West Parry Sound Health Centre v. Canadian Union of Public Employees, Local 1473, 1997 CanLII 15579

[1997] OLRB REP. JULY/AUGUST 794

0058-97-R West Parry Sound Health Centre, Applicant v. Canadian Union of Public Employees, Local 1473, Ontario Public Service Employees Union, Local 320 and Service Employees' Union, Local 478, Responding Parties

BEFORE: Laura Trachuk, Vice-Chair.

APPEARANCES: Peter F Chauvin and Alex O'Brien for the applicant; B. Sheehan, D. Broadbent, K. Heming and K. Atherton for CUPE, Local 1473; David Wright, Ed Ogibowski, Don Stewart, Jamie McAndie and Dollera Landy for OPSEU, Local 320; Sean Fitzpatrick, Suzanne Saville and Sandra Zvler for Service Employees' Union, Local 478.

DECISION OF THE BOARD; August 22, 1997

1This is an application under section 69 of the Labour Relations Act, 1995. At the outset of the hearing the parties advised the Board that they had agreed that a sale of a business occurred for the purposes of the Act when the Parry Sound District General Hospital and the Parry Sound Area Health Centre Chronic Care Facility merged on April 1, 1995 to become the West Parry Sound Health Centre. They also indicated that they had agreed that the bargaining units relevant to this application should be merged into two bargaining units, specifically, a clerical unit and a service unit. They have also agreed that a representation vote should be held between the Ontario Public Service Employees Unit, Local 320 (O.P.S.E.U.) and the Canadian Union of Public Employees, Local 1473 (C.U.P.E.) for the service unit and that a representation vote should be held between C,U.P.E. and the Service Employees' Union, Local 478 (S.E.U.) for the clerical unit. The parties further indicated that they are confident they can agree on bargaining unit descriptions and voters' lists prior to the votes taking place. However, the parties have identified one outstanding issue which is preventing them from proceeding to hold the votes. The parties have asked the Board to determine the issue of what collective agreement or terms and conditions of employment will govern the employees in the new bargaining units following the vote.

2The parties agreed to present their arguments with respect to this issue on the basis of the facts set out in the application as follows:

SCHEDULE "A"

In support of its request, the Applicant relies on the following material facts:

1. Prior to April 1, 1995, both Parry Sound District General Hospital and Parry Sound Area Health Centre Chronic Care Facility, known as St. Joseph's Hospital ("St. Joseph's Hospital") existed as distinct Hospitals in the City of Parry Sound.

2. Prior to April 1, 1995, the following bargaining units existed at the Parry Sound District General Hospital. The number of employees currently in these bargaining units is inserted in brackets:

(i) OPSEU - full-time (48) and part-time (144) support services

(ii) SEU - full-time clerical (30)

(iii) SEU - full-time (15) and part-time (5) paramedical

(iv) CUOE - full-time and part-time operating engineers (I)

(v) ONA - full-time nurses (34)

(vi) ONA - part-time nurses (42)

(vii) ONA - full-time (3) and part-time (26) nurses Home Care Program

3. Prior to April 1, 1995, the following bargaining units existed at St. Joseph's Hospital. The number of employees currently in these bargaining units is inserted in brackets:

(i) CUPE - full-time (49) and part-time (57) clerical and support services

(ii) ONA - full-time nurses (7)

(iii) ONA - part-time nurses (12)

4. The two Hospitals decided to seek government approval for an amalgamation. The amalgamation was designed to enable the two institutions to improve patient care, rationalize services, maximizing their resources with resultant costs and efficiency savings. Guidelines for the rationalization of the two Hospitals were circulated.

5. The amalgamation between the Parry Sound District General Hospital and St. Joseph's Hospital was effective April 1, 1995. The amalgamated entity carries on business under the name of the West Parry Sound Health Centre (the Applicant).

6. Immediately following the amalgamation and for some time thereafter, the operations of the two predecessor Hospitals effectively continued at their separate sites, located approximately one kilometer apart in the City of Parry Sound. However, by virtue of the amalgamation, these two sites were under the common administration and governance of the Applicant.

7. The collective agreements that had been in effect prior to the amalgamation continued in effect, and were honored by the Applicant, subsequent to the amalgamation, with the result that the Applicant now had to administer ten separate collective agreements with five different unions.

8. On November 28, 1995, CUPE was certified to represent part-time clerical employees working at the former Parry Sound District General Hospital site. As noted above, the full-time clerical employees working at the former Parry Sound District General Hospital site had been represented by SEU since before the amalgamation.

9. As had been anticipated at the time of the amalgamation, the Applicant began to consolidate or rationalize some of its departments. The finance/accounting, human resources, health records, admitting/communications, laundry, rehabilitation, X-ray and laboratory departments were consolidated over the period April, 1995 to May, 1996. The kitchens and most of the Food Services Departments are to be consolidated to the former Parry Sound District General Hospital site by July, 1997. The ALC Programme is to be consolidated to the former St. Joseph's Hospital site by July, 1997.

10. This multiplicity of bargaining units had unduly fragmented the workplace resulting in increased grievances and additional administrative costs due to the fact that there were ten different collective agreements with ten different sets of terms and conditions of employment. In some instances, there are different and conflicting terms and conditions of employment which apply to persons working side by side performing essentially the same work. For instance, both CUPE and OPSEU have separate collective agreements pertaining to support services. Both CUPE and SEU have collective agreements pertaining to office and clerical staff. Several employees work under two collective agreements and thus have different terms and conditions of employment and salaries depending upon which bargaining unit they happen to be working within at any given point in time, even though their job function and classification may be identical.

11. Intermingling has occurred as a result of the amalgamation of the two Hospitals, primarily arising from the consolidation of the departments discussed above and the certification of CUPE for part-time clerical employees at the former Parry Sound District General Hospital. Many of the Applicant's employees perform their duties alongside other employees of the same or similar classifications who are members of different unions and bargaining units. For example, many CUPE and SEU employees are intermingled in the accounting, admitting/communications, health records and laboratory departments and in the Home Care Programme. Many OPSEU and CUPE employees are intermingled in the dietary services, housekeeping and laundry services departments.

