Canadian Airport Workers Union v Goodwill Industries

ONTARIO LABOUR RELATIONS BOARD

OLRB Case No: 1298-20-R

Canadian Airport Workers Union, Applicant v Goodwill Industries,

Ontario Great Lakes, Responding Party

BEFORE: Derek L. Rogers, Vice-Chair

APPEARANCES: Raymond Seelen and Artan Milaj appearing for the

applicant; Christopher A. Sinal, Jennifer J. Herpers, and Michelle Quintyn

appearing for the responding party

DECISION OF THE BOARD: March 4, 2022

This is an application pursuant to section 69 of the Labour

Relations Act, 1995, S.O. 1995, c.1, as amended (the “Act”) in which

the applicant trade union, the Canadian Airport Workers Union (“the

applicant” or “the Union”), asserts that Goodwill Industries, Ontario

Great Lakes (“the responding party” or “OGL”) is a successor employer

to Goodwill Industries of Toronto, Eastern, Central and Northern Ontario

(“TECNO”) and bound to its collective agreement.

In the application, the Union alleged that “Goodwill TECNO has

sold or transferred all or part of its business to the Responding Party

and/or there has been an amalgamation of the Responding Party with

Goodwill TECNO”.

OGL contended that no sale of business within the meaning of

section 69 of the Act took place between it and the “now defunct” TECNO

and that the applicant’s seeking to apply section 69 amounts to an

attempt to expand its bargaining rights. The remedies requested in the

application were described differently in that the Union sought a finding

that OGL “is bound to the Collective Agreement between the Applicant

and Goodwill TECNO with respect to its operations in any of the areas

where Goodwill TECNO once operated” and a declaration that OGL is

required to bargain with the applicant for the purpose of negotiating a

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new collective agreement. That is to say, the application did not suggest

that the Union sought to extend its bargaining rights beyond the area

for which it had been recognized by TECNO.

The parties submitted a joint book of documents and agreed

about many of the material facts.

The responding party’s Chief

Executive Officer, Ms. Michelle Quintyn, was the only person called to

testify.

The parties concluded their cases with written submissions

delivered in December 2021 and in January 2022.

Background

The applicant was certified to represent the employees of

Goodwill Industries of Toronto¹in December 2012. Those parties

entered into a collective agreement for a term that ran from March 2013

to March 2016. While TECNO anticipated bargaining with the Union, no

renewal agreement was concluded after TECNO’s disaffiliation as a

Goodwill operation on February 3, 2016 and its filing an assignment in

bankruptcy on February 8, 2016.

The disaffiliation resulted in TENCO’s Goodwill territory

becoming unassigned and available.

The recognition clause in the collective agreement was quoted

as follows by the responding party:

2.01 Goodwill recognizes the Union as the sole and

exclusive bargaining agent for all employees of Goodwill

Industries of Toronto, Eastern, Central & Northern Ontario

including REACH employees, save and except assistant store

managers and those above the rank of assistant stores

managers, team leads and those above the rank of team

leads, office, clerical, security and professional staff,

supported employees on the roles of the Ministry of

Community and Social Services, persons employed in the

Creative Services Division and students employed during the

school vacation period.

1

The parties did not explain the migration from “Goodwill Industries of Toronto” to “Goodwill

Industries of Toronto, Eastern, Central and Northern Ontario” or whether the change as solely

in the name and not in the Union’s jurisdiction.

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The applicant indicated in its pleading that TECNO’s operations

had included sixteen stores and ten donation centres in Toronto,

Mississauga, Brampton, Newmarket, Barrie, Orillia and Brockville.

TECNO was, and OGL continues to be, one of more than one

hundred fifty entities (sometimes “Goodwills” or “a Goodwill” if a single

entity) in Canada and the United States that, together with member

agencies in other countries, comprise Goodwill Industries International

(“GII”), described by the responding party as a network of “autonomous

community-based non-profit charities . . . striving toward achieving a

mission . . . most often centred on serving people who face disability or

who are marginalized and shut out of full participation in society”.

OGL described itself as having online services and forty-two

locations through which it “provides work opportunities, skills

development, and employee and family strengthening.”

More

particularly, OGL added:

Its mission services and operations are multi-faceted and

include: life stabilization, soft and technical skills training;

career advancement services; donation centres; community

(thrift) stores; boutique stores; bookstores; café and

banquet services; manufacturing wheel chairs; de-

manufacturing computer parts; assembling and packaging

medical supplies; apparel manufacturing; and recycling.

Social enterprises, such as thrift stores, offer opportunities

for people shut out of work to gain skills, experience, work

readiness, and the dignity and purpose that comes with

work.

The applicant characterized the responding party more

prosaically as “a not-for-profit business which collects, repairs and sells

used goods and clothing”. The Union did allow that OGL “also engages

in certain charitable activities”. Both descriptions were borne out on the

evidence.

The applicant expanded on its description in its submissions:

Goodwills . . . view themselves as movement oriented. The

central philosophy underlying the movement is the provision

of work to those who face barriers in entering the workforce,

such as persons with disabilities or recent immigrants.

Goodwills believe that by providing these persons with work

in Goodwill facilities and by providing job training or other

services, they are giving their employees the skills that they

need to enter the workforce elsewhere. This development

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is both funded by and facilitated through the Goodwills’

commercial operations.

These commercial operations

consist of the collection, repair and resale of used goods.

Resale typically occurs in thrift stores, but some Goodwills

(including the Responding Party) also sell goods online.

Some Goodwills engage in other activities in addition to their

thrift stores, such as the operation of cafes or of catering

services.

For the purposes of this matter, it is sufficient to accept that GII

provides services to member agencies such as TECNO and OGL,

authorizes members to operate under the Goodwill brand, regulates the

use of Goodwill’s names, trademarks, and logos, including the name

“Goodwill” and what is referred to as the “smiling G” logo, enforces

prescribed membership standards, sets quality standards for goods and

services offered by members, polices accreditation, affiliation and

disaffiliation, and determines applications for membership, including

applications of subsisting member agencies to acquire an unassigned

territory such as that created by the disaffiliation of TENCO.

GII was not a party to this application.

While it subsequently disputed the applicant’s characterization

of GII’s grant of territorial authority to a Goodwill as a licence, OGL did

state in its submissions that GII grants members “a license . . . to

operate under the Goodwill brand” including “the right to use the

Goodwill names, trademarks, service marks and logos”.

Goodwills pay dues to GII in accordance with their revenues.

Each Goodwill is allocated a specific geographic territory within

which it will have the exclusive rights to the services associated with the

Goodwill name and undertaking, and to carry on business as a Goodwill.

Each member agency is at liberty to select the services it will offer in its

assigned territory.

Goodwills do not compete with each other. As noted by the

applicant in its closing submissions, GII’s territory policy “protects

Goodwills on multiple fronts, including competition for customers,

financial donors, grants, donated goods and real estate.” Rather than

compete, the Goodwills are expected to and do engage in the sharing of

advice and expertise in order to facilitate the advancement of the

“movement’s” objectives. In that vein, Ms. Quintyn, as an experienced

CEO for OGL, mentored TECNO’s CEO for several years following her

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appointment and through to TECNO’s eventual disaffiliation and

bankruptcy.

The GII Territory Policy includes the following provision:

Each Member is assigned a territory by the GII Board of

Directors with precise boundaries upon its recognition as an

Organizational Member. The territory given to a Member

shall be an asset of that Member and not subject to violation

by another Member (or the other Member’s affiliates,

subsidiaries, or other related organizations) or GII. Any

Member that accepts an assignment of territory

acknowledges that at such time as a local Goodwill ceases

to be a member of GII, whether through resignation or

termination of membership, that member’s geographic

territory (but not its real or personal property) will revert to

unassigned status until the Board of GII reassigns that

territory.

OGL has been in place for more than seventy-five years, and

recently expanded its historically settled territory in two steps: first, its

successful application in 2016 to be granted what had been TECNO’s

territory²and, secondly, its acquisition, by merger, of the locations of

another Goodwill agency, Goodwill Industries Essex Kent Lambton Inc.

(“EKL”), in 2019.

In its 2016 application to GII, the responding party described

the TECNO territory as follows: “The TECNO Goodwill is the 4th largest

territory in the Goodwill International movement with 9.6 million people

equivalent to 30% of the Goodwill market share in Canada.”

