2615-99-R Power Workers Union Canadian Union of Public Employees, Local 1000, Applicant v. Bracebridge Hydro-Electric Commission, and Ontario Hydro Services Company, Inc., Responding Parties v. Canadian Union of Public Employees and its Local 1457, Intervenor.

BEFORE: Brian McLean, Vice-Chair, and Board Members J. A. Rundle and R. R. Montague.

APPEARANCES: Andrew K. Lokan and John Sprackett for the applicant; Richard J. Charney for Bracebridge Hydro-Electric Commission; Michael McFadden for Ontario Hydro; Nick E. Milanovic, James Keenan and Shawn Morrison for the intervenor.

DECISION OF THE BOARD; July 24, 2000

1. This is an application under section 69 of the Labour Relations Act, 1995 (the “Act”). The applicant union (“PWU”) contends that there has been a “sale” of part of Ontario Hydro Services Company Inc.’s (“Hydro”) business to the Bracebridge Hydro Electric Commission (“the Commission”). More importantly, the PWU asserts that because of that sale the Board should conduct a representation vote amongst the employees of the Commission so that they can decide whether they wish to be represented by the PWU or their current bargaining agent CUPE Local . A hearing was held in Toronto on June 15 and 16, 2000 to determine the application.

2. This application arises out of amendments to the Power Corporation Act in 1994 which are commonly referred to as “Bill 185”. Under Bill 185 a municipality may pass a by-law which essentially allows the municipality to take over the parts of Hydro’s business which are physically located in the municipality. If the municipality passes such a bylaw, Bill 185 contains certain provisions and procedures which may cause some of Hydro’s employees to become employees of the municipality. Under Bill 185 the PWU could appeal a by law passed by a municipality to the Ontario Municipal Board.

3. The PWU appealed the by-laws enacted by Bracebridge and a number of other municipalities. The PWU also asserted that each of the transactions that resulted from the bylaws constitutes a sale of a business under section 69 of the Labour Relations Act, 1995 and claimed bargaining rights over the employees of the commission in those instances. The PWU and a number of municipalities entered into minutes of settlement in partial resolution of these disputes. Under the minutes of settlement the parties agreed that the PWU and Lincoln Hydro Electric Commission would have the Board determine the PWU’s sale of business application vis a vis Lincoln Hydro and the result of that determination would essentially bind the signatories to the minutes of settlement.

4. In the result, the Board determined that there had been a sale of all or part of Hydro’s business to Lincoln Hydro, [1999] OLRB Rep. May/June 397). Therefore, the Commission is precluded from disputing that there has been a sale of a business in this application. In addition, while Local 1457 was not a signatory to the minutes of settlement and therefore could dispute whether a sale occurred, at the hearing into this matter Local did not take issue with the fact that there had been a sale under section 69.

5. In order to expedite the hearing the parties agreed to the facts that would be put before the Board so that it could determine whether a sale occurred. Those facts are as follows:

6. Bracebridge Hydro expanded its service area pursuant to amendments to the Power Corporation Act (Bill 185) on April 1, 1999.

7. On that date, Bracebridge Hydro acquired approximately 3000 customers from Ontario Hydro without interruption in service.

8. Pursuant to the provision of section 83.2(29) of Bill 185 Bracebridge Hydro also acquired all assets, liabilities, land works and interests related to the distribution of power within the expanded area from Ontario Hydro at a price calculated in accordance with section 83.3(4) of Bill 185.

9. Bracebridge Hydro further acquired customer data necessary to service the new customers within the expanded service area.

10. On December 31, 1998 Bracebridge Hydro and Ontario Hydro entered into a transfer agreement as foreseen by Bill 185 which set out further details of the transfer including:

a) assignment of contracts (Clause 5(i));

b) assignment of rental and maintenance of water heaters and lighting equipment (Clause 5(i));

c) assignment of existing agreements associated with the supply and installation of underground

facilities and capital contributions associated with open work orders and associated letters of credit (Clause 5(i)) and 3(a);

d) conveyance of easements, rights of way, leaves and licences (Clause 9); and

e) assignment of accounts receivable after the final meter reading (Clause 11(o).

