[1996] OLRB REP. MARCH/APRIL 259
4174-93-R La Co-operative De Pointe-Aux-Roches, 1015195 Ontario Limited and Charles Desmarais, Applicants v. United Food and Commercial Workers International Union, Local 278W, and The United Brotherhood of Carpenters and Joiners of America - Local 3054, Responding Parties v. United Co-operative of Ontario and UCO Petroleum Inc., Intervenors v. Group of Employees, Objectors
BEFORE: Jerry Kovacs, Vice-Chair, and Board Members S. C. Laing and B. L. Armstrong.
APPEARANCES: Theodore Crljenica, Charles Desmarais and Evert Geelen for the applicants; Joanne L. McMahon, John Hammond, Wayne Lee for the United Food and Commercial Workers International Union, Local 278W; Mike McCreary, Ken Fenwick, Rose Talbot and Ralph Anderson for the United Brotherhood of Carpenters and Joiners of America - Local 3054; no one appearing for UCO Petroleum Inc.; no one appearing for the Group of Employees.
DECISION OF JERRY KOVACS, VICE-CHAIR, AND BOARD MEMBER B. L. ARMSTRONG; BOARD MEMBER S. C. LAING RESERVING HER DECISION; April 12, 1996.
This is an employer application made under sections 1(4) and 64 (now section 69) of the Labour Relations Act. None of the changes to the Act effected by Bill 7 appear relevant to the issues before us at this stage in these proceedings.
The case concerns a number of transactions effected by the applicants in 1993, whereby La Co-operative de Pointe-Aux-Roches ("the Stoney Point Co-op") acquired certain operations of Harrpw Farmers Co-operative Association Limited ("Harrow") and United Co-operatives of Ontario ("UCO") in and around the area of Essex County. For the Stoney Point Co-op's part, the transactions were managed by its principal, Charles Desmarais, through a numbered company (1015195 Ontario Limited) incorporated for the sole purpose of those acquisitions.
Some issues were resolved at the hearing. The responding parties ("the Carpenters" and "the UFCW") did not challenge the applicants' contention that the Stoney Point Co-op, 1015195 Ontario Limited and Charles Desmarais were related employers within the meaning of subsection 1(4), and the Board accordingly declares that they are one employer for the purposes of the Act (and we refer to them hereinafter collectively as "the Stoney Point Co-op" or "the employer"). The Carpenters agreed that the transaction between Harrow and the Stoney Point Co-op (a managerial transfer in May of 1993, formalized on December 1, 1993) constituted a sale of business within the meaning of section 64. And the UFCW agreed that the transaction between UCO and the Stoney Point Co-op (a managerial transfer in May of 1993, formalized on December 1, 1993) constituted a sale of business within the meaning of section 64. Indeed, the employer has continued to abide by the collective agreements that were in place between these two unions and the predecessor employers, pending the outcome of these proceedings.
Finally, the employer retreated from its initial position that the Board ought to terminate the two unions' bargaining rights. Instead, the employer asks the Board to find that an intermingling of employees has occurred and seeks orders that would rationalize (and potentially eliminate) its collective bargaining obligations. Its goal is to reduce the various existing bargaining units to a single all-employee' unit, and to offer its employees a choice between representation by one of the existing bargaining agents or no representation by any bargaining agent.
The issues before the Board, then, are whether there has been an intermingling of employees; what, if any, is the appropriate bargaining unit or bargaining units that should exist; whether the Carpenters and UFCW collective agreements should continue to operate and the unions' bargaining rights continue in effect; and whether the 3-way representation vote requested by the employer should be ordered.
These proceedings included a challenge by the the Carpenters and the UFCW to the constitutional jurisdiction of the Board to hear the matter. In a decision dated February 3, 1995,
the Board (by a differently constituted panel) determined that it had jurisdiction and directed that the matter proceed to a hearing on the merits of the application.
In that February decision, the Board reviewed the nature of the operations of the Stoney Point Co-op, Harrow and UCO, as well as the sequence of transactions between them, and we rely upon the facts set out therein (with a minor correction noted by the employer - prior to the transactions, the Stoney Point Co-op employed 43 or 44 persons, rather than 50 as stated in the February decision). Prior to the continuation of the proceedings before this panel of the Board, the parties and their counsel were able to reach agreement on a detailed statement of the further facts necessary to the determination of the outstanding issues.