TECNO’s territory comprised much of Central, Eastern and

Northern Ontario to Thunder Bay and beyond; however, its operations

had consisted principally of community thrift stores and donation

centres in Toronto, Ottawa, Brockville, Kingston, Brampton, Richmond

Hill, Newmarket, York, Peel, Barrie, and Orillia. TECNO employed

approximately six hundred workers immediately prior to its shutdown.

The responding party’s territory, before the expansions in 2016

and 2019, included the counties of Middlesex, Elgin, Norfolk, Oxford,

Perth, Waterloo, Wellington, Huron, Bruce and Grey. OGL has

2

The applicant referred throughout its submissions and reply to this as the “TECNO Territory”

while the responding party favoured identifying it as the “Unassigned Territory”. I have most

often referred to the “TECNO territory” solely as a matter of convenience.

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approximately nine hundred employees.

In addition to other

endeavours, OGL now manages donation centres, thrift stores, and

boutiques for used personal, household and other goods in forty-two

locations in London, Strathroy, St. Thomas, Tillsonburg, Ingersoll,

Woodstock, Wallaceburg, Chatham, Windsor, Essex, Kingsville,

Goderich,

Stratford,

Cambridge,

Kitchener-Waterloo,

Guelph,

Mississauga, Toronto, and Newmarket.

The Demise of TECNO

Late in the day on January 15, 2016 the board of directors of

TECNO approved resolutions authorizing its CEO, Ms. Keiko Nakamura,

to layoff all employees effective at the end of the following day, to

terminate operations and close all stores effective at the same time, and

to file appropriate documents in connection with the termination of all

employees. The members of the TECNO board resigned en masse that

evening.

Consistent with those resolutions, TECNO employees, including

the applicant’s members, attending work on January 17, 2016 found

locked doors and posted signs indicating that TECNO had ceased all

operations effective immediately.

Ms. Quintyn had been mentoring Ms. Nakamura, in accordance

with a formal GII mentorship programme. Nevertheless, and while she

was aware of difficulties that confronted TECNO and Ms. Nakamura,

Ms. Quintyn testified that the demise of the neighbouring Goodwill

shocked her. She and OGL’s chief financial officer attempted to assist

in restoring TECNO’s operations; however, GII’s board of directors voted

on February 3, 2016 to disaffiliate TECNO with immediate effect.

The disaffiliation required TECNO to cease representing itself as

a Goodwill, to cease using the Goodwill trademarks and logos, and to

destroy all signs identifying it as a Goodwill entity. That ended TECNO’s

right to carry on as a Goodwill in its assigned territory and rendered

ineffective its attempt at resuscitation; however, Ms. Nakamura, with

assistance from Ms. Quintyn and OGL, did pursue an attempt to

restructure TECNO for a period after GII’s notice of its disaffiliation.

On February 8, 2016, TECNO filed an assignment in bankruptcy.

The statement of affairs in the bankruptcy indicated TECNO’s total

liabilities to have been in excess of six million dollars against assets

valued at less than one million dollars. Those assets included inventory

and accounts receivable, but no real estate and no trade fixtures.

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The trustee in bankruptcy liquidated TECNO’s assets for the

benefit of creditors. OGL acquired none of those assets.

TECNO’s landlords assumed their respective properties and all

Goodwill signage was removed from their sites.

In the result, following the liquidation processes, nothing

remained of TECNO’s stores, donation centres, or other assets as

elements associated with a Goodwill or GII.

OGL Obtains the Former TECNO Territory

On March 8, 2016, Ms. Quintyn proposed to her board of

directors that OGL should apply to GII for the open territory made

available by the disaffiliation of TECNO. The application was made to

GII on March 24, 2016 and granted on June 12, 2016.

In its submissions to the Board, OGL made the following points

regarding its application to GII:

.

OGL’s application “addressed the risks the organization

would face if it was granted the Unassigned Territory,

including the likelihood of unionization”.

.

OGL’s business plan for the Unassigned Territory

presented a very different business model to TECNO.

OGL’s approach was focused on lean processes with

rigorous operating procedures, driven by data and

science.

.

No staff of the former TECNO . . . assisted in drafting

OGL’s Application.

OGL’s Application did not involve leveraging TECNO’s

assets as there were no assets to leverage. TECNO’s real

estate had been assumed by the landlords, the

donations and equipment were liquidated, and the

senior management team was not interested in coming

over to OGL.

The decision of the GII board of directors to award the former

TECNO territory was stated in the responding party’s pleading as

“thereby expanding OGL’s territory to include: Toronto, York, Peel,

Durham, Dufferin, Simcoe, Kawartha Lakes, Northumberland,

Peterborough, Prince Edward, Hastings, Lennox & Addington, Frontenac,

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Leeds & Grenville, Lanark, Ottawa, Stormont Dundas and Glengarry,

Prescott & Russell, Renfrew, Halliburton, Muskoka, Nipissing, Parry

Sound, Manitoulin, Greater Sudbury Area, Sudbury, Algoma, Cochrane,

Thunder Bay, Rainy River and Kenora.”

OGL’s Conduct after Obtaining the Territory

OGL noted in its pleading that it “did not expand its operations

into the unassigned territory . . . for over three years.” Ms. Quintyn

explained the delay as a function of financial concerns, the restricted

availability of suitable properties in the areas it wished to serve, and the

merger with EKL that had not been a factor at the time of OGL’s

application to GII for the former TECNO territory. The documentation

supporting the responding party’s application for the territory also

indicated that the planned development of the territory was to be

staged.

On June 28, 2019, OGL opened a boutique Goodwill store in

Newmarket.

Almost one year later, on June 16, 2020, the responding party

opened a thrift store and donation centre on Dundas Street East in

Mississauga, in connection with which it pleaded:

Although TECNO once operated a donation centre/thrift

store at the same premises in which the Mississauga

boutique store³[sic] now operates, OGL did not assume

TECNO’s lease. Rather, there were four tenants who leased

the premises between TECNO and OGL. Moreover, the

building is now owned and managed by a different

organization.

In its application, the Union pleaded: “In June 2020, the

Applicant became aware that certain stores which had been operated by

Goodwill TECNO had reopened and were now being operated by the

Responding Party”. The applicant did not address the extent of its

knowledge or ignorance about OGL’s being granted the territory in 2016

or its opening a location in Newmarket in June 2019.

OGL acknowledged that both it and TECNO sold donated goods

— clothing, shoes, household items, games, recreational equipment,

3

This is a misdescription; the Mississauga location is a thrift store/donation centre and not a

boutique operation.

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books, etc. — at the Mississauga location and that its locations dealt

with items of the same sorts TECNO had received and sold. Regardless

of OGL’s “lean processes” and “rigorous operating procedures, driven by

data and science”, there was no evidence of any changes in the

functioning of OGL’s donation centres and thrift stores in Newmarket

and Mississauga that were material in the context of labour relations

generally and section 69 of the Act in particular.

The responding party also opened a facility on Dufferin Street

in Toronto. Ms. Quintyn was unsure whether it opened in 2020 or 2021;

however, as neither party referred to that location in their pleadings

filed in or about September 2020, one would assume that the third

location was opened after September 2020.

Leaving aside the disputed significance of OGL’s successful

application for the former TECNO territory, the parties agreed that the

responding party did not purchase or otherwise acquire any of the

assets, inventory, equipment or supplies that had been used or in the

possession of TECNO prior to its demise.

OGL had not taken the place of TECNO on any leases or

contracts. It did not employ any former employees of TECNO, and it

maintained that there had never been “any transfer of expertise,

knowledge and/or skill of key personnel from TECNO to OGL”. The

responding party also pleaded:

There has never been the purchase or transfer of goodwill,

actual or otherwise, from TECNO to OGL. To the extent that

TECNO possessed any goodwill based on locality, this

goodwill has long since dissipated in the three/four years

between TECNO’s cessation of operations and OGL’s opening

of the Newmarket boutique store and the Mississauga thrift

store/donation centre, respectively.

OGL’s Expansion into Essex Kent Lambton

OGL took over operational control of the Essex Kent Lambton

Goodwill by a merger of their two organizations in 2019. OGL acquired

the locations previously operated by EKL. GII was not required to be

involved in vetting or approving the merger as it was not controlled by

GII’s regulations or operating requirements.

