Page: 1 PROVINCE OF PRINCE EDWARD ISLAND IN THE SUPREME COURT - APPEAL DIVISION

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1 Page: 1 PROVINCE OF PRINCE EDWARD ISLAND IN THE SUPREME COURT - APPEAL DIVISION Citation: Trigen v. IBEW & Ano PESCAD 16 Date: Docket: S1-AD-0930 Registry: Charlottetown BETWEEN: AND: TRIGEN ENERGY CANADA INC. AND TRIGEN P.E.I. APPELLANT THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL Workers, LOCAL 1432 AND THE LABOUR RELATIONS BOARD OF PRINCE EDWARD ISLAND RESPONDENTS Before: The Honourable Chief Justice G.E. Mitchell The Honourable Mr. Justice J.A. McQuaid The Honourable Madam Justice L.K. Webber Appearances: John K. Mitchell, Q.C. Counsel for the Appellant J. Gordon MacKay, Q.C. Counsel for the Respondent, The International Brotherhood of Electrical Workers, Local 1432 M. Lynn Murray Counsel for the Respondent, The Labour Relations Board of Prince Edward Island Place and Date of Hearing Place and Date of Judgment Charlottetown, Prince Edward Island June 25, 2002 Charlottetown, Prince Edward Island September 6, 2002 Written Reasons by: The Honourable Chief Justice G.E. Mitchell Concurred in by: The Honourable Mr. Justice J.A. McQuaid The Honourable Madam Justice L.K. Webber

2 Page: 2 Judicial Review - Error with respect to jurisdiction - Appeal allowed - Decision of Labor Relations Board quashed Authorities Cited: STATUTES CONSIDERED: Labor Act R.S.P.E.I. 1988, Cap L-1, s-s.16(4), s.39, s- s.39(1), s-s. 39(2), s-s. 39(5); Judicial Review Act R.S.P.E.I Cap J-3 Reasons for judgment: MITCHELL C.J.P.E.I.: [1] This appeal concerns the jurisdiction of the Labor Relations Board (Prince Edward Island) ( the Board ) under section 39 of the Labor Act R.S.P.E.I. 1988, Cap L- 1. Section 39 deals with issues involving the continuity of bargaining and collective agreement rights in cases of business transfers. [2] The appeal is from the August 30, 2001 decision of a Trial Division judge. See: Trigen v. I.B.E.W. & Ano PEISCTD 82. That decision rejected the appellants ( Trigen ) claim for relief under the Judicial Review Act R.S.P.E.I Cap J-3. [3] The subject of the judicial review proceeding was the January 11, 1999 decision of the Board on an application by The International Brotherhood of Electrical Workers, Local 1432 ( the Union ) under s. 39 of the Labor Act. The application was for an order requiring Trigen, a business transferee, to adhere to the terms of a collective agreement that had been entered into by the Union on behalf of power engineers employed at a heating plant ( the plant ) while it was owned and operated by the transferor, the University of Prince Edward Island ( the University ). [4] The University and the Union had entered into the collective agreement to cover the period from May 1, 1996 to April 30, During the term of the agreement the University decided to transfer the plant to Trigen. In contemplation of the transfer, the University and the Union negotiated a severance package for the power engineers employed at the plant. An agreement was reached on August 23, It provided as follows: WHEREAS the University and the Union are parties to a Collective Agreement with an effective date of May 1, 1996 and an expirty date of April 30, 1999; AND WHEREAS the Union is the certified bargaining agent of a classification of employees listed in the Collective Agreement as Power Engineer;

3 Page: 3 AND WHEREAS the parties wish to make an agreement providing for the terms and conditions of the separation of the employment of these Power Engineers from the employment of the University as a result of the transfer of the heating plant services from the operation of the University to Trigen Energy Canada Inc., which transfer is scheduled to take place in THEREFORE, the parties agree as follows: 1. Until such time as the transfer takes place, the Power Engineers shall remain as employees of the University and shall be entitled to all of the rights and benefits of the Collective Agreement and other employment conditions of the University presently enjoyed by the employees; 2. If any of the present Power Engineers suffers a direct loss of employment as a result of the transfer of the heating plant operation, a separation payment will be made to each employee as follows: Severance Pay: 1. Seventeen (17) week s pay in lieu of notice; plus Regular Severance: 2. For employees with a minimum of five (5) years of continuous service at the date of termination of employment, one (1) week s pay per year of service. Special Severance: 3. One (1) week s pay per year of service up to ten (10) years, and two (2) week s pay per year of service in excess of ten (10) years. 4. The payment may be taken as a retirement allowance to a maximum of two thousand ($2,000.) dollars per year of service prior to 1996 and transferred to an RRSP or a deferred annuity with the remainder, if any, taken as a cash payment; or the complete severance payment may be taken in cash. 3. To qualify for this severance payment, the present Power Engineers are required to: (a) Apply for, and make a reasonable effort to obtain, employment with Trigen Energy Canada Inc. when its positions are advertised;

