United Steelworkers of America v. Mining Technologies International Inc., 1997 CanLII 15575

[1997] OLRB REP. MAY/JUNE 482

1688-96-R United Steelworkers of America, Applicant v. Mining Technologies International Inc., Responding Party

BEFORE: Laura Trachuk, Vice-Chair.

APPEARANCES: Mark Rowlinson and Ken Dawson for the applicant; Andra Pollak, Lynn Maxwell and Peter Snucins for the responding party.

DECISION OF THE BOARD; May 8, 1997

1. This is an application under section 69 of the Labour Relations Act, 1995. The applicant (referred to as the "union") alleges that the responding party (referred to as "MTI") is a successor to Epton Industries Inc. (referred to as Epton). MTI is alleged to have purchased the rubber division of Epton's business. At the outset of the hearing, MTI raised a preliminary objection to proceeding with the application on the basis that the scope of the union's bargaining rights did not extend to the location of its business in Elora, Ontario and therefore the application should be dismissed. The following is the Board's decision with respect to that preliminary objection,

The Facts

2. Very few of the facts relevant to this motion were disputed. The United Rubber, Cord, Linoleum and Plastic Workers of America, Local No. 73 has had a long-standing bargaining relationship with Epton Industries Inc. and its predecessor. The United Steelworkers of America is successor union to that local.

3. Epton is a well-established manufacturing operation which makes rubber and plastics products. By 1993, it was in financial difficulty and filed for bankruptcy protection. Mr. William Thomson, a principal of a consulting firm which assists in such "crisis" situations, became the president, C.E.O. and sole director of the company. Price Waterhouse was assigned to monitor the situation.

4. At the time that Mr. Thomson took over the company, the union and Epton were bound by a collective agreement which was in effect from February 29, 1992 to February 28, 1995. The recognition clause contained in that collective agreement provides as follows:

2.02 In accordance with the certification of the Ontario Labour Relations Board as of July 25, 1945, the Company recognizes the Union as the sole bargaining agency for the hourly-rated factory employees and scrap collectors at its plants and its warehouses located in the Regional Municipality of Waterloo, SAVE AND EXCEPT, watchmen, guards, shift foremen, floor foremen, having authority to hire, promote, discharge or otherwise effect changes in the status of employees or effectively recommend such action and hourly rated clerks in the following departments or occupa­tional classifications: Engineering Department, Office, Time Checking Clerks. Mail Boys, Industrial Products Construction Clerks. Planning Department Clerks. Production Schedulers, Physical Labo­ratory Operators and Industrial Nurses.

5. Mr. Thomson was attempting to sell Epton and he perceived that the fact that the collective agreement was about to expire as well as certain items in that agreement, such as a pension plan with a funding shortfall of half of a million dollars, to be an impediment to a sale. In the fall of 1994, he therefore asked the union to commence early negotiations for a collective agreement. The union agreed to participate in such negotiations and on December 9, 1994 a memorandum of agreement was signed. The memorandum provided that it would not take effect unless and until the company was sold as an ongoing business by February 28, 1995 or within 60 days thereafter, The memorandum was worded as follows:

This Memorandum of Settlement entered into this 9th day of December, 1994 between Epton Industries Inc. (hereinafter called the Company) and Local 73, United Rubber, Cork, Linoleum and Plastic Workers of America (hereinafter called the Union) is to amend the Collective Labour Agreement and Pension Plan C- 101854 for the period February 28, 1995 to February 28, 1998, subject to:

The Company shall provide the Union with any registered Pension Commission of Ontario docu­mentation and the latest revised Actuarial Report.

The Company will make any payments outstanding coincidental with the investment from a new investor/buyer.

The Company shall inform the Union and the Pension Committee of Ontario of any payments which are not remitted immediately as such shortfall becomes apparent.

The Pension Plan amendments are subject to the approval of the Pension Commission of Ontario and all pension language amendments are subject to review by the Union's Solicitor, Pension Actuary and International Union prior to becoming effective.

