3227-99-R Service Employees International Union, Local 204, Applicant v. Durham Access to Care, Canadian Red Cross Society (Ontario Zone), Comcare Independent Living Inc., Kawartha Quality Care Inc., ParaMed Health Services, and Bayshore Health Care, Responding Parties v. Ontario Nurses Association, Intervenor.
3292-99-R Ontario Nurses Association, Applicant, v. Durham Access to Care, Victorian Order of Nurses (Durham), ParaMed Home Health Care, Partners in Communities Nursing, Saint Elizabeth Health Care, Bayshore Health Care, and Comcare Independent Living Inc., Responding Parties v. Service Employees International Union, Local 204, Practical Nurses Federation of Ontario, Canadian Union of Public Employees and its Locals 132 and 1764, and Durham Association for Family Respite, Intervenors.
BEFORE: Gail Misra, Vice-Chair.
DECISION OF THE BOARD; October 25, 2000
These are applications filed pursuant to sections 69 and 1(4) of the Labour Relations Act, 1995 (the “Act”).
All of the responding parties in these two applications have made a preliminary motion requesting that the Board dismiss the applications for failure to establish a prima facie case for the relief the applicants are requesting. They are requesting that the Board decline to hear the matters pursuant to Rule 46 of the Board’s Rules of Procedure. All of the parties have made written submissions to the Board with respect to this issue. This decision addresses the responding parties’ motion.
It is noteworthy at the outset that all of the responding parties made one joint submission. In addition, some of the responding parties made additional submissions respecting their particular situation. The two applicants also made joint submissions. The Board thanks all of the parties for their cooperation in this matter as it has considerably simplified the task of sorting through the arguments.
Rule 46 of the Board’s Rules of Procedure states:
Where the Board considers that an application does not make out a case for the orders or remedies requested, even if all of the facts stated in the application are assumed to be true, the Board may dismiss the application without a hearing or consultation. In its decision, the Board will set out its reasons.
Background To Board File No. 3227-99-R
In Board File No. 3227-99-R the Service Employees International Union, Local 204 (“SEIU”) has bargaining rights for “all employees” of the Red Cross Homemaker Services of the Canadian Red Cross (Ontario Zone) in the Regional Municipality of Durham (“Red Cross”). The employees represented are homemakers, household support workers or attendants, and are collectively referred to as “homemakers”. The Red Cross has for some time received contracts for the provision of homemaking services to clients of the Durham Access to Care.
There appears to be no dispute that SEIU has never had bargaining rights for any employees of Durham Access to Care (“DATC”), and neither the DATC nor its predecessor have ever employed homemakers. Similarly, it appears that the SEIU has never had bargaining rights for the employees of Comcare Independent Living Inc. (“Comcare”), Bayshore Health Care (“Bayshore”), Kawartha Quality Care Inc. (“Kawartha”), or Paramed Health Services (“Paramed”), all of which are responding parties to this application and are also service providers providing homemaking services under contract to the DATC. There also appears to be no dispute that each of these responding parties is a separate corporate entity with no common ownership as between them.
The SEIU is claiming that the DATC conducted a competition for homemaking services the result of which was that part of the business that the Red Cross used to provide has been transferred to the other service providers, Comcare, Bayshore, Kawartha and Paramed. The SEIU further claims that this transfer of part of the business of the Red Cross constitutes a sale of a business under section 69 of the Act, and that all or some of the responding parties together constitute a related employer within the meaning of section 1(4) of the Act. As a consequence, the SEIU claims as a remedy that all of the responding parties should be bound by the existing collective agreement between the SEIU and the Red Cross.
The SEIU asserts in its application that the Red Cross and the DATC are not-for-profit corporations without share capital. Comcare, Kawartha, Paramed and Bayshore are private, for-profit corporations. The DATC purchases long-term care services from outside service providers, who in turn actually deliver to or perform the services for individual clients. In order to purchase services the DATC enters into contracts for services with both the for-profit and not-for-profit service providers through a managed competition process.
According to the SEIU application the DATC exercises management and control over the delivery of long-term care services through the service providers in a number of ways which the application describes in some detail. Suffice it to say that the SEIU is generally claiming that the DATC screens potential participants in the Request for Proposal (“RFP”) process, conducts the RFP process, and awards contracts. It enters into detailed service agreements with the service providers, and those agreements regulate virtually all aspects of their service delivery. The DATC then determines what services will be provided to individual clients and assigns the client to be served to particular service providers. Finally, the DATC funds the service providers and supervises their budgets.