The Stoney Point Co-op, Harrow and UCO were each engaged in the business of supplying farm inputs and services (e.g., seed, fertilizer, pesticides, feed, hardware, bulk petroleum) and merchandising grain. To some extent, the three competed for similar business. Prior to the transactions, the Stoney Point Co-op operated at 3 locations:
(1) Stoney Point included the head offices, a seed cleaning mill, grain elevators and silos, a workshop, a farm supply retail store, and warehouses.
The 23 employees included truck drivers delivering grain and fertilizers, truck drivers delivering bulk petroleum, store salespersons, a grain salesperson, an agronomy salesperson (involved in the sale of chemical, seed, feed and fertilizer to farmers along with the rendering of general advice), elevator workers, yard workers, accounting clerks, and a systems co-ordinator.
(2) At Belle River, the Co-op operated a gas bar, a convenience store, a car wash, and a garden centre, and maintained a feed warehouse.
The 18 employees were part-time sales clerks and gas bar attendants.
(3) Rochester Township was a small operation consisting only of a grain elevator.
The 2 employees were grain elevator workers.
None of the employees of the Stoney Point Co-op were represented by a trade union.
- Prior to the transactions, Harrow operated at 2 locations:
(1) Harrow, in the Town of Harrow, consisted of a feed mill, a feed warehouse, grain elevators and silos, a bulk petroleum depot, a retail store and a machine shop. This facility was similar to the main Stoney Point location operated by the Stoney Point Co-op. However, it did not engage in bulk petroleum sales.
The 6 employees included a grain salesperson, a sales/data clerk, a gas bar attendant (also working as store salesperson, an elevator worker, and a driver.
(2) McGregor was a small branch operation consisting of a grain elevator and silos, a feed warehouse, and a store from which the feed was sold. Also located on the premises was a retail store, leased and operated by an independent operator. (The lease was terminated and the store closed after the transactions with Stoney Point Co-op).
There was one employee, Ralph Anderson. He occasionally also worked at the Harrow location, filling in as a driver or elevator operator in the absence of a regular employee.
The employees of these 2 locations comprised a single bargaining unit (all employees at Harrow and McGregor) represented by the Carpenters. The Carpenters have represented this bargaining unit since 1964, and bargained (without strike or lockout) a continued succession of two-year collective agreements with Harrow until the transaction with the Stoney Point Co-op.
- UCO operates many locations throughout the province. Five locations were the subject of the transactions with the Stoney Point Co-op:
(1) Cottam was the largest facility, with administrative offices, bulk petroleum sales, a seed cleaning mill, a feed warehouse, a farm supply retail store, grain elevators and silos, a fertilizer depot, chemical storage, and a workshop.
(2) Amer was a small facility operated as a branch of the Cottam operation, and consisted of a grain elevator and silos, and a small office.
The 8 employees of the Cottam and Amer sites included an agronomy salesperson, a grain salesperson, yard workers, elevator workers and a data clerk.
(3) The Kingsville operation included a large retail store, a feed warehouse, a fertilizer warehouse and blender, a pesticide warehouse and a gas bar.
The 5 employees were store clerks and gas bar attendants.
(4) Oldcastle was similar to the Kingsville operation, consisting of a large retail store, grain silos, a fertilizer warehouse, a feed and seed warehouse, and administrative offices.
The 7 employees included an agronomy salesperson, office and store clerks, and yard employees.
The Stoney Point Co-op acquired only the retail store and fertilizer outlet.
(5) Comber was a small operation consisting of a single elevator, a retail store and a fertilizer outlet.
There were 5 employees.
Stoney Point Co-op acquired only the elevator, and assumed the employment of the operator. The other parts of the location remain as a UCO operation, with 4 employees.
These 5 UCO locations included 3 separate bargaining units, each represented by the UFCW, Local 278W. The Cottam and Amer sites were subject to one collective agreement (covering all employees at Cottam), the Kingsville site was subject to another agreement (covering all employees at Kingsville), and the Oldcastle site was subject to yet another collective agreement (covering all employees at Oldcastle). The Comber site was not subject to any of the 3 collective agreements.
