Canadian Union of Public Employees, Local 895 v. Northway Bus Lines Inc., 2000 CanLII 9396

0597-99-R Canadian Union of Public Employees, Local 895, Applicant v. Northway Bus Lines Inc., Responding Parties.

BEFORE: Anthony Brown, Vice-Chair, and Board Members J. A. Rundle and R. R. Montague.

APPEARANCES: Mark Gallina, Anna Sweet and John Marcuccio for the applicant; Roy Filion, Daniel Joanis and Louise Joanis for the responding parties.

DECISION OF THE BOARD; November 8, 2000

1This is an application pursuant to section 69 of the Labour Relations Act, 1995 (the "Act"). A related application under subsection 1(4) of the Act was previously withdrawn.

2The application was heard on June 30, 2000. The responding party, Hanmer Bus Lines Inc. (“Hanmer”), is a dissolved corporation and did not appear. The other parties do not object to a request by Hanmer’s solicitors that the company be struck from the style of cause. The Board hereby removes Hanmer Bus Lines Inc. as a responding party and deletes it from the style of cause.

3The facts in this application are relatively straightforward. The applicant represents part-time school bus drivers formerly employed by Hanmer. These drivers worked on routes contracted by Le Conseil scolaire catholique du Nouvel-Ontario (the “Conseil” or “school board”). Hanmer also employed full-time drivers who were not unionized. In the summer of 1998, Hanmer went out of business and its assets were put up for sale. At the time the company ceased operating, it employed seven members of Local 895, who had been on legal strike commencing April, 1998.

4The responding party Northway Bus Lines (“Northway”), is an established bus operator, engaged in several different transportation related businesses, including public transit, wheelchair/handicap transit, charter coaches, tours, in addition to transporting pupils for the Conseil and the local public school board.

5Louise Lacroix Joanis, an owner of Northway, testified that in late August 1998, the Conseil informed Northway that it would be given a contract to operate about 59 routes for pupils served by the Conseil. This was a significant increase over the number of routes the company had in 1997-98. (The company also had a contract with the local public school board to operate about 21 routes, about the same number as in 1997-98.) Accordingly, Northway needed to acquire more school buses. In addition, about eight buses were required to replace aging fleet.

6Hanmer had closed down and had 51 buses for sale. Northway purchased 15 of them in August and 4 more in September, 1998. It also purchased 22 mobile radios and one video camera. During the same period, Northway also purchased school buses from another supplier in Drummondville. The former Hanmer buses were used on routes in Valley East, Capreol and Garson.

7At the end of 1997-98, Northway employed about 40 bus drivers. In September 1998, it employed about 80 drivers, about half of whom had student pick-ups in Valley East and Capreol.

8In the summer of 1998, Northway advertised for bus drivers. Some former Hanmer employees applied. Fourteen were hired, four of whom quit over the summer, leaving ten in the employ of Northway. These were valued employees because they knew the area and were qualified. However, each of them received further training from the company. No Hanmer administrative staff were hired.

9Ms. Joanis testified that Northway had no connection with Hanmer Bus Lines and that no discussions took place between Hanmer and Northway about 1998-99 bus routes.

10Jo-Anne Harrison is employed as the Manager of Transportation Services at the Conseil, and as such is intimately aware of how the Conseil contracts with local school bus operators for pupil transportation. In addition to its own pupils, the Conseil also provides transportation for pupils enrolled in the local English Catholic school board, and for approximately 1000 public school pupils.

11In 1997-98, the school board had 219 routes, about 58 of which included the Valley East area. In 1997-98, the Conseil contracted with Hanmer for 30 bus routes, seven of which were driven by Local 895 members. In 1997-98, Northway ran 16 bus routes for the Conseil. Each route requires a bus and involves morning and afternoon runs.

12During the strike by Hanmer’s part-time drivers, the Conseil contracted with Estaire Bus Lines to transport pupils affected by the strike. This arrangement lasted until the end of the 1997-98 school year.

