Ontario Labour Relations Board

[1995] OLRB Rep. January 32

1141-94-R International Alliance of the Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada, Local 461, Appli­cant v. Cineplex Odeon Corporation and/or 796278 Ontario Limited and/or Kingsbridge Theatre on the Square (Niagara) Inc., Responding Parties

BEFORE: Russell G. Goodfellow, Vice-Chair.

APPEARANCES: Bernard Fishbein, Walter Lipscombe and Andrew Mestern for the applicant; no one appearing for Cineplex Odeon Corporation and/or 796278 Ontario Limited; Robert B. Reid and Anthony Gudgin for Kingsbridge Theatre on the Square (Niagara) Inc.

DECISION OF THE BOARD; January 31, 1995

1. This is an application under section 64 of the Labour Relations Act. The applicant I.A.T.S.E. Local 461 alleges that the respondent Kingsbridge Theatre on the Square (Niagara) Inc. ("Kingsbridge") purchased a part of the business of Cineplex Odeon Corporation ("Cine­plex") when it acquired from a Cineplex subsidiary, 796278 Ontario Limited, (the "numbered company"), the building and premises known as the Seneca Theatre in Niagara Falls.

2. The applicant has represented projectionists employed at the Seneca Theatre by Cine­plex and its predecessors for more than fifty years. These bargaining rights are contained in a col­lective agreement which covers the Seneca and other theatres in the St. Catharine's area. Pursuant to its most recent agreement with Cineplex, I.A.T.S.E has the right to supply, and Cineplex has the obligation to employ, any and all projectionists and stagehands required at theatres covered by the agreement.

3. Kingsbridge is a non-profit charitable corporation which has operated as a community theatre in Niagara Falls since 1985. Its activities are governed by a volunteer Board of Directors and its productions are carried out with the assistance of volunteer labour.

4. On June 24, 1994, Kingsbridge purchased the Seneca Theatre at a cost of $150,000.00. Immediately thereafter, Kingsbridge undertook renovations to the theatre at a further cost of $275,000.00. These renovations were both cosmetic (e.g., carpeting and redecorating) and struc­tural (e.g., removing seats and expanding the existing stage). Although there was some dispute on the evidence as to the extent of the renovations necessary to enable the Seneca to be used for live theatre, it would appear that with relatively minimal renovations the theatre could have been used to accommodate some basic performances but more substantial productions required the kind of renovations undertaken by Kingsbridge. Initially, Kingsbridge had contemplated erecting a new theatre on land which it had already purchased, but the projected cost of 3.4 million dollars was deemed prohibitive.

5. As part of the agreement of purchase and sale with the numbered company, Kings-bridge is prohibited from showing motion pictures at the Seneca for a period of ten years. It was agreed, however, that Kingsbridge has no expectation of operating the Seneca as a cinema and does not anticipate receiving any clientele by virtue of the Seneca having previously been operated by Cineplex. The single projectionist employed at the Seneca was laid off prior to the sale, the screen and sound system were subsequently removed and the projection equipment will be sold or otherwise disposed of. The former projectionist is now on the union's relief referral list.

6. Finally, the parties also agreed that the Seneca has never been used for live theatre. Its

principle, if not exclusive, use over the years appears to have been as a cinema.

7. On the basis of these facts, I am of the view that there has been no sale of a business within the meaning of section 64 of the Labour Relations Act. This provision states 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.

(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.

8. As noted by counsel for the respondent, the facts of this case are essentially indistin­guishable from those in The Corporation of the City of Brantford, [1988] OLRB Rep. July 648, in which the Board found that the transfer of a cinema from Famous Players Limited to the City of Brantford and its subsequent conversion to use as a live theatre did not amount to a sale of busi­ness within the meaning of section 64. It was the view of the Board in that case, and it is my view here, that the vendor and purchaser were engaged in two different businesses - the exhibition of motion pictures and the performance of live theatre, respectively - and that what was acquired by the purchaser was an asset of the vendor's business, but not a "part of the business" within the meaning of section 64.

9. In Accomodex Franchise Management Inc., [1993] OLRB Rep. Apr. 281, a case relied on by the applicant, the Board reviewed the cases in which a sale of part of a business has been found, before summarizing:

10. In each of these cases, the Labour Relations Board found that the predecessor had transfer­red a coherent and severable "part" of its economic organization - managerial, or employee skills, plant, equipment, know-how, or goodwill - thereby allowing the successor to perform a definable part of the economic functions formerly performed by the predecessor. This "new" economic organization undertook activities which gave rise to employment, and the terms and conditions of employment, together with the union's right to bargain about them were pre­served. The "part" of the predecessor's business which it no longer wished to continue, pro­vided the business opportunity which the successor was able to pursue to its own advantage.

11. In all of these cases, there was a transfer of a distinct part of the predecessor's configuration of assets or capacity to carry on business, and no material change in the character of the work performed by the employees within that asset framework. There was a continuation of the work performed, the essential attributes of the employment relationship, and the skills of the employ­ees; and, but for section 64, the established bargaining and collective bargaining rights would have been lost. This was the mischief to which section 64 is directed, and the Board was satisfied on the evidence in each of these cases that it should be applied.

12. Employing the analysis set out in Accomodex, it is questionable whether the Seneca Theatre constituted "a distinct part of [Cineplex's] configuration of assets". Cineplex and the num­bered company did not participate in the proceedings, and the constituent elements of the Cine­plex business were not identified. I note, however, that there was no disposition of any logos, trademarks, customer lists, accounts receivable, contracts, employees, licenses or other assets that might form part of the Cineplex business. Kingsbridge acquired no "goodwill" from Cineplex and does not anticipate receiving any customers by virtue of the former operation of the Seneca by Cineplex.

13. More importantly, however, there appears to have been no "continuation of the work performed, the essential attributes of the employment relationship and the skills of employees". The only work in relation to which the Board heard evidence was that of projectionists. Not only has this work been discontinued, but there is no likelihood that it will ever be performed by Kings-bridge. Further, the work in relation to which the union now seeks to assert its bargaining rights, that of stagehands, appears never to have been performed by Cineplex or its predecessors at the Seneca and only to an extremely limited extent by Cineplex elsewhere. (There was some sugges­tion in the applicant's opening statement that Cineplex had used stagehands supplied under the agreement to undertake certain renovations necessary for other cinemas to be marketed for speak­ing engagements, but such work appears to have been exceptional in nature and limited in dura­tion.)

14. In my view, these facts demonstrate that Kingsbridge has not continued any part of the Cineplex business.

15. In coming to this conclusion, I was not persuaded by the applicant's argument that the real issue was whether there has been a substantial change in the character of the business within the meaning of section 64(5). Section 64(5) only applies where the threshold requirements of sec­tion 64(1.1) have been met. For the reasons .given above, that is not the case here. Similarly, the fact that the collective agreement makes provision for stage work and that such work could have been performed, to some extent, in the unrenovated facility, are not sufficient in themselves to support a finding of a sale of a business. The existence of a scope clause that can accommodate the kind of work in which a purchaser is engaged and the capacity for some such work to have been performed in the transferred facility are factors to be considered by the Board in determining the application of section 64, but they are not conclusive of that issue. In this case, as in the City of Brantford, these considerations are more than offset by the fact that such work appears never to have been performed at the Seneca or, to any real extent, at other cinemas covered by the Cine­plex collective agreement.

16. For all of these reasons, the application is dismissed.