12. These difficulties arising from the undue fragmentation of the workplace and the intermingling of employees have not to date been resolved through bargaining between the parties. The Applicant has been successful in negotiating some solutions to some of these problems. For instance, on January 2, 1996, the Applicant signed a memorandum of agreement with the CUOE and OPSEU which affected the transfer of the CUOE's bargaining rights to OPSEU and the elimination of the CUOE bargaining unit. Second, on July 10, 1996, the Applicant and CUPE signed a memorandum of agreement which consolidated the new CUPE part-time clerical bargaining unit which was certified by the Board on November 28, 1995 with CUPE's existing full-time and part-time clerical and support services' collective agreement. Third, on April 22, 1996, the Applicant signed a memorandum of agreement with ONA consolidating the two full-time bargaining units and consolidating the two part-time bargaining units. The ONA Home Care bargaining unit remains a distinct third ONA bargaining unit. As a result, there will now be three rather than five ONA collective agreements. Fourth, on February 1, 1996, the Applicant signed a memorandum of agreement with SEU voluntarily recognizing the formerly non-union laboratory technologists working at the previous St. Joseph's Hospital site. This was done to resolve difficulties arising from the intermingling of union and non-union paramedical staff performing the same duties at the same location. Originally, paramedical employees at St. Joseph's Hospital were non-union. Paramedical employees at Parry Sound District General Hospital were represented by SEU. The laboratory department was consolidated following amalgamation, resulting in union and non-union paramedical employees all working together at the former Parry Sound District General Hospital site.

3The parties also agreed to the submission of a chart comparing some of the terms, particularly monetary terms, of the collective agreements. That chart indicates that, on average, the wages in the last C.U.P.E. agreement are higher than those in the O.P.S.E.U. agreement. The last collective agreements between the parties were submitted to the Board.

4The parties also agreed to the facts with respect to the status of their current collective agreements and negotiations. As is common in the hospital sector, all of the collective agreements have expired and the parties are involved in some stage of the negotiation and interest arbitration process under the Hospital Labour Disputes Arbitrations Act (HLDAA). C.U.P.E. bargains centrally and has an interest arbitration award for a 1994-1995 collective agreement which has not yet been signed by the parties. Its last signed agreement expired on September 28, 1993. Its local appendix expired in September, 1995. C.U.P.E. has given notice to bargain for its post-1995 collective agreement. OP.S.E.U.'s most recent collective agreement expired in April, 1995. It has finished the interest arbitration process for a collective agreement which expired in April, 1997, but an award has not yet been issued for that agreement. S.E.U.'s last collective agreement also expired in April 1995. It has commenced interest arbitration for its 1995-1997 collective agreement but that process has not been completed. That collective agreement will also have expired in April, 1997. Therefore, all of the parties are covered by the statutory "freeze" found at section 13 of the HLDAA.

5The parties also agreed that the hospital could make three points for the purposes of the hearing with which the unions would neither agree nor disagree as follows:

1. One of the reasons for the amalgamation was to attempt to achieve some cost and efficiency savings.

2. According to the hospital's Operating Plan [which was approved by the Ministry in June, 1997], its excess revenues are less than $1,000.00 at the current wages. The hospital described this as a "break-even" budget.

3. If, as a result of the reorganization of the bargaining agents and collective agreements, there is an immediate increase in costs to the hospital it will put the hospital in an unforecast deficit position.

6The parties also indicated that they had all agreed that seniority would be dovetailed regardless of the outcome of the votes.

7The parties have also agreed that the S.E.U. paramedical unit will cover all paramedical employees at the merged hospital and the Board was asked to confirm that agreement in its order.

Labour Relations Act, 1995

Relevant Statutory Provisions

69. (1) In this section, 'business" includes a part or parts thereof; ("entreprise")

“sells" includes leases, transfers and any other manner of disposition, and "sold" and "sale" have corresponding meanings. ("vend", "vendu", "vente")

(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.

(3) Where an employer on behalf of whose employees a trade union or council of trade unions, as the case may be, has been certified as bargaining agent or has given or is entitled to give notice under section 16 or 59, sells his, her or its business, the trade union, or council of trade unions continues, until the Board otherwise declares, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union or council of trade unions is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement or the renewal, with or without modifications, of the agreement then in operation and such notice has the same effect as a notice under section 16 or 59, as the case requires.

(4) Where a business was sold to a person and a trade union or council of trade unions was the bargaining agent of any of the employees in such business or a trade union or council of trade unions is the bargaining agent of the employees in any business carried on by the person to whom the business was sold, and,

(a) any question arises as to what constitutes the like bargaining unit referred to in subsection (3); or

(b) any person, trade union or council of trade unions claims that, by virtue of the operation of subsection (2) or (3), a conflict exists between the bargaining rights of the trade union or council of trade unions that represented the employees of the predecessor employer and the trade union or council of trade unions that represents the employees of the person to whom the business was sold,

the Board may, upon the application of any person, trade union or council of trade unions concerned,

(c) define the composition of the like bargaining unit referred to in subsection (3) with such modification, if any, as the Board considers necessary; and

(d) amend, to such extent as the Board considers necessary, any bargaining unit in any certificate issued to any trade union or any bargaining unit defined in any collective agreement.

(5) The Board may, upon the application of any person, trade union or council of trade unions concerned, made within 60 days after the successor employer referred to in subsection (2) becomes bound by the collective agreement, or within 60 days after the trade union or council of trade unions has given a notice under subsection (3), terminate the bargaining rights of the trade union or council of trade unions bound by the collective agreement or that has given notice, as the case may be, if, in the opinion of the Board, the person to whom the business was sold has changed its character so that it is substantially different from the business of the predecessor employer.

(6) Despite subsections (2) and (3), where a business was sold to person who carries on one or more other businesses and a trade union or council of trade unions is the bargaining agent of the employees in any of the businesses and the person intermingles the employees of one of the businesses with those of another of the businesses, the Board may, upon the application of any person, trade union or council of trade unions concerned.