The SEIU goes on in its application to give extensive detail about the type of information the DATC seeks about the service providers, and what it expects the service providers to do in order to comply with the DATC’s service expectations. Essentially the SEIU is alleging that the DATC exercises very detailed control over the way in which service providers and their employees deliver services on behalf of the DATC.
In support of its contention that there has been a sale of a business, the SEIU claims that for many years the Red Cross was the primary service provider for homemaking services in Durham region. After the introduction of the RFP process in 1997 the Red Cross received an ever-diminishing percentage of the available homemaking work, until in April 1999 it had no protected volume of work at all. Even though the Red Cross participated in the RFP process, and was successful in getting a percentage of the available homemaker services work, the SEIU alleges that work previously performed by the Red Cross homemakers was transferred to Comcare, Kawartha, Paramed, and Bayshore, who were other successful bidders for the same work. It therefore claims that all or part of the homemaking business of the Red Cross was transferred to one or more of the responding parties.
The SEIU claims that prior to the transfer of work by the DATC from the Red Cross to the other service providers, the Red Cross had 201 full and part-time bargaining unit employees. By August 1999, after the transfer of work, the Red Cross had 161 full and part-time employees in the SEIU bargaining unit, and the hours worked by those employees had been reduced. The SEIU further claims that after the other service providers were successful in getting contracts from the DATC, many former Red Cross employees went to work for the other service providers for lower hourly rates of pay. The SEIU concedes that some of the work transferred to Comcare has since returned to the Red Cross.
The SEIU alleges that all of the responding parties are providing substantially the same services that had been provided by the Red Cross, to the same clients, in the same geographic region. Therefore, the SEIU claims that there has been a transfer or sale of all or part of the business of the Red Cross to the DATC, Comcare, Kawartha, Paramed, and Bayshore within the meaning of section 69 of the Act. It further claims in the alternative that one or more of the responding parties are related employers within the meaning of section 1(4) of the Act.
Background To Board File No. 3292-99-R
The Ontario Nurses Association (“ONA”), in Board File No. 3292-99-R, is also seeking remedies under sections 69 and 1(4) of the Act with respect to the DATC, Paramed, Bayshore, Comcare, the Victorian Order of Nurses (Durham) (“VON”), Partners in Communities Nursing (“Partners”), Saint Elizabeth Health Care (“St. Elizabeth”), and Durham Association for Family Respite (“DAFR”).
ONA has bargaining rights for nurses working as homecare nurses who provide “hands on” nursing for the VON and St. Elizabeth. It appears undisputed that ONA does not represent “hands on” nurses at any of the other responding parties. It does represent “Case Managers and Placement Co-ordinators” employed by the DATC, all of whom are nurses by profession, however the DATC has never employed nurses to work in a nursing capacity, i.e. as “hands on” nurses.
It appears that the VON and St. Elizabeth used to provide nursing services to clients of the DATC or its predecessor. ONA claims that as a result of the competitive bidding process conducted by the DATC for nursing services in Durham Region, parts of the businesses of the VON and St. Elizabeth have been transferred to one or more of the other responding party service providers. Therefore, ONA is seeking to have the Board find that all or some of the responding parties are related employers pursuant to section 1(4) of the Act, and that the transfer of parts of the businesses constitute sales of businesses within the meaning of section 69 of the Act. ONA seeks as a remedy to have all of the responding parties bound by the collective agreements it has with the VON and St. Elizabeth.
It appears to be undisputed that all of the responding parties to this application are separate corporate entities with no common ownership. The VON, St. Elizabeth, DAFR and DATC are incorporated as not-for-profit corporations without share capital. Paramed, Partners, Bayshore, and Comcare are private, for-profit corporations.
Most of the application filed by ONA contains the same general details as does the SEIU application. Specifically, the VON and St. Elizabeth had been nursing service providers before the institution of the managed competition process. As such, they were entitled to volume protection during the transition to a full competitive process. Following institution of the competitive process in 1997, and by 1999, VON, St. Elizabeth, Paramed, Partners, Bayshore, Comcare, and DAFR were awarded contracts. ONA alleges that some of the homecare nursing work that had been performed by bargaining unit employees of the VON and St. Elizabeth was transferred by the DATC to one or more of the other responding parties.
