The Ontario Labour Relations Board issued an interesting decision yesterday that attracted some media attention. Here’s a Toronto Star piece.
The case involved unionized employees of Richtree restaurant at the Eaton Centre who were terminated last January when the store closed. When the company opened a new restaurant at a different part of
the mall, it refused to recall its old employees and took the position that the collective bargaining rights did not apply at the new location. The workers’ union filed an unfair labour practice complaint alleging bad faith bargaining and discrimination against union members by the employer. The union argued that a company can’t just close a store and then open up 50 metres away and then claim that all collective bargaining rights have been distinguished.
Here’s how the law works. Unions obtain a legal right to represent a defined group of employees of an employer (a ‘bargaining unit’). The bargaining unit is defined by two factors: (1) the types of jobs that are included in the unit; and (2) the geographic scope of the unit. For example, the geographic scope could be as large as all of Ontario, or the City of Toronto, or as small as a specific street address that captures just one location of the employer. It was the geographic scope at issue in this case. The question was whether the bargaining unit scope included any location of Richtree in the Eaton Centre, or just a very specific corner of the Eaton Centre in which the old restaurant existed.
Facts in a Nutshell
The union (UNITE HERE , Local 75) has represented workers of Richtree Market restaurant at the Eaton Centre in Toronto since 1996. That store closed in January 2013, and all of the unionized employees were terminated. But in September 2013, Richtree opened a new, larger store at the other end of the mall, some 50 metres away from the old store. The bargaining unit that the union was initially certified to represent was “all employees of the restaurant located at the Eaton Centre, Toronto”. If that simple language applied, then it would have been obvious to everyone that a move within the mall would leave the collective agreement in place for the new location. However, in 2006, the collective agreement scope clause was amended to read “all employees of Richtree Markets Inc … located at the Eaton Centre, 220 Yonge Street”. The actual address of the Eaton Centre is 1 Dundas Street West, so the reference to 220 Yonge Street is confusing, and the Board was quite critical of both parties for not calling witnesses who could explain how that language ended up in the collective agreement. In evidence were some examples of paperwork (including a business card of a senior Richtree employee) and websites, including the Eaton Centre website itself, which lists the address of the Eaton Centre, or parts of it, as 220 Yonge. There was also evidence that Richtree asked the City to issue it a new distinct Queen Street address, but that in fact that new address was on paper only: there is no door, no restaurant, and no signage indicating that there is a Richtree restaurant located at 14 Queen Street.
Issue: Do the bargaining rights of the union flow from the old location to the new Richtree restaurant within the Eaton Centre?
Yes, they do. OLRB Chair Bernie Fishbein ruled that, in the absence of evidence that the parties intended, by introducing “220 Yonge Street” into the collective agreement scope clause, to change the original scope from ‘the Eaton Centre” to a specific physical space within the mall, the most logical conclusion was that the parties just used 220 Yonge as a proxy for the Eaton Centre:
Bernie Fishbein, Chair of the OLRB: “In the end, I conclude that 220 Yonge Street is added as merely a description of the Eaton Centre – not a limiting qualification or restriction to only part of the Eaton Centre.”
So what does this mean? All the Board decided here is that the union still represents the Richtree employees at the Eaton Centre. The bargaining rights of Unite Here carried over from the old to the new location of the restaurant.
The next issue will be sorting out what that means in practice. It’s not clear to me from the decision whether there is a collective agreement currently in force, or whether it has expired. If there is an agreement in effect, then it would now presumably apply to all of the existing Richtree employees and would supplant their individual (nonunion) employment contracts. The employees’ wages will be whatever the collective agreement specifies, their benefits will be as indicated in the agreement, they will start to pay union dues, and have access to the collective agreement’s grievance procedure, and so on. If the collective agreement has a standard “just cause” for discipline and dismissal clause, then the employer will no longer be able to fire employees for no reason at all (as nonunion employers can in Canada, except in the Federal sector) with notice, but will now need to establish a good reason for the dismissal.
An interesting point is what happens to the terminated employees of the old location. Assuming the collective agreement included recall rights for laid off employees, then the refusal to recall the original workers would be a violation of that clause. The remedy for that legal breach would be reinstatement of the employees to their old jobs, with compensation for any lost wages and benefits to make them whole (they were paid some amount of severance pay which would cover some or maybe even all of those loses). Right? Recalling the old employees may necessitate terminating some of the new employees if there are not enough jobs for everyone.
Issues for Discussion
The legal onus was on the union to establish that the collective bargaining rights carried over to the new location. The “220 Yonge Street” address in the bargaining unit description was found to be ambiguous (unclear as to its meaning). Do you think that this ambiguity should have been resolved by a ruling that the union has failed to prove that it captures the new location? Or do you agree with the Board that the most obvious interpretation is that the parties intended that address to mean “the Eaton Centre”?
Advanced question for labour law students: Who should resolve the outstanding issues relating to the legal effect of this ruling: the OLRB or a labour arbitrator assigned under the collective agreement? Do those two entities have different remedial powers?