13The Conseil’s written policy on Transportation Contracts states that: “All contracts will be reviewed each year for the purpose of renewing or tendering contracts.” Ms. Harrison explained that the Conseil’s pupil transportation contracts are not tendered, although the local public board does use a tendering process. Ms. Harrison also stated that, under the policy, any change of ownership of a bus company on contract with the school board must be approved by the school board in order for the contract to remain in effect.

14Ms. Harrison testified that, beginning in March of each year, the school board examines its pupil transportation requirements, taking into account enrolment projections, school closings and openings, program location changes and other variables. The school board also determines which pupils are eligible for transportation, and, depending on where they reside, it may alter the locations where the buses are required to stop. Bus routes are routinely changed each year. The inception of larger “District School Boards” and changes to provincial transportation funding also necessitated route changes in 1998. The Conseil’s transportation planning process also involves ongoing discussions with local bus operators. After the Conseil has determined its routes for the coming school year, it notifies parents and meets with bus operators to conclude transportation agreements.

15For the 1998/99 school year, the school board contracted with three bus lines to serve the Valley East area: “Northway Bus Lines”, “Estaire Bus Lines” and “Jutras Transportation”. Two previous operators were out of contention for routes, Hanmer because it was out of business and LaBelle Bus Lines because it had been purchased by Northway.

16On July 30, 1998, Ms. Harrison wrote to Anna Sweet, a representative of the Canadian Union of Public Employees (CUPE) and advised her, in part:

Each year the Board reserves the right to negotiate and award transportation contracts for new, modify or existing routes to operators. Runs or routes are not held by operators from one year to the next.”

17Anna Sweet testified for the applicant. She is a CUPE representative, assigned to Local 895. She explained that, at the time of the strike against Hanmer, nine bargaining unit members were on lay-off, one had been terminated and seven were active members on strike. Ms. Sweet also indicated by way of background that an arbitration award had ordered Hanmer to return work to the bargaining unit that had previously been removed from it. There were no proceedings by the union against Hanmer as a result of the award.

18Ms. Sweet was asked when giving evidence to review the names of the ten former Hanmer employees who were hired by Northway and whose applications were filed by the responding party. She identified three of them as being members of Local 895, and was unsure about the status of two others.

19John Marcuccio is president of Local 895 but was not employed by Hanmer. He testified that the part-time drivers in Local 895 were doing essentially the same duties as the full-time drivers, namely picking up students, dropping them at school, picking them up at school in the afternoon and dropping them at or near home. He was not aware whether bus routes were the same or different each year although he stated that his impression was that the routes cover the same area each year. In reviewing the list of 10 former Hanmer employees who were hired by Northway, Mr. Marcuccio stated that two of the 10 persons were members of the Local 895 bargaining unit.

20Joyce Guenette testified that she was employed by Hanmer and at all material times was a member of Local 895. She had 24 years experience as a bus driver with Hanmer prior to the termination of her employment by Hanmer on June 23, 1998. She stated that, over the three years immediately prior to her termination, she had driven the same route, except for changes to pick-up and drop-off locations. Prior to this three-year period, she had driven another route for ten years, which also remained essentially unchanged.

21Ms. Guenette she stated that she had ascertained that, as of September, 1998, her former route (from the prior three years), now being serviced by Northway, was split between two drivers, who were also given other areas to cover.

Submissions

22The applicant submits that there has been a sale of business from Hanmer to Northway, within the meaning of section 69 of the Act. It submits that there was a transfer of assets, a transfer of employees and a transfer of work. It asserts that Northway took over Hanmer’s bus routes in the Valley East area and that this work was transferred through the “medium” of the Conseil, which acted as an intermediary or conduit. The applicant compares the “transfer” of the Conseil’s bus contract to the transfer of a government licence as occurred, for example, in Thunder Bay Ambulance Services Inc., [1978] OLRB Rep. May 467 and Caressant Care Nursing Home of Canada Limited , [1984] OLRB Rep. Aug. 1060. It submits that the nature of the work did not change.

