Reasons for decision
Canadian Union of Postal Workers,
applicant,
and
Secure Distribution Service Ltd. (SDS),
respondent,
Go Logistics Inc., 2109372 Ontario Inc., 2109373 Ontario Inc.,
interested parties.
Board File: 26984-C
CITED AS: Secure Distribution Service Ltd. (SDS) and Go Logistics Inc.
Neutral Citation: 2008 CIRB 425
November 14, 2008
Application filed pursuant to sections 35 and 44 of the Canada Labour Code, Part I.
Single employer–Sale of business–Practice and procedure–Application requesting a single employer declaration and a declaration of a sale of business–The employer and the other named parties never provided any submissions–The Board decided the case based solely on the union’s submissions–The Board does not have sufficient information before it to determine whether or not a sale of business has occurred between the employer and any of the other named parties–This part of the application will be dismissed–The union has demonstrated that the employers constitute a single employer–The other employer has an employer/ employee relationship with members of the bargaining unit–The address for both employers are the same–An employer representative is also a director of the other employer–The Board has a discretion whether or not it should issue a single employer declaration–In this case, the ongoing challenges in coming to a collective agreement, the employer representative’s refusal to provide an answer to legitimate requests for information, and the length of time that negotiations have taken, demonstrate an undermining of the bargaining unit–The union is therefore entitled to a single employer declaration–The Board has granted the union’s request for a single employer declaration–The union asked, by way of remedy, that the Board impose a collective agreement on the employer, based on a union offer presented during conciliation–The Board does not have the authority to impose a first collective agreement in the manner the union requested–The Board, in the absence of a reference from the Minister of Labour, does not have the power to impose a first collective agreement in the circumstances of this case–Even for situations where the Board might have the power to impose a process that would lead to a collective agreement, the Board will exercise this power sparingly–The Board cannot transform the union’s offer presented during conciliation into a binding collective agreement.
A panel of the Board composed of Mr. Graham J. Clarke, Vice-Chairperson, sitting alone pursuant to section 14(3) of the Canada Labour Code (Part I–Industrial Relations) (the Code) has considered the above-noted application.
Section 16.1 of the Code provides that the Board may decide any matter before it without holding an oral hearing. Having reviewed all of the material on file, the Board is satisfied that the documentation before it is sufficient for it to determine this application without an oral hearing.
I–Nature of the Application
[1] On August 11, 2008, the Board received from the Canadian Union of Postal Workers (CUPW) an application requesting a single employer declaration pursuant to section 35 and a declaration of a sale of business under section 44 of the Code. CUPW named Secure Distribution Service Ltd. (SDS) as one of the responding parties. The Board previously certified CUPW to represent a bargaining unit at SDS. CUPW also named three other parties: Go Logistics Inc. and two numbered companies 2109372 Ontario Inc. and 2109373 Ontario Inc.
[2] In addition to the requests for a single employer and sale of business declarations, CUPW also asked, by way of remedy, that the Board impose a collective agreement on SDS, based on a CUPW offer presented during conciliation in December 2007.
[3] On August 12, 2008, the Board wrote to SDS and the other named parties to advise them of CUPW’s application. The Board requested that they post a notice for employees and return a certificate of posting. The Board gave the named parties 15 days to respond to CUPW’s application and also appointed a labour relations officer.
[4] The Board wrote again to the named parties on September 4, 2008, confirming that none of them had filed a response to the Board’s August 12, 2008 letter. The letter advised that the matter would be referred to the Board for adjudication.
II–Facts
[5] The facts are based exclusively on the content of CUPW’s uncontested application.
[6] The Board certified CUPW for a unit of employees working at SDS on December 13, 2005. The bargaining unit read as follows:
all employees of SDS Inc., operating as Secure Distribution Services, engaged in the processing, collection and delivery of lettermail and parcels and other products and services in and out of the Oakville, Ontario postal facilities, excluding those persons excluded by section 3(1) of the Canada Labour Code.
[7] At a December 18, 2007 conciliation meeting, the President of SDS, Mr. Mahmood Hemani, advised CUPW that SDS was “bankrupt” and that Go Logistics now employed the employees subject to the certification order.
[8] The bargaining unit members had noticed no change whatsoever in their working conditions and pay. They received no notification of any change regarding their employer.
[9] It appears from the supporting documents attached to CUPW’s application that Mr. Hemani had previously provided CUPW with a package of “bankruptcy documents.”
