[1995] OLRB Rep. October 1303
4625-94-R Ontario Public Service Employees, Applicant v. St. Mary's of the Lake Hospital, Responding Party v. Kingston General Hospital, Intervenor #1 v. Association of Allied Health Professionals: Ontario, Intervenor #2 v. The Religious Hospitallers of Saint Joseph of the Hotel Dieu of Kingston (Hotel Dieu Hospital), Intervenor #3, v. Employees' Association, St. Mary's of the Lake Hospital, Intervenor #4 v. Canadian Union of Public Employees and its Local 1974, Intervenor #5
BEFORE: Roman Stoykewych, Vice-Chair.
APPEARANCES: David Wright, Robin Gordon, Ed Ogobowski, Barbara Linds, Roger Haley and Fern Abraham for the applicant; Kees Kort and Gwen Pooley for the responding party; Steven Menard and Peter Lewis for Kingston General Hospital; M. I. Rotman and Maureen Fraser for Association of Allied Professionals: Ontario; Tony Button for Hotel Dieu Hospital; Phillip G. Hunt and Brian Harris for Employees' Association, St. Mary's of the Lake Hospital; Linda Dumbleton and John Bastos for Canadian Union of Public Employees.
DECISION OF THE BOARD; October 3, 1995
- This is an application pursuant to the provisions of section 64 of the Labour Relations Act. The portion of that section relevant to the present application reads as follows:
64.(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.
The application, brought by the Ontario Public Service Employees Union ("OPSEU"), arises out of the ongoing rationalization of rehabilitation services previously provided by the three Kingston hospitals. In labour relations terms, the primary consequence of the rationalization is the transfer of all rehabilitation services currently being provided by personnel in the rehab units of Kingston General Hospital ("KGH") and Hotel Dieu Hospital ("HDH") to a consolidated "Regional Rehabilitation Centre" operating out of facilities at St. Mary's of the Lake Hospital ("SMOL"). Upon the completion of this transfer process, which is expected to take place in a piece-meal fashion spanning several years, the rehab units of KGH and HDH will both be closed.
The bulk of the employees at SMOL are represented by the Employees' Association of St. Mary's of the Lake Hospital ("EASMOL"), which has concluded a series of collective agreements with the employer hospital with respect to separate units of full-time employees and part-time employees. The scope clause of the collective agreements cover a broad range of employees, including those engaged in RPN, clerical and office, janitorial, maintenance, kitchen staff and therapy aide capacities. Also present at SMOL is a bargaining unit of nurses represented by the Ontario Nurses Association ("ONA") and one of paramedical personnel, represented by the Association of Allied Health Professionals: Ontario ("AAHP:O"). It is anticipated that a total of approximately 57 full-time and 37 part-time employees will be transferred from KGH to SMOL, and 11 full-time and 8 part-time employees will be transferred from HDH to SMOL.
The majority of the contemplated transfers are to positions that are presently covered by SMOL's collective agreements with AAHP:O and ONA. It appears that SMOL and the unions concerned have reached agreement with respect to a substantial majority of the matters related to these transfers, including that of the recognition of employees' seniority upon transfer or a "dovetailing" basis. However, no such agreement has been reached with respect to the approximately 24 full-time and 12 part-time employees currently represented at their hospitals by the Ontario Public Service Employees Union ("OPSEU") and the Canadian Union of Public Employees ("CUPE"), who are transferring into positions within the scope of the collective agreements between SMOL and EASMOL. The present decision of the Board is concerned with the question of retention of these employees' seniority upon their transfer to SMOL.
All of the parties to this application are in agreement that the above-described rationalization process constitutes a "sale of a business" within the meaning of section 64 of the Act. Furthermore, both OPSEU and CUPE concede that they have no claim to the bargaining rights at SMOL as a result of the transfer of employees formerly represented by them into the EASMOL units, and agree that EASMOL is appropriately the bargaining agent for the now-enlarged units. Finally, all parties, with the exception of EASMOL, are in agreement that the seniority of the transferred employees that accrued under the collective agreements of CUPE and OPSEU should be recognized once they are in the EASMOL units, and in that respect, the seniority "lists" of the incoming employees ought to be "dove-tailed" with those of the existing complement. By contrast, EASMOL takes the position that seniority of employees entering into its bargaining units should not to be recognized, and that the incoming employees ought to be "end-tailed" for purposes of their placement on the seniority list.
The matter came on before me for hearing on July 6,1995. Earlier, in correspondence dated June 9, 1995, the Board was advised that the parties had reached the following agreements at a Labour Relations Officer meeting the previous day:
"(1) The transfer of Rehabilitation Services from Hotel Dieu Hospital and Kingston General Hospital to St. Mary's of the Lake Hospital constitutes a "sale of a business" within the meaning of section 64 of the Labour Relations Act.