23The responding party submits that the only transaction that occurred in this matter is the purchase of school buses (and radios) from Hanmer after Hanmer went out of business. This purchase was necessary for routine updating of the fleet and because Northway had secured more routes from the Conseil. The responding party asserts that it is common practice for bus operators to swap buses from year to year, depending on their needs. The responding party submits that no administrative staff were hired from Hanmer and that, according to Mr. Marcuccio, only two members of Local 895 were hired by Northway.

24The responding party asserts that the bus routes themselves were not assets that belonged to Hanmer or that could be transferred to Northway. Bus routes were routinely changed each year and allocated by the Conseil according to its needs. No bus operator had a right to operate a route from year to year. In addition to routine changes, there were significant changes to pupil transportation in the Sudbury area because of the creation of new district school boards on January 1, 1998.

Decision

25The issue in this application is whether or not there has been a sale of business within the meaning of section 69 of the Act. Section 69 states:

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.

26There is extensive jurisprudence explaining the purpose of section 69 and the various criteria used by the Board to determine if a sale of business has occurred. A fairly recent analysis can be found in Lincoln Hydro Electric Commission, OLRB Rep. May/June 397 where the Board stated:

98. A "business" takes its colour from the "business setting", and is best thought of as a kind of commercial vehicle which has been rationally constructed to produce certain goods or services for a defined market. In St. Leonard's Society of Metropolitan Toronto, [1993] OLRB Rep. Jan. 56 the Board put it this way:

The Board's conception of the "business" under the Labour Relations Act is an operational or instrumental one. The business is not its legal envelope, nor the employees, nor some incidental or unrelated grouping of assets, nor the body of work in which employees may be engaged from time to time. It is a delivery system, an economic vehicle, an organizational means of getting something done. It is to this vehicle that bargaining rights attach and in which they continue if the undertaking or a coherent part of it is transferred to a new owner.

This also seems to be the approach taken by the Supreme Court of Canada in the Bibeault case, [1982] 2 S.C.R. 1048, where Beetz, J. describes a business undertaking as something that "consists of a series of different components which together constitute an operational entity". He later describes it as "all the means available to an employer to obtain his objectives".

99. The "instrumental approach" to successorship confirms that bargaining rights are attached to an economic vehicle ‑ the mechanism, resources, or facilities by which the undertaking serves its purposes ‑ rather than the purposes themselves, the legal envelope, the employees, or their work. Bargaining rights attach to the business undertaking, as defined operationally. The Board then tries to determine whether a "business" or "part of a business" has been transferred to a new owner within the meaning of section 69. The Board has to decide, on the language of the statute and viewed from a labour relations perspective, whether the transfer and continuation of some facet of that undertaking warrants a continuation of bargaining rights (i.e. when giving a purposive reading of section 69, one cannot ignore the concrete consequences of its application in the particular case).

100. As a result of section 69, bargaining rights are not coextensive with commercial ownership or the continuing identity of a particular owner. Nor does it matter how the new owner comes to have possession of the instruments necessary to carry on all or part of the business functions of the predecessor ‑ provided there is some "manner of disposition" from the predecessor to the successor. Bargaining rights continue with a continuation of the business undertaking ‑ in whole or in part. The precise "manner of disposition" is irrelevant.

101. Thus, it does not matter whether the transaction under review is a purely commercial sale, or a transfer between public sector entities ‑ such as the kind of municipal reorganization to which section 69(11) of the Act specifically applies. Public sector transactions attract the application of the Labour Relations Act in the same manner that private sector transactions do. The context, undertaking or delivery system may be different, but the same statutory language and principles apply.