[10] Those documents suggest that SDS and certain other corporations were involved in a receivership proceeding under the Bankruptcy and Insolvency Act, R.S., 1985, c. B-3. That receivership appears to have ended following the execution of a transaction described as the “Marfatia Agreement.”
[11] There is nothing in the documentation provided with the application that suggests SDS went bankrupt or otherwise ceased to remain a going concern.
[12] SDS representative, Mr. Anthony James White, to whom the Federal Mediation and Conciliation Service wrote on December 28, 2007 with regard to the appointment of a mediator, is listed as a Director of Go Logistics.
[13] An employee of SDS in the bargaining unit received a pay stub from SDS but his pay cheque came from Go Logistics. Go Logistics and SDS have the same address in Mississauga and share the same phone number.
[14] CUPW attempted on several occasions to obtain further facts from SDS about its relationship with Go Logistics. On March 14, 2008, CUPW sent a letter to Mr. Hemani asking for clarification of the relationship. On March 26, 2008, the CUPW regional office called Mr. Hemani about the March 14, 2008 letter. Mr. Hemani indicated he would be mailing a response the following day. CUPW never received any information.
[15] CUPW followed up a final time in a July 8, 2008 letter but never received a response from Mr. Hemani.
[16] There is no evidence about the two numbered companies mentioned previously, other than the fact that they had been involved in the receivership proceeding and may have purchased certain unspecified assets. There is no evidence the numbered companies purchased any business subject to a Board certification.
III–Issues
[17] This case raises the following four issues:
i) The consequences for a party which fails to file submissions with the Board;
ii) Has there been a sale of business between SDS and Go Logistics?;
iii) Are SDS and Go Logistics a single employer under the Code?; and
iv) Can the Board impose a collective agreement in the circumstances of this case?
IV–Analysis and Decision
i) The consequences for a party which fails to file submissions with the Board
[18] The Board advised SDS and the other named parties of CUPW’s application and gave them 15 days to respond. The Board provided a reminder on September 4, 2008 when it indicated that the matter would be referred to the Board.
[19] Despite the Board’s reminder letter of September 4, 2008, SDS and the other named parties never provided any submissions.
[20] A party’s failure to provide submissions in response to an application does not prevent the Board from proceeding with the matter. Section 47(1)(b) of the Canada Industrial Relations Board Regulations, 2001 reads as follows:
47. (1) If a party fails to comply with a rule of procedure under these Regulations, after being allowed an opportunity for compliance by the Board, it may
...
(b) decide the application without further notice, if the non-complying party is the respondent.
[21] In this situation, SDS and the three named parties had ample opportunity to file submissions with regard to the facts in this case as well as their legal arguments.
[22] The Board is not obliged to hold an oral hearing in every case. The labour relations community has known for years that the Board may decide cases based solely on the written submissions before it (see NAV Canada v. International Brotherhood of Electrical Workers, Local 2228 (2001), 267 N.R. 125 (F.C.A., no. A-320-00)).
[23] In this case, given the failure of SDS and the other named parties to file any submissions, the Board decided the case based solely on CUPW’s submissions.
ii) Has there been a sale of business between SDS and Go Logistics?
[24] Sections 44 and 45 of the Code read as follows:
44.(1) In this section and sections 45 to 47.1,
“business”
« entreprise »
“business” means any federal work, undertaking or business and any part thereof;
“provincial business”
« entreprise provinciale »
“provincial business” means a work, undertaking or business, or any part of a work, undertaking or business, the labour relations of which are subject to the laws of a province;
“sell”
« vente »
“sell”, in relation to a business, includes the transfer or other disposition of the business and, for the purposes of this definition, leasing a business is deemed to be selling it.
Sale of business
(2) Where an employer sells a business,
(a) a trade union that is the bargaining agent for the employees employed in the business continues to be their bargaining agent;
(b) a trade union that made application for certification in respect of any employees employed in the business before the date on which the business is sold may, subject to this Part, be certified by the Board as their bargaining agent;
(c) the person to whom the business is sold is bound by any collective agreement that is, on the date on which the business is sold, applicable to the employees employed in the business; and
(d) the person to whom the business is sold becomes a party to any proceeding taken under this Part that is pending on the date on which the business was sold and that affects the employees employed in the business or their bargaining agent.