(a) declare that the person to whom the business was sold is no longer bound by the collective agreement referred to in subsection (2);

(b) determine whether the employees concerned constitute one or more appropriate bargaining units;

(c) declare which trade union, trade unions or council of trade unions, if any, shall be the bargaining agent or agents for the employees in the unit or units; and

(d) amend, to such extent as the Board considers necessary, any certificate issued to any trade union or council of trade unions or any bargaining unit defined in any collective agreement.

(7) Where a trade union or council of trade unions is declared to be the bargaining agent under subsection (6) and it is not already bound by a collective agreement with the successor employer with respect to the employees for whom it is declared to be the bargaining agent, it is entitled to give to the employer a written notice of its desire to bargain with a view to making a collective agreement, and the notice has the same effect as a notice under section 14.

(8) Before disposing of any application under this section, the Board may make such inquiry, may require the production of such evidence and the doing of such things, or may hold such representation votes, as it considers appropriate.

(9) Where an application is made under this section, an employer is not required, despite the fact that a notice has been given by a trade union or council of trade unions, to bargain with that trade union or council of trade unions concerning the employees to whom the application relates until the Board has disposed of the application and has declared which trade union or council of trade unions, if any, has the right to bargain with the employer on behalf of the employees concerned in the application.

(10) For the purposes of sections 7, 63, 65, 67 and 132, a notice given by a trade union or council of trade unions under subsection (3) or a declaration made by the Board under subsection (6) has the same effect as a certification under section 10.

(11) Where one or more municipalities as defined in the Municipal Affairs Act are erected into another municipality, or two or more such municipalities are amalgamated, united or otherwise joined together, or all or part of one such municipality is annexed, attached or added to another such municipality, the employees of the municipalities concerned shall be deemed to have been intermingled, and,

(a) the Board may exercise the like powers as it may exercise under subsections (6) and (8) with respect to the sale of a business under this section;

(b) the new or enlarged municipality has the like rights and obligations as a person to whom a business is sold under this section and who intermingles the employees of two of the person's businesses; and

(c) any trade union or council of trade unions concerned has the like rights and obligations as it would have in the case of the intermingling of employees in two or more businesses under this section.

(12) Where, on any application under this section or in any other proceeding before the Board, a question arises as to whether a business has been sold by one employer to another, the Board shall determine the question and its decision is final and conclusive for the purposes of this Act.

(13) Where, on an application under this section, a trade union alleges that the sale of a business has occurred, the respondents to the application shall adduce at the hearing all facts within their knowledge that are material to the allegation.

Hospital Labour Disputes Arbitration Act

Working conditions may not be altered

Sec. 13. Despite subsection 81(1) [now 86(l)] of the Labour Relations Act, where notice has been given under section 14 [now 16] or 54 [now 59] of that Act by or to a trade union that is the bargaining agent for a bargaining unit of hospital employees to which this Act applies to or by the employer of such employees and no collective agreement is in operation, no such employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees, and no such trade union shall, except with the consent of the employer, alter any term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees, until the right of the trade union to represent the employees has been terminated.

Submissions of the Parties

8The hospital commences its argument by referring to the differences in the various unions' collective agreement provisions. Some of the differences pertain to wage rates but there are also some classifications which exist in one bargaining unit but do not exist in others. In such cases the hospital suggests that whichever union wins the vote will have to commence negotiation for those positions. The hospital argues that this indicates that the Act contemplates that after a representation vote under section 69 the "status quo" is to be maintained (meaning that employees continue to be covered by the terms of the collective agreement which covered them before the vote) and that the winning union has the option of giving the employer notice to bargain. If the winning union does give notice to bargain the statutory freeze is triggered and the status quo is therefore maintained until bargaining is completed. The hospital notes that almost half of O.P.S.E.U.'s bargaining unit is classified as "home support worker" which is a classification which does not exist in the C.U.P.E. agreement. Therefore, if C.U.P.E. wins the vote, not only will there not be a wage rate in its collective agreement for these individuals, but the specific provisions in the O.P.S.E.U. agreement which accommodate the fact that they work unusual hours outside the hospital will also not be reflected.

9The hospital then turns to an analysis of section 69 of the Act. It suggests that section 69(2) does not apply to this case but does apply in situations where there is no intermingling. In such circumstances the collective agreement "flows through" as C.U.P.E. and S.E.U. assert it does in this case. The hospital asserts that it is section 69(6) which applies to the facts of this case. The hospital notes that subsection (c) gives the Board the power to declare which bargaining agent holds bargaining rights but not to declare that a collective agreement applies to all of the employees. According to the hospital this section is read in reference to section 69(8) which gives the Board the power to order a vote but the purpose of that vote is not to determine which collective agreement applies but which bargaining agent will represent the employees. The hospital suggests that if the winning union's collective agreement is to apply to all employees after the vote then unions could campaign on the basis of which collective agreement is preferable. In the hospital's view that is not appropriate because employees should be voting on the basis of which union "best represents their interests". The best interpretation, according to the hospital, is that the winning union inherits both collective agreements and then reconciles them through negotiation. This result shelters the hospital from an unforecast expense. The present budget is based on the status quo with the expectation that there will be an opportunity to negotiate the size of any deficit resulting from wage and benefit increases. If the winning union's collective agreement applies to everyone and includes wage and salary increases there will be an automatic unforecast deficit. The hospital contends that the power in section 69(d) to amend a bargaining unit description as necessary does not mean that the Board can extend the winning union's collective agreement over the entire bargaining unit after the vote.

10The hospital submits that section 69(7) also directly applies to this situation. Under this section the winning union commences bargaining with the employer after the vote for the collective agreement. The collective agreement does not flow through as it would under section 69(2) as the sale was in 1995 and the unions have not claimed bargaining rights for the other bargaining units since that time. The purpose of section 69 of the Act is to preserve and not to expand a union's bargaining rights and an interpretation of the section which would extend the winning union's collective agreement across the whole of the new bargaining unit would not be consistent with that principle. It notes that the Act does not say that the winning union's collective agreement is extended to cover all of the employees formerly represented by both unions. According to the employer, the winning union becomes a party to two collective agreements and the Board's power to amend the recognition clause of a collective agreement is included to permit that to happen. The employees therefore have two different collective agreements and two bargaining units but the same union is a party to both. In the alternative, the employer suggests that the different terms and conditions of employment could be included in the same collective agreement. If the winning union then wants to consolidate the two collective agreements or the different terms, and the agreements have not expired, it may give notice to bargain under section 69(7). The statutory freeze then applies to maintain those terms and conditions of employment until a new collective agreement is negotiated.

