Beachville Lime Limited v. Communications, Energy and Paperworkers Union, Local 3264
File No.: 0359-00-R Date: November 23, 2000 Ontario Labour Relations Board
Applicant: Beachville Lime Limited Responding Parties: Communications, Energy and Paperworkers Union, Local 3264 and Communications, Energy and Paperworkers Union, Local 774
Before: Patrick Kelly, Vice-Chair.
Appearances: Rusty McLay, Steven Brookshaw, Suzanne Ritzler and Gord Adam appeared on behalf of the applicant; S. B. D. Wahl and E. Dures appeared on behalf of CEP Local 774; David Wright, Rick Cecchin and Tim Harrington appeared on behalf of CEP Local 3264.
DECISION OF THE BOARD
1This is an application under section 69 of the Labour Relations Act, 1995, S.O. 1995, c.1 (“the Act”).
2By decision dated July 5, 2000 a differently constituted panel of the Board, pursuant to the parties’ minutes of settlement dated June 23, 2000, declared that a sale of a business had taken place, that there existed a conflict between the bargaining rights of the two responding parties, and that there had been an intermingling of employees of the two bargaining units for which the responding parties held bargaining rights. On the consent of the parties, the Board ordered a representation vote for August 10 and 23, 2000.”
3A differently constituted Board panel which I chaired dealt with prima facie motions of the applicant and the responding party Communications, Energy and Paperworkers Union, Local 3264 (“Local 3264”) which resulted on October 12, 2000 in the dismissal of the request of Communications, Energy and Paperworkers Union, Local 774 (“Local 774”) for a second representation vote. The Board then declared that Local 3264 was the bargaining agent for the employees who had been members of both the Local 3263 and the Local 774 bargaining units. That left remaining two issues, which Local 774 requested be set down for an expedited hearing. That hearing before me took place on November 7, 2000.
4Local 774 argued that the Board should declare which of the collective agreements (or parts thereof) to which Local 774 and Local 3264 are parties respectively with the applicant should apply in light of the Board’s earlier declaration that Local 3264 was the bargaining agent. Local 774 also argued that the Board should determine the relative seniority of the employees now represented by Local 3264. At the conclusion of the submissions of all the parties, I rendered the following oral decision:
Section 69(6) outlines the Board’s powers in an intermingling situation. There are four possibilities. The Board may declare that the successor employer is no longer bound by the collective agreement that bound the predecessor. The Board may also, and it did so, determine the bargaining unit configuration. Thirdly, the Board may, and again it did so, declare the bargaining agent for the bargaining unit configuration. Finally, the Board may amend the certificate or certificates issued or amend any bargaining unit description in the applicable collective agreements.
In the circumstances of this case, the only two things remaining available for determination by the Board relate to sections 69(6)(a) and (d). With respect to paragraph (a) there is, in my opinion, no discretion other than to either declare that the predecessor collective agreement no longer binds the successor, or not make such a declaration. It does not confer a residual discretion to choose between collective agreements, or to enter into an inquiry as to whether one collective agreement or another can accommodate the interests or rights that employees heretofore may have enjoyed. And it is clear, in light of amendments to the Labour Relations Act, 1995 that the Board has no power to deal with the issue of seniority rights under section 69. As the discretion the Board has in section 69(6) is extremely limited, it follows that there would be no purpose in further exploring the merits of the case as urged by Local 774.
After giving careful consideration to the submissions of the parties, the Board is of the view that the scheme of section 69 of the Act anticipates that the collective agreement of the trade union that is successful in the representation vote will apply to the entire bargaining unit.
I therefore make the following declaration and order:
Beachville Lime Limited is no longer bound by the collective agreement between Global Stone (Ingersoll) Ltd and Communications, Energy and Paperworkers Union of Canada, Local 774 dated April 1, 1996 – March 31, 1999 and extended to March 31, 2000.
Article 2.1 (a) of the collective agreement between Beachville Lime Limited and the Communications, Energy and Paperworkers Union, Local 3264 is amended to read as follows:
The Company recognizes the Union as the exclusive bargaining agent for the purpose of collective bargaining in respect to wages, hours of work and working conditions on behalf of all employees at its operations in the Townships of Zorra and Southwest Oxford save and except foremen, persons above the rank of foremen, office staff and non-bargaining unit stores and laboratory staff.
A written decision incorporating these, and possibly other reasons, will follow.
5After canvassing the applicant and Local 3264, those parties confirmed their agreement that the declaration and the order set out in my oral ruling should be effective at 11:00 p m. on November 25, 2000. Accordingly, I indicated that my ruling would reflect their agreement.
6What follows are more detailed reasons for the oral ruling I made at the conclusion of the hearing on November 12, 2000.
7The provisions of section 69 relevant to the issue to be determined in this decision are as follows:
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.
(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.
(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.
(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.