6. Pursuant to Bill 185, offers of employment were made to 6 employees of Ontario Hydro between December 1998 and February 1999, 2 of whom accepted a transfer to Bracebridge Hydro effective April 1, 1999.

7. By agreement dated June 14, 1998 adhered to by Bracebridge Hydro, Bracebridge Hydro agreed to be bound by the decision in P.W.U. v. Ontario Hydro on whether the expansion constituted a sale of a business and consented to an order that a sale of a business had occurred.

8. Based on the agreed facts, the Board ruled orally at the hearing that a sale of business under section 69 of the Act had occurred. This decision confirms that oral ruling.

9. The real issue between the parties is what remedy, if any, ought to flow from the sale of business determination. The PWU seeks a representation vote among the Commission’s employees so that they can determine which bargaining agent should represent them, the PWU or Local 1457. Local 1457 and the commission resist the PWU’s request and in turn request the Board to terminate the PWU’s bargaining rights with respect to the commissions employees.

10. For the purposes of the remedial stage of the hearing, the parties asserted facts which were essentially agreed to. The Commission has been bound by bargaining rights with CUPE, Local 1457 since 1972. Under the most recent collective agreement between Local 1457 and the Commission and its predecessor collective agreements, office staff are excluded from the bargaining unit. The expansion pursuant to Bill 185 commenced in 1995. Prior to the expansion, CUPE and its Local 1457 represented a bargaining unit of employees in the “outside” unit. There were 2 non-managerial office employees who were non-union. Ontario Hydro wrote the Commission and suggested that 5 Ontario Hydro employees should be considered for employment. Under Bill 185 there are two phases of job consultation for Hydro employees. In the first stage, 15 Ontario Hydro employees were interviewed for the 5 positions, 2 were offered jobs and one accepted. In the second phase, 4 Ontario Hydro employees were designated by Ontario Hydro and were offered positions by the Commission. Only one of these, an office employee, accepted. Therefore, as of the date of expansion, there were 10 outside workers represented by CUPE Local 1457, one of whom was formerly represented by PWU, and there were 3 non-union office (inside) workers, one of whom was formerly represented by PWU.

11. Subsequently, one of the office employees who had been employed by the Commission for many years, retired. She was replaced by a part-time office employee.

12. The applicable statutory provision is section 69 (6) of the Act which states:

13. (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.

DECISION

11. The parties are agreed that intermingling occurred. The facts support the parties agreement. The Board concludes that intermingling has resulted from the sale by Ontario Hydro to the Commission. In these circumstances, the provisions of section 69(6) of the Act apply.

12. We turn next to define the appropriate bargaining unit, as authorized by the provisions of section 69(6)(b). It would not be unfair to suggest that the parties’ positions on the appropriate bargaining unit was in some large measure influenced by the Board’s intermingling jurisprudence. The parties were all aware that the greater the percentage of employees formerly represented by the PWU who were now employed in a bargaining unit the greater the likelihood that a representation vote would be held. The parties argued over which one of two options was appropriate: either an “all employee” unit as existed at Hydro or two bargaining units, an “outside” unit and an “inside” unit, which reflects the long standing structure at Bracebridge.

13. There is little doubt that were this an application for certification and there was no incumbent trade union, either of the bargaining units proposed by the parties could be appropriate. But the situation is different in an application under section 69 of the Act where there are two trade unions. The Board must take into consideration the scope of the bargaining units already in existence. The purpose of section 69 is to preserve bargaining rights, not grant new ones.

14. In this case we conclude that the existing bargaining structure at Bracebridge ought not to be interfered with. It is a longstanding structure that has withstood the test of time. As the Board stated in City of Peterborough, [1979] OLRB Rep. Feb. 133:

… while the remedial scope of the section allows the Board to engage in an assessment of what is the appropriate bargaining unit the criteria to be applied are not identical to those which obtain in an application for certification of previously unrepresented employees… In the fashioning or amending of bargaining units under section 55 of the Act the Board must give effect to existing bargaining rights to the extent that those rights can be reasonably accommodated within the new employer’s administrative structures.