The responding party noted that, in merging with EKL, it had

recognized Unifor Local 200 as the bargaining agent of certain EKL

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employees and had bargained a renewal of the Unifor collective

agreement for those employees in 2019.

Evidence of Alleged Anti-Union Animus

The Union’s application made no reference to any history of its

having concerns about OGL or GII harbouring anti-union animus;

however, in the documents OGL produced, there was evidence of their

having shared a keen and continuing concern to assure union avoidance.

In applying to GII for the then unassigned territory that had

been TECNO’s, OGL identified the threat of unionization as the most

significant issue it confronted with respect to what would be its new

operations, if not its entire undertaking.

Moreover, Ms. Quintyn had engaged in email (and perhaps

other) discussions with Ms. Nakamura about decertifying or otherwise

displacing the applicant prior to the collapse of TECNO. Included in the

joint book of documents produced for this matter were emails

exchanged by the two CEOs in which, by way of summary,

Ms. Nakamura indicated TECNO’s perceived difficulties in dealing with

the Union and Ms. Quintyn identified means by which those concerns

might be addressed. Ms. Quintyn’s suggestions counselled conduct

contrary to the Act such as seeking the Union’s decertification and the

possible introduction of another union to displace it as the bargaining

agent. Ms. Quintyn maintained in her evidence that she was unaware

at the time that she was suggesting unlawful conduct; however, the

advice she proffered was patently inappropriate.

As noted by the Union in its closing submissions, the evidence

also established that GII was mindful of the effect the Union was thought

to have had on the history and prospects of TECNO. In a January 16,

2021 email reporting on the sudden closing of TECNO, GII’s president,

Jim Gibbons, stated:

You are likely aware that the Toronto Goodwill has been

struggling financially over the course of the last decade. It

is a Goodwill that has a very strong union. This past year

they have been executing on a restructuring plan which

included some downsizing. They were not garnering the

cooperation they needed, and union grievances and Labour

Board directives prevailed.

Ms. Quintyn forwarded that email to her board of directors and

added these comments:

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Many of you are aware that the Toronto Goodwill has been

struggling financially over the course of the last dozen years.

It is a Goodwill that has a strong union in a very pro-union

environment, and for a variety of reasons they have

struggled to pull themselves out of financial distress. Keiko

Nakamura, the CEO, contacted me earlier this week,

informing me that due to some union demands they may be

placed in an untenable position and may need to move down

a dissolution path. Events that took place later this week

accelerated that untenable position, and last night the board

of directors of the Goodwill of Toronto resigned in its

entirety.

The minutes of the OGL’s board meeting on March 8, 2018, prior

to the submission of the responding party’s application to GII, noted

that “the issue of union succession rights” was addressed, that a legal

opinion was being prepared, and the preliminary advice suggested “that

the plan as proposed should carry no more additional risk of being

unionized than would exist in any workplace in Ontario”. The comment

continued with:

The likelihood of the union claiming succession is high

however improbable that the Labour Board would

automatically certify. Having a single Goodwill be the sole

territory owner will be a shield for other Canadian Goodwills

and will keep union monitoring and avoidance centred.

Other recorded comments and discussion confirmed the concern about

union avoidance, the union of immediate concern obviously being the

applicant.

The responding party’s March 8^thdocument entitled “Board

Recommendation/Decision Overview” dealing with the proposed

application to GII included the following comment under the caption

“Labour/Union Considerations”: “Clearly the union issue is the most

pressing due diligence concern and perhaps one of the biggest risks for

Goodwill Industries Ontario Great Lakes moving forward”.

The

document noted that OGL’s “attorney has provided a thorough opinion

(appended), taking into consideration the Collective Bargaining

Agreement, The Ontario Labour Relations Act, and relevant case law”

and added: “A second review by another arms-length attorney is now

under development as an extra precaution”.

After a redacted portion, the document continued:

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Further . . . it is important that Goodwill Great Lakes and

its 600 employees are not organized, and the company has

never in its decades long history had a brush with a union. . .

The company has been diligent about practicing union

avoidance under professional guidance. An attempt to

unionize a single new territory site would hopefully not

succeed but in any event, could be overpowered by tactics

that require consideration of all Great Lakes employees and

its long history of no union.

None-the-less [sic], the union concern will be the focus of

significant effort to build culture, expand into the territory in

a careful and timely manner and monitor the issue as in the

past.

The responding party’s concern about the applicant and

unionization was not merely academic. In a November 26, 2015 email

to Ms. Quintyn and other Goodwill executives in Ontario, Ms. Nakamura

warned:

I had spoken with Michelle [Quintyn] that I heard from my

union that they were going after London.

My union

agreement expires in March 2016 and I have another union

that has appeared since the summer trying to take over.

Union activity is VERY active right now. Their focus is on

Toronto since our agreement expiry is time sensitive e.g.,

another union can take over from the existing within 60 days

of contract expiry. The current union, CAWU’s wish is to

unionize Goodwill's retail operations in Canada.

In making its application to GII on March 23, 2016, OGL

repeated much of the above, adding: “Recommendations to protect the

reality of an unrelated company have been made by the attorney and

will be followed in the entry and long-term development strategy”.

Under the caption “Phasing Development to Monitor Risk”,

OGL’s application to GII stated:

The entry strategy to the expanded market will be

deliberately phased and monitored to assess risk particularly

pertaining to labour organizing activity and donor

contribution. Early markets targeted (first 12 months) will

be those that have no history of Goodwill on the assumption

that union activity will be unlikely. However, a site in or

near where Goodwill TECNO has a history of operating will

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be opened as part of the first 18-month entry phase to

monitor these same issues.

The “Territory Application Analysis by GII’s Member Services

Team” identified as one of the “Strengths of the Proposal” OGL’s “ability

to mount a successful response to potential labour issues”, a comment

that was carried through to the minutes of the GII’s board meeting at

which OGL’s application was approved on June 12, 2016.

Those minutes also recorded the GII board’s interest in having

Goodwill return to the Toronto area “to reestablish the brand and blunt

competition”.

Statutory Provisions

The immediately relevant statutory provisions are as follows:

69. (1) In this section,

“business” includes a part or parts thereof;

“sells” includes leases, transfers and any other manner of

disposition, and “sold” and “sale” have corresponding

meanings.

Successor employer

(2)

Where an employer who is bound by or is a party

to a collective agreement with a trade union or council of

trade unions sells his, her or its business, the person to

whom the business has been sold is, until the Board

otherwise declares, bound by the collective agreement as if

the person had been a party thereto and, where an employer

sells his, her or its business while an application for

certification or termination of bargaining rights to which the

employer is a party is before the Board, the person to whom

the business has been sold is, until the Board otherwise

declares, the employer for the purposes of the application

as if the person were named as the employer in the

application.

Same

(3)

Where an employer on behalf of whose employees

a trade union or council of trade unions, as the case may be,

has been certified as bargaining agent or has given or is

entitled to give notice under section 16 or 59, sells his, her

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or its business, the trade union, or council of trade unions

continues, until the Board otherwise declares, to be the

bargaining agent for the employees of the person to whom

the business was sold in the like bargaining unit in that

business, and the trade union or council of trade unions is

entitled to give to the person to whom the business was sold

a written notice of its desire to bargain with a view to making

a collective agreement or the renewal, with or without

modifications, of the agreement then in operation and such

notice has the same effect as a notice under section 16 or

59, as the case requires.

. . .

Power of Board to determine whether sale

(12) Where, on any application under this section or in

any other proceeding before the Board, a question arises as

to whether a business has been sold by one employer to

another, the Board shall determine the question and its

decision is final and conclusive for the purposes of this Act.

Duty of respondents

(13) Where, on an application under this section, a

trade union alleges that the sale of a business has occurred,

the respondents to the application shall adduce at the

hearing all facts within their knowledge that are material to

the allegation.

The Applicant’s Submissions

The applicant referred to the following authorities in making its

submissions or in replying to those of the responding party:



United Food & Commercial Workers, Local 175 v Pavao

Meats Wholesale & Retail Ltd, 2016 45355

(ON LRB) (“Pavao Meats”)

Service Employees Union, Local 268 v. Thunder Bay

Ambulance Services Inc., 1978 569 (ON LRB)

(“Thunder Bay Ambulance”)

Service Employees International Union, Local 183 v.