102. What the many cases explore are the following considerations: what the instruments or elements of "the business" are in a particular setting; what is considered to be the essence of the undertaking (land, equipment, location, employee skills, licences, patents, etc.); and whether all or a definable part of that undertaking has been transferred to a new owner. The Board then considers from a labour relations perspective, whether a sufficiently coherent grouping of those things have been transferred, so as to warrant a continuation of bargaining rights. The Board looks at what was in the hands of the predecessor, and what has found its way, by whatever "manner of disposition", into the hands of the successor. In this regard, there is a notional "tracing principle" which the Supreme Court of Canada described in W. W. Lester, 91 CLLC para. 14002:

To determine whether or not the business or part of a business has been disposed of, most Boards examine the nature of the predecessor business and the nature of the successor business [to see] if the business of the predecessor is being performed by the successor. Most Boards approach the issue by examining factors like the work covered by the terms of the collective agreement, the type of assets that have been transferred, whether goodwill has been transferred, whether employees are transferred, whether the business is operating in the same location, whether there is a continuity of management, and whether there is a continuity of the work performed ... no single factor is determinative, since factors which are sufficient to support a successorship finding in one type of industry may be insufficient in another ... in each case the Board must determine if, within the business context in which the transaction occurred, it can reasonably be said on the factors present that the business or part of the business has been transferred from the predecessor to the successor ...

103. In deciding whether there has been a sale of the predecessor's business for successor rights purposes, the Board has adopted the approach mentioned by the Supreme Court of Canada in Lester above. If many of the elements of the predecessor's organization can be found in the hands of the successor, or if there is a definable part which is used for the same business purposes, then there is an inference that there has been a transfer of a business or part of a business to which section 69 applies. The more the transferee's ability to carry on this business (or part of a business) is derived from, or dependent upon, things acquired from the owner of the predecessor business, the stronger the inference will be ‑ particularly if the predecessor has ceased to carry on its business or that part of the business, or the predecessor has withdrawn from the relevant market.

27After reviewing several cases where the Board found that there was a sale of business, the Board in Lincoln Hydro Electric Commission concluded

118. In each of these cases the Board found that the predecessor had transferred a coherent and severable "part" of its economic organization ‑ managerial or employee skills, plant, equipment, know‑how, or goodwill ‑ thereby allowing the successor to perform a definable part of the economic functions formerly performed by the predecessor. This new or augmented economic organization undertook activities which gave rise to employment, and the terms and conditions of employment together with the union's right to bargain about them were preserved. The "part" of the predecessor's business which it no longer wished to (or was able to) continue, provided the successor with an opportunity to establish or expand its own business, which it then pursued to its own advantage.

119. In all of these cases, therefore, there was a transfer of a distinct part of the predecessor's configuration of assets or capacity to carry on a part of the business, and little material change in the character of the work performed by employees within that asset framework. There was a continuation of the work performed in a coherent part of the operational context. Yet, without section 69, the established bargaining and collective agreement rights would have been lost, because there was a new "owner". That was the mischief to which section 69 is directed, and the Board was satisfied on the evidence in each case that section 69 should be applied.

28The Board in Lincoln Hydro Electric Commission also noted that characterizing a transaction as a mere “asset transfer” does not advance the Board’s enquiry very much because there are many forms of commercial transaction that on the surface appear only to involve a transfer of assets. The Board must scratch the surface and examine the transaction to see if there are indicia of a sale of a business or part of a business. In this respect, the Board stated at paragraph 19 in Caressant Care Nursing Home that it has,

“generally focussed on such questions as whether enough of the essential components of the business of the vendor can be traced into the hands of the purchaser as to cause the Board to find that it is in fact the same business, as opposed to a parallel business of a similar nature established by the purchaser, or in other words, whether the purchaser’s business can be said to “take its life” from that of the vendor.”

29In our view, the purchase of 19 buses (out of a total of 51 available for sale by Hanmer) cannot be characterized as a sale of business unless the facts also show that a business enterprise (or part) was transferred. What business was transferred?