11The hospital refers to the following decisions of the Board: The Bryant Press Limited, [1972] OLRB Rep. April 30]; Kitchener Waterloo Hospital, [1993] OLRB Rep. March 187; Caressant Care Nursing Home of Canada Limited, [1984] OLRB Rep. August 1060.

12O.P.S.E.U. supports the result urged upon the Board by the hospital but suggests that a different analysis of section 69 would lead there. O.P.S.E.U. submits that the terms and conditions of both collective agreements would be "frozen" after a vote in these circumstances because of the effect of section 69(7) and the fact that the parties are all in the "statutory freeze" period in any case. O.P.S.E.U. notes that section 69(7) is the only subsection that deals with what is to occur after a declaration under section 69(6). After such a declaration the union represents people it did not represent previously and section 69(7) therefore gives the union the power to give notice to bargain with the same "statutory freeze" result as notice under section 16 (all of the parties agreed that the reference to notice under section 14 in the Act is an error). O.P.S.E.U. denies that section 69(7) is intended to apply where there is no collective agreement because section 69(3) already deals with that situation. According to O.P.S.E.U. the Act mandates that after a union has been declared the bargaining agent after a vote it can give notice to bargain but it cannot insist on its collective agreement continuing and covering the entire new bargaining unit.

13O.P.S.E.U. acknowledges that, on its analysis, there would continue to essentially be two collective agreements in place after the vote. However, it submitted that this was acceptable for a period of time in order to provide the opportunity to employees to have a say in what the terms and conditions of employment contained in their collective agreement will be. If the winning union's agreement is imposed after the vote, the employees who were not in that bargaining unit at the time of its negotiation have had no opportunity to participate in that bargaining process. O.P.S.E.U. suggests that the Board's power under section 69(6)(a) to declare that a collective agreement no longer binds an employer can be exercised at any time so the Board could delay making such a declaration until a new agreement was negotiated. O.P.S.E.U. acknowledges that the losing union whose agreement remained in effect would no longer be a party to it.

14In the alternative, O.P.S.E.U. argues that the circumstances of this case fall within section 69(3) of the Act. None of the parties have an existing collective agreement which they can claim should continue and all are covered by section 13 of the HLDAA. They are all operating under frozen terms and conditions in any case. Therefore all of the unions are in bargaining under section 69(3) of the Act and section 69(7) puts them in bargaining for the newly added part of the unit after the vote. To find otherwise would be to allow a union to require an employer to change the terms and conditions of employment for the newly added members of the bargaining unit during the freeze.

15O.P.S.E.U. suggests that there are good policy reasons to accept its interpretation of the Act on the facts of this case. Over 50% of O.P.S.E.U.'s bargaining unit are home care workers or ambulance drivers which are classifications not covered by C.U.P.E.'s collective agreement. There are very specific provisions in O.P.S.E.U.'s agreement to reflect the unusual working conditions of these classifications. The employees affected by them have had the opportunity to have input into these terms. If C.U.P.E. wins the vote it will not be possible to negotiate special provisions for these classifications until negotiations/arbitration for the 1997-1999 agreement. O.P.S.E.U. suggests that it will not be possible to include them in the 1995-1997 agreement as they were not in the C.U.P.E. bargaining unit during those years. O.P.S.E.U. notes that its agreement has much more expansive long term disability rights than C.U.P.E.'s. It suggests that employees should be involved in the renegotiation of those if they are to change. Given the relative percentages of members in the combined bargaining unit, if C.U.P.E. wins the vote the terms and conditions of employment will have been determined by approximately 30% of the employees.

16O.P.S.E.U. refers to a decision of the Board in File Nos. 0269-96-R, 0270-96-R, 0271-96-R, 0272-96-R (June 19, 1996) which incorporated Minutes of Settlement between other locals of these union parties in which they agreed to a process similar to the one O.P.S.E.U. claims is mandated by the Act.

17S.E.U. submits that the correct interpretation of section 69 is that the collective agreement of the successful union covers all of the employees in the new bargaining unit after a vote. The S.E.U. suggests that this interpretation is consistent with the Board's jurisprudence and with good labour relations. Section 69(6) is the subsection which deals with a conflict between two unions. The subsection outlines the Board's powers to deal with a situation such as this one. Those powers are precise. The Board has the power to make declarations under section (a) and (c). Subsections (b) and (d) are the Board's powers to determine how many bargaining agents there should be and how they should be described. According to the S.E.U. these parties have agreed upon the matters that fall under (b) and (d) and have agreed that the winner of the vote will become the bargaining agent. The issue before the Board, therefore, turns on section 69(6)(a). The Board should use that section to declare that the hospital is no longer bound by the losing union's collective agreement. The Board should then use subsection (d) to amend the bargaining unit description in the collective agreement of the successful union to the extent necessary so that it reflects the new bargaining unit that the parties have agreed to.

18S.E.U. rejects the suggestion that the Board should not use its power to declare the losing union's collective agreement not binding upon the employer until some future date. It also denies that section 69(3) applies to this situation. Furthermore, the S.E.U. claims that the Act does not empower the Board to order the parties into negotiation for a collective agreement. According to the S.E.U., section 69(7) only empowers the union to give notice to bargain. It also denies that this section applies to a situation such as this between two unions with collective agreements who are subject to a vote. S.E.U. submits that subsection (7) is limited to a situation where a union has been issued a certificate and has given notice to bargain but does not yet have a collective agreement. That is why it only refers to notice under section 14 of the Act (which is assumed by all to mean section 16) and does not refer to notice under section 59. S.E.U. denies that the section can be used by the winning union to give notice to bargain for those parts of the new bargaining unit that do not "fit" under its collective agreement. It notes that there are a number of problems with any other interpretation. For example, who would such notice to bargain refer to, as there would be only one bargaining unit of employees? It would also mean that the employees in the same bargaining unit would be covered by different terms and conditions of employment and their '~agreements" would be on different timetables. According to the S.E.U., this is a bad labour relations result and is not consistent with the Board's previous jurisprudence. S.E.U. asserts that such discrepancies are to be dealt with under the terms of the winning union's collective agreement or through negotiations in the normal course. It argues that the implication of the hospital's and O.P.S.E.U.'s proposed interpretations of the Act is that the winning union's collective agreement will have to be terminated at some point. The Board has indicated that it would only be willing to do that in the most extraordinary circumstances. Such an interpretation is not consistent with the 1970 amendments to the Act referred to in the Board's decision in Bermay Corporation Limited, [1980] OLRB Rep. Feb. 166. It is also not consistent with the proposals in Bill 136, legislation currently before the legislature, which specifically gives a different tribunal the power to do what O.P.S.E.U. and the hospital claim can be inferred from section 69.