Thus, ONA alleges that the DATC, through one or more of the other responding parties, is providing substantially the same services that had previously been provided by the VON or St. Elizabeth. Further, those services are being provided to the same clients and in the same geographic region that had been served previously by the VON and St. Elizabeth. Funding allegedly continues to come from the Ministry of Health, through the DATC. ONA maintains that the Ministry of Health and the DATC retain direction and control of the business of the provision of services through the contractual obligations imposed on service providers.
ONA alleges that one or more, or all, of the responding parties are related employers within the meaning of section 1(4) of the Act. It claims that the DATC and/or the Ministry of Health exercises control and direction over the associated or related activities of one or more or all of the responding parties. The ONA application does not however name the Ministry of Health as a responding party. In the alternative, ONA claims that there has been a transfer or sale of a part of the business of the VON and St. Elizabeth to one or more of the responding parties, pursuant to section 69 of the Act.
The responding parties, in making this “no prima facie case” and Rule 46 motion, argue that the applicants cannot succeed based on the facts they have pled as they have not pled anything to suggest that the service providers (i.e. the responding parties other than the DATC) are related to one another. They further argue that the Act cannot be interpreted such that two, or more, completely separate corporate entities can be related to one another simply because they are performing associated or related activities or businesses under the common control or direction of a third party. Thus, even assuming that the Board could find that the service providers are related to the DATC, it is argued that there is no legal basis for finding that the service providers are related to each other within the meaning of section 1(4).
Section 1(4) of the Act states:
- (4) Where, in the opinion of the Board, associated or related activities or businesses are carried on, whether or not simultaneously, by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, the Board may, upon the application of any person, trade union or council of trade unions concerned, treat the corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and grant such relief, by way of declaration or otherwise, as it may deem appropriate.
The responding parties further argue that the applicants have pled nothing that could support a finding that the service providers have effected a “sale” between each other within the meaning of section 69 of the Act, or that any service provider effected a sale to the DATC which then resold the business to another service provider.
The responding parties argue that what has taken place is a pure work transfer. Thus, they state that even if all of what the applicants’ claim in their respective pleadings are proved, their applications cannot succeed. Therefore, they ask that the Board exercise its discretion to dismiss both applications without a hearing.
According to the responding parties, what SEIU and ONA are seeking to do through these applications is to extend their bargaining rights from the organized service providers to the non-union service providers. Thus, it is suggested that it would be of no assistance to the applicants for the Board to find that the unions’ bargaining rights flow from the organized service providers to the DATC since the DATC does not employ any homemakers or “hands on” nurses. What the unions are seeking is to have the Board find that all of the service providers are related to each other, and to thus expand the unions’ bargaining rights to the unorganized service providers. Yet, it is argued, the applicants have not pled anything to support the contention that the service providers exercise control over each other or are in any way carrying on associated or related activities or businesses as among themselves. All that the applicants are basing their arguments upon is that the DATC controls the service providers, and if that is so, then the service providers are also all related to each other. The responding parties argue that there is simply no support for such a finding in either the legislation or the Board’s jurisprudence because the relevant sections of the Act were not designed to sweep together unrelated subcontractors on the sole basis that they all provide services to the same contractor. Some responding parties also suggest that the applicants are attempting to obtain bargaining rights without attempting to determine the wishes of the employees of the non-union service providers through a representation vote.
DAFR, in addition to supporting the arguments outlined above, also argues that the applications should be dismissed because the applicants have unduly delayed in filing these applications. It points out that ONA has claimed that the introduction of the managed competition process is the event that triggered the related employer relationship between the VON, the DATC and the other successful bidders for work. However, DAFR points out that the competition process was implemented in April 1997, almost three years before the application was filed. It argues that ONA has presented no reasonable excuse for the delay in initiating this application. Further, DAFR would now be seriously prejudiced if ONA was successful in its application as it has been bargaining directly with its employees as if it was their sole employer.
VON joins DAFR in its argument that there has been undue delay in the filing of the ONA application. The VON claims that it has been seriously prejudiced by the union’s delay as it only recently completed its last round of bargaining for a new collective agreement with ONA in November 1999. VON took positions in bargaining that it would not otherwise have done had it been the subject of a related employer application.