30At the outset, we observe that Northway was already an established school bus operator when it bought buses from Hanmer. Aside from school buses (and other minor equipment), Northway had no need for any other asset belonging to Hanmer. There is no documentary or other evidence before the Board of any transaction between Northway and Hanmer pertaining to the transfer of anything other than the aforementioned physical assets.

31We are satisfied that Hanmer’s “assets” did not include a continuing right to transport pupils from year to year. The Conseil revised and renewed its contracts each year according to its needs, and bus operators adjusted their staff and assets accordingly. The evidence is clear that no school bus operator has a continuing ownership in, or claim to, a Conseil bus route and that bus operators cannot rely upon what, if any, routes they might be given from year to year. They may expect to be given routes each year, and their business investment is founded upon this expectation. However, Northway did not need to acquire this “expectation” from Hanmer because Northway already had an existing business relationship with the Conseil.

32We do not consider that any work was transferred from Hanmer to Northway. It is true that the general nature of the work performed by the school bus drivers consisted of driving a school bus on an assigned route. However, the evidence is that bus routes are established by the Conseil from year to year and that virtually every route undergoes some degree of change each year. The changes from 1997-98 to 1998-99 were particularly significant because of the Fewer School Boards Act, 1997 and the Education Quality Improvement Act, 1997. For example, the applicant’s own witness, Ms. Guenette, testified that over the summer of 1998 her former Hanmer route was in fact split between two drivers. The assignments actually performed by drivers at Hanmer were different from those performed by Northway drivers to the extent that the routes changed. A more relevant question is to what extent Northway acquired the work force of Hanmer. The ten former Hanmer drivers hired over the summer of 1998 (most of whom were not represented by the applicant) formed a relatively small portion of the total number of bus drivers at Northway, which had approximately 80 routes (including about 59 for the Conseil). Although the former Hanmer employees were obviously valuable to Northway, they came to Northway through an open application process. No evidence was adduced to show that former Hanmer employees were specifically approached by Northway or that Northway relied upon them to seek employment at Northway. There is no evidence of any implicit or explicit arrangement between Hanmer and Northway to assume the employment of these persons. No Hanmer administrative or managerial staff were hired by Northway. This is readily distinguishable from the facts in Charterways Transportation Limited, [1994] OLRB Rep. Oct. 1296, for example, in which the Town of Ajax “took back” the municipal transit business from Charterways. Of 30 drivers hired by the Town, 23 had worked for Charterways on its Ajax contract. The facts disclosed that substantial elements of the business (including the buses) had remained with the Town and that the scope of the business engaged in by Charterways consisted primarily of the provision of a skilled work force.. By acquiring a substantial part of the work force the Town transferred to itself an essential element of the business.

33The instant facts can also be distinguished from those in City of Peterborough, [1979] OLRB Rep. Feb. 133 in which a transit company, Border Transit Ltd. decided to get out of the business and served notice that it would not renew its franchise agreement which was due to expire on December 30, 1978. This left the City of Peterborough with the option of finding another franchise or operating the transit service itself. Ultimately, the City “took over the transit business as a going concern, including not only certain physical assets, but the staff that made them work. There was no interruption of service or substantial change in the nature of the business.” (para. 7). In the instant application, Hanmer was not taken over as a going concern. Only two-fifths of its total bus assets were purchased by Northway and a relatively small number of Hanmer employees found their way to Northway. Although the “transfer” of Hanmer employees to Northway is a factor that must be considered and taken into account, it is not determinative of the issue of whether there was a sale of business in this application. In this respect we find Charterways helpful, where at paragraph 36, the Board stated,