(2) The Applicant, the Responding Party, and all the intervenors agreed to deal with the issue of seniority rights of those persons who would transfer from Hotel Dieu Hospital and Kingston General Hospital to St. Mary of the Lake Hospital in isolation and without prejudice to any rights of the Applicant, the Responding Party, or all of the intervenors with respect to any other issues which may arise in these proceedings.
(3) That the Board convene a hearing to deal with the seniority issue as soon as possible."
Nevertheless, at the outset of proceedings, counsel for EASMOL took the position that the Board could not determine the seniority issue because an "intermingling of employees" within the meaning of subsection 64(6), had not yet occurred. Therefore, it was submitted, the application with respect to the seniority determination was premature. With respect to the agreement of June 8, 1995, counsel argued that the caveats included in paragraph (2) preserved his client's right to make the prematurity argument and that, in any event, the agreement of the parties in itself could not provide the Board with powers it did not otherwise possess by virtue of statute. All of the other parties present at the hearing opposed the motion, relying both upon the terms of the above-noted agreement and the assertion that intermingling had in fact occurred. After considering the parties' submissions I ruled orally that I would proceed to hear the merits of the parties' dispute on the assumption that the Board possessed the necessary powers to do so. Since the date of the hearing, I have further concluded that the circumstances are such that it would be appropriate for me to exercise my discretion under section 64(6)(e). The following are my reasons for so determining.
Although the parties' procedural agreement appears to contemplate the Board entertaining the parties' submissions and issuing a ruling with respect to the seniority issue, (particularly since the caveats relate to issues other than seniority) it is not necessary for me to rely upon that agreement to proceed to the merits of this application. That is because I am satisfied that, in any event, an intermingling of employees within the meaning of subsection 64(6) of the Act has occurred.
I accept that none of the affected employees have been physically transferred from their respective hospitals to SMOL, and that the rationalization process is far from complete. Nevertheless, the Board notes that the full effects of the rationalization are hardly a matter for speculation, and that the employer has presented a concrete and detailed plan with respect to both the rationalization and the contemplated labour relations effects of the transfer. Further, pursuant to this plan, a portion of the work forces of the predecessor hospitals are already operating under the direction of SMOL personnel (albeit in their predecessor hospitals), and various labour relations processes have been put into place in order to effect the "physical" transfer of employees: particular positions have been selected for the move, and the affected employees and their bargaining agents have been notified that they will be subject to the transfer. Indeed, it appears that the rationalization process is in significant measure deadlocked due to uncertainty over the seniority issue, as senior employees in both HDH and KGH are understandably reluctant to agree to such transfers in circumstances in which their substantial seniority could be jeopardized.
Subsection 64(6) of the Act provides the Board with certain powers to reconfigure existing collective bargaining structures that have ceased to become reflective of, or responsive to, the new array of labour relations interest arising from a successor employer's "intermingling" of employees of a "purchased" business with those of another business. The Board has generally adopted a purposive approach in its interpretation of the "intermingling" provisions. Thus, while the "side-by-side" integration of two previously distinct workforces has been viewed as the best evidence of intermingling, the Board has also made it clear that a physical transfer of employees is not a necessary prerequisite to the exercise of its discretion, provided that the operational processes of two recently-merged entities are such as to give rise, in a substantial manner, to the labour relations mischief intended to be addressed by these provisions. (Caressant Care Nursing
Home [1984] OLRB Rep. Aug. 1060; Union Felt Products (Ontario), Decision of the Board, July 15, 1992) [now reported at [1992] OLRL Rep. July 871] In this regard, mere speculative harms that might affect the operations of a business entity cannot be the basis upon which the Board exercises its powers under subsection 64(6). That, however, is not the case in the present instance, nor are the circumstances such as to make me conclude that a party to this proceeding is seeking an "advance ruling" from the Board. Given the relatively advanced stage of the rationalization process in the present application, and the clear direction in which that process is manifestly headed, the labour relations difficulties that are encountered can hardly be characterized as hypothetical. In particular, the reluctance of employees to transfer from one hospital to another is not a potential problem, but a current obstacle to the successful integration of the three units. With that in mind, it is clear that the statutory objectives underlying subsection 64(6) would be fulfilled, and more generally, important labour relations interests advanced, were the Board to exercise its powers to assist in the orderly transfer of employees.
Accordingly, particularly bearing in mind that the kind of mischief to which the intermingling provisions of the Act were directed has fully materialized, I am satisfied that the rationalization process of the three units has sufficiently crystallized so as to constitute an intermingling of employees within the meaning of subsection 64(6) of the Act and that it is otherwise appropriate to exercise the discretion accorded to the Board under these circumstances.