A number of responding parties have argued that no labour relations purpose would be served by the Board issuing a section 1(4) related employer declaration in these applications. This argument is particularly made by those responding parties that already have collective bargaining relationships with the applicants. St. Elizabeth argues that it already has collective agreements with ONA for all registered nurses and for all office and clerical staff. If the objective ONA wishes to achieve is to have Paramed, Partners, Bayshore and Comcare bound to one or both of the collective agreements with St. Elizabeth and VON, then the Board would have to find that all of the service providers are related to each other. However, it is pointed out that ONA has not claimed that the service providers are related to each other, it has claimed that DATC is related to one or more of the service providers. St. Elizabeth states that the service providers are in fact all in competition with each other, and are not related within the meaning of section 1(4) of the Act. Further, there has been no erosion in ONA’s bargaining rights with St. Elizabeth as a result of the 1998 or 1999 Request for Proposal processes.
In a similar vein, VON argues that no labour relations purpose would be served by a section 1(4) declaration that VON and the DATC are related employers. The VON has already recognized ONA as the bargaining agent for its registered nurses for the last five years, and there has been no erosion of ONA’s bargaining rights as a result of the 1998 or 1998 RFP processes. VON argues that in fact there has been a steady increase in the volume of work it has had since 1998.
As has been noted earlier, the applicants made a joint response submission to the “no prima facie case and Rule 46” motion.
In determining whether or not an application discloses a prima facie case for the remedy requested, the Board accepts as true and provable all allegations contained in the applicants’ pleadings. The Board does not normally consider the responding parties’ factual assertions in the course of this review. In section 69 and 1(4) applications the applicants have correctly noted that while they bear the ultimate onus, pursuant to sections 69(13) and 1(5) of the Act, the responding parties are required to adduce at hearing all material facts within their knowledge. The Board notes that pursuant to a Board order issued in May 2000 the majority of the responding parties had produced a substantial amount of material to the two applicants before the applicants had to prepare their response to this motion.
The applicants argue that it is not necessary for them to present a comprehensive factual basis for their allegations in the applications. They state that the standard to present a prima facie case in these types of applications is very low, and that they have in any event surpassed the requirements.
For ease of reference section 1(4) is reproduced again:
- (4) Where, in the opinion of the Board, associated or related activities or businesses are carried on, whether or not simultaneously, by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, the Board may, upon the application of any person, trade union or council of trade unions concerned, treat the corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and grant such relief, by way of declaration or otherwise, as it may deem appropriate.
Thus, in considering this section 1(4) application, the Board must decide whether on the facts before it there are associated or related activities or businesses, carried on through more than one corporation, under common control or direction. In the event that all of these elements are established, the Board has a discretion to decide whether or not to declare that the corporations are to be treated as constituting one employer for the purposes of the Act.
The applicants claim that, on the basis of their respective pleadings, the responding parties are carrying on related activities under common control and direction.
The applicants assert that there is no question that there is more than one entity claimed to be associated or related in these applications. They further assert that their respective pleadings address the common control and direction aspects between the various responding parties. In particular, the applicants point to the contracts between the DATC and the service providers as proof that the DATC maintains control and direction over the employees of the service providers. Further, the applicants assert that the DATC maintains control of the work by assessing the needs of the clients of the service providers, determining what services will be provided, assigning delivery of service to the service providers, monitoring and regulating all aspects of the delivery of service, directing the transfer of services between different service providers, and funding service providers.
The applicants maintain that there is common financial control of all of the responding parties as almost all funding comes from the Ministry of Health to all of the service providers. It is alleged that the DATC has centralized control of the delivery of services through the terms of the mandating legislation and through the service agreements.
The applicants claim that the DATC and the service providers represent themselves to the public as a single integrated enterprise providing home care. The applicants plead also that there is centralized control of labour relations because the DATC places so many requirements on the service providers regarding what both the service providers and their respective employees may and may not do.
The applicants particularly rely on their respective pleadings as supporting the proposition that the responding parties are carrying on associated or related activities. They argue that the entities themselves do not have to be related to each other, only that the activities giving rise to employment must be related. Thus, they claim that the responding party service providers are all engaged in the delivery of long term care services. In turn, these services are related through the RFP process, by government regulation under legislation, by their common source of funding, and by the terms of their service provider contracts with the DATC.
With respect to the section 69 claim, the Board must consider whether an employer who is bound by a collective agreement with a trade union has sold, leased, transferred, or in any other manner disposed of a part of the business to someone else.