In the event the Union's Pension Actuary, Solicitor and/or the International Union advise the Local Union the amendments contained in Letter No. 21 and/or Clause 7.12 of the Pension Plan in this tentative Memorandum of Settlement necessitate any modification to the extent that such modifica­tion is necessary ensure the amendments contained herein shall provide no less than $21.00 of pension entitlement than currently provided for in the Pension Plan, the Company and Union shall resume immediate negotiations to incorporate the required changes, if any.

*** Upon the completion of such negotiations, if any, this tentative Memorandum of Settlement shall be the [sic] signed as a Memorandum of Agreement between the Company and Union for a new Collective Labour Agreement dated the [sic] February 28. 1995 to February 28. 1998 subject to the conditions contained herein.

Epton Industries Inc. being sold as an ongoing business subject to the terms and conditions as defined in all Agreements between the Company and the Union; and

In the event the Company is not sold as an ongoing business on or before February 28. 1995, the Memorandum of Agreement shall not be binding on either the Company and/or the Union unless:

a) The Company has a signed agreement with a prospective purchaser of the Company as an ongoing business; and

b) the offer to purchase the Company as an ongoing business shall be finalized no later than sixty (60) days commencing as of February 28, 1995 in which event all the provisions contained herein shall be immediately retroactive to February 28, 1995; and

c) should there be no offer to purchase the Company as defined in a) and/or b) and the Company assets are sold in whole or in part to finalize the conditions of the bankruptcy as pertains to Epton Industries Inc. any partial or complete plant closure shall be subject to the terms of the 1992 Collective Labour Agreement between the Company and the Union; and

d) Employees currently eligible or who become eligible for Special Early Retirement or Early Retirement who are on the rolls of the Company on the date on which the members of the Bargaining Unit voted upon the ratification of the tentative Memorandum of Settlement, and who retire, shall be guaranteed the 1995 Pension One Time Enhancement of $23.00 retroactively to the date of the employee(s) retirement upon the sale of the Company.

All dates and monetary amounts be updated in accordance with the terms of this Agreement; and

This Memorandum of Settlement is tentative and subject to the approval of the members of the Bargaining Unit and the International Union.

6. A list of "amended terms" was attached to the above agreement which was ratified by the members of the bargaining unit on or about December 9, 1994. One of those terms was an amendment to the recognition clause to extend it to include Wellington County in which the subject MTI operation is located. The agreement also contained some changes to the pension, vacation and seniority provisions,

7. It is clear from the testimony of both of the Epton managers who testified as well as the union's witness that the parties were trying to negotiate an agreement which would make the company more attractive to prospective purchasers while accommodating the union's need to protect its bar­gaining rights if the business was moved. However, the parties were also trying to avoid having the reduced terms, particularly the pension changes, apply to the agreement between the union and Epton. It appears that this was either because the union wanted to be able to make its full claim against Epton if it was not sold or because it wanted to be able to make its claim against Epton even if it was sold.

8. The memorandum was put into collective agreement form and was signed by the parties on January 13, 1995.

9. There was no agreement to purchase Epton by the end of February and on February 22, 1995 the union and the company extended the date by which the 1995-1998 agreement would come into effect upon a sale to March 31, 1995 plus 60 days. Apparently the timing of these agreements was intended to coincide with a work sharing agreement reached with Canada Employment. The February 22, 1995 agreement between Epton and the union provides as follows:

This Memorandum of Agreement entered into this 22nd day of February. 1995 between Epton Industries Inc. hereinafter called the "Company" and the United Rubber, Cork, Linoleum and Plastic Workers of America, Local Union No. 73 hereinafter called the "Union" is to amend the terms of the Memorandum of Settlement entered into December 9th, 1994, related to the sale of Epton Industries Inc. and Pension Plan C-101854 which shall be incorporated into this Memoran­dum of Agreement, *** subject to:

It is agreed that in the event Epton Industries Inc. is not sold as an ongoing business on or before February 28, 1995, the Company and Union agree to the following amendments to the December 9th. 1994 Memorandum of Settlement as follows:

SALE OF EPTON INDUSTRIES INC.