36. Although the distinction may frequently be difficult to draw, a “business” is in this respect to be set apart from the work performed by its employees: both the Board and the Courts have reasoned that the general statutory scheme of granting trade unions bargaining rights with respect to employees of employers, and, in turn, the specific language of the sale of a business provision in which rights attach to the “business” entity militates against a finding that the rights attach to the work that is performed. (Syndicat national des employees del la Commission scolaire de l’outaouais (CSN) v. Union des employes de service local 298 (FTQ), Bibeault et al 1988 CanLII 30 (SCC), [1988] 2 SCR 1048; British American Bank Note Company [1979] OLRB Rep. Feb. 72; Metropolitan Parking, supra; Parnell Foods Limited, [1992] OLRB Rep. Dec. 1164.) The distinction between a “transfer of a business” and a “transfer of work” has been extensively examined by the Board in Metropolitan Parking, supra, and more recently, in Parnell Foods, supra, and little would be gained by recapitulating that analysis here. It is sufficient to note that although the Board may consider whether similar work is being performed as a factor in determining whether or not there has been a sale, where the board is satisfied that what has been transferred as between two employers is principally a right or opportunity to perform certain work, the Board will normally conclude that a “business” has not been transferred. In that respect, the mere fact that the same work is being performed by another employer does not determine that there has been a sale of a business. (See, for example, Metropolitan Parking, supra; The Corporation of the City of Stratford, [1985] OLRB Rep. June 923.) Instead, in order to trigger the sale provisions of the Act, the Board must satisfy itself that a particular economic organization, or part thereof, in the form of a configuration of assets, organizational capacity, or some other “intangible” good that is an essential characteristic of one business has been transferred from one entity to another.

34With respect, we do not agree with the applicant’s submission that the school board was an “intermediary” or “conduit” between Hanmer and Northway by which the right or licence to transport pupils was passed. The Conseil was simply a customer who contracted for transportation services on an annual basis. If, in one year, it contracted with Hanmer and the next year with Northway, this does not make it an intermediary between the two. As mentioned, Hanmer had no form of ownership or proprietary interest in the bus routes as of the end of 1997-98. Even if it had not dissolved, there was no evidence that it had any subsisting right to routes for 1998-99. It was required to compete with everyone else.

35The annual contract from the Conseil can be readily distinguished from a “licence”. For example, in Caressant Care Nursing Home, the Board determined that a “transaction” in which a Ministry of Health nursing home licence was surrendered by one nursing home operator and an equivalent one was acquired by another operator, constituted a “sale of business”. However, the Board’s description of this transaction shows that it bears little similarity to the allocation of pupil transportation contracts. At paragraph 18, the Board states:

18. Dealing with counsel’s first point, the evidence of the Ministry makes it clear that licences cannot technically be “transferred” from one operator to another. Rather, one operator agrees to surrender its licence on the condition that the other be granted a comparable one, and it is then up to the second operator to satisfy the Ministry that it is an appropriate replacement. If it does, it is ultimately issued a new licence in its own name. The evidence further discloses that the Ministry can on its own initiative only relieve an operator of its licence on limited and narrow grounds, and after lengthy proceedings. That circumstance, plus the fact that the provincial government tightly controls the number of nursing care beds it will make available in an area (the Ministry pays two-thirds of the cost of each bed), makes an agreement by an existing operator to voluntarily relinquish its rights in favour of another operator an extremely valuable one. The respondent paid just under a million dollars to secure that agreement in the present case.

36In Caressant Care, the licence alone was valued at approximately $900,000, very much an “intangible asset” in its own right. Such a licence is the essence of operating a nursing home. Unlike a nursing home licence, a bus contract is not “surrendered” by a bus operator in order to be transferred to some other company. The pupil transportation contract is not a licence to operate a bus company. It is an agreement for the supply of a service.