For that part of its business consisting of bulk petroleum sales, UCO had entered into an arrangement with Sunoco Petroleum that resulted in the creation of a corporation called UCO Petroleum Sales ("UPI"). UPI subsequently carried on the bulk petroleum sales functions. A UCO employee performed the related work, and UCO billed UPI for his labour costs. In addition, UPI used the services of truck drivers with an independent contractor (Carl Gyori Petroleum).
After the transactions, the Stoney Point Co-op moved to consolidate and integrate its enlarged operations. It centralized administrative operations and rationalized the sale and distribution of its products and services. In particular:
(1) Employment and labour relations matters are managed centrally from the Stoney Point location.
(2) Accounting for all locations is done at the Stoney Point location, for the most part by employees who were located there prior to the transactions. Before the transactions, Harrow did accounting functions at the Harrow location, and UCO did accounting functions at its head office in Mississauga.
(3) Grain marketing is now handled centrally at the Stoney Point location. A Grain Marketing Manager markets grain for all locations, working in conjunction with branch managers. Grain elevator operators (whose positions do not fall within any bargaining unit) were formerly stationed at a particular elevator. Stoney Point Co-op now shifts them between locations from time to time, since an elevator may not be operational on certain days due to weather conditions at that particular site.
Although grain may be sold through a particular location, delivery is performed by drivers working out of the Stoney Point location, or by contract haulers. Prior to the transactions, delivery was performed out of each location.
Stoney Point Co-op arranges for pick-up of grain from farmers (25% of its grain is obtained by pick-up as opposed to drop-off by the farmer). The pick-up work is performed by Stoney Point drivers or by independent contractors engaged by the Stoney Point office. Prior to the transaction, Harrow did not offer such a service; UCO did offer pick-up through an independent contractor.
(4) The purchase and distribution of seed is now managed centrally by the Stoney Point branch manager. Despite relationships that customers might have had in the past with a particular Harrow or UCO location, seed delivery is now done through whichever of the Stoney Point Co-op locations is closest to the customer.
(5) The purchase and distribution of fertilizer is now managed centrally by the Cottam branch manager. Customer delivery is done by whichever Stoney Point Co-op location is closest to the customer.
(6) The purchase and distribution of pesticides is now managed centrally by the Harrow branch manager. Customer delivery is done by whichever Stoney Point Co-op location is closest to the customer.
(7) There is now a single feed mill, at the Harrow location, for the entire Stoney Point Co-op operation. The Harrow location sells some of the feed itself, but distributes the majority of the feed to other Stoney Point Co-op locations for sale by those branches.
(8) The McGregor site is now used as a warehouse for the entire enterprise. That use reflects the second transformation of the location since the transactions. Initially, for the first year following the transactions, the employer used the site as a storage facility for industrial lubricants which it markets to industrial customers in Windsor; delivery to Windsor was done by drivers from the Stoney Point location.
(9) Bulk petroleum sales and deliveries have been consolidated and centralized, and are handled through the Stoney Point location. Seven drivers are now dispatched from that site. Before the transactions, Stoney Point Co-op and UPI (the UCO joint venture with Sunoco) were in competition for business in Essex County. Subsequent to the transactions, Stoney Point Co-op entered into a joint venture agreement with UPI. Stoney Point Co-op has a controlling interest in the venture and manages UPI business in Essex County. In assuming the former business of UPI, the Stoney Point Co-op also assumed the employment of the drivers working with Carl Gyori Petroleum.
Stoney Point Co-op has rationalized customer service, dividing the County into districts. Regardless of a customer's prior relationship with either UPI or Stoney Point Co-op, the customer is now served by whichever driver works in the district; and when in need of immediate delivery, a customer can by-pass the main office and seek delivery from the closest available driver.
(10) The employer now offers high-clearance pesticides application equipment at a variety of locations, including Cottam and Harrow. Prior to the transactions, UCO (e.g., Cottam) did not have such equipment.
(11) The employer now uses the service of an intra-company courier, who works out of Stoney Point. The courier transfers product between branches.
(12) Stoney Point Co-op closed the former UCO operation at Kingsville (a UFCW bargaining unit location).
The employer states it intends to continue to develop the integration of locations.