In the event the Company is not sold as an ongoing business on or before March 31. 1995, the Memorandum of Agreement executed between the Company and Union on the 13th day of January, 1995 shall not be binding on either the Company or Union unless:

(a) the Company has a signed agreement with a prospective purchaser of the Company as an ongoing business; arid

(b) the offer to purchase the Company as an ongoing business shall be finalized no later than sixty (60) days commencing as of March 31. 1995, in which event, all the provisions as contained in the 1995-1998Collective Labour Agreement shall be immediately retroactive to February 28, 1995.

(c) should any offer of purchase not be concluded on or before March 31, 1995 as defined in (a) and/or (b) and the Company assets are sold in whole or in part to finalize the conditions of the bankruptcy as pertains to Epton Industries Inc., any partial or complete plant closure shall be subject to the terms and conditions of the 1992-1995 Collective Labour Agreement between the Company and the Union.

The Company and Union agree to the following understanding in regards to the 1995 – 1998 Collective Labour Agreement, Letter No. 19, Letter No. 21 and the Pension Plan - One Time Pension Enhancement should the sale of Epton Industries Inc. not occur on or before February 28, 1995.

10. In spite of the existence of the 1995-1998 document, the witnesses all unequivocally agreed that the union and Epton were at all times bound by the terms of the 1992-1995 agreement which was automatically renewed on February 28, 1995 for one year according to its automatic renewal clause which provides as follows:

13.01 This Agreement shall be effective from February 29, 1992 and shall remain in full force until February 28. 1995, and thereafter from year to year unless either party gives to the other party, notice in writing of cancellation within a period of ninety (90) days prior to February 28, 1995, or any anniversary thereafter.

11. There was no agreement to purchase the company by the end of March or at any time except for the alleged sale to MTI.

12. Throughout this period Epton was in financial difficulties and, although it had orders to fill, had cash flow problems which affected its ability to acquire raw materials, Mr. Thomson testified that throughout this period Epton gave priority to its plastics/automotive division to honour its supply contract with General Motors. The local's former president did not necessarily agree with this factual claim but the Board finds it likely that the automotive division was prioritized in the circumstances. In any case, this factual dispute is not germane to the Board's decision.

13. By the end of June, 1995, Epton's financial problems had become severe and it found that it would not be able to reopen after the plant shut down in early July without an infusion of money. Mr. Thomson advised General Motors (GM) of this situation as it was relying upon a product from the plastics division for the operation of five of its plants. As a result, the Epton plant was flooded with representatives of various interests, including GM's, and an arrangement was worked out.

14. Epton agreed to file for bankruptcy on August 13, 1995. However, it was imperative that the plastics division continue to produce the GM product until an alternative supplier could be found, As a result, Epton, Price Waterhouse, the trustee in bankruptcy, GM and the union, came to an agreement as to how the plant would continue to operate. According to the witnesses, this agreement involved Epton amending its 1992-1995 agreement to extend the recognition clause to the Province of Ontario in the 1995-1998 agreement. The union and Price Waterhouse entered an operating agreement about the terms and conditions under which the employees would work in the plant during the bankruptcy and which contained a paragraph purporting to bind any potential purchaser of the business, or part of it, to the 1995-1998 collective agreement between the union and Epton.