The applicants contend that the RFP process results in a transfer or any other manner of disposition of long term care services from one service provider to one or more other service providers where the various service providers essentially provide the same services. ONA and the SEIU suggest that the contract that a service provider had to provide services to the DATC for fees was a significant asset that has been transferred as a result of the RFP process conducted by the DATC. They also assert that there has been at least one significant transfer of employees from one service provider to another as a result of the transfer of work under a contract.
The applicants maintain that the Board’s decision in Multi Professional Support Services Inc., [2000] OLRD No. 95 (now reported in [2000] OLRB Rep. March/April 266), is readily distinguishable from these two applications because in that case the Board did not have to consider the related employer issue. Further, the applicants wish the Board to consider the comprehensive implications of the CCAC scheme, a matter not argued in the earlier case. They assert that the Board should consider the CCAC scheme with a view to creating or preserving appropriate conditions for collective bargaining in the home care sector in view of the RFP process. It is argued that the RFP process neglects to protect the continuity of bargaining rights, and indeed as presently constructed, this process functions to erode and potentially eliminate bargaining rights in the long-term care sector. Through repeated tenders it is suggested that the services will be transferred to successful bidders who may then acquire the skilled workforce displaced by the process, but without acquiring any collective bargaining rights. The applicants argue that because the DATC is in effective control and direction of the services provided, it would serve a compelling labour relations purpose to recognize the DATC as the true employer for the purposes of collective bargaining.
Decision Regarding Section 69 Applications
In considering a motion as to whether or not an application discloses a prima facie case for the remedy requested the Board accepts as true and provable all of the pleadings contained in the application. It does not consider a responding party’s pleadings, although it may conclude from a review of the response that there is no dispute about some or all of the applicant’s pleadings.
The Board has held that it will generally only dismiss an application without a hearing in the clearest of cases where the allegations are insufficient to render reasonable or arguable a conclusion that the remedy sought might be appropriate. (See Elizabeth Balanyk, [1987] OLRB Rep. Sept. 1121).
Section 69 of the Act contemplates the sale of a business from one employer to another business or person. “Business” has been defined to include a part or parts of the business. “Sells” has been defined broadly to include leases, transfers, and any other manner of disposition. The section however contemplates that the seller of the business or part of a business will be an employer whose employees are represented by a trade union, or who is bound by or is party to a collective agreement (see sections 69(2) and (3)).
Pursuant to section 69(13) of the Act where a trade union alleges that a sale of a business has occurred, the respondents have the duty to adduce at a hearing all facts that are within their knowledge and material to the allegation. This has generally been taken to mean that while the onus of proving that a sale of a business has occurred lies with the applicant, the responding parties, who have access to all of the relevant evidence, must produce that evidence at the hearing into such an application.
The Board’s powers in section 69 applications are broad. Of particular interest for the purpose of this motion is section 69(8):
- (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.
As is clear from a reading of the above-noted sub-section, the Board has the discretion to do a variety of things prior to disposing of an application made under section 69. In the first instance, it has the discretion to decide whether or not it will conduct an inquiry into the application.
The gist of the applicants’ position is that the DATC has conducted competitions for the delivery of homemaking and nursing services the result of which is that some of the work formerly done by the Red Cross, VON and St. Elizabeth has now been divided up among more service providers, thereby leaving these three unionized service providers with less work for their respective employees. It is suggested that this constitutes a transfer of a part of the businesses of the Red Cross, VON and St. Elizabeth to other service providers.
Even accepting for the purpose of this motion that there was a transfer of some of the work performed by employees of the Red Cross, VON and St. Elizabeth, the problem for the Board is that it was the DATC who ran a tendering process and it was the DATC that, as a result of that tendering process transferred work from these parties to other service providers. However, the DATC has never been an employer of the type of nurses and homemakers employed by these three responding parties.
It appears undisputed that it was always the DATC, or its predecessor, who contracted with services like the Red Cross, VON and St. Elizabeth for the provision of nursing and homemaking services. It is also clear that prior to the competition process there was the possibility that services may be provided by more than one service provider, as is obvious from the fact that nursing services were provided by both the VON and St. Elizabeth. The DATC or its predecessor gave out the work to be done by the service provider or providers. The difference is that now, as a result of legislative and public policy changes, the DATC must give out the work through a competitive process of tendering.
