Great War Memorial Hospital of Perth District v. Ontario Public Service Employees Union

[1995] OLRB Rep. October 1293

3616-94-R; 3824-94-R; 0778-95-R Great War Memorial Hospital of Perth District, Applicant v. Ontario Public Service Employees Union, Responding Party v. Ontario Nurses' Association, Intervenor #1 v. Association of Allied Health Professionals: Ontario, Intervenor #2; Great War Memorial Hospital of Perth District, Smiths Falls Community Hospital, Applicants v. Ontario Public Service Employees Union, Canadian Union of Public Employees, Local 2119, Independent Canadian Transit Union and its Local 6, Ontario Nurses' Association, Responding Parties v. Non-Union Employees Smiths Falls Community Hospital and The Great War Memorial Hospital, Intervenor #1 v. Association of Allied Health Professionals: Ontario, Intervenor #2; The Association of Allied Health Professionals: Ontario, Applicant v. Perth & Smiths Falls District Hospital, Responding Party v. Ontario Nurses' Association, Intervenor

BEFORE: S. Liang, Vice-Chair.

APPEARANCES: John Wakely, Caroline Manley and Shirley Rogers for the Ontario Hospital Association and Perth and Smiths Falls District Hospital; Nelson Roland for the Independent Canadian Transit Union and its Local 6; Valerie MacDonald and Pat Gibson for the Ontario Nurses' Association; David Wright, Roger Haley and Bill McNicol for Ontario Public Service Employees Union; Simon Laxon, Sue McCulloch and Chris Luscombe-Mills for the Association of Allied Health Professionals: Ontario; Sean McGee and Doreen Leeder for Canadian Union of Public Employees, Local 2119; David P. Burns for the group of employees.

DECISION OF THE BOARD; October 13, 1995

1. These matters are two applications brought pursuant to the provisions of section 64 of the Labour Relations Act, and an application for certification.

2. In the applications under section 64 of the Act, the applicant is the Perth and Smiths Falls District Hospital (hereinafter referred to as "the Hospital"). This hospital was created out of the merger of two hospitals, the Smiths Falls Community Hospital (referred to herein as "Smiths Falls"), located in Smiths Falls, and the Great War Memorial Hospital ("Great War"), located in Perth, 22 kilometres away. The merged Hospital continues to operate out of the two locations. The Hospital seeks in these applications the merger of certain bargaining units working out of the two locations and currently represented by the Canadian Union of Public Employees ("CUPE"), the Ontario Public Service Employees Union ("OPSEU") and the Independent Canadian Transit Union ("ICTU"). Henceforth, in this decision, the two applications will be referred to in the singular since this was the manner in which the parties have dealt with them.

3. Section 64 of the Act provides, in part:

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) 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).

4. This application is based in particular on the provisions of section 64(6). The parties do not disagree that the merger of the two former hospitals into the new Hospital constitutes a sale of a business within the meaning of section 64. They disagree as to whether the further conditions required to invoke the relief under section 64(6) are present. The Hospital and CUPE take the position that the Hospital has intermingled employees of one aspect of the business (corresponding to one location) with employees of another aspect of the business (the other location). OPSEU and ICTU maintain that there has been no intermingling of employees as a result of the merger. Further, they state that even if there has been some nominal intermingling, no relief is warranted because given the geographic basis of current bargaining rights, it is possible to preserve the integrity of the bargaining units without creating serious problems for the employer. ICTU also takes the position that it is a craft unit and the Board ought not to merge its unit with another even if it is otherwise warranted.

5. The third application before us is a certification application pertaining to one of the locations, brought by the Association of Allied Health Professionals: Ontario ("AAHPO"), who have also intervened in the section 64 applications. As a preliminary matter, the Board was asked to rule on whether the certification application ought to proceed before the section 64 applications. In an oral ruling, I found that it was appropriate to determine the issues in the section 64 applications first.

6. The parties were able to agree to most of the facts for the purposes of the section 64 applications, including a number of documents. This was supplemented by brief oral evidence called by the Hospital.

