[1995] OLRB Rep. September 1217
2119-94-R IWA Canada, Local 2693, Applicant v. Shin Ho Canada Ltd., Solid Wood Research Inc., Responding Parties
BEFORE: Laura Trachuk, Vice-Chair, and Board Members R. M. Sloan and D. A. Patterson.
APPEARANCES: Sean Fitzpatrick, W. McIntyre and L. Szkaley for the applicant; Derek L. Rogers, Wolfgang Gericke and Yves Fricot for Solid Wood Research Inc.; no one appearing for Shin Ho Canada Ltd.
DECISION OF LAURA TRACHUK, VICE-CHAIR, AND BOARD MEMBER D. A. PATTERSON; September 28, 1995
Introduction
1This is an application under section 64 of the Labour Relations Act. The applicant (hereafter the "union") was certified as the bargaining agent for a bargaining unit of employees of Kakabeka Timber Ltd. (hereafter "Kakabeka"). Kakabeka was acquired by Shin Ho Canada Ltd. (hereafter "Shin Ho") in 1988. Kakabeka/Shin Ho negotiated a collective agreement with the union for the period June 1, 1991 to May 31,1993. In September 1992, Shin Ho closed down the operation and laid off the employees. On April 15, 1994, Solid Wood Research Inc. (hereafter "Solid Wood") leased the premises and the equipment from Shin Ho and commenced an operation at the site. Shin Ho did not participate in this hearing.
The Facts
2Most of the relevant facts in this matter are not in dispute. The real issue is whether the facts support the applicant's contention that Solid Wood acquired a "part of a business" from Shin Ho. It is Solid Wood's position that it is a "research operation", not a production operation such as Shin Ho ran, and that Solid Wood has therefore not acquired part of Shin Ho's business. It is the union's view that Solid Wood is using the same premises and equipment and producing the same or a similar product as Shin Ho and has therefore acquired part of its business within the meaning of section 64 of the Act.
3Mr. Wolfgang Gericke testified for Solid Wood. He is the president of five companies referred to as the "Buchanan Group" and, although he has no official position with Solid Wood, appears to be its guiding hand. Mr. Gericke is an enthusiastic man with ambitions for his company and his community. For a number of years he has been interested in finding manufacturing uses for the wood that is left over by the processing of lumber in his mills. He believes that developing uses for this waste wood will create a secondary industry from the sawmills in the area. He was therefore looking for an appropriate location for a research operation. In 1994 he decided to lease the premises and equipment of the former Kakabeka timber mill from Shin Ho and to form Solid Wood Research Inc. He described two main motives for entering into this lease agreement: the price was right and the mill had two state-of-the-art, Weinig planning/molding machines from Germany. Mr. Gericke knew through his research that in Europe many soft woods, considered inferior in North America, are used for high end-value products that the North American market has traditionally only accepted from hard woods or high-grade soft woods. Mr. Gericke wished to try to find some high end-value products that could be made from the "SPF" (Spruce/Pine/Fir) boards of slightly irregular size that are left after wood is processed into lumber in his mills. He wanted to find ways to make "high end-value products" from this wood on a commodity, that is, a high-volume basis. He also, of course, hoped to try to sell whatever products could be developed.
4After leasing the Kakabeka Mill from Shin Ho, Mr. Gericke hired a foremen from one of his other mills to manage the new company. He also asked one of the former Kakabeka managers whether he knew of any good potential employees in the area. He was referred to, and subsequently hired, the two previous planing machine operators, the former knife grinder and two former foremen. Two other people who worked at the mill during Shin Ho's tenure were also eventually hired. At the time of the hearing there were approximately eighteen people working at the mill including management, seven of whom had previously worked for Shin Ho.
5The Kakabeka mill was originally a small lumber mill. However, after Shin Ho bought the operation in 1988 it became a specialized wood-processing operation producing high end-value products, particularly flooring and panelling. It brought in lumber in "cants" which were sometimes dried in the kilns and then cut and planed through the Weinig machines into flooring or panelling. The strips of flooring or panelling were then bundled, shrink wrapped and shipped out or stored. Flooring strips would also be sent through the end-matching machine in the flooring plant. The majority of the Shin Ho operation was directed to the production of flooring but a significant amount of wall panelling was also produced. Shin Ho often used hard wood for its products but some higher-grade pine and other soft woods were also used, particularly for the panelling. Shin Ho had its own salespeople to market and sell its product. During some period of its operation Shin Ho also produced "S4S" (smooth-4-sides) which are basically boards that have been planed. S4S is used