A particular concern in the determination of bargaining units under section 55 of the Labour Relations Act is that existing bargaining structures not lightly be interfered with. The Board recognizes the full value of a bargaining unit that has developed through a succession of collective agreements. A bargaining structure with some substantial history to it often indicates a sound bargaining relationship. More often that not it has evolved through increased communication between union and employer and has come to reflect a workable pattern of mutual expectations between union and employer. Since the promotion of sound collective bargaining relationships is what the Labour Relations Act is all about, the Board is understandably reluctant to dismantle a bargaining structure that has withstood the test of time.

15. Moreover, it would be problematic to roll in the existing unorganized office employees with the outside workers just because a sale of business has occurred and Bracebridge has hired an additional 2 employees from the vendor Hydro.

16. We have some sympathy with the Commission’s position that the PWU never applied to represent the two groups of employees of Bracebridge separately.

However, in the end, in our view the Commission’s concern is just an issue of appropriate notice and not of jurisdiction and the Commission never suggested that it required an adjournment to consider the issue.

17. Having determined that there ought to be two bargaining units (or at least two potential bargaining units) we move next to decide whether representation votes ought to be held in either or both of the units. The parties cited numerous cases in which in the specific facts in those instances the Board either ordered votes or not. As the Board stated in several cases, the Board has not specifically defined the minimum proportion of employees in the intermingled bargaining unit which a trade union must have represented prior to the intermingling for a representation vote to be appropriate. However, it is also apparent from a review of the caselaw that if a union represents about 25% of the employees following a sale in which intermingling occurs the Board generally orders a representation vote.

18. Whether the dividing line is 25% or not we are satisfied that, under these circumstances, there ought to be a representation vote among the office employees. One of three employees in the office is formerly represented by the PWU at Hydro which is a sufficiently large percentage so as to entitle the PWU to a vote.

19. In coming to our decision, we have considered the arguments advanced by the Commission and the unions. There is merit to the argument that the collective agreement between PWU and Ontario Hydro has no possible applicability to the state of affairs which exist between the Commission and its office employees. Indeed, the Board in Lincoln Hydro, supra, identified the problems of applying the Hydro collective agreement to a municipality like Bracebridge (see paras. 79-85). However, in our view, the fact that the PWU and Ontario Hydro have negotiated a complicated collective agreement ought not to have any influence on whether the PWU’s bargaining rights are protected in accordance with section 69 of the Act. The difficulties in applying the collective agreement must be worked out in bargaining.

20. We also see little merit in the Commission’s argument that if the PWU were to win that would lead to labour relations problems for the Commission. The office employees have been in a separate “bargaining unit” for years without any apparent labour relations difficulties. There is no evidence of any problems which would arise if they had their own bargaining unit and a different trade union than the “outside” employees. Indeed, if the PWU had the support of 40% or more of employees in the office, there is no doubt that the Board would certify them for such a unit if a majority of employees voted in favour in a representation vote.

21. On the other hand, we are also satisfied that, under the circumstances, the PWU’s bargaining rights with respect to the outside bargaining unit ought to be terminated without a representation vote.

22. In none of the cases which were presented to the Board by the parties did the Board order a representation vote when one of the competing unions formerly represented as little as 10% of the intermingled employees. In all of the circumstances, therefore, we are satisfied that it is not appropriate to hold a representation vote. Unless we ignore the Board’s caselaw, we can come to no other result.

23. Having regard to our findings, the Board orders that a representation vote be taken among employees in the following voting constituency:

all office and clerical staff employed by Bracebridge Hydro Electric Commission, save and except managers and those above the rank of manager.

24. The vote will be held on August 1, 2000. Other vote arrangements will be as determined by the Registrar and set out on the attached “Notice of Vote”.

25. Employees will be asked whether or not they wish to be represented by the PWU in their employment relations with their employer.

26. The responding party is directed to post copies of this decision and of the "Notice of Vote and of Hearing" adjacent to each of the posted copies of the "Notice to Employees of Application for Certification". These copies must remain posted for 30 days.

27. The matter is referred to the Registrar.

“Brian McLean”

for the Board