Daynes Health Care Limited, 1984 1003

(ON LRB)

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

Hotel Employees Restaurant Employees Union, Local 75

v. Accomodex Franchise Management Inc., 1993

8023 (ON LRB) (“Accomodex”)4

Canadian Union of Public Employees v. Metropolitan

Parking Inc., 1979 815 (ON LRB) (“Metropolitan

Parking”)

International Beverage Dispensers' and Bartenders'

Union, Local 280, v. Vivace Tavern Inc., 1982

962 (ON LRB) (“Vivace Tavern”)

Local 280 of the International Beverage Dispensers' &

Bartenders' Union of the Hotel and Restaurant

Employees' and Bartenders' International Union, v. John

Katsuras, c.o.b. as Krush, 1986 1671 (ON LRB)

(“Krush”)



Power Workers’ Union, Canadian Union of Public

Employees, Local 1000 v. The Goldman Group, 2001

5945 (ON LRB) (“Goldman Group”)

Service Employees' Union, Local 183, v. Riverview

Manor, operated by Daynes Health Care Ltd., 1983

979 (ON LRB) (“Riverview Manor”)

London & District Service Workers' Union, Local 220 v.

Caressant Care Nursing Home of Canada Limited, 1984

1006 (ON LRB) (“Caressant Care”)

Service Employees' International Union, Local 532 v.

Saint Elizabeth Home Society, Ontario Ministry of Health

and Hamilton Jewish Home for the Aged Charitable

Foundation operating as Shalom Village South, 1992

6339 (ON LRB) (“Shalom Village South”)



United Food and Commercial Workers International

Union, Local 175 v. 1390386 Ontario Limited c.o.b. as

Ingersoll Knechtel Foodland, 2002 22867

(ON LRB) (“Knechtel Foodland”)

Ontario Council of The International Union of Painters

and Allied Trades International Union of Painters and

Allied Trades, Local 1891, v The Builders Warehouse

Inc., 2017 28688 (ON LRB)

⁴I note that the applicant referred to this decision as “Accommodex” throughout its submissions

and reply. I have not corrected that error in what follows.

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

Canadian Union of Public Employees and its Local 1521-

03 v Ottawa-Carleton Lifeskills Inc., 2014 75042

(ON LRB) (“Ottawa-Carleton Lifeskills”)

IWA-Canada, Local 2693 v. Long Lake Forest Products

Inc., 1994 CarswellOnt 1526 (ON LRB) (“Long Lake

Forest Products”)

United Food & Commercial Workers, Local 175, v Sofina

Foods Inc., 2018 99023 (ON LRB) (“Sofina

Foods”)

The Carpenters’ District Council of Ontario, United

Brotherhood of Carpenters and Joiners of America on

behalf of Local 1072 v. Woodland Store Fixtures

Incorporated and Woodbench Incorporated, 2012

67907 (ON LRB) (“Woodland Store Fixtures”)



Labourers’ International Union of North America, Local

183 v Germag Construction Limited, and Drain Bros.

Excavating Limited, 2021 868 (ON LRB)

(“Germag Construction”)



Labourers' International Union of North America, Local

506 v Northern Precast, 2018 71350 (ON LRB)

(“Northern Precast”)

UNIFOR Local 975 v. Enercare Home & Commercial

Services Limited Partnership, 2017 36002

(ON LRB) (“Enercare Home”)

The essence of the applicant’s position is captured in the

following introductory submission:

29. The Union asserts that the following factors are relevant

and must be considered by the Board:

a.

The Responding Party’s exclusive right to operate

as “Goodwill” within the TECNO Territory;

b.

c.

The continuation of TECNO’s business;

The Responding Party, GII and TECNO each had

pre-existing relationships;

d.

The acquisition of goodwill following the TECNO

bankruptcy; and,

- 17 -

e.

Policy concerns with respect to the ability of GII

to frustrate a trade union’s bargaining rights.

The applicant characterized the assignment of territory as “a

substantial component of the Responding Party’s operations within the

TECNO Territory”, adding: “It is a prerequisite to operating the business

— without the territory, the Responding Party would be prohibited from

operating in the territory under the Goodwill name” and “the assignment

of the TECNO Territory represents the essence of the Responding Party’s

operations within that territory”.

The applicant noted that the assignment of the territory

conferred rights of “significant financial value” associated with the

“exclusive right to operate as a ‘Goodwill’ within the territory” without

competition from other Goodwills, in contrast to the circumstances of

“traditional franchisors” that “can and do create ‘cannibal’ franchises”.

The applicant’s argument was as follows:

33. The assignment of the TECNO Territory confers upon the

Responding Party certain rights.

These rights are of

significant financial value. The Responding Party has an

exclusive right to operate as “Goodwill” within the territory

and to use the trademarks associated with the Goodwill

brand within the territory. Goodwill is one of the largest and

most recognizable thrift store brands worldwide. The use of

the Goodwill brand in the association with GII provides a

competitive advantage to the Responding Party as against

other thrift brands in the area. As Ms. Quintyn noted during

her testimony, the Responding Party competes with other

thrift retailers for more than just customers. They also

compete for grants, for real estate and for donations.

Ms. Quintyn also agreed that the responding party faces a

degree of competition from other retailers like Wal-Mart.

34. Moreover, the territory permits the Responding Party to

operate without competition from other Goodwills. This is a

significant distinction between GII and more traditional

franchise operations. GII protects the territory for each of

its members and as such members do not compete with

each other. This includes competition for funding, for

employees, for real estate and for sales. Instead, Goodwills

operate solely within their territories and cooperate with

other members with respect to advice, technology and best

practices.

- 18 -

. . .

37. This protection is significant. The Responding Party

cannot accurately assert it is operating a separate and

unrelated business in the territory. Because of GII’s policy,

there can be only one Goodwill in a territory. The naming

conventions used by the various member Goodwills reflect

this fact. Each organization is named after the region that

they operate in.

38. The Responding Party could not operate a business in

the territory while it was occupied by TECNO. Cannibalism

is prohibited by GII’s policy and those policies leave no room

for a separate operation. There is one Goodwill for each

territory. In the past, the Goodwill for the TECNO Territory

was TECNO. At present, the Goodwill for the TECNO

Territory is the Responding Party.

The Union referred to the Board’s jurisprudence in that

connection:

40. In the past, the Board has considered the transfer of a

licence to operate in a number of contexts. The TECNO

Territory, in effect, is a licence to operate within the territory

issued by GII or is extremely similar to one. The parallels

are clear and the cases are instructive.

The first decision the Union referred to was Thunder Bay

Ambulance, supra. The applicant cited the following holding of the

Board in paragraph 18 of the decision:

In the view of the Board, the two essential elements of the

predecessors’ businesses were transferred to the alleged

successor. Firstly, the exclusive use of the assets owned by

the Ministry of Health was transferred. Although the same

licence or piece of paper was not transferred between the

two, the Board has no hesitation in finding that the exclusive

entitlement, as embodied in a Ministry of Health Licence,

was transferred.

The applicant’s argument went as follows:

42. The Board should take two cogent facts from this

decision. First, the transfer of the licence is a “sale” under

the Act notwithstanding the fact that the specific piece of

paper was not transferred and notwithstanding the

involvement of the Ministry of Health. As such, the Board

- 19 -

should have no difficulty concluding that GII served as a

necessary “link” in the transfer, notwithstanding the fact

that it is a third-party actor.

43. Secondly, the Board characterized access to the

Ministry's assets through its licence as an “essential

element” of the business. Presumably, the transfer of the

licence alone would have been sufficient to protect the

applicant’s bargaining rights.

The second case relied on in this context was Vivace Tavern,

supra, about which the Union submitted:

44. In Vivace Tavern, the responding party purchased the

Hollywood Tavern, with the intention of shutting it down and

using the real estate and chattels to reopen another

business, the House of Lancaster. The Board nonetheless

found that a sale of business had occurred. At paragraph

13, the Board placed significant weight on the acquisition of

the Hollywood tavern's liquor licenses by the responding

party:

While the respondent may choose to disavow any

interest in or attach any importance to the chattels

which had been made part of the sale, and to

characterize the entire transaction as merely the

acquisition of a real property and location for his existing

business, the conveyance documents and other facts

purport the transfer to be more than a sale of assets.