37The instant facts are also readily distinguishable from those in Thunder Bay Ambulance Services Inc. where the Board considered whether there was a sale of an ambulance service from two hospitals to Thunder Bay Ambulances Services Inc. Much revolved around the involvement of the Ministry of Health in granting an ambulance licence to the successor employer. The facts are described at paragraph 14, as follows:

14. This case requires a careful analysis because of the complicating factor of third party involvement. The Ministry of Health, although neither the predecessor nor successor employer, owned the assets which were necessary to the ambulance service provided by both the alleged predecessor and successor and licensed and regulated the alleged predecessor as it does the successor. The Ministry is also the source of the cash flow as it provided and continues to provide funds on a monthly basis in an amount agreed between the operator of the ambulance service and itself. These funds are the only source of revenue for the operator of the ambulance service. The integral involvement of the Ministry must be taken into account in considering the nature of the alleged predecessor’s business and more importantly, in determining whether or not there has been the transfer of that “business” or the establishment of a parallel or similar business.

15. That part of the predecessor’s business which is at issue can best be described as the management and operation of a group of assets owned by the Ministry of Health, for the purpose of providing ambulance service in the Municipality of Thunder Bay. The alleged successor manages and operates these same assets for the same purpose and therefore its business can be described in identical terms. This similarity of description, however, does not necessarily establish a “continuum” of the predecessor’s business. In the absence of any direct contact between predecessor and successor, in the absence of the success purchasing anything from the predecessor, and in the absence of the predecessor receiving any consideration from the alleged successor, it might be said that the predecessor emp0loyer did not sell or transfer its business but rather that it went out of business and a different, albeit parallel business, took its place. In the context of a regulated monopoly, the lack of hiatus and the similarity of function, cannot be the overriding considerations. The issue must be determined on the basis of what, if anything, was transferred to the alleged successor.

The Board found that there was a sale of business.

17. In view of the Board, the two essential elements of the predecessor’s businesses were transferred to the alleged successor. Firstly, the exclusive use of the assets owned by the Ministry of Health was transferred. Although the same licence or piece of paper was not transferred between the two, the Board has no hesitation in finding that the exclusive entitlement, as embodied in a Ministry of Health Licence, was transferred. Secondly, the predecessor’s management and organization in the person of Mr. Rudyke, and the predecessors’ employees were also transferred. The predecessor’s ambulance operations were largely managerial and organizational in nature and it follows that the transfer of managerial skills, albeit through a request for proposal system and competition, and the continuation of identical job functions filled by the same persons as were employed by the predecessors must weigh heavily with the Board.

18. Having regard to the transfer of the exclusive right to use the Ministry’s assets, to the transfer of managerial skills and to the uninterrupted continuation of the identical job functions, the Board must conclude that the Ministry of Health, the entity charged with maintaining an ambulance service in the Municipality of Thunder Bay, did not facilitate the establishment of a similar or parallel business but rather it served as the necessary link in the transfer of the predecessor’s businesses to the successor. It is the finding of the Board, therefore, that a sale of a business within the meaning of section 55 has occurred and that the bargaining rights of the union, which were established in respect of the predecessor’s businesses, should be preserved. The applicant trade union was entitled to give notice to the predecessors under section 45 of the Act and accordingly, the Board declares, pursuant to the provisions of section 53 of the Act, that the trade union is entitled to give the respondent a written notice of its desire to bargain with a view to making a renewal collective agreement.

38We decline to draw a parallel between what occurred in Thunder Bay and what occurred in the instant application.

39When we “scratch the surface” of what initially appears to be a straightforward sale of physical assets we find that the surface reveals the whole story. There is no sale of business lying beneath. Hanmer was engaged in the business of transporting pupils. There is insufficient evidence that Northway acquired that business or any part of it. It was already engaged in transporting pupils. It contracted with the Conseil for an increased number routes for 1998-99 through the normal competitive process. It needed buses to service the routes and to replace aging fleet. It bought some of those buses from the most convenient source, Hanmer. It did not acquire the expertise of Hanmer’s administrative staff. It did not acquire buildings or office equipment. It did not acquire the right or licence to operate routes “belonging” to Hanmer – no such right existed. It hired a relatively small number of former Hanmer bus drivers.

40Having considered the foregoing, we find that there was no sale of business from Hanmer to Northway within the meaning of section 69.

41The application is dismissed.

“Anthony Brown”

for the Board