Under subparagraph 64(6)(e) of the Act, the Board has been given the power to resolve questions related to collective agreement seniority rights upon an intermingling of employees resulting from the sale of a business. The grant of discretion is worded broadly and, while there is some case law to provide guidance with respect to the disposal of seniority list questions in the context of unfair representation claims (Dufferin Aggregates, [1982] OLRB Rep. Jan. 35; Michael Burkett, [1988] OLRB Rep. March 274) and, perhaps more usefully, in the context of the combination of bargaining units (F.M. G. Timberjack, [1995] OLRB Rep. Feb. 115), there is little authority that is of practical assistance with respect to the function required of the Board in the present application.
Nevertheless, the practical labour relations considerations that emerge from these circumstances are neither unique nor unusual. For that reason, argument with respect to the seniority issue proceeded, in significant measure, on the basis of consensus as to the relevant applicable principles. Thus, all parties argued that, in the absence of agreement between the parties on the seniority question, and particularly as between the SMOL and EASMOL (which are the parties to the collective agreement in question) it was appropriate for the Board in this instance to exercise what was characterized as an "interest arbitration" function with respect to the seniority question. (See Saint-Vincent Hospital, [1995] OLRB Rep. May 677.) In this respect, the role of the Board is to consider the competing claims to seniority in light of the prevailing circumstances, and to effect an optimal resolution of the interests involved. In the course of such a balancing of interests, considerable weight ought to be placed in favour of the retention of seniority, given its enormous significance to employees in the collective bargaining system. For that reason, an employee's seniority ought not to be abrogated except in the most unusual circumstances. In the context of the merger of seniority lists, the parties were in further agreement that, absent some compelling justification, for which objective evidence is required, it is the usual practice to "dovetail", or to otherwise accord recognition of seniority.
The parties, of course, differed as to the applicability of these principles to the present case and, in effect, what weight to accord the respective claims to seniority. Each of the parties,
with the exception of EASMOL, argued that a dovetailing of the seniority lists should be directed, in which "incoming" employees would have their accumulated seniority recognized in full, and for all purposes, under the relevant EASMOL collective agreement. Counsel for EASMOL, by contrast, submitted as appropriate various forms of "end-tailing", each of which had the result of placing the employees entering into the bargaining units at the bottom of the current seniority lists. It was the thrust of the argument that the present circumstances were precisely such as to place them outside the application of the principles enumerated above because of the disproportionate prejudice to the interests of the current EASMOL employee that would result from a dovetailing of the lists.
It is noteworthy that, in response to my questions during counsel's submissions as to whether a form of seniority list integration other that the extreme options presented in argument had been considered by the parties, I was advised that various such possibilities had been thoroughly discussed and repeated as inappropriate in their settlement discussions. No such intermediate positions were advanced by any party during the course of the proceedings before me and, under such circumstances, I have not considered such options in the course of my deliberations.
Having regard to all of those circumstances, I am satisfied that a merged seniority list in which the incoming employees have their seniority recognized in full would be appropriate in this application. The rationalization of the three rehab units, as it is described in the voluminous materials filed with the Board and as elaborated upon in the submissions of counsel, contemplates a transfer of both functions and corresponding funding for positions. It does not entail the overall reduction of staffing levels. While, of course, it is difficult to be sanguine today with respect to prospects of continued employment in the publicly-funded sector, I note that the employer (SMOL) has made a "soft" commitment to the union that no loss of jobs would ensue directly from the reorganization. Furthermore, the positions being transferred into the EASMOL units appear for the most part to be relatively specialized ones, with a high correlation between the function and the employee transferred. Thus, while it is true that the average seniority of the incoming employees is high relative to employees in the EASMOL units (and, as a result, the incoming group would, on average, have a higher claim to seniority-based benefits were their seniority to be recognized), it is far from clear as to whether displacement would result from the rationalization, at least in the foreseeable future.
Thus, to use the language of the authorities referred to by counsel for EASMOL (Greater Niagara General Hospital, unreported arbitration decision of Gail Brent, dated April 25, 1995; Central Okanogan School District No. 223 v Renaud (1992), 1992 CanLII 81 (SCC), 95 D.L.R. (4th) 577 (S.C.C.)), this is not a case in which the size of the "economic pie" remains unchanged, and for which therefore the appropriate question might be whether incoming employees are to be "accommodated". Instead, to continue the analogy, the employees entering into the EASMOL bargaining unit by virtue of the rationalization bring with them (in addition to their claim for recognition of seniority) an additional piece of that "pie", commensurate in size to their numbers, in the form of a discreet, ongoing, and viable unit.
In such circumstances, what is required is a balancing of interests informed by the importance of seniority to employees, and in which the respective claims to seniority of each of the groups are accorded substantially equal weight. Bearing this in mind, I do not find that the interests of the EASMOL employees in general would be adversely affected to a substantial degree were the seniority lists to be dove-tailed, and certainly not in a such a manner as to warrant the total non-recognition of the incoming employees' seniority. Indeed, to place the incoming employees at the bottom of the seniority list in these circumstances would in many respects create a windfall for the employees currently in the EASMOL bargaining unit.