- The key dispute between the parties is whether the Stoney Point Co-op has "intermingled the employees" of Harrow and UCO with each other and/or with the employees of the former version of the Stoney Point Co-op as a result of this corporate reorganization. The parties' representations addressed the following evidence of personnel transfers:
Affecting bargaining unit employees:
(1) Ralph Anderson was the sole employee at the McGregor warehouse (in the Carpenters' bargaining unit). While the Stoney Point Co-op used the site to warehouse industrial lubricants, Anderson would assist in loading and unloading trucks, working along side the Stoney Point drivers (who are not represented by any bargaining agent). The employer characterizes this as Stoney Point, or non-bargaining unit, work.
Anderson also worked for a few days in 1993 driving a high-clearance fertilizer application vehicle out of the Cottam location (one of the UFCW bargaining units); and in 1995 he worked 9 or 10 days at Oldcastle (another of the UFCW bargaining units), mixing fertilizers and helping with deliveries.
These latter assignments were on a voluntary basis, as Anderson sought out extra hours of work.
(2) Joe Wilson, a member of the UFCW bargaining unit at Cottam, was reassigned to operate the high-clearance application equipment (not claimed as bargaining unit work, but Wilson nonetheless remained within the bargaining unit).
(3) Mike King, part of the UFCW bargaining unit at Oldcastle, worked for 5 days in 1995 at a Chatham location rented by the employer; he also once worked a 7 or 10 day period at Comber (non-union former UCO location) with the consent of the UFCW.
(4) Deborah Galos, a member of the UFCW bargaining unit at Oldcastle, was transferred to Cottam, a different UFCW bargaining unit.
(5) Barbara Tallent, formerly the grain clerk at Cottam (a UFCW bargaining unit position), was transferred to Stoney Point (no bargaining unit) and is now the grain clerk for the entire enterprise.
(6) Rose Talbot, both before and after the transactions, was and continues to be the data entry clerk at Harrow (a Carpenters' bargaining unit position). However, she now works at Stoney Point (no bargaining unit) each month, for 2-3 day periods, assisting with month-end accounts receivable.
(7) Sherry Amante was the data clerk at Cottam (a UFCW bargaining unit position). She was transferred to Stoney Point (no bargaining unit) to perform dispatch and clerk duties for the enterprise-wide bulk petroleum business. The vacancy at the Cottam position has not been filled.
(8) Russ Renaud was the truck driver at Cottam (UFCW bargaining unit), delivering bulk petroleum for UPI. Initially, Stoney Point Co-op did not assume that bulk petroleum business and therefore did not assume Renaud's employment; he remained a (UFCW bargaining unit) employee of UCO. However, when Stoney Point Co-op later entered into a joint venture agreement with UPI, Renaud was hired and transferred to Stoney Point (where there is no bargaining unit), working as one of the 7 bulk petroleum drivers dispatched out of Stoney Point. UFCW does not claim his work as within any of their bargaining units.
(9) Although Stoney Point Co-op did not acquire the grain elevator operated by Oldcastle, it did assume the employment of UFCW bargaining unit member Gary Shepley. Shepley was eventually transferred to Cottam (a different UFCW bargaining unit).
(10) When Stoney Point Co-op closed the former UCO operation at Kingsville (a UFCW bargaining unit), it laid off 4 of the S employees. One of the employees, Jason Hamel, was transferred to Oldcastle (a different UFCW bargaining unit).
(11) At the time the Kingsville operation was closed, the employer assigned employees from Oldcastle, Harrow, Belle River and Comber to remove stock and inventory from Kingsville and to distribute it to other locations.
(12) Gary Shepley, a member of the Cottam UFCW unit, worked for 3 days in July of 1994 at the McGregor site (a Carpenters unit) to fill in for Ralph Anderson, who was attending a hearing in these proceedings before the Board. This occurred with consent of the parties.
Affecting only non-bargaining unit employees:
(13) The employer transferred Stoney Point agronomy salesperson Richard Thibert to Harrow, then to Oldcastle, and eventually back to Stoney Point.
Agronomy sales is not bargaining unit work.
(14) Harrow's controller, Charlie Quenneville, was transferred to Stoney Point. His is not bargaining unit work.
(15) Andre Mailloux, formerly a Stoney Point employee (non-union), was transferred to Cottam (where UFCW has a bargaining unit) for the 7-month period during which the employer had moved high-clearance applicator equipment to Cottam; Mailloux operated that equipment. That work was not claimed as within the UFCW bargaining unit.