19The S.E.U. denies that the Board should be concerned that employees will be covered by a collective agreement into which they have had no input as they will have the opportunity to vote. That is why it is appropriate to determine what effect the vote will have in advance of holding it. It also denies that the Board should consider the cost to the hospital. It notes that it is the hospital's application and if it set its budget without considering the possible effect of the application it is just bad planning. It was the hospital's decision to amalgamate the two hospitals in the first place and this must have been considered a potential cost. The hospital's cost considerations should be weighed against the labour relations principles of putting the labour relations regime on a firm footing. Overall, the problems caused by either the hospital's or O.P.S.E.U.'s proposals would be so significant that the S.E.U. position should be preferred.

20S.E.U. denies that this situation is governed by section 69(3) as proposed by O.P.S.E.U. It also denies that the fact that all of the collective agreements have expired and that the parties are covered by a statutory "freeze" should be a significant concern to the Board. In response to a question from the Board as to what it would be amending under section 69(6) counsel suggested that the Board would amend the scope clause in the "frozen" collective agreement.

21S.E.U. denies that most of the cases referred to by the hospital and O.P.S.E.U. apply to this situation as they do not deal with what happens with respect to collective agreements after a vote. It refers the Board to Caressant Care Nursing Home of Canada Limited, [1985] OLRB Rep. March 382 and Bermay Corporation Limited, supra.

22C.U.P.E. commences its argument by pointing out that the application was initiated by the hospital to resolve the mischief that it now wants to continue with its proposal i.e. the problem of operating with various collective bargaining regimes. It submits that the hospital's proposal requires the winning union to administer two collective agreements, one of which it never negotiated, until both are up for renewal and new negotiations completed. In this case that might be four to five years hence. This is inconsistent with the whole intent of section 69(6) which is to end up with one bargaining unit. C.U.P.E. then outlines some of the conflicting provisions which would be "frozen" and therefore apply to the employees in the same bargaining unit if the hospital's or O.P.S.E.U.'s proposals are accepted.

23C.U.P.E. denies that the Board has the statutory authority to do what O.P.S.E.U. and the hospital are asking it to do. Section 69(6)(a)-(d) taken together give the Board the power only to declare that the winning union's collective agreement applies after a representation vote. The Board can declare a collective agreement to be null and void under section 69(6)(a) but it cannot declare that the collective agreement provisions remain in force. If that was the legislature's intention it would have been clear. It claims that this interpretation flows from this situation in which the parties have agreed to a bargaining unit description. The collective agreement is therefore amended and a representation vote is held. The Board does not need to amend the recognition clause. The Act does not require a trade union to give notice to bargain. Section 69(7) deals with a situation in which a union is negotiating a first collective agreement. Under the hospital's and O.P.S.E.U.'s proposals a winning union would be worse off after a sale because section 59 notice gives greater protection than section 16 notice and section 69(7) only refers to section 16 notice. Section 69(7) treats the union as a new bargaining agent. The difference between section 69(3) and (7) is that section 69(3) refers to notice under section 59 or 16, whereas (7) only refers to section 14 (section 16) indicating that it applies to a first contract situation. C.U.P.E. also notes that the legislation prior to the 1995 amendments gave the Board the express power to deal with seniority which has been removed. It cannot therefore be said that such powers to amend collective agreements are "inherent" in the Act or the section.

24C.U.P.E. agrees with the S.E.U. that the decisions referred to by the hospital are distinguishable as they do not deal with the issue of what happens in a two union situation after a vote. It does rely upon the Board's decision in Kitchener Waterloo Hospital, supra, however, for the principle that the declaration should be made as of the date of the sale not the date of the application.

25C.U.P.E. argues that the Board should not be concerned if, as a result of the vote, a collective agreement is applied to all of the employees even though a relatively small percentage had input into its negotiation because all of the employees will have the opportunity to vote. It is appropriate that part of the decision in deciding who to vote for would be based on what each union has been able to achieve. In this case the people voting will know exactly what their terms and conditions of employment will be depending on who wins the vote so it cannot be said that they do not have the democratic right to choose their terms and conditions of employment. C.U.P.E. also denies that the Board should be concerned that if it wins the vote its collective agreement does not have provisions which deal with some of the employees. It asserts that the parties will sort out those problems as they always do and as Bermay supra and the decision of the Board in Ronnie Gee's Sports Palace, [1991] OLRB Rep. May 689 anticipates that they will. It points out the problems inherent in an interpretation of section 69(7) which would result in the winning union giving notice to bargain for part of the bargaining unit. For example: Would a party apply for conciliation for part of the unit? Would there be two separate applications for arbitration under the HLDAA? In C.U.P.E.'s case the problems are compounded by the fact that it participates in central bargaining. It cannot give notice to bargain for any part of its bargaining unit outside of that process.

26C.U.P.E. also denies that this is a case which should be considered in terms of the statutory freeze.