15. The above agreements were worked out with the participation of several lawyers. The collective agreement amendment signed by Epton was held in escrow until the union ratified the operating agreement. The amendment signed by Epton provides as follows:

This Memorandum of Agreement is entered into this 3rd day of August, 1995 between Epton Industries Inc. (hereinafter called "the Company") and the United Steelworkers of America on behalf of Local 73 of the United Steelworkers of America (formerly United Rubber. Cork. Linoleum and Plastic Workers of America, Local Union No. 73) (hereinafter called "the Union") is to reflect the merger between the United Rubber, Cork, Linoleum and Plastic Workers of America and the United Steelworkers of America as a result of which United Steelworkers of America on behalf of its Local Union No. 73 is now the successor of the United Rubber, Cork. Linoleum and Plastic Workers of America. Local Union No. 73 as Bargaining Agent for the employees of the Company and to amend the Collective Agreement in effect between the parties to reflect that the Recognition Clause in the revised Collective Agreement effective 1995 to 1998 shall provide as follows:

In the event the Company is not sold as an ongoing business on or before August 3. 1995, Article 2.02 of the Collective Agreement shall be amended and shall read as follows:

The Company recognizes the Union as the sole bargaining agency for all hourly-rated factory employees and scrap collectors at is plants and warehouses located in the Province of Ontario SAVE AND EXCEPT watchmen, guards, shift foremen, floor foremen, having authority to hire, promote, discharge or otherwise effect changes in the status of employees or effectively recommend such action and hourly rated clerks in the following departments or occupational classifications: Engineering Department. Office. Time Checking Clerks. Mail Boys, Industrial Products Construc­tion Clerks, Planning Department Clerks, Production Schedulers. Physical Laboratory Operators and Industrial Nurses.

16. The relevant paragraphs of the operating agreement between Price Waterhouse and the union provide as follows:

1. The collective agreement in force between Epton and the Union on the day immediately prior to the bankruptcy ("Collective Agreement") which is attached as Appendix I to this Agreement shall continue to apply to the operation of the Epton business during the bankruptcy and PW shall comply with the terms of the Collective Agreement, except as modified by the terms of this Agreement. In the event of an inconsistency between the Collective Agreement and this Agreement, this Agreement prevails.

2. Should the business or part of the business of Epton be sold, this Agreement in relation to the part of the business that is sold shall terminate immediately prior to the closing of that sale and the 1995-1998 collective agreement, as amended, between the Union and Epton shall come into force with respect to that part of the business on the closing of that sale so that the purchaser of the business becomes bound by the 1995-1998 collective agreement, as amended, subject to section 64 of the Labour Relations Act. The Union acknowledges that subject to the limitations contained in paragraph 2 of this Agreement the Participants are not liable and shall not be liable to the Union or any employee represented by the Union for any matter related to the 1995-1998 collective agreement, as amended.

17. The August 3, 1995 agreement set out in paragraph 15 was attached as an appendix to the 1992-1995 agreement which was attached to the operating agreement.

18. In November, 1995 MTI entered into the transaction with the trustee, Price Waterhouse, that the applicant alleges is a sale pursuant to section 69 of the Act,

19. The trustee wound down the operation of the plastics division by December 1995 and the last employee left the plant on January 26, 1996.

20. The Board did not hear any evidence as to whether any other parts of the Epton business have been "sold".

21. MTI had considered buying Epton, or part of it, prior to the bankruptcy in August 1995. It was therefore advised by Mr. Thomson of the terms of the 1995-1998 agreement.

Relevant Sections of the Act

22. The relevant sections of the Act are as follows:

55. There shall be only one collective agreement at a time between a trade union or council of trade unions and an employer or employers' organization with respect to the employees in the bargaining unit defined in the collective agreement.

56. (1) If a collective agreement does not provide for its term of operation or provides for its operation for an unspecified term or for a term of less than one year, it shall be deemed to provide for its operation for a term of one year from the date that it commenced to operate.

(3) A collective agreement shall not be terminated by the parties before it ceases to operate in accordance with its provisions or this Act without the consent of the Board on the joint application of the parties.

(5) Nothing in this section prevents the revision by mutual consent of the parties at any time of any provision of a collective agreement other than a provision relating to its term of operation.

69. (2) Where an employer who is bound by or is a party to a collective agreement with a trade union or council of trade unions sells his, her or its business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if the person had been a party thereto and, where an employer sells his, her or its business while an application for certification or termination of bargaining rights to which the employer is a party is before the Board, the person to whom the business has been sold is, until the Board otherwise declares, the employer for the purposes of the application as if the person were named as the employer in the application.