4 Page: 4 (b) (c) (d) If offered employment with Trigen, in a similar capacity, the employee must accept that employment; Continue in the employment of the University until September 30, 1996, or the date on which Trigen Energy Canada Inc. formally takes over the operation of the heating plant and the employment relationship with the University is formally severed. Lose their employment as a direct result of the takeover of the heating plant operation by Trigen Energy Canada Inc. These provisions shall be in lieu of, and not in addition to, any other severance benefits contained in the Collective Agreement. Subsequently all of the power engineers at the plant were either transferred to other positions in the University or were terminated. Those terminated received the severance payment that had been agreed upon between the Union and the University. On April 1, 1997 Trigen acquired the plant from the University. Trigen was a non unionized employer at the time of the transfer. However, around the time of the transfer Trigen did hire some power engineers who had been members of the Union and employees covered by the collective agreement when the University operated the plant. These power engineers worked some of the time at the plant but most spent the majority of their time at other Trigen workplaces. According to the evidence before the Board, only one of them has spent significant time at the plant since the transfer. [5] On December 5, 1997, eight months after the transfer, the Union filed a successor rights application with the Board under s. 39 seeking an order requiring Trigen to honor the terms of the collective agreement in place of the University. In its application the Union claimed that there had been no substantial change in the character of the business since the transfer but acknowledged that intermingling of unionized and non unionized employees in the workplace had taken place. [6] On December 23, 1997 Trigen, as authorized by s-s. 16(4) of the Labor Act Regulations, filed a reply to the Union s application. In its reply, Trigen: a. denied there had been a transfer of the business; b. claimed that the Union by entering into the severance agreement of August 23 with the University, had given up its bargaining rights with respect to the power engineers at the plant and thus to any successor rights under s. 39; c. claimed there was a substantial difference in the character

5 Page: 5 of the business being carried on at the plant; d. admitted that it did hire some power engineers formerly employed by the University at the plant but claimed most of them did little or no work at that site; e. contended that the former University employees represented only a small percentage of the power engineers employed by Trigen at the plant and an even smaller percentage of those power engineers employed in Trigen s integrated operations of which the plant had become a part; and f. claimed that the Union did not represent a majority of employees working at the plant. [7] Section 39 of the Labour Act provides as follows: TRANSFER OF BUSINESS AND SUCCESSOR RIGHTS 39. (1) Where an employer sells, leases or transfers or has agreed to sell, lease or transfer his business or the operations thereof or any part of either of them, and (a) either the employer or the purchaser, lessee or transferee or both of them is a party to or is bound by a collective agreement with a bargaining agent on behalf of any employees affected by such sale, lease or transfer; (b) one or more bargaining agents have been certified as bargaining agent for any such employees; (c) one or more trade unions have applied to be certified as bargaining agent for any such employees; or (d) one or more bargaining agents have given or are entitled to give notice under either section 21 or section 23 with respect to any such employees, unless and until the board otherwise directs, such collective agreement, certification, application, notice or entitlement to give notice continues in force and is binding upon such purchaser, lessee or transferee. (2) Any such employer, purchaser, lessee or transferee, or any such bargaining agent or trade union may apply to the board for the resolution of any question or problem that, as a result of such sale, lease or transfer, has arisen or may arise with respect to any such collective agreement, certification, application, notice or entitlement to give notice. (3) Upon such application being made, the board shall, by order, make

6 Page: 6 such award, give such direction, or take such other action, as in its discretion the board considers appropriate, to resolve any such question or problem and, without restricting the generality of the foregoing, may by such order or subsequent order (a) amend or rescind to such extent as the board considers necessary or appropriate any such collective agreement; (b) revoke or amend any such certification or amend any such application for certification; (c) modify or restrict the operation of any such notice or entitlement to give notice; (d) determine whether employees affected constitute one or more appropriate bargaining units; (e) if more than one collective agreement is to continue in force, designate which employees are to be covered by such agreements; (f) modify or restrict the operation or effect of any provision of any such collective agreement and define the rights with respect thereto of any employees affected by such sale, lease or transfer; (g) declare which trade union shall be the bargaining agent for such employees; and (h) interpret any provision of any collective agreement. (4) Until the board has disposed of any application under subsection (3), such purchaser, lessee or transferee, notwithstanding any other provisions of this Part, shall not be required to bargain with any such bargaining agent with respect to employees to whom the application relates. (5) Where any application is made under this section, the board may make or cause to be made such examination of records or other inquiries and may hold such hearings and take such representation votes as it considers necessary and prescribe the nature of evidence to be furnished to the board. (6) Where an employer who is a party to or is bound by more than one collective agreement reorganizes or intends to reorganize his operations so that employees covered by separate collective agreements are intermingled or will be intermingled, the board may, on application by such employer or any bargaining agent party to any such collective agreement, exercise the powers conferred on the board by this section and the provisions of this section shall apply. (7) Where two or more municipalities are amalgamated, united, or