(16) Alex Micinski, once the agronomy salesperson (non-bargaining unit) at Oldcastle, was transferred to Cottam to operate the high-clearance pesticide applicator. He was subsequently transferred to perform that work at Harrow (not work claimed within the Carpenters' bargaining unit). Later, he was promoted to a management position at Harrow.
(17) Marianne Bonneau, formerly the grain clerk at Stoney Point (non-union) was reassigned when Barbara Tallent moved to Stoney Point. Bonneau is now responsible for grain wholesaling, at Stoney Point.
(18) Before the transactions, UPI also used the truck services of the independent contractors (i.e., these drivers were not employees of any of the three companies) with Carl Gyori Petroleum for the delivery of bulk petroleum. Stoney Point Co-op now employs those persons as part of the 7-person crew that is dispatched out of Stoney Point to deliver bulk petroleum (non-union).
(19) From the UCO Comber location (non-union), Stoney Point Co-op initially acquired only the grain elevator. It assumed the employment there of Mark Wright. Mark Wright later became a courier for the new enterprise, working out of Stoney Point (non-union). In one month of 1993 he was occasionally assigned to work at Comber (non-union former UCO location).
(20) Stoney Point Co-op later acquired the other UCO operations at Comber (non-union), assuming the employment of employees there. One of the employees, Gary Geelen, was transferred to Stoney Point (also non-union). Later, Geelen's time was split between Stoney Point and Comber.
The parties acknowledge that changes have occurred with the co-operation of the trade unions or, at least, without challenge by the trade unions (e.g., the trade unions have stated that they are not claiming that new work like the operation of high-clearance application equipment should fall within the scope of their "all-employee" collective agreements; and they have not objected where the employer has transferred an employee out of one bargaining unit into another).
The employer describes these personnel movements as examples of "employee-specific" intermingling, and asks the Board to recognize them as indicators of an "intermingling of employees" within the meaning of subsection 64(6). However, it takes the further position that intermingling has occurred as a result of the integration of the businesses, and that such a finding is contemplated by the statute even in the absence of employee-specific integration. In its submission, the employer requires a remedy that allows it flexibility in employee mobility throughout its reorganized, integrated and rationalized enterprise, as opposed to the constraints of the existing collective agreement enclaves that developed in the pre-existing scenario of independent competing businesses. The employer suggests that a multi-unit bargaining structure makes no sense in the new enterprise, and that it presents serious labour relations problems. It submits that a single all-employee bargaining unit is the only appropriate one in the new circumstances.
The trade unions submit that the evidence of personnel movement contains few relevant instances of employee intermingling. They point out that a number of the examples involve non-bargaining unit and managerial persons (and thus do not deal with intermingling of "employees"), that others involve non-bargaining unit work, that others involved merely voluntary assignments, and that others merely show accretion to their bargaining units. They contend that these are not relevant to the assessment of employee intermingling. In their submission, the actual examples of employee intermingling are too insignificant to be relied upon. They also note that the personnel movement has, to a large degree, occurred with the co-operation of the trade unions. They ask the Board to find that no intermingling within the meaning of subsection 64(6) has occurred. In the alternative, if the Board finds intermingling, the trade unions submit that the existing bargaining structures remain viable and appropriate and that the Board ought not to exercise its discretion to order a representation vote of any sort, given that the primary purpose of section 64 is to preserve bargaining rights.
The first issue to be determined is whether the facts disclose "intermingling of employees" as contemplated by section 64. We start by noting that the provisions apply with respect to "employees" and that, pursuant to section 1(3) of the Act, those who exercise managerial functions are not "employees". Accordingly, the Board focuses upon intermingling at the level of affected bargaining unit employees rather that with the movement of managers or changes in managers' roles. (See New Dominion Stores Inc., [1986] OLRB Rep. Apr. 519, at para. 20.) Thus, examples of managerial changes (like the one involving Charlie Quenneville) do not support the applicant's suggestion of "employee-specific" intermingling.