Submissions of the Parties

23. MTI requests that the Board dismiss the application on the grounds that the scope clause of the relevant collective agreement does not extend to its operation in Elora so the applicant cannot claim bargaining rights with respect to its employees. It argues that the union and Epton's attempts to expand the scope clause in the event of a sale failed for a number of reasons. It claimed firstly that the August 3, 1995 agreement could not amend the 1995-1998 agreement as it purported to do because the 1995-1998 agreement had no legal status, either because there was no extension to the February 22, 1995 memorandum, and/or because it had not come into existence as it was subject to a condition precedent.

24. MTI's second, and in the Board's view more persuasive, argument is that if the 1995-1998 agreement were ever to come into effect it would violate the Labour Relations Act. MTI points out that the parties were governed by the 1992-1995 agreement as a result of the automatic renewal clause. The term of the operative agreement was therefore February 28, 1995 to February 28, 1996. If the 1995-1998 collective agreement were to come into effect upon the alleged sale in November, 1995 there would be two collective agreements in effect contrary to section 55 of the Act. MTI argued that this is not merely a case of changing one or two terms during the operation of a collective agreement, which the parties are entitled to do, but the imposition of an entirely new agreement. The Act does not permit the existence of two collective agreements. On the other hand, the company argues, if the 1995-1998 collective agreement were to supersede or amend the 1992-1995 renewed agreement, it would change the term of operation of the existing collective agreement which would also be a violation of the Act, specifically section 58(5).

25. In response to a question from the Board MTI denied that it was possible for the Board to find certain sections of the agreement, specifically the term of operation, to be a violation of the Act but to find that the rest of the agreement was binding. MTI argued that the 1995-1998 agreement was negotiated as a whole and to "read out" any sections would be to rewrite the parties' negotiated agreement. The union did not address this argument.

26. MTI also asserts that the operating agreement between the union and Price Waterhouse would not apply to any sale that might have occurred between it and the receiver in November, 1995 because MTI bought assets from the rubber division and the agreement only applied to the automotive/ plastics division. MTI bases its argument that the agreement only applied to the automotive/plastics division on the claim that only the automotive division was operating after the agreement was negotiated and that the agreement in certain sections refers only to that division.

27. MTI also argues, in the alternative, that although the operating agreement exempted General Motors from successor status it was, in fact, a successor employer because that agreement and the continued operation of the automotive division were for its benefit.

28. MTI referred the Board to the following decisions: Danver Ambulance Service, [1985] OLRB Rep. June 833; Ferano Construction Limited, [19891 OLRB Rep. May 446; Turney et. al. v. Zhilka, 1959 CanLII 12 (SCC), [1959] S.C.R. 578; Liquor Control Board of Ontario 1981 CanLII 4538 (ON LA), 29 L.A.C. (2d) 289; Hobart Manufacturing Co. Ltd. 1970 CanLII 1687 (ON LA), 21 L.A.C. 141.

29. The union responds that the Board should look to the clear intention of the parties to the various agreements to interpret the meaning of those agreements. If the agreements are not unlawful then effect should be given to them according to the intentions of the parties. It argues that it was clear that Epton and the union entered into a contingent agreement (the 1995-1998 agreement) which would amend the 1992-1995 agreement in the event of a sale. The union notes that the original document signed by Epton and the union in December 1994 illustrates that the agreement is a contingent amendment to the existing agreement, not a new agreement.

30. The union argues that the two sections of the Act which the company claims are violated by the 1995-1998 agreement exist to protect the rights of employees to exercise their wishes to terminate bargaining rights or to change unions through an "open period" and not to assist successor employers. The union notes that there was an "open period" in the 60 days prior to the automatic renewal in February, 1995.