The Board has consistently held that, except in exceptional circumstances, a continuity of work or employees alone is not sufficient in and of itself to find a successorship. This is because the Board has found that bargaining rights do not attach to work, nor does the acquisition of bargaining rights grant a right to the continuation of particular work. (See for example Metropolitan Parking Inc., [1979] OLRB Rep. Dec. 1193, Parnell Foods Limited, [1992] OLRB Rep. Dec. 1164, and Mil-don-ex Packaging, [1992] OLRB Rep Dec. 1155.)
It is noteworthy that the applicants have not pled anything that would suggest that there has been a sale or transfer of a business as between the various service providers.
Even accepting the applications at their highest, and accepting as true and provable all of what the applicants assert, the Board is not convinced that this is a case in which it should make a further inquiry into the section 69 aspect of the applications. In reaching this conclusion the Board has borne in mind that pursuant to section 69(13) it is the responding parties who would have to present all evidence at a hearing. However, it appears to the Board that there is simply nothing pled that would lead the Board to conclude that there had been a sale of a business within the meaning of section 69 of the Act.
The Board is bolstered in its view when it compares the situation in these applications to that in the Multi Professional Support Services Inc., [2000] OLRB Rep. March/April 266, case. While the Board is not bound by its previous decisions it does look to how other decisions have been made in similar circumstances or in the same industry. The centralization of the provision of home care services from public health units and home care programs to CCAC’s has been the subject of a number of cases before the Board in the last two years. As such, the Board has had the opportunity to consider the history of this process and its consequences at some length. There is therefore nothing untoward in the Board considering a recent decision arising out of similar circumstances to those presented in these two applications.
In the Multi Professional case a union was alleging that there had been a sale of a part of the business of a community care access centre (“CCAC”) to a private service provider as a result of an RFP process like the one in these applications. In that case the CCAC and its predecessor had themselves been providing nursing services through a compliment of employee nurses. Following the introduction of the managed competition process the CCAC began to accept bids for the nursing services. Multi Professional Support Services (“MPSS”) was a successful bidder such that by April 1999 it was awarded 98% of the nursing services from the CCAC. MPSS had been an existing business before it bid for the CCAC work. A number of nurses who had been employed by the CCAC began to work for MPSS over the course of time as MPSS was more and more successful in getting an ever-larger percentage of the nursing work from the CCAC.
In Multi Professional the Board reviewed at some length most of the salient caselaw that the parties have relied upon in this motion. Even on the facts of that case and considering the jurisprudence regarding section 69 of the Act, the Board did not find that there had been a transfer of a part of a business.
In the present applications the DATC did not employ any nursing or homemaking employees, and it did not provide homemaking and nursing services directly. The applicants represent employees of service providers to the DATC. Through a competitive bidding process the DATC has now spread the work it has to offer among the three organized service providers, and other service providers. This is not a case of a transfer of work from a unionized employer to a non-union employer. Unlike the situation in Multi Professional, these are cases of a contractor deciding to contract out work that was always contracted out, but is now contracting that work out to more sub-contractors. In that respect the facts of this case appear to be far less compelling than those in Multi Professional, wherein the CCAC had itself been the employer and provider of the services in question. Therefore, while the Board has not heard the evidence in these applications at this stage and is only relying on the applications, even accepting at their highest the applicants’ basic facts it is extremely unlikely that the Board would find that there had been a sale of a business within the meaning of section 69 of the Act.
In order for the Board to find that there had been a sale of a business in these cases the Board would be required to find that even though it was the DATC that had given work to the Red Cross, VON and St. Elizabeth in the first place, it was these three unionized employer service providers who had transferred a part of their respective businesses to the DATC when they lost access to some of that work. The Board would then have to find that the DATC in turn had transferred the erstwhile-unionized work to non-union service providers.