27In reply O.P.S.E.U. notes, among other things, that the statutory freeze under the HLDAA does not freeze the collective agreement but the terms of the collective agreement. Therefore there is nothing in existence to amend under section 69(6) and the parties are simply negotiating in the statutory freeze while the terms and conditions of employment that existed before the vote continue to be frozen. It denies that Bill 136 has any bearing on this situation and notes that if the reference in section 69(7) to section 14 is an error when the omission of section 59 could also be an error. If section 69(7) deals only with "first contract" situations it is redundant as section 69(3) already does that. Without section 69(7) there is nothing that requires an employer to negotiate with the winning union with respect to making the collective agreement appropriate to the new bargaining unit.

28The hospital replies that the best interpretation and result is that after the vote the winning union is a party to both collective agreements and it can seek to have them merged into one through negotiations with the employer if it chooses. It submits that Bermay is distinguishable as it deals with a union/non-union situation which was treated by the Board as an "accretion".

Decision

29The issue that the parties have agreed to place before the Board can be broken down into two questions.

a) Does the collective agreement of the winning union apply to all of the employees in the bargaining unit after a representation vote held pursuant to section 69(8) of the Act?

b) What, if any, impact does the fact that the parties are in a statutory freeze period have on the answer to question (a).

Does the collective agreement of the winning union apply to all of the employees in the bargaining unit after a representation vote held pursuant to section 69(8) of the Act?

30After carefully considering the submissions of the parties the Board finds that the interpretation proposed by S.E.U. and C.U.P.E. is the only one supported by the legislative provisions. Section 69 provides the Board with limited tools to deal with the fall-out of a representation vote between two trade unions in a sale of a business situation. The limited nature of these tools, however, has not been the source of significant labour relations difficulties since it does not appear that the Board has been asked to determine this specific issue in the past. In the vast majority of cases, the parties have been able to agree on a post-vote strategy that makes labour relations sense to them. In this case, however, the parties were unable to reach such an agreement and the limited nature of the Board's tools has become obvious.

31Section 69(6) is the subsection which refers to intermingling and it is therefore in that subsection that the Board's powers in this situation are found. Taken together, they allow the Board to do the following. Prior to the vote the Board can make a determination under section 69(b) that the employees constitute one or more appropriate bargaining units. It can then order a vote of those employees under section 69(8). After the vote it can declare which trade union shall be the bargaining agent of the employees in the unit under subsection (c). That is as far as the Board has generally gone in such cases. Here the Board has been asked to go further and it finds that subsequent to the vote it has the power to declare that the hospital is no longer bound by the collective agreement of the losing trade union under section 69(a). It can then, under subsection (d), amend the bargaining unit description in the winning union's collective agreement to reflect the proper employer and the parameters of the bargaining unit found to be appropriate by the Board under subsection (b).

32It might be possible to interpret the sections as permitting the Board to terminate both collective agreements after a vote or to amend the bargaining unit descriptions of both collective agreements to make the winning union a party to both. However, the lack of any other supportive provisions makes such an interpretation untenable. In either case the Board would also need the power to direct the parties to enter collective bargaining and to order the contents of the new or consolidated collective agreement if the parties are unable to agree. The suggestion that the winning union should be a party to, and therefore responsible for administering, both collective agreements is simply unreasonable. It would be responsible for administering conflicting provisions arising out of a collective agreement it had never negotiated.

33The result of having the winning union's collective agreement apply to all of the employees in the bargaining unit with no requirement to negotiate at all may not make labour relations sense in many situations and this may indeed by one of them. On the other hand, continuing two conflicting labour relations regimes which have given rise to the need for Board intervention in the first place does not make good labour relations sense either. A "winner take all" approach as described by the hospital has the benefit of a certain outcome for all of the parties and for at least those employees in classifications found in both collective agreements.

34The hospital urges the Board not to interpret the Act so as to extend the winning union's collective agreement over the entire bargaining unit because of the unforeseen costs if the union with the higher wage rates wins. However, the potential for increased wage costs can hardly be unforeseen when two businesses are merged and one pays higher wages. It could certainly be foreseen as a potential outcome when the hospital filed this application. The hospital's wage increases are always unknowable to some degree due to the interest arbitration process. Furthermore, there is nothing to stop a winning union and any employer from meeting to negotiate the ramifications of such increased wage costs. Indeed, they may be wise to do so. However, there is nothing in section 69 which empowers the Board to require the parties to meet for the purpose of such negotiations.

35This interpretation is also most consistent with the few comments that the Board has made on this issue in the past. The closest the Board has come to making a determination on point is in the Bermay decision, supra. Although that case did not deal with a situation in which the members of two unionized bargaining units were intermingled, the Board makes it clear what the outcome would be after the vote in such a case. It should be noted that to the extent that doubt has been cast upon the Board's findings in Bermay it is not with respect to what it has to say about what should occur after a vote in such circumstances. The Board stated as follows:

14. The employer submits that both the effect of section 55 and the intention of the Board's order is that the vote should determine only whether the union should be entitled to bargain on behalf of the employees. The respondent's position in this regard proceeds from a view of the operation of section 55 which is difficult to reconcile with the history of the Act.

15. There was a time when section 55 used to operate in the way the respondent says it should in this case. The first legislation imposing a duty on a successor employer when he purchased a business where a collective agreement was in effect was The Labour Relations Amendment Act, 1962-63, SO. 1962-63, c. 70, section 1, which introduced what was then section 47a(2), into theAct:

"Where an employer who is bound by or is a party to a collective agreement with a trade union or on behalf of whose employees a trade union has been certified as bargaining agent or has given or is entitled to give notice under section II or 40 [now 13 or 45] sells his business, the trade union continues, until the Board otherwise directs, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement, and such notice has the same effect as a notice under section II."

16. That legislation kept the collective agreement and a union's bargaining rights distinct. What survived the sale of a business was the union's right to bargain on behalf of the employees in a bargaining unit like the unit described in the prior collective agreement or in an outstanding certificate. In other words, the union found itself in the same position as a newly certified union. The result was that the employees were then subject to having their terms and conditions of employment negotiated anew. The employees were not protected by the operation of what was then section 59 (now section 70), from changes in their terms and conditions of employment until the union gave the new employer notice of its desire to bargain. The collective agreement ended and the continued entitlement of the employees to have their contracts of employment unchanged depended on how quickly their union gave its notice to bargain. In the result, there was considerable insecurity surrounding the rights of employees as to their terms and conditions of employment if the business was sold to a new employer. And most importantly, the sale of the business effectively terminated the collective agreement.

