The Ontario Labour Relations Board (“OLRB”) considered the sale of a business provisions in the Labour Relations Act, 1995 in ADT Security Services Canada, Inc. v Unifor Local 554, 2017 CanLII 4481 (ON LRB).
ADT (a unionized company) purchased a Protectron (a non-unionized company) and, although initially operating as distinct companies, over time, intermingled the operations and employees. According to the OLRB:
The Intermingled unit is comprised of twenty (20) individuals who were formerly Protectron employees and twenty-four (24) individuals who were formerly ADT employees.
ADT asked Unifor to consent to a representation vote. Unifor refused and took the position that the Protectron employees fell within Unifor’s bargaining unit, that Unifor represented them and there was no reason for holding a vote.
ADT made an application to the OLRB arguing that there had been a sale of a business within the meaning of the Act, that employees had been intermingled and that the OLRB order a representation vote among all employees.
The union argued that the application ought to be dismissed because the employer had failed to make out a prima facie of a breach of the Act.
The OLRB stated:
From the earliest sale of business cases, the Board has held that the purpose of section 69 is to protect and preserve a union's bargaining rights (and/or collective agreement) where a unionized business is sold: See, for example, Kerr Progress,  OLRB Rep 590.
Under section 69(6) of the Act, the Board may determine the status of collective agreement and bargaining rights when a sale of business occurs and employees of the vendor and purchaser are intermingled. The Board may order a representation vote under section 69(6) where a sale of business results in the intermingling of the unionized employees of the vendor with other employees of the purchaser.
The Board was not provided with a case that held that it should exercise its discretion under section 69(6) where a non union business was sold to a purchaser with a union.
The OLRB agreed with the union and dismissed the application. In doing so, they stated:
Generally speaking, the Act confers bargaining rights on the basis of the expression of the wishes of a majority of employees. The union’s bargaining rights attach to the workplace and not to individual employees, so that employees who join that workplace (in whatever fashion) after bargaining rights are granted are covered by the collective agreement if they fall within its scope. To that extent, the scheme of the Act provides that new employees have no “choice” in the matter. Once granted, bargaining rights are subject to termination in accordance with the Act and in this way, the Act permits employee wishes to be tested.
In this case, the employer urges the Board to exercise its discretion and to apply its labour relations expertise under section 69(6) to direct a representation vote to permit the expression of employee wishes. The employer is asking the Board through section 69(6) to create a new vehicle for allowing employees to express their choice.
The employer seeks to elevate “employee choice” to a right that triggers a vote in a bargaining unit when a sale has occurred and non union employees are affected. The Act provides opportunities for all employees – including ADT’s employees in this case – to choose to terminate their union’s bargaining rights during the statutory open periods at the conclusion of every collective agreement. To direct a vote in this case would subvert the protection of bargaining rights that is the purpose of the sale provisions of the Act and it would, at the same time, disrupt the normal cycle of open periods in which employees may terminate their union’s bargaining rights.
The case stands for the proposition that a representation vote under section 69(6) will not be ordered where a unionized company purchases a non-unionized company. Where a non-union business is purchased by a unionized employer, the employees of that non-union business who fall within the scope clause in the purchaser’s collective agreement are an accretion to the purchaser’s pre-existing bargaining unit. If those employees want to rid themselves of the union, they can make an application during an open period to terminate the union’s bargaining rights as provided in the Act.