7 Page: 7 otherwise joined together, or all or part of one such municipality is annexed, attached, or added to another such municipality, the provisions of this section apply. [8] The s. 39 application was heard on September 23, At the beginning of the hearing Trigen conceded there had been a transfer of business within the meaning of s. 39. However, Trigen argued that as a result of the severance agreement between the Union and the University, there had been a bargaining away or waiver of successor rights and that, in any event, they ought not to be extended due to the intermingling of employees that had occurred as a result of the transfer. Before any evidence was called, the following discussion clarifying the issues that were to be considered by the Board took place: Mr. McBride [the union representative]: I just have one question, Mr. Chairman, before we proceed here to be clear on what the Board is looking for. Is the Board only going to look now for the issue of what took place with respect to successor rights, the deal, the contract? Mr. Mitchell has agreed there has been a transaction. Mr. Chairman: Yes. The transfer - and that was, I thought, the paramount consideration, and the respondent has conceded that point, but I saw that as the threshold issue and if we didn t get over that then he s conceded that point so I think we re on now to the issue of the operation, and we ll hear evidence on the operation or non-operation of the plant. And the intermingling issue is the second issue that was raised by the respondent. Mr. Mitchell [counsel for Trigen]: And as well issues concerning the Memorandum of Agreement, I trust as well. Mr. McBride: Yes, we re prepared to speak to that Memorandum of Agreement, and the content of that, what was discussed or lack of.... [9] Nobody contended the Board did not have jurisdiction to deal with the issues discussed above. In fact, Mr. McBride, the Union representative, stated at p. 96 of the transcript... I think the Board s got wide discretionary means to handle this application with respect to any issue raised with successorship. At p. 12 of the transcript he said Well we know there s intermingling of employees to some degree. Then at p. 107 he said I ll leave it to the Board s discretion on dealing with the intermingling. Intermingling is of course an important factor in a s.39 application because it gives rise to the question of whether collective bargaining rights attached to the predecessor employer should be continued. [10] On January 11, 1999 the Board rendered its decision. In it the Board defined the issues as follows: ISSUES

8 Page: 8 The Board acknowledges the Applicant s stated position that this matter is site specific to the operations on the UPEI Campus and not aimed at any other TRIGEN PEI/TRIGEN ENERGY Canada Inc. operation. Upon the concession on the part of Counsel for the Respondent that, within the meaning of the Act, there had been a transfer of operations, the Board was left to consider the issues: a) Was there a bargaining away of successor rights by the Applicant; b) Was there a waiver of successor rights by the Applicant; and c) Was there an intermingling of employees so as to extinguish any successor rights. [11] The Board had before it extensive evidence and argument concerning all of the issues it identified. In spite of that and in spite of the discussions that had taken place at the hearing, the Board declined to deal with any of the issues in dispute and decided to issue a declaration of successor rights for the Union simply on the basis of the transfer of business that had been conceded at the outset of the hearing. The Board set out its conclusion as follows: CONCLUSION The Applicant seeks a ruling of this Board that, in relation to the Plant Operators on the UPEI Campus, successor rights did survive or were transferred pursuant to Section 39 of the Act by virtue of the transactions that took place between the University of Prince Edward Island and Trigen. Flowing from such a finding, the Applicant also claimed that the Board should rule that while the plant is operating it must be operated by Union Members and the personnel operating should be paid Union rates for work performed. It also asked the Board to rule that Trigen failed to collect Union dues since its commencement of operations in the Spring of 1997 and that these monies are due and owing. It was submitted that the Board has the right to make such a ruling pursuant to the Applicant s interpretation of Section 39(3) of the Act. The Board rules with respect to the initial submission of the Applicant, and on the basis of the concession made by the Respondent, that there was a transfer of operations as envisioned by Section 39 of the Act. As to the relief sought by the Applicant, the Board cannot concur with the Applicant s interpretation of Section 39(3) as empowering it to make such an Order. The Respondent submitted that there was either bargaining away of successor rights as evidenced by the Agreement, a waiver of successor rights by reason of acquiescence of the Respondent form the Spring of 1997 to the date of this Application December 1997, or such an intermingling of employees as to extinguish successor rights. The Board, at this time, and on the basis of the evidence currently before it, is not prepared to so rule.