We are also of the view that, when considered in isolation, temporary or one-time assignments of employees for the purposes of effecting the transfer of certain functions from one location to another, or to facilitate the integration of operations for the new enterprise, do not constitute the sort of intermingling contemplated by section 64. (See, for example, Parkwood Hospital, [1980] OLRB Rep. May 759 and The Brantford General Hospital, [1994] OLRB Rep. Aug. 1103, where the Board has indicated that it looks for regular interchange of employees as opposed to occasional assignments.) Into this category fall the examples of work performed by Ralph Anderson, Mike King, and the employees who assisted in the closure of the Kingsville location. In a similar vein, transfers which have resulted in accretion to the current bargaining units have not caused representational problems of the sort that the intermingling provisions are designed to address. Into this category fall certain transfers involving Deborah Galos, Gary Shepley, Jason Hamel and Alex Micinski. None of these changes have caused a conflict in bargaining rights, and none have raised any issue regarding the definition of either bargaining unit.
After subtracting these examples from the list of personnel movements, there remains only minimal evidence of the purported "employee-specific intermingling". These involve transfers of bargaining unit members to non-bargaining unit positions (Thibert's assignment to agronomy sales, Tallent's reassignment to the Stoney Point office, Amante's reassignment to head office, Talbot's occasional work at the head office, King's occasional work at Chatham and at Comber, Anderson's work related to warehousing of industrial lubricants), or transfers within a bargaining unit (Wilson continued to be treated as a bargaining unit member once reassigned to high-clearance applicator work), or transfers that do not involve a claimed bargaining unit position or person (Mailloux, Bonneau, the drivers formerly with Carl Gyori Petroleum, Mark Wright, Gary Geelen). None of these changes involve conflict of bargaining rights. And to the extent that some of the changes may affect a bargaining unit, no dispute has arisen amongst the parties. Neither union has raised any concern regarding movement of bargaining unit members or of bargaining unit work into a non-bargaining unit location. Similarly, neither union has challenged assignment of new' work to non-bargaining unit persons (e.g., the operation of high-clearance application equipment from Stoney Point to Cottam and Harrow), despite the "all-employee" definition of bargaining rights.
Do these facts present an "intermingling of employees"? The obvious situation that the intermingling provisions are intended to address was described by the Board in New Dominion Stores Inc., [1986] OLRB Rep. Apr. 519 as:
“……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..." [the reference to like unit" reflects the language of subsection 64(2) as it read prior to amendment by Bill 40 and now reads after passage of Bill 7.]
- The applicant argues that the Board has held that an intermingling within the meaning of section 64(6) may occur even in the absence of employee-specific intermingling, and even where there is no conflict in the scope clauses of the affected collective agreements (i.e., even in the absence of employees working side by side subject to different collective agreements). In support of its position, the applicant refers to The Brantford General Hospital, sup ra, at para. 35:
In Caressant Care Nursing Home of Canada Limited, [1984] OLRB Rep. August 1060, the Board considered what section 64(6) [then 63(6)1 was meant to address and stated as follows:
- ... 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 [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...
Reflecting the Board's view in Caressant Care in Kitchener-Waterloo Hospital, [1991] OLRB Rep. Oct. 1130, in a situation similar to the one in this case, the parties agreed there had been "intermingling" within the meaning of section 64(6) even though there had been no intermingling of employees.
In this case, the facts disclose employee movement and reorganization of the enterprise. Because of the protracted litigation of this matter and the agreement of the parties to consider facts covering the period of time up to the most recent hearing, those facts covered a lengthy period (close to 2 years) following the transfers that constituted the sales of business. Notably, those facts did not include any plan for eventual regular employee interchange between the branches of the employer's enterprise. Instead, the employer argued that the list of employee movements described above, together with the evidence of substantial reorganization of the enterprise, should lead the Board to conclude that the existing collective agreement enclaves fettered the employer's operations and prevented regular employee interchange.
In the applicant's submission, the primary question for the Board is whether the operational integration of the merged entities gives rise to the labour relations problems that may be addressed by subsection 64(6). That may be a fair extrapolation of the Board's approach in Caressant Care, Kitchener-Waterloo Hospital and The Brantford General Hospital, and it would lead us to conclude that intermingling had occurred in this case. But even if operational integration is not the threshold determination in finding that subsection 64(6) applies in a particular sale of business, it is clearly the key issue in determining whether the Board ought to exercise its discretion to restructure or eliminate bargaining rights. In this case, we are not persuaded that the Board ought to intervene in existing bargaining structures even if there was intermingling of employees.