Whether or not the respondent acquired clear title to the

chattels, their acquisition and use allowed the

uninterrupted operation of the business from the time

he acquired it on February 12th until closed as aforesaid.

Of even greater significance, the Agreement of Purchase

and Sale purports to convey to the respondent “Any

right the vendor may have to the use of the name

Hollywood Tavern” and “Any right and interest the

Vendor has or may have in the existing liquor licenses

of the Hollywood Tavern.” The respondent attached

great importance to the licenses, particularly to the adult

entertainment license, since no new entertainment

licenses are being issued in Metropolitan Toronto and the

respondent was dependent upon the predecessor’s

previously acquired rights in having an application for

such a license accepted. The transfer of the two liquor

licenses avoided the delay of the normal waiting period

for new licenses and allowed continuity of the business

without interruption. [emphasis added by the Union]

- 20 -

45. Once again, the rights associated with the licence (in this

case, the ability to serve liquor) are treated as fundamental

to the business and assigned significant weight by the

Board.

The Union commented that the Board in Krush, supra, “placed

significant weight on the transfer of a liquor licence”, quoting as follows

from paragraph 17 of the decision:

Moreover, the most critical elements of the business in this

case were the premises and the liquor licence, both of which

passed to Mr. Katsuras either directly or indirectly as a result

of the sale. Mr. Katsuras suggested that the licence was

unimportant to him since he could simply have applied for a

new licence. However, he conceded that transferring the

licence previously issued for the same location was faster,

and it is apparent from the sequence of events, including the

amendment to the purchase and sale agreement and the

dispatch with which he applied for the liquor licence transfer

after the sale closing, that the licence played a significant

role in the transaction.

The Union linked the “tavern cases” and the instant matter with

reference to Goldman Group, supra, and the Board’s observation at

paragraph 14 of that decision that it

. . . will focus on the essential common components in the

operation of both businesses. In the tavern cases, that

common component was the licenses.

Without those

licenses, the new businesses could simply not operate as

intended, notwithstanding all the other changes effected by

the purchasers.

The applicant concluded:

The licenses are significant factors in the tavern cases

because the taverns simply cannot operate as intended

without being properly licensed. By a similar measure, the

Responding Party cannot operate within the TECNO Territory

at all without first being assigned that territory by GII.

The Union then drew on cases in the long-term care industry,

first citing Riverview Manor, supra, as a case in which the Board dealt

with the sale of a nursing home property which was contingent on the

Ministry of Health’s approval of a transfer of the long-term care licence.

- 21 -

The Board found that a sale of business had occurred. The Union relied

on the following comments at paragraph 38 of the decision:

Riverview obtained two major assets from Balmoral, the

licence and the land.

The transfer of the licence is

particularly significant, because it led most Balmoral

residents to move to Riverview Manor. (Both parties to the

transaction contemplated residents would move from one

home to the other, as evidenced by the contract that ties

the date from which interest runs to the transfer of

patients.) In this sense, the license is the essence of the

businesses.

The applicant added:

51. It is also significant that the Board placed weight on the

fact that the assignment of the license provided the

purchaser with a shield from competition with unlicensed

care homes. In a similar way, the assignment of the TECNO

Territory (indeed, of any Goodwill territory) provides the

Responding Party with protection from competition against

[sic] other Goodwills.

The applicant put forward the following about Caressant Care,

supra:

52. In Caressant Care, the Board considered another case

where a purchaser received a licence to operate a nursing

home from a defunct company. The Board in Caressant Care

relied heavily on the decision in Riverview Manor. In that

decision, Vice-Chair Mitchnick observed that “The Board [in

Riverview Manor], in finding a “sale of a business” in that

decision appears to have focussed on the importance of the

licence, owing to the limited availability of such licences in a

given geographic area, and the evidence before the Board

in this case only tends to confirm that thinking.” The Vice-

Chair went on to note that “There was not in the present

case, the transfer of any land by the insolvent company

Caressant Care, but as . . . Riverview makes clear, it is the

licence that is the essence of the Nursing Home business.”

The applicant referred to Shalom Village South, supra, a case

that concerned the reassignment of a licence following the closing of a

nursing home that had been taken over by the Ministry of Health.

Shalom Village South was one of three successful applicants for licensing

for the home’s former beds. The Union noted that Shalom Village South

received nothing more than the licence to operate a portion of the beds

- 22 -

formerly in the original, defunct business and quoted the following from

the Board’s decision finding a sale of business for the purposes of the

Act:

However, the only physical asset that passed between the

Ministry and Shalom Village was the sixty licensed beds.

There was no dispute that although Shalom Village

contemplated the possibility of purchasing some of the

equipment the Ministry had acquired during its tenure, it

decided not to do so. Nevertheless, the Board has found a

sale of a business under the Labour Relations Act where a

license was the only asset transferred, because the license

is the essence of the business in the nursing home industry

and because it tends to bring with it a captive market of

residents (Caressant Care, supra, Riverview Manor, supra).

The Board noted that “a significant number of residents did transfer with

the license”.

In summary on the point, the applicant submitted:

55. These cases set out clear principles which readily apply

to the present matter. To summarize, where a license to

operate is core to the operation of a business, the Board will

assign significant weight to its transfer. It is not required

that the same “license” be transferred and it is sufficient for

the Board’s purposes to have a similar license issued. Where

there is explicit discussion of a continuity of the license, as

was the case in Shalom Village South, the Board will place

weight on those discussions. Moreover, the involvement of

a third party does not reduce the weight placed on such a

transfer. In certain circumstances, where the license is the

essence of the business, the transfer of the license alone

constitutes a sale of business for the purposes of section 69

of the Act.

56. In the present matter, the Responding Party has

received the right to operate within the TECNO Territory

from a third party. The Responding Party’s rights within the

territory are identical to those previously held by TECNO.

The Responding Party would be unable to conduct business

in the territory without the license and, therefore, it is

essential to their business. Ultimately, each of these factors

demonstrate a sale of business and, in the submission of the

Applicant, the transfer of the license alone is sufficient to

constitute a sale of business for the purposes of the Act.

- 23 -

The applicant then turned to its submission that the responding

party’s operations in the territory were a continuation of TECNO’s

business as, it maintained, OGL’s “businesses in the TECNO Territory

were virtually identical to those operated by TECNO”.

In that context, the applicant made the observation: “Because

of these [GII-prescribed] signing practices, any passerby would not

realize that the Goodwills in the TECNO territory are no longer operated

by TECNO”. The Union argued: “In essence, the public reasonably would

view both TECNO and the Responding Party as a single entity (i.e.

“Goodwill”) and the signage and branding used by the Responding Party

does nothing to dispel this conception”.

The Union also pointed out that OGL had acquired the lease of

the property at 1224 Dundas Street East in Mississauga at which TECNO

had a store until 2016 or thereabouts.

The applicant submitted: “By operating in the TECNO Territory,

the Responding Party is serving the same customers that TECNO would

have served. They are also receiving donations from the same market”.

The Union concluded its submissions on this point as follows:

67. The facts set out above plainly demonstrate a

continuation of TECNO’s business.

The cores of both

TECNO’s business and charitable activities remain

unchanged and, to the eyes of the Responding Party's

customers and donors, the ownership of the business does

not appear to have change [sic] either. The Applicant

reiterates that this continuation of business was only

possible due to the transfer of the TECNO Territory. In

effect, the Responding Party is now doing exactly what

TECNO did when TECNO held control of the territory.

The applicant then addressed the proposition that both OGL and

GII had a pre-existing relationship with TECNO. In particular, the Union

noted the evidence that Ms. Quintyn “was intimately involved in the

operation of TECNO both leading up to and after its collapse” and that

her “objective following the collapse of TECNO had been to see

Goodwill’s operations in the TECNO Territory continue.”

From that, the applicant posited:

74. In these circumstances, the considerations set out in

Metropolitan Parking Inc. apply.

