2291-00-R Service Employees’ International Union, Local 210, Applicant v. Canadian Red Cross Society (Ontario Zone), Consult A Professional Services Corp. (c.o.b. as Bayshore HealthCare), ParaMed Home Health Care, Windsor/Essex Community Care Access Centre, Responding Parties v. Saint Elizabeth Health Care, Intervenor.
BEFORE: Christopher J. Albertyn, Vice-Chair.
DECISION OF THE BOARD; July 16, 2001
The style of cause is hereby amended to reflect the correct name of the responding parties: “Consult A Professional Services Corp. (c.o.b. as Bayshore HealthCare)”, “ParaMed Home Health Care”, and “Windsor/Essex Community Care Access Centre.”
This is an application filed pursuant to the provisions of sections 1(4) and 69 of the Labour Relations Act, 1995 ('the Act'). The applicant seeks an order that the Canadian Red Cross Society (Ontario Zone) (‘the Red Cross’), Consult A Professional Services Corp. (c.o.b. as Bayshore HealthCare) (‘Bayshore’), ParaMed Home Health Care (‘ParaMed’) and the Windsor/Essex Community Care Access Centre (‘the CCAC’) are related employers within the meaning of section 1(4) of the Act. The applicant wants a declaration that there has been a sale of business from the Red Cross, through the CCAC, to Bayshore and ParaMed within the meaning of section 69 of the Act.
The applicant refers to Bayshore as Olsten Health Services. Bayshore’s response explains that Olsten Health Services was the predecessor of Gentiva Health Services Limited, which was sold to Consult A Professional Services Corp., which carries on business in Windsor/Essex as Bayshore HealthCare.
The responding parties take the position that the application does not disclose a prima facie case. They ask that it be dismissed under Rule 46 of the Board’s Rules. This decision addresses that request. Saint Elizabeth Health Care (‘Saint Elizabeth’), an intervenor, which provides homemaking services for the CCAC, requests that the application be dismissed also for reasons of delay. It contends the union brought the application over a year after the tender process when homemaking work was assigned to Bayshore, ParaMed and Saint Elizabeth by the CCAC. Saint Elizabeth contends the union has provided no explanation for the substantial delay.
The prima facie merits of the application are to be judged solely upon the allegations contained in the application.
The Red Cross is a non-profit corporation which provided homecare services in and around Windsor-Essex County and elsewhere in Ontario. Bayshore and ParaMed are for-profit homecare service providers. They have contracts with the CCAC to provide homemaking services in Windsor-Essex County. Saint Elizabeth is a non-profit or charitable organization.
The CCAC is a body established by the Long Term Care Act, 1994 to coordinate the assignment of community services, which includes homecare services, in Windsor-Essex County. A comprehensive description of the origin, role and purpose of the CCAC is provided in the application. From the CCAC’s response, it was incorporated in 1996 and commenced operations in February 1997.
On November 23, 1994 the union was certified as the bargaining agent of all employees of the Red Cross in its Windsor-Essex branch homemakers service, excluding supervisors, office and clerical staff. The bargaining unit consisted of approximately 190 employees. A collective agreement was meant to be effective until March 31, 2002.
Before the establishment of the CCAC and the start of its operation, the Red Cross provided homemaking services in Windsor-Essex. Once the CCAC was established, it assumed responsibility for the assignment of homemaking work. For a period of three years the existing homemaking service providers, like the Red Cross, had a diminishing percentage of their original work assignment guaranteed. From 1999 all of the homemaking work was to be subject to competition, managed by the CCAC.
The CCAC assigns homecare work to service providers through a tender process. Service providers pre-qualify for homemaking work. (The application uses the terms, ‘home care’ and ‘homemaking’ interchangeably. Although they can mean different services, I do the same.) The service providers respond to Requests for Proposals (RFP’s). They bid on the work. The CCAC assigns the work on the basis of the tenders. It does not perform homemaking services itself.
The application provides a detailed account of the many ways in which the service providers are accountable to the CCAC. The application demonstrates a very high degree of control by the CCAC over the service providers as regards the manner in which they provide their service to clients. Considerable organizational information must be provided by the service providers to the CCAC and the work of the service providers is closely monitored by the Case Managers of the CCAC. The details of the accountability of the service providers to the CCAC is comprehensively described in the application.
On the basis of its allegations, the union contends that the CCAC ‘exercises very detailed and close control over the way in which the agency and its employees deliver services. The CCAC is involved at almost every level in determining and discharging the function of employing home care workers. The union therefore states that the CCAC, [Bayshore] and ParaMed are related employers within the meaning of section 1(4) of the Act’.
The Red Cross tendered for homemaking work during 1999. It sought the agreement of the union to cut the travel allowance payable under their collective agreement by 50%. It advised the union that, if the employees in the bargaining unit were unwilling to agree to the reduction in the travel allowance, it would withdraw its homemaking tender to the CCAC. Employees in the bargaining unit in Windsor-Essex had voted on the issue and they had rejected the Red Cross’s request. The Red Cross then withdrew its bid from the CCAC tender process. The CCAC awarded the homemaking service contracts to Bayshore and ParaMed [and Saint Elizabeth, although it is not referred to in the application]. The employees of the Red Cross were laid off.