7. The rough composition of the bargaining units which are affected by these applications is as follows ("Fr" denoting full-time, and "PT" denoting part-time):

Smiths Falls CUPE service units (including maintenance) — 51 FT — 85 PT and casual

Great War OPSEU office, clerical and service unit

— 46 FT

— 51 PT

OPSEU paramedical unit

— 7 FT

— 9 PT

ICTU unit (stationary engineers and maintenance)

— 4 FT

8. There are separate CUPE full-time and part-time collective agreements. There is one OPSEU agreement which covers full and part-time office, clerical and service employees.

9. The office and clerical employees at Smiths Falls are not represented by a union. They appeared at the hearing, however, through a representative and made representations on the issues before me. The paramedical employees at Smiths Falls are the subject of the AAHPO application for certification. For the purposes of the section 64 applications, therefore, these employees are as yet unrepresented by a union. The number of unorganized employees at both locations totals about 98, with about half of those affected by the AAHPO application. There is also a small unit of stationary engineers at Smiths Falls, represented by the Canadian Union of Operating Engineers, which is unaffected by the relief requested in these applications.

10. The Hospital requests that the Board merge the office and clerical, service and maintenance employees into a single bargaining unit across the two locations, including those employees who are currently unrepresented. The Hospital proposes that the Board conduct a three-way representation vote, between CUPE, OPSEU and ICW. CUPE supports this position.

11. Further, the Hospital proposes that the paramedical units at the two locations be merged, with a two-way representation vote between OPSEU and a no-union option.

12. The amalgamation of the hospitals became official effective March 31, 1995, the date of an "Amalgamation Agreement to Form Perth and Smiths Falls District Hospital" between the Smiths Falls Community Hospital and the Great War Memorial Hospital of Perth District. The merger had, however, been in the planning for some time. In April of 1994, the bargaining agents at the two locations were advised of the impending merger and the parties had various meetings to try and resolve certain issues arising out of the merger. It appears that the major issue was how to deal with seniority, and particularly whether non-union service should be given recognition for bargaining unit positions. No agreement was reached, and the documents suggest that this was due to some lack of certainty about the impact of the impending merger on staffing.

13. Even before the official merger date, some aspects of the merger were implemented, in the sense that certain services were consolidated. In the fall of 1994, convalescent beds at the Smiths Falls site were transferred to the Perth site. Over time, the obstetrics department of the Perth site was transferred to Smiths Falls. The computer system for the two locations was consolidated in Perth, as was the switchboard. The finance department at Perth was relocated to Smiths Falls. Doctors now have privileges at both sites, and patients may be placed at one or the other location depending on the availability of beds. In general, as of the date of the hearing before me, many of the various departments of the hospitals have been merged in the sense that they are run by common management with a common budget. It is the intention of the Hospital, over the next two years, to merge the remaining departments. However, although this is the intention, there is some lack of specificity about when this will occur for all departments. For instance, at the time of the hearing, there was no current plan for the merger of the Plant Operations departments at the two locations and such merger was not budgeted for the current fiscal year.

14. Accompanying the consolidation of services was the movement of certain equipment from one hospital to another. The effect of the rationalization of services on employees is primarily that jobs have been lost. A number of employees, both bargaining unit and non-union have been laid off. It does not appear that more than one to three jobs in total have been created at both locations as a result of the merger. In fact, one of the few concrete examples of a movement of jobs from one location to another relates to switchboard staff. A number of switchboard employees at Smiths Falls (non-bargaining unit) were given notices of layoff when the switchboard was relocated to Perth. These employees have had relatively long service with the Hospital. One full-time switchboard position has been created at Perth, which has been filled by a laid-off OPSEU bargaining unit member. Two more part-time switchboard positions at Perth have been posted but not yet filled.

15. The parties are agreed that no bargaining unit employees have been transferred from one location to the other as a result of the merger (apart from ONA members, which are not affected by this application). For the most part, where one site took over the provision of services for both sites, the work is being performed using the existing staff complement at that site.

16. There has been a history of some employees working at both locations when they were two separate employers. Therefore, some employees have been covered by both the OPSEU and CUPE collective agreements. The OPSEU and CUPE agreements do not recognize service at the other location. Vacancies at one location, however, are posted at the other location and positions are filled in accordance with the applicable collective agreement at the site where the vacancy exists.