The pre-existing

- 24 -

connection between the two Goodwills must colour the

Board’s consideration of the facts before it. In these

circumstances, the pre-existing connection between TECNO

and the Responding Party renders it unlikely that the

intention here was to create or expand a separate company

that merely happens to perform the same work as TECNO.

Ms. Quintyn knew what TECNO did and was dead set on its

business continuing.

Next, the Union submitted that OGL had received substantial

goodwill related to the TECNO territory because it “is the sole entity

entitled to use the ‘Goodwill’ name within the TECNO Territory” and it

continued:

75. This goodwill is transferred through two specific

mechanisms. First, there is the goodwill associated with the

“Goodwill” brand generally and, second, there is the goodwill

associated with the TECNO in light of its bankruptcy.

76. Goodwill is one of the largest thrift store brands in the

world. It is also one of the most recognizable charities which

accept donations of clothing and other goods. Like Q-Tip is

to cotton swabs or Kleenex is to tissues, “giving to Goodwill”

is a short hand in the province of Ontario and elsewhere for

donating used items to charity.

77. The use of the Goodwill brand, as discussed above,

provides GII members, including the Responding Party, with

significant benefits when they compete with other thrift

retailers for both sales and donations.

78. While the Responding Party had access to such benefits

prior to its acquisition of the TECNO Territory, its ability to

leverage those benefits was constrained by GII’s bylaws. It

had free reign to benefit from the goodwill associated with

the Goodwill brand but only within its own territory. It had

no ability to benefit from that goodwill within the TECNO

Territory because it had no ability to actually do business

within the TECNO Territory. As such, the acquisition of the

TECNO Territory also constitutes the acquisition of additional

goodwill associated with the Goodwill brand generally.

79. Moreover, the documentary evidence demonstrates that

the public supported the return of Goodwill to the TECNO

Territory.

. . .

- 25 -

89. The way in which the Responding Party has sold itself to

the public in the TECNO Territory is significant.

The

Responding Party intentionally made use of the bankruptcy

of TECNO and its subsequent acquisition of the TECNO

Territory to tell a story that paints itself in a positive light.

Moreover, this is a story that plays upon opinions already

present in the community and compels members of the

community to both donate to and shop at the new stores.

The fact that the media has covered the story demonstrates

continued interest in seeing Goodwill return to the TECNO

Territory.

90. This specific type of goodwill is specific to the TECNO

Territory. It is rooted in the good that TECNO did for the

community and a desire to see that good work return. By

acquiring the TECNO Territory and making itself the face of

TECNO’s return, the Responding Party has benefited in both

financial terms and in terms of its charitable activities in the

community.

Finally, the applicant turned to its argument that the structure

of GII would permit it to frustrate a union’s bargaining rights by

reassigning territory. The thrust of the submission was as follows:

If the Board finds that a unilateral revocation and

subsequent reassignment of territory is not a sale of

business for the purposes of the Act, the Board will have

handed GII the ability to unilaterally frustrate the bargaining

rights of any Goodwill employees in the province of Ontario.

This cannot be the intention of the Act and as such, the

Union asserts that these public policy concerns must be

considered in disposing of this application.

The following paragraph appears to have been key to the

applicant’s submission:

94. The evidence shows that one purpose which the GII

Board considered in disaffiliating TECNO is the applicant's

rights to represent its employees. Ms. Nakamura made

numerous comments behind closed doors blaming the

applicant for TECNO’s failure. While Ms. Nakamura's opinion

is entirely counterfactual, it took root with Ms. Quintyn and

with GII.

The applicant proceeded with an analysis of the various email

communications and documents that supported the proposition that

OGL prepared its application for the TECNO territory identifying union

- 26 -

avoidance as “the most pressing due diligence concerns and perhaps

one of the biggest risks for Great Lakes moving forward”.

The Union’s submission continued as follows:

100. The application [by OGL for the former TECNO

territory] goes on to advise that a labour lawyer has been

retained to provide an analysis of the situation and to draw

a reference to the Responding Party’s long history of “no

union”. The application asserts that the Responding Party

diligently practices union avoidance and that the Responding

Party will advance in a “careful and timely manner” to

attempt to avoid the Applicant.

101. The basis for these comments was to convince GII that

the Responding Party would be able to successfully evade

the Applicant. This is bourn [sic] out be [sic] the fact that

GII’s evaluation of the proposal explicitly considers the

Responding Party’s ability to avoid unionization.

102. The evidence plainly establishes that Ms. Nakamura

placed considerable blame on the Applicant for TECNO’s

failure. Whether or not this is true, both the Responding

Party and GII have taken these assertions as fact. The

ability to avoid unionization was explicitly considered in GII’s

assessment of the proposal. It is transparent that anti-union

animus was a factor in determining to disaffiliate

Ms. Nakamura [sic] and in the decision to reassign the

territory to the Responding Party.

103. While anti-union animus is not a factor that the Board

considers in applications under section 69, it is required to

consider the purpose of section 69. That purpose . . .

includes preventing the use of corporate or institutional

mechanisms to frustrate bargaining rights. That is precisely

what occurred in the present matter. GII essentially ended

whatever possibility TECNO had for restructuring by

disaffiliating it. It then transferred its territory to a different

member. The Responding Party asserts that this action by

GII ought to extinguish that [sic] Applicant’s rights. This

cannot be what the legislation intended and flies in the face

of the purpose of the Act.

104. If the Board supports the Responding Party’s position,

it runs the risk of providing GII with a mechanism by which

it can unilaterally evade unionization. Moreover, it will

provide other organizations with the structure that they can

mimic to the same end. This cannot be what the Act

- 27 -

intended and, on this basis, the applicant's claim ought to

succeed.

The applicant concluded its submissions with the following:

106. By acquiring the territory from GII, the Responding

Party has acquired the very same rights that TECNO once

held. In exercising those rights, it is operating the very

same business that TECNO once operated. This is especially

clear in light of the fact that the Responding Party was

affiliated with TECNO prior to the transfer of the territory.

Moreover, in expanding its operation, it has acquired

significant goodwill related to both the Goodwill brand and

to its specific role in rebuilding the TECNO territory.

107.

Perhaps more significantly, this matter raises

substantial policy concerns. It is crystal clear that one

element of the GII Board's decision to transfer the TECNO

Territory was anti-union animus directed specifically at the

Applicant. The word “sale” is given an expansive and non-

exhaustive definition in the Act in part because section 69 is

intended to act as a shield for unions against such unfair and

unilateral actions. The Board must determine whether the

transfer of the TECNO Territory constitutes a “sale” for the

purposes of the Act.

The Board cannot accept a

determination which would frustrate the purposes of the Act

by allowing the unilateral frustration of a trade union’s vest

[sic] right to represent employees.

The Responding Party’s Submissions

In replying to the applicant’s submissions, the responding party

referred to many of the cases cited by the Union and added the

following: United Association of Journeymen and Apprentices of the

Plumbing and Pipefitting Industry of the United States and Canada, Local

46 v. 1013644 Ontario Limited c.o.b. as Cartwright Plumbing, 2017

57734 (ON LRB); I.A.T.S.E. , Local 299 v. Cineplex Odeon Corp.,

1998 27800 (MB QB); and Canadian Union of Brewery and

General Workers, Component 325 v. Molson Coors Canada (Toronto

Brewery) and Sherway Warehousing Inc. and Sherway Logistics Inc.,

2017 14504 (ON LRB).

The responding party argued that none of the traditionally

recognized criteria for a “sale of business” were met on the evidence

presented:

- 28 -

53. There is [sic] no indicia of a sale or transfer of a

business, or even part of a business, in this case. The

evidence demonstrates that TECNO, after struggling

financially for many years, ceased operating. OGL, which

had been in the same business for over 70 years, then began

to expand its operations into the Toronto area three years

after the closure of TECNO. OGL's ability to operate these

Toronto locations was not derived from TECNO in any way.

54. There is no evidence — nor has the Applicant alleged —

that OGL purchased, acquired, or otherwise received

TECNO’s operating name, accounts receivable, customer

lists, existing contracts, inventory, employees, licensing

agreements, business processes, or that it entered into any

restrictive covenants with TECNO.

55. OGL's ability to carry on business in the Unassigned

Territory was not derived from TECNO, but rather from its

experience and infrastructure built up over more than half a

century of OGL's operations.