17. That was radically changed by an amendment of the section seven years later. The Labour Relations Amendment Act, 1970 (No. 2), SO. 1970, c. 85, section 22 replaced the above section with what is now section 55(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 business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if he had been a party thereto and, where an employer sells his business while an application for certification or termination of bargaining rights to which he 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 he were named as the employer in the application."

18. The section as it now stands stabilizes the status quo from the moment of the sale and gives more security to employees and their union. Under the present provisions of section 55, the first question is whether the sale of business has occurred. A determination by the Board that a sale or transfer has occurred within the meaning of section 55 of the Act means that the collective agreement continues in force without interruption, binding the new employer just as it did his predecessor. There is no hiatus in the operation of the collective agreement and no room for the unilateral imposition of changes. The successor employer is obliged to observe the terms of the agreement in relation to all of the employees who come under it until the Board otherwise declares.

19. A necessary adjunct to the preservation of collective agreements or bargaining rights, as the case may be, after the sale of a business is the ability to sort out competing interests where two or more collective agreements or two or more sets of bargaining rights appear to conflict. No less Important is the ability to make adjustments when, as in this case, "non-union" employees of a successor employer are intermingled under a collective agreement handed down from a predecessor employer. To deal with that problem section 55(6) of the Act provides:

"Notwithstanding subsections 2 and 3, where a business was sold to a person who carries on one or more other businesses and a trade union or council of trade unions is the bargaining agent of the employees in any of the business [sic] and such person intermingles the employees of one of the businesses with those of another of the businesses, the Board may, upon the application of any person, trade union, or council of trade unions concerned,

(a) declare that the person to whom the business was sold is no longer bound by the collective agreement referred to in subsection 2;

(b) determine whether the employees [sic] concerned constitute one or more appropriate bargaining units;

(c) declare which trade union, trade unions or council of trade unions, if any, shall be the bargaining agent or agents for the employees n such unit or units; and

(d) amend, to such extent as the Board considers necessary, any certificate issued to any trade union or council of trade unions or any bargaining unit defined in

any collective agreement."

Section 55(6)(a) of the Act was enacted at the same time as section 55(2). It gives the Board a discretion to deal with the realities of each particular situation where intermingling occurs. It clearly does not provide that the Board shall terminate the collective agreement any time there is intermingling of employees after the sale of a business.

20. Where the intermingled employees are drawn entirely from two bargaining units represented by two different unions the Board presumes that the majority of them have chosen collective bargaining as the mode of relationship with their employer. The issue then is not whether the employees should be represented by a union but rather which of the two unions should be their bargaining agent. If an overwhelming majority of the employees are members of one union the Board may, without more, declare that union to be exclusive bargaining agent for all of them (see, e.g. Alliance Dairy Ltd. [1966] OLRB Rep. Aug. 337). If, on the other hand, both unions represent a substantial number of employees the Board may, pursuant to section 55(8), order a representation vote by which the employees choose which of the two unions will be their bargaining agent. (e.g. The Borden Company Limited [1970] OLRB Rep. Jan. 1244). The result of the vote will inevitably extinguish one trade union's bargaining rights and collective agreement.

Subsequently, the Board noted as follows:

43. Sometimes the policy of the Act to preserve collective bargaining rights will result in two collective agreements existing side by side. That would have happened in this case if the transferred employees had come from another plant of the employer with its own collective agreement negotiated with another union containing a scope clause overlapping the scope clause in the collective agreement in force in the newly purchased plant. In that situation the policy of the Act to preserve established bargaining rights would require the employer to respect both collective agreements until a Board order could be made determining which union and which collective agreement should have precedence. The wording of section 55(6) anticipates that situation and provides the mechanism to resolve it.

36In Caressant Care (1985), supra, the Board stated as follows

16. The respondent also argues that the Board, because of the onerous nature of the collective agreement, should exercise its power under section 63(6)(a) to declare that the Willson collective agreement no longer is binding upon the respondent even if the union wins the vote. This is rather an astonishing submission. It is apparent that section 63(6)(a) would operate to cause the Board to do just that if the union were to lose the vote. The respondent would then be free to operate the entire Nursing Home, rather than just a part, on the basis of its own policies and employment terms and conditions (although obviously the provisions of the Labour Relations Act continue in such situations to act as a safeguard against any form of discrimination against formerly unionized employees). But if the union wins the vote, it surely should not be in a worse position, vis-a-vis the collective agreement, than it had been at the new facility prior to the vote. The Board therefore wishes to make it clear that, an opportunity having been granted for a representation vote to cure the anomaly of the respondent's two "intermingled" businesses being operated one under the terms and conditions of a collective agreement and one not, the result of a vote in favour of the union will mean that the terms and conditions of the Willson collective agreement will apply to the entire Nursing Home until, in accordance with the Hospital Labour Disputes Arbitration Act, a new collective agreement has been entered into between the parties.

37If it is appropriate for the collective agreement to apply to the entire bargaining unit after the vote when formerly part of the unit was not unionized as in Caressant Care (supra), it is certainly appropriate for it to apply to the whole bargaining unit when part of the unit was formerly represented by a different union.

38The Board therefore finds that under the scheme of section 69 of the Act it is anticipated that the collective agreement of the union which is successful in a representation vote between two unions will apply to the entire bargaining unit. This is accomplished by declaring that one collective agreement no longer binds the employer and by amending the successful union's bargaining unit description to reflect the bargaining unit that the Board has declared to be appropriate under section 69(b).

What impact, if any, does the fact that the parties are in the statutory freeze have?

39The circumstances of this particular case do appear to fall within section 69(3) of the Act. All of the unions have given notice to bargain to the predecessor or the successor employer and are therefore covered by the statutory freeze. However, that does not necessarily determine what the "frozen" terms and conditions of employment are. O.P.S.E.U. argues that they are the terms and conditions that governed the individual employees as of the date of the vote, that is, the terms and conditions of the former collective agreements no matter who wins the vote. The effect of this is that the employees will continue to work side by side doing the same work while being governed by different terms and conditions of employment until the HLDAA interest arbitration process for 1997-1999 has been completed. It also means that the successful union will be responsible for monitoring the statutory freeze for terms and conditions that it has never negotiated and with which it has no familiarity. Furthermore, it is a fact of life in hospital sector labour relations that parties are almost always in the statutory freeze period as they rarely have a current collective agreement. Therefore, the expectation that the terms of the successful union's collective agreement will apply to the bargaining unit after a vote would almost never pertain in the hospital sector.