Change of activity or sale of a provincial business
(3) Where, as a result of a change of activity, a provincial business becomes subject to this Part, or such a business is sold to an employer who is subject to this Part,
(a) the trade union that, pursuant to the laws of the province, is the bargaining agent for the employees employed in the provincial business continues to be their bargaining agent for the purposes of this Part;
(b) a collective agreement that applied to employees employed in the provincial business at the time of the change or sale continues to apply to them and is binding on the employer or on the person to whom the business is sold;
(c) any proceeding that at the time of the change or sale was before the labour relations board or other person or authority that, under the laws of the province, is competent to decide the matter, continues as a proceeding under this Part, with such modifications as the circumstances require and, where applicable, with the person to whom the provincial business is sold as a party; and
(d) any grievance that at the time of the change or sale was before an arbitrator or arbitration board continues to be processed under this Part, with such modifications as the circumstances require and, where applicable, with the person to whom the provincial business is sold as a party.
45. In the case of a sale or change of activity referred to in section 44, the Board may, on application by the employer or any trade union affected, determine whether the employees affected constitute one or more units appropriate for collective bargaining.
[25] The Board understands the challenge for any applicant to put forward sufficient evidence about a sale of business where the employer refuses to respond to requests for information. This is made even more difficult when the same employer ignores a request for submissions from the Board.
[26] However, the Board does not have sufficient information before it to determine whether or not a sale of business has occurred between SDS and any of the other named parties. This part of the application will be dismissed.
[27] However, given that a sale of business takes place as of right, and does not require a formal Board decision, CUPW can return to the Board in the future if further facts come to light.
iii) Are SDS and Go Logistics a single employer under the Code?
[28] Section 35 of the Code reads as follows:
35.(1) Where, on application by an affected trade union or employer, associated or related federal works, undertakings or businesses are, in the opinion of the Board, operated by two or more employers having common control or direction, the Board may, by order, declare that for all purposes of this Part the employers and the federal works, undertakings and businesses operated by them that are specified in the order are, respectively, a single employer and a single federal work, undertaking or business. Before making such a declaration, the Board must give the affected employers and trade unions the opportunity to make representations.
[29] CUPW has demonstrated that SDS and Go Logistics constitute a single employer. The comment of Mr. Hemani suggests that Go Logistics also has an employer/employee relationship with members of the bargaining unit. The pay information for an SDS employee further confirmed this fact.
[30] There is no evidence that SDS is no longer a going concern. Employees have continued doing their work since the certification without any notice of change from SDS. The address for both Go Logistics and SDS are the same. An SDS representative is also a director of Go Logistics.
[31] These facts, while somewhat scarce due to the challenge for CUPW to gather corporate information from SDS, is nonetheless sufficient for a single employer declaration.
[32] The Board has a discretion whether or not it should issue a single employer declaration. In this case, the ongoing challenges in coming to a collective agreement, Mr. Hemani’s refusal to provide an answer to legitimate requests for information, and the length of time that negotiations have taken, demonstrate an undermining of the bargaining unit.
[33] CUPW is therefore entitled to a single employer declaration.
iv) Can the Board impose a collective agreement in the circumstances of this case?
[34] CUPW asked the Board to impose the collective agreement it offered to SDS at a conciliation meeting in December 2007.
[35] The Board first certified CUPW for a unit at SDS in December 2005. Despite conciliation, no collective agreement has been concluded between the parties.
[36] The Board does not have the authority to impose a first collective agreement in the manner CUPW requests. Section 80(1) of the Code reads as follows:
80.(1) Where an employer or a bargaining agent is required, by notice given under section 48, to commence collective bargaining for the purpose of entering into the first collective agreement between the parties with respect to the bargaining unit for which the bargaining agent has been certified and the requirements of paragraphs 89(1)(a) to (d) have otherwise been met, the Minister may, if the Minister considers it necessary or advisable, at any time thereafter direct the Board to inquire into the dispute and, if the Board considers it advisable, to settle the terms and conditions of the first collective agreement between the parties.
(emphasis added)
[37] The Board, in the absence of a reference from the Minister of Labour, does not have the power to impose a first collective agreement in the circumstances of this case.
[38] Even for situations where the Board might have the power to impose a process that would lead to a collective agreement, the Board will exercise this power sparingly (see TELUS Communications Inc., 2005 CIRB 317; and Hudson Bay Port Company, 2004 CIRB 296). For example, section 99(1)(b.1) of the Code provides authority for the Board to order a binding method for resolving collective agreement disputes, but that power only arises after a finding that a party had failed to bargain in good faith (section 50(a) of the Code).
[39] Accordingly, the Board cannot transform CUPW’s December 2007 offer into a binding collective agreement.
[40] The Board has granted CUPW’s request for a single employer declaration and will be issuing the appropriate order.