8The argument made by counsel for Local 774 was that the Board should hear evidence concerning a number of things including the relative merits of the two collective agreements in question, the alleged agreement between the applicant and Local 3264 to “end tail” the members of the Local 774 bargaining unit on a combined seniority list, the alleged future location of the applicant’s work opportunities in what would have been the jurisdiction of Local 774 had there been no sale of a business, the looming potential for layoffs, and possibly other matters. The purpose for hearing such evidence would be to enable the Board to decide which of the two collective agreements – or even some combination of both - should apply, and to declare how the seniority clause operates in whatever collective agreement is chosen. (No matter which collective agreement applies, counsel argued, Local 774 members would not and could not be “end-tailed” on a seniority list by operation of either collective agreement). In carrying out this exercise, counsel for Local 774 suggested that the Board would be merely guarding against the “tyranny of the majority”, and concomitantly ensuring the protection of rights of the minority.
9Counsel for Local 774 spent considerable time taking the Board through the Canada Business Corporations Act, the regulations made thereunder, and the Ontario Business Corporations Act, in an effort to make the point that upon the amalgamation of corporations, the obligations of those corporations continue to be borne by the amalgamated corporation. Hence, in a labour relations context, to the extent that the predecessor employer, Global Stone (Ingersoll) Ltd. (“Global”) recognized that the seniority of Local 774 members was based upon length of continuous service with that company, so too must the successor, Beachville Lime Limited (“BLL”) recognize and fulfill that obligation. Neither BLL nor Local 3264 can escape that reality once the amalgamation is effective, although counsel for Local 774 conceded that that reality can be changed quickly in the course of collective bargaining. In support of this arm of his argument, counsel referred me to several cases: Stanward Corporation v. Denison Mines Ltd. (1966) 1966 CanLII 22 (ON CA), 57 D.L.R. (2d) 674 (Ont. C.A.); Stanward Corporation et al v. Denison Mines Ltd. (1968) 1968 CanLII 8 (SCC), 67 D.L.R. (2d) 743 (S.C.C.); Witco Chemical Co. Canada Ltd. v. Town of Oakville et al (1974) 1974 CanLII 7 (SCC), 43 D.L.R. (3d) 413 (S.C.C.); Regina v. Black & Decker Manufacturing Co. Ltd. (1974) 1974 CanLII 15 (SCC), 43 D.L.R. (3d) 393 (S.C.C.); Loeb Inc. v. Cooper, Cooper and Cooper (1991) 1991 CanLII 7219 (ON CTGD), 5 O.R. (3d) 259 (Ont. Ct. Gen. Div.).
10Counsel for Local 774 candidly admitted that he was establishing the groundwork for a complaint under section 74 of the Act of unfair representation of Local 774 members by the new bargaining agent, Local 3264. To that end, counsel sought from the Board in this matter a starting point for such a complaint, namely a declaration in this application that upon the section 69 sale of a business (or an amalgamation under the federal or provincial corporate regulatory legislation discussed above), the successor employer BLL was bound by the seniority provisions of the respective collective agreements, which counsel contends both effectively provided for length of continuous service with either of the two amalgamating corporations. Thus Local 774 members cannot be “end-tailed” on a seniority list – under either the Local 774 or the Local 3264 collective agreements, their seniority is the equivalent of continuous service with Global, which service must be recognized by BLL and applied vis-à-vis Local 3264 members. Again, counsel referred me to several cases in relation to this part of his argument: William Geddes [1984] O.L.R.B. Rep. Feb. 233; Humphrey et al v. Moore et al (1964) S.C.U.S. 375 U. S. 335; Timberjack Inc. [1995] O.L.R.B. Rep. Feb. 115; St. Mary’s of the Lake Hospital [1995] O.L.R.B. Rep. Oct. 1303; Bluewater District School Board [1998] O.L.R.D. No. 1233 (April 20, 1998); Re City of Miramichi [1995] N.B.L.E.B.D. No. 27 (July 10, 1995); Re Estevan Coal Corp. [1998] S.L.R.B.D. No. 57 (Nov. 12, 1998); Re Edmonton (City) [1997] Alta. L.R.B.R. 72 (Feb. 25, 1997); Canadian Union of Public Employees, Local 1545 (Cape Breton County Municipal Office Employees) v. Nova Scotia (Labour Relations Board) 1996 CanLII 5336 (NS SC), [1996] N.S.J. No. 313, [June 3, 1996] (N.S.S.C.); T.&M. Winter Ltd. v. Transport & Allied Workers, Local Union No. 855 [1992] N.J. No. 341 (Dec. 2, 1992) (Nfld. S.C.); Canadian Brotherhood of Railway, Transport and General Workers and Seaspan International Ltd. and Seafarers’ International Union of Canada [1979] 2 Can LRBR 213. Counsel also cited sections from nine other Canadian jurisdictions comparable to section 69 of the Act. I do not find the cases or the other Canadian legislation cited as particularly helpful to a consideration of my jurisdiction under section 69 of the Act. With one exception, the Ontario Board cases all pre-date Bill 7, which amended section 69 by removing the Board’s authority to determine issues of relative seniority in sale of business applications. The one case that was decided after Bill 7 deals with a different statute altogether, namely the Education Quality Improvement Act 1997, otherwise known as Bill 160. The statutory provisions of the other jurisdictions to which I was referred, and the cases interpreting those provisions are of little assistance, because none of the statutory provisions use the same legislative language appearing in section 69(6) of the Act. In fact, a review of the statutory provisions of other jurisdictions reveals that arguably all confer broader discretionary authority on their respective labour relations tribunals in respect of sale-of-business intermingling remedies than is conferred on this Board by section 69(6) of the Ontario statute.