We start from the proposition that the Board should preserve the established bargaining structure unless there are compelling reasons to do otherwise; this assumption stems from the primary purpose of section 64, which is the preservation of employees' bargaining rights upon the transfer of a business. (See City of Peterborough, [1979] OLRB Rep. Feb. 133; and Parkwood Hospital). The Board must assess the labour relations impact of the intermingling to determine whether there are problems serious enough to require restructuring of existing bargaining relationships. To the extent that this requires the Board to assess the appropriateness of the Carpenters' and the UFCW's bargaining units, we note that this inquiry is not identical to the one we would undertake at the point of an application for certification. As the Board said in City of Peterborough, supra at para. 13:
“……while the remedial scope of the section allows the Board to engage in an assessment of what is the appropriate bargaining unit the criteria to be applied are not identical to those which obtain in an application for certification of previously unrepresented employees... In the fashioning or amending of bargaining units under section 55 of the Act the Board must give effect to existing bargaining rights to the extent that those rights can be reasonably accommodated within the new employer's administrative structures."
In addition, the Board described the careful approach that it must take with respect to existing bargaining structures:
A particular concern in the determination of bargaining units under section 55 of The Labour Relations Act is that existing bargaining structures not lightly be interfered with. The Board recognizes the full value of a bargaining unit that has developed through a succession of collective agreements. A bargaining structure with some substantial history to it often indicates a sound bargaining relationship. More often than not it has evolved through increased communication between union and employer and has come to reflect a workable pattern of mutual expectations between union and employer. Since the promotion of sound collective bargaining relationships is what the Labour Relations Act is all about, the Board is understandably reluctant to dismantle a bargaining structure that has withstood the test of time.
In the applicant's submission, the Stoney Point Co-op has demonstrated that it no longer maintains the previously independent (or "stand-alone") operations of Harrow and UPI as distinct businesses. The functions of each location have been rearranged to meet the employer's goal of treating each location as a satellite or branch of the greater enterprise, with each site providing an array of services to the customers closest to it, and with some sites obtaining primary responsibility for certain enterprise-wide functions (e.g., grain marketing from Stoney Point, fertilizer distribution from Cottam, pesticides distribution from Harrow). In the applicant's submission, the existing geographic-specific units are no longer appropriate for bargaining. However, this is not an initial application for certification in which the question revolves around a proposed bargaining unit. Here the question is whether the Board should intervene in long-standing bargaining structures.
The Board has described the mischief to which the Act's intermingling provisions are aimed. In The Corporation of the City of Peterborough, [1984] OLRB Rep. Dec. 1752 at para. 10, the Board commented that "...an order under subsection 63(6) [now s. 64(6)] should be limited to circumstances where the exercise of management rights pursuant to a sale results in an intermingling so thorough or so sudden that it is impractical to resolve the resulting representational problems by means of collective bargaining." On the facts before us, we cannot conclude that the intermingling of employees (if it is the sort contemplated by subsection 64(6)) has caused labour relations problems so serious as to require dismantling of existing bargaining structures. The list of personnel movements does not disclose the sort of "employee-specific intermingling" that triggers representational issues. And while it is true that the employer no longer maintains the former UCO and Harrow sites as the stand-alone operations they once were, the evidence indicates that most employees continue to treat the pre-sale location as their workplace. The integration of locations has resulted in few job opportunities beyond the pre-existing collective bargaining enclaves. Although the employer has shifted some equipment and job functions between locations, it has not demonstrated a plan to regularly assign employees from one location to another. Assuming there is inter- mingling of employees, it is not of the "thorough" nature that would lead the Board to intervene under subsection 64(6). (See City of Peterborough, [1984], at para. 10.)
Although the bargaining structures may not be ideal, they remain viable. The lack of dispute between the employer and the bargaining agents in effecting the changes to date, and the lack of any clear plan for regular employee interchange between locations, indicate that the geographic-specific bargaining units remain workable at this time. The unions have not objected to accretion or deletion in respect of any of the units, and have not raised any issue regarding the minimal movement of new work into bargaining unit locations. We do not find insurmountable administrative difficulties for the employer. All of these are issues that can be addressed in the co-operative fashion shown thus far, and that can be further addressed at the bargaining table in renewal of the existing collective agreements.
For these reasons, the employer's application for relief under subsection 64(6) is dismissed. The geographic-specific bargaining units remain intact and the employer remains bound to the collective agreements with the responding parties.