The CCAC entered into service agreements with Bayshore and ParaMed. According to the union, Bayshore was to provide the bulk of the home care services in Windsor-Essex. So, the service previously provided by the Red Cross was in future to be done by Bayshore and ParaMed. Most of the former Red Cross employees were employed by Bayshore or ParaMed. As the union says, ‘many of those employees continued to provide services, without interruption, to exactly the same clients they previously worked with as employees of the Red Cross’. The conclusion the union draws is, ‘for the home care workers virtually nothing has changed. While they are now .. employees of Bayshore and ParaMed, they have continued to deliver home care services to the same clients in exactly the same way as they previously did when employees of the Red Cross’.
On the basis of these allegations the union contends there has been a sale of business within the meaning of section 69 of the Act. It relies principally upon the transfer of the employees from the Red Cross to Bayshore and ParaMed. Furthermore, it says that the funding (from the Ministry of Health) which previously went to the Red Cross now goes (through the CCAC) to Bayshore and ParaMed. There is, in the union’s view, a transfer and continuity of the Red Cross’s business into Bayshore and ParaMed.
I accept, for the purposes of the responding parties’ Rule 46 motion, that the CCAC, Bayshore and ParaMed carry on related activities within the meaning of section 1(4) of the Act. However, that does not answer the question of whether the Board would exercise its discretion to make a declaration that they are related employers.
Saint Elizabeth has an interest because, it contends, from October 19, 1999 the CCAC assigned some of the homemaking work in Windsor-Essex County to it. Saint Elizabeth says that the homemaking work in Windsor-Essex is assigned to three agencies: Bayshore, ParaMed and Saint Elizabeth. This modifies the union’s contentions. It means, if correct, that the work of the Red Cross has passed to three agencies, not two. This matter is clarified in the CCAC’s response. The assignment of homemaking service work for the period September 1, 1999 to August 31, 2001 was as follows: one-third each to Bayshore, ParaMed and Saint Elizabeth.
Saint Elizabeth says that it hired its employees to do homemaking work through its normal advertising, application, interviewing and selection process. It says nothing of whether it engaged any former Red Cross employees. The union makes no allegation that former Red Cross employees were employed by Saint Elizabeth.
Saint Elizabeth makes clear in its response, as do Bayshore and ParaMed in theirs, that it has no organizational or structural connection with the CCAC or with any of the other service providers. Each is managed separately under the broad, regulatory direction of the CCAC. The responding parties contend that their relationship with the CCAC is one of sub-contractors to a contractor. In Saint Elizabeth’s words, ‘the CCAC performs co-ordinating functions, including conducting the tender/RFP process and awarding contracts for bidders, assessing client eligibility, authorizing client services and monitoring adherence to the requirements of the service contract’.
As the responding parties contend: the Red Cross did not sell, lease or transfer any of its assets to any of the responding parties. It walked away from its tender for homemaking service for the period September 1999 to August 2001. The only ‘assets’ arguably transferred to Bayshore, ParaMed and/or Saint Elizabeth were its former employees who performed homemaking work. How many were subsequently employed by each of those three companies is not clear from the application. From the CCAC’s response, homemaking services consist of housecleaning, doing laundry, ironing, mending, shopping, banking, paying bills, planning menus, preparing meals, caring for children, assisting a client to do these things, training someone to do these things and providing prescribed equipment, supplies or other goods. That work is what was transferred from the Red Cross to Bayshore, ParaMed and Saint Elizabeth (assuming that the process of the Red Cross abandoning its tender and the other agencies being assigned the work by the CCAC can constitute a ‘transfer’).
The Board has considered several applications under sections 69 and 1(4) concerning the loss of work by one homemaking service provider, like the Red Cross in this case, to other service providers through the aegis of a CCAC. The Board has issued decisions which deal with Rule 46 requests by responding service providers who have challenged whether the applicant union has made out a prima facie case for relief under those sections: Durham Access to Care [2000] OLRB Rep. Sept./Oct. 855; Durham Access to Care [2000] OLRB Rep. Nov./Dec. 1109; Canadian Red Cross Society (Ontario Zone) (unreported, decision of June 29, 2001, Board File No. 2494-99-R). In the latter case, the following appears (at paragraph 23):
In certain limited and specific circumstances, as in Charterways Transportation Limited [1994] OLRB Rep. Oct. 1296. [See also Town of Ajax v. C.A.W 222 (1998), 1998 CanLII 7179 (ON CA), 166 D.L.R. (4th) 516 (Ont. C.A.)], a business may consist entirely of the accumulated skills of a group of employees. When that group moves, intact, or are recruited or acquired in such a way so that they may provide the same service which they provided previously, that may be a sale of a business: Town of Ajax, above, at 523, ¶25. In circumstances when the assembled and accumulated human capital is critical to the operation of the new business, then receipt of the group of employees in whom that capital resides may constitute the acquisition of a business. A professional sports team is an obvious example.