The applicants rely on the Board’s decision in Thunder Bay Ambulance Services Inc., [1978] OLRB Rep. May 467, as an example in support of their applications. The gist of that case was recently reviewed in Multi Professional (cited above) as follows:
- The situation in this case is quite different from that in Thunder Bay Ambulance Services Inc., [1978] OLRB Rep. May 467, which the union drew to the Board’s attention. In that case the Ministry of Health determined that the two ambulance services in the Thunder Bay area had to be amalgamated. The two hospitals that had been running the services did not wish to consolidate the services so the Ministry tendered the work of the operation of the ambulance service. A manager of one of the existing ambulance services was the successful bidder. His company, Thunder Bay Ambulance Services Inc., therefore received all of the ambulances and equipment that had heretofore been used by the two hospitals, but which were owned by the government. He also hired the vast majority of the personnel who had been providing the services through the two hospitals. In that case the Board found that there had been a transfer of a business within the meaning of section 69. It so found because the part of the predecessors’ business which had been transferred was essentially the management and operation of a group of assets owned by the Ministry of Health. Key management and personnel was, in the hands of the successor business, doing precisely what had been done before. The Board found that the essential elements of the predecessors’ businesses were transferred to Thunder Bay Ambulance Services Inc. without any hiatus in the operations because of the level of expertise and “know how” which moved from the predecessors to the successor.
The applicants in these applications are not alleging that anything other than some of the homemaking and nursing services and some of the employees have been transferred from the Red Cross, VON and St. Elizabeth to other service providers. There is no suggestion that the essential elements of the business of the Red Cross, VON and St. Elizabeth have been transferred to the other service providers, or to the DATC. Indeed, these three service providers continue to have contracts for service with the DATC and to provide homemaking and nursing services. Furthermore, the applicants plead that there will continue to be regular RFP processes. That was not the case in Thunder Bay Ambulance where the Ministry of Health awarded the exclusive license to operate the ambulance service, along with all of the ambulances and equipment, to the new company. The original providers of the ambulance services no longer existed.
The applicants rely on the decision in Town of Ajax v. CAW (1998), 1998 CanLII 7179 (ON CA), 166 DLR (4th) 516 (Ont. C.A.), for the proposition that an en masse transfer of a qualified and experienced group of employees from a predecessor employer to a successor employer can be a sufficiently significant asset to constitute the transfer of a part of a business for the purposes of section 69 of the Act. The facts of the Town of Ajax case are quite distinguishable from those pled in these applications. In that case the Town of Ajax had contracted out to a company the provision of drivers, mechanics and cleaners for its transit services. It then decided to end the contract and to take back the provision of drivers, mechanics and cleaners of its transit services. To that end, it ended up hiring almost all of the employees of the sub-contractor in order to maintain an experienced workforce that could continue to provide seamless services to the public with little disruption. The Board found that there had been a sale of a business as what was transferred was not just the work done by the employees, nor the employees themselves, but the added value that accrued with the continuity, experience, and stability of that work force. The Ontario Court of Appeal and the Supreme Court of Canada upheld the Board’s decision.
The applicants claim that a number of employees of St. Elizabeth went to one of the other service providers, thus creating a situation like that in the Town of Ajax. Taken at its highest it is extremely unlikely that the Board would find that the situation with St. Elizabeth was analogous to Town of Ajax. In the case here St. Elizabeth continues to provide the same services to the DATC that it always did, even if the Board accepts the applicant’s allegation that it has less work. Thus, it cannot be said that there has been an en masse shift of personnel as there was in Town of Ajax where the subcontractor no longer provided any of the services to the Town after the contract was rescinded.
Having considered the two applications, the submissions made by the parties, and for all of the reasons outlined above, in accordance with Rule 46 of the Board’s Rules of Procedure, the Board is of the view that these applications, taken at their highest, do not make out a case for the remedies requested. In addition, and for the same reasons, the Board exercises its discretion pursuant to section 69(8) not to inquire further into these applications. The Board therefore dismisses the section 69 aspects of the applications without a hearing.
Decision Regarding Section 1(4) Applications
As outlined above at the beginning of the decision regarding the section 69 applications, in considering a motion as to whether or not an application discloses a prima facie case for the remedy requested the Board accepts as true and provable all of the pleadings contained in the application. It does not consider a responding party’s pleadings, although it may conclude from a review of the response that there is no dispute about some or all of the applicant’s pleadings. Further, the Board has held that it will generally only dismiss an application without a hearing in the clearest of cases where the allegations are insufficient to render reasonable or arguable a conclusion that the remedy sought might be appropriate. (See Elizabeth Balanyk, cited above).
As noted earlier, in considering a section 1(4) application the Board must first decide whether on the facts before it there are associated or related activities or businesses, carried on through more than one corporation, under common control or direction. If all of these prerequisites are established, the Board has the discretion to decide whether or not to declare that the corporations should be treated as constituting one employer for the purposes of the Act.