9 Page: 9 In summary, the Board has granted the site specific Application to the extent that successor rights flow with the subject transfer of operations. The Board does not have the power nor the evidentiary basis to grant anything other than successor rights. [12] On February 10, 1999 Trigen filed the application for judicial review of the Board s January 11, 1999 decision. The application for judicial review was based on the Board s failure to deal with the intermingling and waiver issues. [13] Although only Trigen applied for judicial review, neither party was satisfied with the Board s decision of January 11, Subsequent to the filing of the judicial review both Trigen and the Union, albeit for different reasons, requested the Board to reconsider its decision of January. Trigen contended the Board should reconsider because of its failure to deal with the intermingling or waiver issues and because it failed to deal with collateral issues arising out of its declaration of successor rights. The Union in a counter application for reconsideration wanted the Board to exercise its discretion under s-s. 39(3) to order that the plant must be operated with members of the Union employed under the terms and conditions of the Collective Agreement. A reconsideration hearing was held on April 21, 1999 at the end of which the Board ruled against altering its earlier decision. The reconsideration decision itself was not made the subject of judicial review proceedings. [14] The judicial review hearing relating to the January 11, 1999 decision took place on May 17, 2001 and on August 30, 2001 the decision now under appeal was rendered. In his decision the judicial review judge held that the Board acted properly in not dealing with the intermingling or waiver issues. In fact he went so far as to say the Board was prohibited from dealing with the intermingling or waiver issues because Trigen had not made an application under s. 39(2) of the Labor Act. He stated at paragraph 18 of his decision: It is clear that an application dealing with the issue of intermingling or any other problem with the continuation of the Collective Agreement should be made in accordance with s. 39(2). The judicial review judge took the position that the only matter before the Board was an application under s. 39(1). As a result he dismissed the application for judicial review. [15] Trigen seeks to have the judicial review judge s decision reversed and the Board s decision quashed. [16] I would allow the appeal because the judicial review judge made errors of law respecting the Board s jurisdiction. In my view, he construed the Board s authority much too narrowly. The Board clearly had ample jurisdiction and evidence to deal with all issues raised by the Union and Trigen in the application and the reply. A separate application by Trigen would have been superfluous.

10 Page: 10 [17] The judicial review judge erroneously held that the Union s application was confined to s-s. 39(1) of the Labor Act and that as a consequence, the Board s authority was restricted to that subsection. He also erred in law by holding the intermingling and waiver issues could not be dealt with by the Board unless Trigen made a separate application for relief under s-s. 39(2). [18] The Union s application was not under s-s. 39(1); rather, on its face it was stated to be under s. 39 without any reference to a specific subsection. Subsection 39(1) is only a statement of the law. It simply states as a matter of law that, in the case of a transfer of a business, an existing collective agreement binds the transferee unless and until the Board directs otherwise. Subsection 39(2) provides that either a bargaining agent or the transferee may apply to the Board to have it resolve any question or problem with respect to a collective agreement that has arisen as a result of a business transfer. In resolving such a question or problem, the Board can utilize its powers under s-s. 39(3)and s-s. 39(5). [19] The question of whether there has been a transfer is always a threshold issue under s. 39 but it is certainly not the only one. In the case at bar, there was clearly a problem or question with respect to the continuation of the collective agreement arising from the transfer that needed to be resolved. The Board had to decide whether it was appropriate to substitute Trigen for the University as employer under the collective agreement in light of the negotiations that had taken place prior to the transfer and the intermingling of employees that had taken place afterwards. The Board was well equipped to resolve the problem. It had the authority, the expertise, and the evidence to do so and if it needed more, it could have utilized its powers under s-s. 39(5). The issues put before the Board by the parties were the very types of problems and questions the Board was intended to resolve under s. 39. [20] I would set aside the decision of the judicial review judge, quash the decision of the Board, and order a new hearing before another panel. The Union shall pay Trigen s costs both here and in the court below. No costs are awarded to or against the Board. I AGREE: The Honourable Mr. Justice J.A. McQuaid I AGREE: The Honourable Madam Justice L.K. Webber The Honourable Chief Justice G.E. Mitchell