, could, with some inconvenience, be accommodated by Ensign. How­ever, over time, the bargaining relationships would increase in number to the point where impedi­ments to orderly collective bargaining and to the administration of the collective agreements would become overwhelming. Ensign would ultimately be required to administer innumerable and differ­ent collective agreement obligations. Some, but not all, of the impediments are referred to above in paragraphs 34 and 35. In our view, there is little, if any, labour relations sense in creating a frag­mented security guard industry in the circumstances before us, especially where the parties have established broader-based bargaining rights. From the perspective of a successor employer, the prospect of having to administer numerous collective agreement obligations can hardly be said to be an attractive one.

48. Likewise, we are extremely concerned with the limitations that such a result would impose upon the employees working at sites acquired by a successor employer (and, of course, eventually, the employees who remain at sites retained by the successor employer). The employees of Ensign would, over time, find themselves isolated at one site for as long as they were employed with Ensign. Presumably, the Legislature intended that the rights created by section 56.6 of the Employment Standards Act would be exercised by employees who work on sites that are subject to a successful re-tendering of the security services contract. The practical effect of the Steelworkers' position would be to largely preclude employees from exercising such an option. And although it is true that the position adopted by Burns, Ensign, and the C.S.U. will require the employees at the sites to change bargaining agents (on the facts of this case), that result is tempered by the fact that the individuals will not be denied union representation. As is evident from the case authorities which were canvassed before us relating to the exercise of the Board's discretion under section 64 of the Act, and from the excerpt from Canadian Labour Law referred to above, the Board has, in similar circumstances, subordinated the principle that employees have the freedom to choose their union, to more significant, overriding labour relations concerns (see, for example, The Municipal­ity of Metropolitan Toronto, [1992] OLRB Rep. March 315, at paragraph 68).

49. One remedial option available to the Board which would permit employees the ability to choose their bargaining agent would be the ordering of a representation vote. During the course of argument the parties addressed the issue of whether the Board ought to order a representation vote of Ensign employees in the circumstances of this case. At the risk of unduly abridging the thorough argument of counsel, the position of counsel for Ensign, Burns and the C.S.U. was that, as the relative number of former "Steelworker" employees was so small as compared to the num­ber of "C.S.U." employees, the Board should not order a vote in the circumstances before us. Counsel for the Steelworkers submitted that such a vote would be appropriate should its initial submissions be rejected by the Board. Case authority was reviewed by all counsel.

50. Section 64(8) of the Act provides the Board with ample authority to order a representa­tion vote in the circumstances. Again, however, we approach the determination of whether a vote ought to be ordered in this case from the perspective of whether to do so makes good labour rela­tions sense. Here, two potential voting constituencies for a representation vote come to mind. The Board could order a vote of all employees of Ensign represented by the C.S.U. in the Regional Municipality of Ottawa-Carleton - in effect providing all Ensign employees in the bargaining unit with the opportunity to decide which of the two competing bargaining regimes would govern the relationship of the employees with Ensign. Although this potential constituency has the singular advantage of ensuring a "municipal wide" result, thus eradicating the fragmentation problem, a vote of this constituency makes very little practical sense for two obvious reasons. First, there is no apparent justification for allowing the "Steelworkers tail" to wag the "C.S.U. dog" - presumably the employees of Ensign who chose the C.S.U. as their bargaining agent did so with the knowledge that other bargaining agents - including the Steelworkers - existed. To provide all Ensign employ­ees a vote would be comparable to providing them with an opportunity to terminate bargaining rights which is not specifically provided by the Act. Secondly, it is also possible, if this voting con­stituency were adopted, that each time a security services contract was acquired by Ensign its bar­gaining relationship would change, as between numerous different trade unions. This "revolving door" approach to labour relations exhibits no redeeming features from any participant's perspec­tive. Accordingly, it must be rejected as an option available to the Board in this case.

51. A second, alternative voting constituency is also an option here - that is, the employees

at the site itself. Adopting this option would have the advantage of permitting those affected by the "deemed" sale to determine their own destiny regarding which bargaining agent will represent them. However, balanced against that advantage are other significant disadvantages. First, over time the fragmentation which counsel for Burns emphasized in argument would still occur although it may take longer to reach significant proportions; that is, even if employees at most of the indi­vidual "sites" acquired by Ensign voted in favour of the C.S.U. as their bargaining agent, those that did not would start the fragmentation process rolling and, over time, the problem of fragmen­tation would become severe for Ensign. Should employees vote for "their" incumbent on a regular basis the severe fragmentation referred to in argument would be expedited in time. The overall effect would be the same as if we were to rule in favour of the Steelworkers' primary position, which we have specifically rejected. To order a vote with a "site specific" voting constituency is to, in effect, guarantee the development of severe fragmentation over time. As has been noted above, the Board will in appropriate cases subordinate employee wishes where concerns over fragmenta­tion are of significance. For the reasons outlined above, this is one of those cases.

52. We conclude that it is inappropriate in this case to order a representation vote of the employees of Ensign in either of the two potential voting constituencies. Accordingly, we are of the view that, in the circumstances of this case, the Board should make the declarations set out below pursuant to section 64(6) of the Act.

VI. Board Declaration

53. The Board, therefore, declares pursuant to s.64 (6) of the Act that, effective the date of this decision:

(a) Ensign Security Services Inc. is no longer bound by the collective agreement between Pinkerton's of Canada Limited and the United Steelworkers of America dated October 1, 1993 insofar as it applies to its employees employed at Heritage Place, Ottawa, Ontario, and 45-99 Rideau Street, Ottawa, Ontario;

(b) the employees of Ensign Security Services Inc. formerly covered by the collective agreement referred to in paragraph (a), those employ­ees of Ensign Security Services Inc. formerly covered by the certifi­cate dated March 24, 1993 held by the United Steelworkers of Amer­ica applicable to Burns International Security Services (Board file 3500-92-R), and those employees of Ensign Security Services Inc. covered by the collective agreement between Ensign Security Ser­vices Inc. and Canadian Security Union dated August 10, 1993 con­stitute one appropriate bargaining unit which is defined as follows:

"All security guards in the employ of Ensign Security Ser­vices Inc. in the Regional Municipality of Ottawa-Carleton, save and except supervisors and persons above the rank of shift supervisor."

(c) the employees of Ensign Security Services Inc. formerly covered by the collective agreement referred to in paragraph (a), those employ­ees of Ensign Security Services Inc. formerly covered by the certifi­cate dated March 24, 1993 referred to in paragraph (b), and those covered by the collective agreement dated August 10, 1993 between Ensign Security Services Inc. and Canadian Security Union are bound by the collective agreement between Ensign Security Services Inc. and Canadian Security Union dated August 10, 1993.

54. Should the parties encounter any difficulty in effecting the order of the Board, this panel of the Board shall remain seized of this matter.

DECISION OF BOARD MEMBER B. L. ARMSTRONG; October 25, 1994

I agree with the presentation of the evidence and argument in the majority decision. However, I disagree with the conclusion reached by the majority. In my view the bargaining rights applicable to the sites ought to bind Ensign.