17. The OPSEU and CUPE agreements are geographically based. The CUPE full-time and part-time collective agreements have recognition provisions which refer to employees "engaged at the Smiths Falls Community Hospital, Smiths Falls, Ontario". The collective agreement which pertains to the OPSEU full-time and part-time office, clerical and service unit has four separate recognition provisions which relate to distinct groups of employees within the overall unit. Each has slightly different wording. Two of the four provisions refer to employees of the Great War Hospital "in Perth", and "at Perth". The other two refer to the hospital's employees without a specific geographic reference. All four groups are treated by the parties as one bargaining unit. There was no suggestion that any one group within the bargaining unit may cover a different geographic area than the others, and indeed, the parties understand that the bargaining unit overall is confined to employees at the hospital in Perth. The OPSEU paramedical unit has yet to reach a first agreement, but the bargaining rights are confined to employees "in the Town of Perth".

18. As indicated above, the parties have agreed that there has been no movement of bargaining unit personnel from one location to another as a result of the merger. In evidence, the representative of the Hospital, Caroline Manley, testified that the only reason that bargaining unit personnel have not been transferred from one location to the other, or that non-bargaining unit personnel have not been transferred into a bargaining unit position, is because "of existing union contracts". When asked to be more specific about this in cross-examination, Ms. Manley stated that she was referring to an instance in May of 1994 when the hospitals (not yet merged) attempted to assign two maintenance employees in the CUPE unit from one hospital to work at the other hospital for a few days. The assigning hospital found itself faced with a grievance from CUPE and the assignment was revoked. The work in question was work of the ICTU bargaining unit. There have been no further instances of this type.

19. Ms. Manley also testified that if the work an employee performed was transferred from one site to another, the Hospital's preference would be to have that employee follow the work rather than be laid off. In general, Ms. Manley stated that the separate collective agreements "could" be an impediment to employee transfers.

20. The Ontario Nurses' Association represents nurses at both locations of the Hospital. ONA and the Hospital have reached an agreement on the merger of its two bargaining units as a result of the merger. Nurses have been transferred from one location to another as a result of the merger.

21. In the collective agreement between OPSEU and the Great War Hospital, the parties agreed to abide by the "Guidelines for Employee Transfer Arrangements in Hospital Service Rationalization" as developed by the Ontario Hospital Industry Labour Management Committee, April 1986. These Guidelines address union representation issues that flow from the merger or amalgamation of institutions providing health care service. At paragraph 10 of these Guidelines, it states:

If more than one union holds bargaining rights for employees in the affected units, then the unions involved will request the Ontario Labour Relations Board's assistance in conducting a vote of all employees in the resultant unit (both part time and full time) in order to determine which union will hold the bargaining rights for the resultant unit. One of the unions involved may wish to waive the need for a vote where the large preponderance of the population is represented by the other union. The operative collective agreement will be that of the receiving unit, administered by the union determined by such a vote or arrangement to hold the resultant bargaining rights.

22. The Guidelines also state, however:

…..It is clear that nothing in these guidelines would preclude any party to the transfer situation from seeking a solution to a problem of this sort through the Ontario Labour Relations Board. It was felt, however, that guidelines established by the committee as equitable will allow the parties to resolve such issues without having to use the presently available avenues of settlement.

23. The central issue before me is whether there has been an "intermingling" of employees as a result of the merger which warrants the measures provided for in section 64(6) of the Act. In order to understand the purposes of section 64(6), it is useful to place it in the context of sections 64(2) to (3), which have been discussed by the Board on many occasions. Although the wording of these sections have been amended recently, their general thrust remains the same. The Board has stated that the purposes of sections 64(2)to (3) is to preserve the bargaining rights which exist in a sold business: see The Municipality of Metropolitan Toronto, [1992] OLRB Rep. Mar. 315. Section 64(4) provides a means for the Board to redefine the scope of a bargaining unit or resolve a conflict between the bargaining rights of two trade unions, in order to give effect to the preservation of pre-existing bargaining rights.

24. Section 64(6) gives the Board broader remedial powers. The result of the application 64(6) may be that a trade union may lose its bargaining rights altogether, or may find itself representing a much different unit than before the sale. Section 64(6) is invoked when it is not possible or practicable to focus on the simple preservation of bargaining rights, because the very logic of the pre-existing bargaining units has been brought into question as the result of a sale. In New Dominion Stores Inc., [1986] OLRB Rep. Apr. 519, the Board has described the mischief to which section 64(6) [then 63(6)] is directed as being:

…..a situation in which there is a defacto overlap or merger of bargaining units, so that it is difficult to preserve bargaining rights in the "like unit" without creating operational problems for the successor employer or prejudicing the established rights of the employees. It would make no sense if employees working side by side performing similar tasks were subject to different collective bargaining regimes. In such circumstances, it might also make sense to direct a representation vote to determine which of two unions the employees wish to represent them....