56. The Board should not be distracted by the fact that

TECNO and OGL both operate under the name “Goodwill”.

There was no transfer of goodwill (as an asset); OGL did not

acquire its operating name from TECNO; nor did its

operating name change following its expansion into the

TECNO territory. When it expanded into the Toronto area,

OGL did not use signage to indicate that TECNO “was back”

or “under new management”. It opened a boutique store, a

community store, and three donation centres, styled using

its own sleek brand standards and the Goodwill brand that

OGL has consistently used, a brand that — as the applicant

noted in its closing submissions — is one of the most

recognizable in the world.

57. Nor was there “goodwill” in the traditional sense to

acquire from TECNO; the business was moribund, and its

collapse was widely publicized in mainstream media. As

stated by Ms. Quintyn, TECNO’s goodwill was so tarnished

that OGL went into the Unassigned Territory in order to

“rebuild”. It was essentially “starting from zero” in the

territory.

58. The Applicant also adduced no evidence that OGL

services the same customers as TECNO. Given the lengthy

hiatus

between

TECNO’s

disaffiliation

and

OGL’s

commencement of operations in Newmarket and

Mississauga (three and four years, respectively), it is

- 29 -

unlikely that any of TECNO’s former customers would have

come to shop at OGL’s stores because of any previous

loyalty to TECNO. Rather, those customers are more likely

to have moved on to other thrift stores in the area during

this time.

59. Nor did OGL assume any of TECNO’s real property

leases.

In one case, OGL operates from the same

Mississauga location as a former TECNO store; however, this

lease was negotiated as a new tenancy with a different

landlord after the property changed hands, and the location

choice was driven entirely by the fact that it was what was

available in an extremely competitive Toronto real-estate

market. Four different tenants occupied the space between

TECNO and OGL.

The second branch of the responding party’s argument was that

the process GII followed in assigning territories was not sufficient to

create a “sale of business”.

The responding party submitted:

61. Where an existing business grows or expands its

operations, the focus of the factual inquiry is on what flowed

from the predecessor’s business to the successor’s business

and whether there is enough evidence to conclude that the

successor’s ability to carry on its business is derived from

what is acquired from the predecessor.

62. This analysis does not change where there is an alleged

transfer of a license to operate, as the Applicant suggests.

Even where an alleged sale of business involves such a

transfer, the Board has still considered and been guided by

whether the other indicia of a sale of business were present

(none of which exist in this case). To paraphrase what the

Board asked in Ottawa Carleton Lifeskills, the relevant

questions are: What did OGL really acquire from TECNO?

What did it really acquire from GII? And, what did it bring

to the table itself?

OGL relied on Ottawa-Carleton Lifeskills, supra, to a substantial

degree, arguing as follows:

65. In Ottawa-Carleton Lifeskills, the Board held that the

successors acquired the license and premises to operate

semi-independent living services to persons with disabilities

from the predecessor employer. However, in finding that no

- 30 -

sale occurred, the Board was guided by the fact that the

successors were entities that were already in the business

of providing support services of the kind provided by the

predecessor, and that they brought their substantial

capacity to operate the newly acquired premises to the

acquisition. The Board noted that even where there is

intervention from a third party intermediary, there still must

be a transfer of a going concern between the predecessor

and the successor to find a sale of business:

24.

The applicant is correct that the intervention of a

third-party intermediary through which the transfer is

affected [sic] does not preclude a finding of a sale of

business.

However, whether or not there is an

intermediary in the transaction, in order to find a sale of

business the transfer must still be from the

predecessor to the successor, and the fact that the

alleged purchaser may wind up with a similar business

to the predecessor does not constitute a sale if the

business did not actually come from the

predecessor. [all emphasis added by the responding

party]

66. The Board went on to stress that the transfer of the

license was not from the predecessor but from the Ministry,

and that the successor did not create the business “out of

the ashes” of the predecessor:

33.

The same analysis applies to the applicant's

argument that OCL and OFP acquired TELCI’s license —

or authorization — to carry on its business at the former

TELCI locations. Even accepting that the agreements

between OCL and OFP and the Ministry to assume the

operation of the buildings and to provide the requisite

services to tenants is akin to a license, the transfer of

the license was not from TELCI to OCL and OFP,

but from the Ministry.

34.

In Riverview relied upon by the applicant,

the nursing home license was sold by the

predecessor to the successor as part of an overall

transaction that included the transfer of numerous

other aspects of the predecessor's business.

Those other aspects of the business depended on

the license in order to be used for their purpose,

and in this sense the license was the essence of

the business.

- 31 -

35.

In Thunder Bay Ambulance, however, the Board

did find a transfer of license even where the successor

had applied for and obtained its own license from the

Ministry.

There is, therefore, some merit to the

applicant’s argument that when the Ministry authorized

OCL and OFP to assume operation of the former TELCI

residences, this constituted a similar transfer of license

from TELCI to OCL and OFP. However, in Thunder

Bay Ambulance, the board also found that the

business

at

issue

was

essentially

an

organizational business (since the assets of the

business, and in particular the ambulances, were

always and remained the property of a third

party), and that in addition to the license, there

was a transfer of management and the people who

carry out the work. The organizational capacity

plus the license was essentially what constituted

the business. The instant case is very different,

where OCL and OFP already possessed the

organizational capacity to carry out the business.

They are not businesses that were created out of

the ashes of TELCI and licensed to perform its

work. Rather, TELCI ceased to carry on business,

and the Ministry was obligated to find new

contractors who were qualified and capable of

looking after the residents in the buildings which

TELCI was no longer servicing. In my view, this is

the essence of the transaction, rather than a

transfer of authorization to carry on the business.

[all emphasis added by the responding party]

67. As noted above, the Thunder Bay Ambulance Services

Inc. case does not assist the Applicant's argument, as far

more than a license was transferred between the parties. In

securing the license, the successor employer also was

provided with the assets necessary to operate the business

(i.e. the ambulances), as it had done for the predecessor.

All employees and managerial experience also transferred to

the successor. Accordingly, the successor obtained all the

necessary assets to set up the parallel business, allowing for

the continuum of the predecessor's business.

This is

markedly different from the instant case, where OGL used

its own existing assets, or independently acquired new ones,

to set up its Toronto locations.

68. The Applicant has also relied on several cases

concerning liquor licenses transfers in support of its

argument that the grant of a purported “license” from GII to

- 32 -

OGL alone is sufficient to ground a sale of business.

However, all these cases are distinguishable as they involve

the transfer of traditional assets in addition to the grant of

a license. . . .

69. Similarly, the nursing home cases relied on by the

Applicant are distinguishable because of the captive market

that accompanied the transfer of the license. Key to the

Board's analysis in those cases was the effect the transfer

of the license had on the successor. In those cases, the

successor acquired not only the license to operate the

nursing home, but a captive market of customers (i.e. the

residents) who needed continued accommodation. As such,

the practical effect of the successor’s acquisition of the

license was the significant transfer of most of the residents

from the predecessor home to the successor home.

Additionally, in all of those cases some of the employees of

the predecessor continued to work for the successor

employers.

70. The territory grant from GII provided OGL with nothing

more than the opportunity to establish undertakings in the

Unassigned Territory. There was no “captive market” to

acquire, and certainly nothing analogous to the relationship

between the residents of a nursing home and the licensee of

that home.

As acknowledged by the Applicant, OGL

competes with many organizations, including other charities

and retailers such as Wal-Mart, for its customer base. On

that basis alone, Riverview Manor, Caressant Care and

Shalom Village South are not applicable to this situation.

The third proposition advanced by OGL was that there was no

basis for the inference of anti-union animus or a scheme to circumvent

the Act.

71. Section 69 does not give the Board the discretion to find

that a sale of business has occurred where there are no

indicia of a sale. Either a sale of business has occurred, or

it has not. This is in stark contrast to s. 1(4) which grants

the Board the discretion to find that one or more persons

are one employer for the purposes of the Act, “where there

is clear evidence of the mischief it was intended to avoid”.

OGL argued that there was no evidence of an effort to carry out

a fraudulent or sham transaction to avoid the transfer of bargaining

rights as might have been suggested in Pavao Meats. Rather, it

contended:

- 33 -

74. OGL did not attempt to facilitate TECNO’s bankruptcy or

closure, or its disaffiliation, to acquire the Unassigned

Territory.