The Board has recently considered a “no prima facie case” motion in a section 69 and 1(4) application. In Sobeys et al, (Unreported, Board File No. 1049-99-R, March 10, 2000) the Board considered an application regarding the sale of nine Sobeys retail stores to franchisees of Sobeys. The franchisees acknowledged that they were the successor employers within the meaning of section 69 of the Act. However, Sobeys and the franchisees argued that the union had not made out a prima facie case for a finding of relatedness as between Sobeys and all of the franchisees. In considering the matter the Board stated as follows:
It is plain from subsection 1(5) that the union concerned is assumed not to know much about the actual contractual relationship or the extent of common control or direction as between the entities in respect of which it makes its application. It is sufficient for a union to make an allegation of the existence of common control or direction in order for it to enjoy the benefits of the evidentiary burden placed upon employers. There is no requirement of great particularity; no necessity of making detailed allegations which describe the facts the union wishes ultimately to prove. It is sufficient for a union to make the allegation, to then be shown the relevant documents, from which a proper determination can be made as to whether common control or direction exists, and further consideration can be given as to whether the Board should exercise its discretion to grant the declaration contemplated in subsection 1(4).
A motion to dismiss a subsection 1(4) application at a preliminary stage for failing to disclose a prima facie case, should be granted only in the clearest of cases, when there is absolutely nothing in the application upon which the Board could reasonably conclude that a declaration under subsection 1(4) could be granted.
Although there is considerable doubt as to whether the union can show that there is a relationship between each individual franchisee such that subsection 1(4) might apply as between them, the union has, though, in my view, established a prima facie case for relief under subsection 1(4) in respect of the relationship between each franchisee and Sobeys. The application may therefore proceed.
Having considered the applications the Board finds that they do disclose a prima facie case with respect to the relationship between the DATC and the service providers. Like the Board in Sobeys, I too have considerable doubt as to whether the applicants will be able to show that there is any relationship within the meaning of section 1(4) of the Act as between the various service providers.
While the Board is satisfied that the applicants have made out a prima facie case for the constituent elements of section 1(4) of the Act, that is not the end of the matter. Assuming that the Board heard the evidence in support of the applicants’ contentions and found that all of the prerequisites of section 1(4) had been satisfied, it is unclear whether the Board would exercise its discretion in these cases. The responding parties have raised this issue in their various submissions and asked that the Board dismiss these applications without a hearing because they are of the view that the Board would not ultimately grant the remedies the applicants are seeking through the section 1(4) declarations.
It appears from the submissions made that the responding parties are of the view that the applicants are seeking to expand their respective bargaining rights, and that that is not a proper basis for the Board making a section 1(4) declaration. They are further of the view that there is no basis for the Board declaring that all of the service providers should be bound to the applicants’ respective collective agreements. Some responding parties have suggested that the Board should not exercise its discretion because the applicants have unduly delayed in filing these applications since the managed competition process began in 1997. Finally, the unionized responding parties have argued that no labour relations purpose would be served by the Board issuing a related employer declaration pursuant to section 1(4) of the Act.
The Board is of the view that it would benefit from hearing oral arguments from the parties on the subject of whether or not it would or should exercise its discretion to make a section 1(4) declaration even if all of the prerequisites of section 1(4) are satisfied. While the parties made extensive and helpful arguments regarding the prima facie aspect of the motion, the Board would benefit from a more complete argument on the matter of the ultimate exercise of the Board’s discretion to make a section 1(4) declaration.
As it is only the SEIU application that is scheduled to be heard commencing on November 1, 2000, the Board invites the parties to that application to come prepared to address the issue outlined above.
The Board is prepared to hear from the parties to the ONA application either by way of an oral hearing to be convened in the near future, or by written submissions should that be the manner in which those parties would like to proceed. The parties to the ONA application should contact the Board within 10 days of the date of this decision to indicate what their preference is.
To summarize, the Board dismisses the section 69 aspects of the ONA and SEIU applications; the Board finds that both applicants have pled a prima facie case in their respective section 1(4) applications; and the Board wishes to hear from the parties to both applications about whether, even if all of the prerequisites of section 1(4) of the Act are established, it would or should grant the declarations and remedies that the applicants are seeking. In the event that the Board is of the view that it would not exercise its discretion under section 1(4), it would not put all of the parties to the time and expense of a hearing.
I remain seized of these applications.
“Gail Misra”
for the Board