40However, the result suggested by O.P.S.E.U. above only pertains if the Board's declarations under section 69(a) and (d) are prospective. If they are prospective, the Board can only declare an existing collective agreement to not bind a successor or to amend an existing collective agreement. On that theory, as there are no existing collective agreements in this case, there is nothing upon which the Board may exercise that power. However, in Kitchener Waterloo, supra, the Board indicated that declarations in successorship cases may be made effective at an earlier date than their issuance.

11. In our view section 64(6) does give the Board the jurisdiction to make its declarations terminating bargaining rights and declaring that a collective agreement no longer applies effective at a time earlier than the date of issuing the declarations.

12. The starting point of the Board's analysis is the purpose of section 64: to preserve, through a variety of legal transactions, the bargaining rights enjoyed by a union and the rights of the employees it represents. This statutory purpose or mischief against which the legislation is directed is relevant in assessing many issues under section 64, not only whether a "sale" has occurred. Section 64(6) is perhaps the most sensitive tool that can be utilized in appropriate circumstances by the Board to ensure that the purpose of section 64 is furthered, and to work out problems which result from a "sale" finding in cases of intermingling. There can be no serious question that the Board has a discretion under section 64(6) with respect to the exercise of its various powers contained therein. That discretion should be exercised in a manner contemplated by the legislation, consistent with the mischief section 64 is directed to, and the overall mandate of the Board to make sound labour relations judgements.

13. When events occur that lead an employer or union to assert that a sale has occurred, the provisions of section 64 require parties to continue to respect those rights and obligations in the absence of any application to the Board and until the Board otherwise declares. This approach removes any hiatus in the representation rights and collective agreement obligations while any dispute is being resolved. And it must be so. Otherwise, employers could delay applications and in practice defeat the purpose of section 64, to preserve existing rights. Employers could engage in a series of corporate transactions, which if timed properly, could have the effect of forever avoiding any collective bargaining obligations. The default" mode of the legislation, that rights continue to apply until the Board determines otherwise, eliminates this problem. This is why subsections 64(2) and (3) are written in a manner stipulating that obligations continue to apply "until the Board otherwise declares". It is why the relevant words in subsection 64(6) mean that the collective agreement continues to apply until the Board makes a declaration that the successor employer "is no longer bound". They do not mean that the successor will always be bound until the date of the Board declaration.

14. The purpose of section 64 is to ensure that bargaining rights and collective agreement obligations carry forward with no interruption through legal transactions and legal litigation. The purpose is to ensure that rights that ought to be preserved do not lapse in the "in-between" times. But where, for sound labour relations reasons, the Board concludes that those rights ought to be terminated, the statutory scheme does not demand that the terminated rights continue until the date of the Board's decision. To read section 64(6) in this manner would undercut the purpose of section 64. It would serve to extend bargaining rights until applications could be disposed of, rather than severing them at the time the Board, as directed by the legislation, determines it is appropriate to do so. It would also interpret section 64(6) in a manner that could lead to absurd results.

15. If the orders or declarations could never be effective earlier than the date of the Board's decision, there would regularly occur serious labour relations problems. One example arises when two inconsistent collective agreements cover the two intermingled businesses. Each union could file grievances under its collective agreement. An employer would likely be in the position of breaching one of those agreements regardless of what it did. Even if bargaining rights were later terminated by the Board, or if it later declared which collective agreement applied, a successor employer would still have breached one of the agreements during the time before the declaration issued, with potentially enormous liability given the time necessary in some cases to litigate these disputes. This is, with respect, an absurd result, one that flows from the interpretation that the Board is without jurisdiction to make its declarations under subsection (6) effective earlier than the date the declarations are made.

16. As a general proposition, significant labour relations problems are likely to result when bargaining rights and the collective agreement are terminated, yet nevertheless continue to apply for a period of time to the intermingled business. This is particularly true in a union-union context, where two collective agreements might apply, until the Board otherwise declared. It is easy to see why declarations terminating bargaining rights for one of the unions and its collective agreement ought ordinarily to be made retroactive to the point of sale. Otherwise, there will always be a period during which the two potentially inconsistent collective agreements apply, with the resulting uncertainty, problems, and costs for all interested parties.

41In this case, what would be the effect of making the Board's declaration retroactive? The benefit would be that when the terms of the "new" collective agreements are issued in the interest arbitration awards and immediately frozen, the same terms will apply to everybody in the bargaining unit. This has the benefit of resolving the labour relations problems which gave rise to the application in the first place and to giving effect to the result anticipated by declarations under section 69(6). Furthermore, it would be clear when the "open period" was and the same "open period" would apply to the entire bargaining unit. It is not necessary to make the declarations retroactive to the date of the sale to achieve this result, and it would not be in the parties' best interests to do so as they have conducted their labour relations for two years on the understanding that they are in separate bargaining units. It is only necessary to make the declarations retroactive to the date of the application, April 4, 1997, the date when presumably it was apparent to all the parties that the former understanding no longer prevailed. In these circumstances, it is therefore appropriate to make the Board's declarations under section 69(6) retroactive to the date of the application.

42The Board's determinations in this case are obviously somewhat premature as the vote has not yet been held and it is therefore not possible to make any actual orders. However, the parties were unanimously of the view that they, and the employees who were going to participate in the vote, were entitled to, and needed to, know the terms and conditions of employment that would govern them after the vote. In view of what little the Board has said on this subject in the past and the parties' apparent agreement that a sale had occurred and a vote should be held, the Board considered it appropriate to hear and decide the issue raised. I will, of course, remain seized to deal with any further matters arising from this application and to make the appropriate declarations after the vote, including the requested declaration with respect to the paramedical unit.