31. The union rejects MTI's argument that the August 3, 1995 amendment and the agreement with Price Waterhouse did not apply to the rubber division. It argues that neither the facts presented, nor the agreements themselves, can support such an interpretation. It claims that the evidence demon­strates that the rubber division was in operation up until the declaration of bankruptcy on August 14. Furthermore, it points to the fact that the August 3 agreement was made a schedule to the 1992-1995 agreement in the operating agreement and the 1992-1995 agreement clearly applies to the whole business including the rubber division. The union also relies upon the language of section 7 of the operating agreement itself which refers to the "business or part of the business".

32. The union denies that there were ever two collective agreements in operation for the same bargaining unit and therefore asserts that there has been no violation of section 55 of the Act. According to the union, up until November 1995 there was one collective agreement in effect, the 1992-1995 agreement as amended by the August 3 agreement and the operating agreement. After November, 1995 only MTI is bound by the 1995-1998 agreement. The predecessor or Price Waterhouse continued to be bound by the 1992-1995 agreement. There were not, therefore, two collective agreements in effect for the same bargaining unit. The two collective agreements covered two separate bargaining units so there was no violation of the Act. In essence, the union claims that the bargaining unit was split upon the sale so it is appropriate to have two separate collective agreements. It applies the same argument to the claim that the term of operation of the collective agreement was changed. The agreement with Epton has one term of operation and the agreement with MTI has a different term of operation. The term of the agreement with Epton was not amended so it did not run afoul of section 58(5) of the Act and the open period was preserved. The union asserted that there is no reason that the employees of MTI should have the benefit of an immediate open period.

33. In response to a question from the Board as to whether section 69 could apply to bind a successor to a collective agreement which never bound and was never intended to bind the predecessor, the union argued that the successor was still stepping into the shoes of the predecessor but stepping into an agreement which was actually an amendment which would only come into effect in the event of a contingency, specifically the sale.

34. The union refers to the following decisions: John Lester Drugs Ltd., [1982] OLRB Rep. June 886; Woodbridge Hotel 1976 CanLII 2221 (ON LA), 13 L.A.C.(2d) 96; Continental Group of Canada Ltd., [1980] OLRB Rep. Oct. 1381 and Laidlaw Waste Systems Ltd., [1987] OLRB Rep. Oct. 1267.

35. MTI replies that section 69(2) of the Act could not apply to this situation because Epton was never bound by the 1995-1998 agreement itself, it was only bound by an agreement that a successor would be bound by that agreement. Section 69(2) cannot be used to bind a successor to an agreement which has never come into being. It denied that the 1995-1998 agreement was an amendment to the 1992-1995 agreement and argued that the existence of the full document, its language and the evidence presented, was all to the contrary. MTI argued that the union's claim that upon a sale there is a split in the bargaining unit and therefore two collective agreements with different terms has no foundation in law. In any case, it argues, even if one accepts this premise, the result is that part of Epton's business was covered by a collective agreement with a specific term of operation and then, prior to the expiry of that term, became governed by a new agreement with a new term of operation, which is still a contravention of section 5 8(5).

Decision of the Board

36. The Board has carefully considered the submissions of the parties and has determined that the application must be dismissed. The union and Epton did not succeed in extending the scope clause of their collective agreement to the County of Wellington or the Province of Ontario and therefore the union cannot claim successor rights at MTI's location in Elora. The Board is sympathetic to the union's plea that the Board should give effect to the clear intentions of the "parties" and find that the 1995-1998 agreement applies to MTI. However, the "parties" the union is referring to are only the parties to the contractual arrangements and there is a third party, MTI, which is deeply effected by those agreements. In this case the agreement that the union and Epton and Price Waterhouse rely upon contravenes the Labour Relations Act, 1995.

37. There are a number of analytical paths one can follow in an attempt to understand what took place between the union, Epton and Price Waterhouse; however, each path leads to the result that the parties attempted to effect an early termination of their collective agreement without the consent of the Board and/or to amend their collective agreement extending its term of operation. Neither result is permitted under the Labour Relations Act, 1995.