25. In New Dominion Stores Inc., the Board found that the bargaining unit represented by the union had not been altered by the sale and was still easily identified. The Board found that there was no intermingling at the level of bargaining unit employees nor any evidence that such intermingling was likely to occur in the near future. In these circumstances, the Board found no reason to put the bargaining rights of the union to the test of a representation vote and instead amended the provisions of the two conflicting collective agreements to resolve the conflict.

26. In a number of the Board's decisions, the Board has looked at the effect of a sale of a business on geographically-based bargaining rights. There are decisions which support the notion that if bargaining rights are limited to one geographic location, the transfer of employees to another location as a result of a sale will not lead to a transfer of bargaining rights to that location. Likewise, the transfer of employees from the former location into another trade union's bargaining unit at another location will not be considered an intermingling if the scope clause covering employees at the former location does not extend to the second location: see Silverwood Dairies, [1980] OLRB Rep. Oct. 1526, and the cases cited therein. In Loeb Inc., the Board found that the two aspects of the business created as a result of a sale remained functionally separate and identifiable. Further the scope clauses of the two collective agreements at issue, as they had been applied by the parties, did not conflict. The Board found no reason in the circumstances to apply section 64(6).

27. In Caressant Care Nursing Home of Canada Limited, [1984] OLRB Rep. Aug. 1060, the Board described the "problem" addressed by section 64(6) in the following terms:

…..It is true that the subsection speaks of the purchaser intermingling the employees of one business with those of another. But that appears to be simply a more precise way of referring to the intermingling of the businesses themselves: it is in fact the "employees" of the businesses who are capable of being "intermingled". The focus of section 63 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....

28. Caressant Care suggests that the "intermingling" required to trigger the response of the Board under section 64(6) may not require that there be conflicting scope clauses. It may be, for instance, that where as a result of a sale an employer operates an integrated business out of two locations which are subject to different site-specific collective agreements, the Board may find it appropriate to merge the existing bargaining units. Further, in focusing on the notion of the business and the practical problems of running two integrated businesses Caressant Care also suggests that the type of intermingling required to invoke section 64(6) may not require "employees working side by' side" subject to different collective bargaining regimes. But even on the facts of that case, the Board found that as a result of the sale of business, there were employees of a predecessor business covered by a collective agreement who ended up working together with employees of a business not covered by a collective agreement.

29. It is not clear to me on the facts of this case as they were presented at the hearing, that there has been intermingling within the meaning of section 64(6) as it has been applied by the Board thus far. To the extent that the lack of a conflict in competing collective agreements has been found to weigh against a finding of intermingling, no such conflict exists in this case. Also, to the extent that the Board has looked to whether employees who may be covered by different collective bargaining regimes will be working together performing the same work, this also does not exist in this case. There is no doubt that there has been an integration of businesses, at a certain level. Services have been consolidated, management merged and budgets combined. But to date~ this integration of services has not been accompanied by a flow of job opportunities from one location to another. Neither does the evidence suggest that this is in the plans for the near future. In effect, although the "businesses" of the two former hospitals has been altered somewhat by the merger, it is still possible to define them and it is still possible for the employees in these bargaining units to identify which "business" they work for.

30. Even if, on a broad and expansive reading of the Board's decisions in this area, I am inclined to characterize some of the effects of this merger as an intermingling, it is not the type of intermingling which would warrant the exercise of my remedial discretion under section 64(6). Even where the Board has found or is prepared to assume some intermingling in a given fact situation, it must be more than "nominal" to warrant the Board's intervention under section 64(6). In Hamilton Cargo Transit Limited, [1983] OLRB Rep. June 887, the Board found a degree of intermingling in the sense that a small number of drivers normally working under one collective agreement were "borrowed" from time to time to supplement another aspect of the business. This did not lead the Board to conclude that the two businesses did not remain distinct and identifiable. No remedy other than the amendment of a scope clause in a collective agreement was ordered.