11The Board rejects Local 774’s argument that section 69(6) of the Act goes so far as to permit the Board to make the type of declaration and determination outlined in paragraph 4 of this decision.. I have concerns about the kind of arrangement that Local 774 says BLL and Local 3264 have agreed to in principle. In certain circumstances, a victorious bargaining agent in a representation vote pursuant to a section 69 application may open itself to charges of unfair representation if, for reasons which are arbitrary, discriminatory or made in bad faith, it prefers the interests of its longer-term members to the detriment of those of the “new” members who, by virtue of the sale and vote, are now represented by that bargaining agent. The consequences of end-tailing are potentially very serious for a minority segment of the new bargaining unit. The duty of fair representation may require the new bargaining agent to explain why it appeared to place the interests of a defined group ahead of those of another. Having said that, this is not a section 74 application, nor was there any evidence before me concerning the rationale behind the alleged end-tailing arrangement. Counsel for Local 3264 indicated in an aside to his main argument that the decision reached with the employer on how to treat to the seniority of Local 774 members was grounded in sound and lawful reasons. That may be so. In any event, there is no basis in this application to provide Local 774 with the remedial relief that it seeks. The basis for that relief must be found somewhere in section 69(6). As indicated in the text of the Board’s oral ruling, cited above, section 69(6) does not provide the Board the authority to do what Local 774 urges the Board to do in this case.
12In arriving at its oral ruling, the Board took into account and adopted the reasons cited in West Parry Sound Health Centre [1997] OLRB Rep. July/August 794. In that case, the parties agreed that a sale of a business had taken place. They also agreed that representation votes should be conducted in the two resultant bargaining units to choose between two bargaining agents in each. The sole issue remaining for determination by the Board was which of the applicable collective agreements of the contesting bargaining agents would prevail following the respective representation votes. The question asked of the Board which is relevant for our purposes was: “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)” (see paragraph 29). Despite the objections of the employer hospital that such a result would have a negative, unanticipated financial impact upon it, and despite the argument of one of the involved trade unions that such a result could exclude certain of its classifications by virtue of the narrower scope of the prevailing collective agreement, the Board answered the question in the affirmative.
13Commencing at paragraph 31, the Board in West Parry Sound Health Care found as follows:
Section 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).
It 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.
The 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.
14Later in the decision, at paragraph 38, the Board stated:
38.The 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).
15The reasoning in West Parry Sound Health Care is applicable to the instant case. The scheme of section 69 contemplates that the collective agreement to which the trade union prevailing in a representation vote is a party will apply to all the employees in the new bargaining unit. That is so despite implementation problems of the kind cited in West Parry Sound Health Care (i.e. previously included union classifications ostensibly being excluded from the scope of the prevailing collective agreement) or issues of competing seniority as in the case before me. The effect of making no declaration under section 69(6)(a) would be that, by virtue of section 69(2) the Local 774 collective agreement would continue to bind the applicant until the Board otherwise declares. There is no mechanism under section 69 by which the Local 3264 collective agreement can be declared not to bind the applicant. Therefore, as the exclusive bargaining agent, Local 3264 would find itself in the situation of having to administer two collective agreements, one of which it had had no part in negotiating. The terms and conditions of employment of employees working side by side in a single bargaining unit would be bifurcated. That is not a desirable labour relations outcome, nor one contemplated by the scheme of the Act.
16For all the reasons articulated in my oral ruling and in this written decision, I make the following declaration and order:
(i) Effective 11:00 p.m. November 25, 2000, Beachville Lime Limited is no longer bound by the collective agreement between Global Stone (Ingersoll) Ltd and Communications, Energy and Paperworkers Union of Canada, Local 774 dated April 1, 1996 – March 31, 1999 and extended to March 31, 2000;
(ii) Effective 11:00 p.m. November 25, 2000, Article 2.1 (a) of the collective agreement between Beachville Lime Limited and the Communications, Energy and Paperworkers Union, Local 3264 is amended to read as follows:
The Company recognizes the Union as the exclusive bargaining agent for the purpose of collective bargaining in respect to wages, hours of work and working conditions on behalf of all employees at its operations in the Townships of Zorra and Southwest Oxford save and except foremen, persons above the rank of foremen, office staff and non-bargaining unit stores and laboratory staff.
17This application is terminated.
“Patrick Kelly”
for the Board