Furthermore, I do not find compelling the argument advanced by counsel for EASMOL to the effect that a dovetailing of seniority lists would effect a disproportionate unfairness upon a specific group of employees in the bargaining unit who were formerly employed at the nearby Ongawanada Hospital. These employees were transferred into the EASMOL unit in 1990 on an end-tail basis upon the closure of a portion of that hospital. Of the 26 employees who transferred in 1990, some 23 have remained at SMOL. Given the relative absence of hirings in the interim, they remain, as a group, at or near the bottom of the seniority lists. All 24 of the proposed full-time transferees from KGH and HDH have more seniority than any of the full-time employees in the "Ongawanada group". While some of the part-time employees who transferred from Ongawanada have accrued more seniority than the incoming part-time employees, on average they would enjoy considerably less seniority than would the employees coming from KGH or HDH. The incorporation of the incoming employees on a dove-tail basis in these circumstances, it was contended by counsel for EASMOL, would have the effect of "leap-frogging" the incoming employees in seniority terms over employees who had worked at SMOL for almost five years. For that reason, an approach consistent with this "past practise", it was submitted, would produce a more equitable result.
It is, of course, clear that the "Ongawanada" employees, as a group, would remain the most vulnerable to layoffs and have a commensurably weaker claim to collective agreement benefits based on seniority were they to remain at or near the bottom of the seniority list (as would be the case in the event that the lists were dovetailed). Conversely, there is no question that their interests in this respect would be substantially advanced were the seniority of the incoming employees not to be recognized. That, however, is not the same as establishing that a dovetailing of the seniority lists would cause unfairness to them; nor is it apparent how, in the circumstances described above, the end-tailing of the incoming employees, all of whom have greater seniority, would produce a result in any respect more equitable.
In this respect, I am prepared to place considerably more weight upon the incoming employees' claims to retention of seniority than upon the claims to equal treatment that arise from the "past practise" of end-tailing. From the perspective of the Ongawanda employees, the rationalization of the rehab units on a dovetail basis can by and large be viewed as a "neutral" event. There is an expectation neither of job loses nor displacement resulting from the transfers. Subsequent events may well trigger layoffs, and in such an event, the Ongawanda group would likely be affected first and hardest. That, however, was also the case prior to the any transfers taking place, and in this respect, their vulnerability to layoff appears to result less from the rationalization than from their placement at the bottom of the list in 1990. Indeed, their very existence as a recognizable "group" is entirely a by-product of their being end-tailed. Under such circumstances, I am not persuaded that the employees in the Ongawanda group would be so seriously prejudiced by the full recognition of the incoming employees' seniority as to warrant a continuation of the end-tailing practise.
Finally, as discussed earlier, the employer's interest in these circumstances is clear, substantial and worthy of serious consideration. In the course of the rationalization process, the employees who are subject to transfer appear to be provided the option of moving to the "Regional Rehabilitation Centre" at SMOL or of remaining at their former hospitals in a different capacity. As noted above, employees, most of whose seniority is substantial, would be understandably reluctant to agree to a transfer to SMOL were there seniority not to be recognized. Thus, the employer's ability to attract the most experienced complement of employees to work in the newly consolidated rehabilitation centre would be seriously jeopardized, and the success of the entire rationalization process placed into considerable doubt were the seniority of the incoming employees not to be recognized. In my view, this is a further, weighty consideration militating in favour of recognizing the incoming employees' seniority.
As a result I am satisfied that the full recognition of the seniority of employees entering the EASMOL bargaining unit constitutes the most equitable and, in labour relations terms, most feasible reconciliation of the interests in the present application. In particular, I am not persuaded that the interest of the EASMOL. employees would be affected in such a manner or to such a degree as to outweigh the interest in the retention of seniority by the incoming employees.
Accordingly, having regard to the foregoing, the Board:
(a) declares that the transfer of Rehabilitation Services from Hotel Dieu Hospital and Kingston General Hospital to St. Mary of the Lake Hospital constitutes a "sale of a business" within the meaning of section 64 of the Labour Relations Act;
(b) declares that, as a result of the aforementioned transfer, an intermingling of employees has occurred within the meaning of subsection 64(6) of the Labour Relations Act;
(c) directs that the employees transferred into the EASMOL bargaining unit who had previously been employed at Hotel Dieu Hospital or Kingston General Hospital subject to the provisions of the OPSEU and CUPE collective agreements shall have the seniority they accrued under those agreements recognized in full upon their entry into the EASMOL bargaining unit.
- The Board remains seized with respect to any questions which may arise from the implementation of this decision, as well as with respect to those other matters raised by the parties in their materials filed with the Board in this application.