31. The Board might have a different view of the matter if it were apparent that the consolidation of services at the two locations has led to a situation where the Hospital is being run, or is intended to be run, at every level of its operation, as an integrated business. But on the evidence before me, it does not appear that the work of the bargaining units at the two locations will be any more difficult to define than it ever has been. There is no suggestion that in order to implement the consolidation of services, for instance, the Hospital intends to assign or transfer employees from one location to another as needed. Work has been transferred, but not work opportunities. In other words, the merger of the two former hospitals has not led to a situation where the fundamental integrity of the bargaining units at those two locations has been called into question.

32. As indicated earlier in the decision, there was some general evidence to the effect that the collective agreements have prevented the Hospital from transferring employees from one bargaining unit to another, or from non-bargaining unit positions to bargaining unit positions in response to the merger. If this suggestion that the Hospital has been prevented from implementing the merger because of the existing bargaining structure had been supported by the facts, I might have had a different view of the matter. However, as I also indicated, the only concrete example which the Hospital's representative was able to give on this point was an isolated incident in May of 1994 which has not been repeated. There was no evidence that the Hospital either intended or even wished to make this type of job assignment a common practice in the future. Likewise, there was evidence that if the work an employee performed was transferred from one site to another, the Hospital's preference would be to have that employee follow the work rather than be laid off but that the separate collective agreements could be an impediment to employee transfers. However, again, there was no evidence to the effect that such employee transfers relating to these bargaining units were any part of the Hospital's plans for the implementation of the merger.

33. The Board has described the remedies under section 64(6) as "extraordinary" (see Loeb Inc.), no doubt because of the potential of these remedies to fundamentally alter bargaining structures in a workplace. The Board will not hesitate to invoke the relief, however, where new business structures give rise to illogical bargaining arrangements. Further, as the Board indicated in The Municipality of Metropolitan Toronto, the Board may be disposed to give less weight to the pre-existing status quo where, as in an essentially two-union situation, there is no issue about continued representation of employees. However, the Board does have to be satisfied that the logic of the current collective bargaining structure in the case of this Hospital has been called into question as a result of the merger, and I am not convinced that the evidence has established this.

34. In argument, the Hospital referred to the "Guidelines for Employee Transfer Arrangements in Hospital Service Rationalization" referred to earlier in this decision. It was stated that the Guidelines, to which OPSEU and the Hospital agreed, address the situation before the Board and ought to govern. If the submission is that by incorporating these Guidelines into their collective agreement the parties intended the Board to apply the provisions of those Guidelines in an application made under section 64(6), I cannot agree. It is clear from that document that the Guidelines are meant to be exactly that, Guidelines. It is also clear that the parties have specifically left open the right to apply to the Board in the event of a disagreement about the labour relations impact of a hospital merger. Nothing in those Guidelines prevents parties from obtaining remedies consistent with the Board's interpretation and application of section 64(6). In any event, it is not said that the Guidelines in any way bind ICTU, one of the parties to this proceeding.

35. The Hospital's application for relief under section 64(6) is accordingly dismissed.

36. During the course of the hearing, counsel for OPSEU raised an issue pertaining to certain paramedical employees working at the Perth location, formerly employed by the Smiths Falls Hospital and now employed by the new Hospital. OPSEU asks the Board to declare that these employees are part of its bargaining unit as a result of this sale. This issue was not fully argued, nor was there a sufficient factual basis provided upon which I can make any determination. If OPSEU wishes a determination, I direct that it provide submissions in writing along with the factual basis of those submissions, to the Board and to the other parties. The other parties will have an opportunity to note any factual disagreement and provide their written submissions. The parties' submissions should address the issue of whether section 64(6) has any application to the OPSEU paramedical bargaining unit at Perth.

37. Finally, during the course of the hearing, ONA, as an intervenor, requested that the Board make certain directions regarding the description of its bargaining unit, and the managerial status of certain persons (for which it requests the appointment of a Labour Relations Officer). These matters are beyond the scope of the hearing before me and indeed, it is not clear to me that they arise as issues under section 64 of the Act, as opposed to other provisions of the Act. ONA is free to pursue these issues, if still outstanding, under the appropriate provisions of the Act.