What is not clear from the application is the extent to which the Charterways decision has any relevance to this case. It is arguably possible, however remote, that the employment of former Red Cross employees by Bayshore, ParaMed and Saint Elizabeth is such that a sale of business has occurred. The Board made the following comment regarding the continuation of the union’s section 69 application in the Canadian Red Cross Society (Ontario Zone) case, above:
There is a paucity of material in the application, understandably, as regards the business operations of Comcare and the VON when they acquired the work which was previously assigned to the Red Cross. The impact of the additional work on their businesses is also not clear. It is therefore not possible, based only upon the allegations in the application, to conclude that only work, and not a part of a business, was acquired by the engagement of the former Red Cross employees. See, in this regard, Metropolitan Parking Inc., [1979] OLRB Rep. Dec. 1193, at 1203, ¶¶27-28. I cannot therefore dismiss the union’s section 69 application on a prima facie basis.
Having come to this conclusion, though, I have no wish that the Board’s (and the parties’) resources be expended on a project which is not likely to succeed. If the responding parties’ allegations, which have not thus far been addressed or admitted by the union, that Comcare and the VON had existing homemaking businesses which had the capacity to assume the additional work assigned to them by the CCAC (Thunder Bay) after the demise of the Red Cross, and that their engagement of the former Red Cross employees was a matter of convenience rather than necessity, then the union will not likely succeed to establish that there was a sale of business. As the responding parties argue, the scope of application of the principles enunciated in Charterways and the Town of Ajax is extremely limited.
In particular, if the VON can establish that it acquired 47 employees who were formerly with the Red Cross out of its complement of 79 homemakers, and if the other aspects of its business (as described in paragraphs 22 to 28 of Schedule “A” to its response) are proven, then there will likely not have been a sale of business from the Red Cross to the VON.
Similarly, in Schedule “A” to Comcare’s response, it alleges that its homemaking work increased by about 48% as a result of the acquisition of the work which was formerly done by the Red Cross. It recruited employees to perform this work through advertisements in local newspapers, through flyers to households and through Human Resources Development Canada. Comcare had 123 Home Support Workers in March 1999, 146 in June 1999 and 237 in October 1999. Assuming the increase in the number of employees was directly and only the consequence of the acquisition from the CCAC (Thunder Bay) of the work formerly done by the Red Cross, only 52 former Red Cross employees were hired by Comcare to perform it. Assuming this to be true and provable, and that no assets, tools, equipment or property interests were transferred (as Comcare alleges at paragraph 34 of Schedule “A”) then there is scant prospect of the Board declaring what occurred to have been a sale of business.
In light of these comments the union should consider whether it wishes to pursue this matter. Should it choose to do so, it should advise the Registrar within 30 days of this decision accordingly and the matter will be scheduled for hearing.
If the union fails to advise the Registrar of its intention, as directed, it will be deemed to have withdrawn this application.
Similar considerations apply in this case. For example, ParaMed claims that it has provided community services to residents in the Windsor-Essex region since 1981. It claims to employ 286 home/personal support workers. It was an incumbent provider of homemaking/personal support services before the establishment of the CCAC. Like other incumbent service providers (e.g. the Red Cross) it had a protected volume of work from the CCAC during the 3-year period of transition (1996-1999) to the new model of managed competition. In ParaMed’s response it asserts that none of the clients formerly serviced by the Red Cross were transferred to it by the CCAC. Furthermore, it appears from ParaMed’s response that very few, if any, former Red Cross employees were engaged by it to perform homemaking work.
Similarly, from Bayshore’s response, it appears that prior to being awarded a homemaking services contract in October 1999 (about when the Red Cross withdrew its tender), it had 116 homemaking workers. After being awarded the 1999 contract by the CCAC, it increased its homemaking staff complement to 296. Of the 180 additional homemaking employees hired, 35 were former Red Cross employees.
In these circumstances, if the responding parties can establish the facts they allege in their responses as regards the employment of former Red Cross employees, it seems unlikely that the union will be able to establish a sale of business on the principles espoused in Town of Ajax, such as is contemplated under section 69 of the Act.
The union has arguably made out a case for relief under section 69 of the Act, based only on the allegations in its application. However, for the reasons stated in Canadian Red Cross Society (Ontario Zone), which apply (with the necessary alterations) to the facts here, the union is required to consider whether it intends to pursue the matter. It should advise the Registrar within 30 days of this decision of its intention. If the union fails to do so, it will be deemed to have withdrawn the application.
For the reasons more fully set out in Canadian Red Cross Society (Ontario Zone), on facts which are indistinguishable from those in this case in respect of the possible application of section 1(4) of the Act, the Board would not exercise its discretion to declare the responding parties to be related employers.
In the circumstances the Rule 46 request by the responding parties is granted. The union’s application under section 1(4) is denied. The section 69 application may proceed in the manner set out above.
“Christopher J. Albertyn”
for the Board