38. The union and Epton negotiated, ratified and signed a collective agreement which on its face clearly states that it is in effect from February 28, 1995 until February 28, 1998. The memorandum of December 9, 1994 states "Upon the completion of such negotiations, if any, this tentative Memoran­dum of Settlement shall be the signed [sic] as a Memorandum of Agreement between the Company and the Union for a new Collective Labour Agreement dated the [sic] February 28, 1995 to February 28, 1998 subject to the conditions contained herein." However, the evidence of the witnesses was unequi vo­cal that they automatically renewed their 1992 to 1995 collective agreement for a period of a year and that was the collective agreement by which their labour relations were governed. Therefore, if the 1995-1998 collective agreement legally "existed" at any time prior to February 28, 1996, there would be two collective agreements between the union and the employer for the same bargaining unit. If there are two such collective agreements, that is a violation of section 55 of the Act.

39. On the other hand, it was persuasively argued by the union that the 1995-1998 agreement superseded or amended the extended 1992-1995 agreement upon the alleged sale to MTI in November, 1995. It took effect at that time as a result of the language of the operating agreement with Price Waterhouse. The agreement with Price Waterhouse states as follows:

Should the business or part of the business of Epton be sold, this Agreement in relation the part of the business that is sold shall terminate immediately prior to the closing of that sale and the 1995-1998 collective agreement, as amended, between the Union and Epton shall come into force with respect to that part of the business on the closing of that sale so that the purchaser of the business becomes bound by the 1995-1998 collective agreement as amended, subject to section 64 of the Labour Relations Act.

40. Article 7 purports to terminate the 1992-1995 extended agreement for part of the business upon the sale of that part of the business. However, the Board's consent to the early termination of the collective agreement has never been sought as required by section 58(3). Furthermore, the above provision purports to replace the old agreement with a new collective agreement containing a different term of operation contrary to section 58(5). The 1992-1995 extended agreement applied to the whole of Epton's business, so the fact that this Article is only being applied to a sale of part of the business is irrelevant.

41, What is the effect of having two collective agreements in operation, terminating an agreement before it ceases to operate without the Board's consent or altering the term of operation of a collective agreement'? The parties cannot rely on actions taken which are contrary to the Act and therefore the extended 1992-1995 collective agreement continues to exist as if it had not been terminated or the term of operation altered, In Laidlaw Waste Systems Ltd., supra, the union was not permitted to rely upon arrangements which the Board found effectively terminated the collective agreement prior to its expiration and altered its term of operation as a bar to a certification application by another union. Likewise, in Ledcor Industries Limited, [1993] OLRB Rep. Aug. 758, the Board revoked a decision granting permission for early termination of a collective agreement on the basis that inadequate notice had been given. The Board would not permit the union to rely upon a subsequent collective agreement between the parties as a bar to an application by another union. The concern expressed by the Board in those cases is shared by the Board in these circumstances. Sections 55 and 58(5) serve to ensure that there is a specified, easily ascertainable open period upon which employees may rely in the event they wish to terminate their union's bargaining rights. If the applicant in this case is permitted to rely upon the 1995-1998 collective agreement with respect to the rubber division, the employees in that division are deprived of that open period. Presumably, the effect of a successful application would be to find that the MTI employees in Elora are covered by the 1995-1998 agreement and that the laid-off Epton employees have some entitlement to those jobs. There is no reason why the principle behind sections 55 and 58(5) should not apply to those employees. Furthermore, neither party argued that any other result would be appropriate in the event the Board found that Epton's and the union's agreements, or part of them, violated the Act.

42. In conclusion, the Board f'inds that the 1995-1998 agreement could not come into effect between Epton or MTI and the union because if it did, it would amend the term of operation of the collective agreement, which is prohibited by the Act. Therefore, the geographic scope clause contained in the valid collective agreement between Epton and the union does not cover the location of MTI's business in Elora. As the Board has made its determination according to the above-noted analyses, it need not consider the other arguments raised by MTI,

43. For all of the above reasons, this application is hereby dismissed.