To the contrary, Ms. Quintyn and OGL did

everything they could to keep TECNO operational. OGL

provided a loan to TECNO so that it could hire a Trustee in

Bankruptcy to restructure the company. If OGL desired to

take over TECNO’s business, it would have had no reason to

assist the restructuring, which, if successful, would have

meant TECNO could continue as a going concern.

75. The fact that OGL may have considered the fact of

TECNO’s relationship with the Applicant, and the potential of

transfer [sic] of bargaining rights, in its business planning is

not sufficient to infer the type of wide-ranging fraudulent

schemes suggested by the Applicant.

The Board has

previously held that, absent unlawful conduct in its efforts

to avoid unionization, it will not put significant weight to a

party's desire to manage it its affairs to avoid a finding of a

sale of business. An employer’s preference or desire to

remain non-union is not illegal, and its statements to that

effect cannot have the effect of creating a sale of business

from whole cloth where no other basis to reach such a

conclusion exists.

76. The GII structure does not prevent a sale of business

from occurring and bargaining rights transferring to the

successor employer. In fact, when OGL and EKL merged,

the bargaining rights of EKL's unionized employees

transferred to OGL. This merger took place after OGL

acquired the Unassigned Territory. There is no evidence to

suggest that GII pushed back or tried to prevent this merger

because of [sic] some of the EKL's employees were

unionized. [emphasis in the original]

In concluding its submissions, the responding party asserted:

77. Throughout Canada and the world, Goodwill Members

operate as independent, incorporated charities serving their

local communities. Like other corporations, some thrive,

while others fail and enter bankruptcy. They expand their

operations, merge with one another and, where their

employees are unionized, those bargaining rights may

transfer.⁵In short, there is nothing unique about Goodwill,

5

I note that the only evidence of this having occurred was in respect of Unifor Local 200 and

OGL’s merger with EKL in 2019.

- 34 -

its structure, or how it operates, and the Board’s traditional

approach to sale of business applications is well-suited to

answer the question: was a business or going concern

transferred from TECNO to OGL?

78. OGL acquired nothing from TECNO. It acquired the right

to operate in the Unassigned Territory through an

application process, and its subsequent expansion into the

Unassigned Territory relied on OGL's well-established

structure, management, equipment, employees and

accumulated skills, ability, know-how and contacts. There

are no indicia of a sale or transfer of business in this case

because one simply did not occur.

79. Finally, the Applicant's argument suggests that public

policy considerations require a finding of a sale of business

where it may otherwise not apply because the mere

possibility that the structure of the GII could allow a party

to circumvent bargaining rights is an unacceptable state of

affairs. The Applicant must rely on this argument given the

absence of any evidence suggesting that the lack of

traditional indicia of a sale of business is due to a fraudulent

transaction or other mechanism designed to avoid the

application of the Act.

However, this “public policy”

argument is not grounded in the law; is an inappropriate

attempt by the Applicant to expand its bargaining rights;

would represent an unprecedented expansion of s.69 of the

Act if successful; and for all those reasons, should not be

accepted. [emphasis in the original]

The Applicant’s Reply Submissions

The applicant asserted that OGL’s contentions that its ability to

operate in the TECNO Territory was not derived from TECNO in any way

and that none of the traditional indicia of a transfer were present in this

case were counterfactual.

As for the responding party’s not acquiring its operating name

from TECNO, the Union noted:

It cannot be denied that both TECNO and the responding

party under operated under the name “Goodwill”. The

“Goodwill” name and all rights associated with it flow from

GII and, as per GII’s bylaws, the use of the name is linked

to the assignment of territory. Prior to the assignment of

the TECNO Territory, the Responding Party had the right to

use the “Goodwill” name within its own territory.

- 35 -

Subsequent to the assignment of the TECNO Territory, the

Responding Party acquired the right to use the name within

the TECNO Territory.

The applicant suggested that OGL “asserts that it is a fully

separate corporation that only happens to use an identical name” and

countered: “While they exist under separate corporate forms, they are

effectively a single operation”.

As for the responding party’s argument that it did not enter into

a restrictive covenant with TECNO, the Union noted that the limitations

GII placed on territories and competition had effectively provided the

benefit of restrictive covenants to TECNO and now to OGL in that

territory.

The applicant argued that it “is patently untrue” to assert “that

there was no goodwill to acquire with respect to TECNO”. Rather, it

claimed that there was: “Substantial evidence . . . before the Board to

demonstrate that the Responding Party repeatedly leveraged goodwill

to TECNO in order to both establish and promote its new operations”.

The Union concluded the point with: “It is simply not credible for the

Responding Party or Ms. Quintyn to assert that there was no remaining

loyalty to the Goodwill brand in the TECNO territory” and, referring to

Pavao Meats, added: “In any event, the Board has held in the past that

while formal goodwill may vanish when a business becomes defunct,

other advantages related to the prior operation remain relevant to the

Board's analysis where the relationship between the two businesses is

touted for advertising purposes”.

The applicant asked the Board to draw the inference that the

responding party is providing substantially the same services as TECNO

to substantially the same market as did TECNO.

Referring to

Accomodex, the Union argued:

The Board relied on the new owner’s access to the same

customers and held that a sale had occurred. It stated that

“[the purchased assets] are now being used by the new

owner, in much the same way as before, to supply the same

general services, to much the same general market, and at

least some of the same customers. The Board also found

that, in light of the access to the same market, Accommodex

had received goodwill from the predecessor employer.

Referring to Knechtel Foodland, supra, at paragraph 58 — a

case involving the acquisition of a grocery store that had been closed

- 36 -

for a period of six months before being reactivated under a different

brand — the Union offered the following from the Board’s comments on

the subsistence of goodwill:

Although loyalty and support might have dissipated over the

period of the closure (in Accomodex the period of the closure

was nearly 18 months), the nature of the service, the

continuity in the use of assets and particularly the use of the

same location are such that the character of the business

remains the same. The nature of the work performed and

the skills utilized in the subsequent manifestation of the

business are the same as those which obtained previously.

The assets acquired ultimately from Loblaws are being used

by the Knechtel store “in the same way as before, to supply

the same general services, to much the same general

market, and at least some of the same customers”

(Accomodex, ¶ 77).

On the responding party's second argument that the

assignment of the “TECNO licence” does not constitute a sale of sale of

business, the applicant noted that the responding party relied heavily

on the Ottawa-Carleton Lifeskills case and asserted that “All cases relied

upon by the responding party are distinguishable and that Ottawa-

Carleton Lifeskills Inc. was wrongly decided”.

The applicant’s analysis of Ottawa-Carleton Lifeskills disputed

the propriety of reliance on Metropolitan Parking, supra, and the “going

concern” standard, and quoted from Accomodex to identify the evolution

of the Board’s approach to these issues. In particular, the Union argued:

19. Accommodex remains the leading case with respect to

the application of section 69. The appropriate test is set out

at paragraph 59 of the Board’s decision:

Accordingly, in determining whether there has been a

sale within the meaning of the Act, the Board attaches

particular significance to the nature of the work

performed in, and by, the business, before and after the

alleged transfer. If the nature of the work performed

subsequent to the transfer is substantially similar to the

work performed prior to that transaction and if the

employees, or types of employees, are the same this

would normally support an inference that there has been

a transfer of a business or part of a business within the

meaning of section 64.

- 37 -

20. The key focus of the Board must not be on whether the

business was transferred as a going concern, but rather it

must be on whether the nature of the business has been

substantially altered by the transaction. As set out in

paragraph 67:

In all of these cases, there was a transfer of a distinct

part of the predecessor’s configuration of assets or

capacity to carry on business, and no material change in

the character of the work performed by the employees

within that asset framework. There was a continuation

of the work performed, the essential attributes of the

employment relationship, and the skills of the

employees; and, but for section 64, the established

bargaining and collective bargaining rights would have

been lost. This was the mischief to which section 64 is

directed, and the Board was satisfied on the evidence in

each of these cases that it should be applied.

The applicant commented that the Accomodex decision was not

provided to the Board in Ottawa-Carleton Lifeskills and asserted; “In

point of fact, the parties in that case agreed to the application of the

going concern test”. The Union’s reference was to the following

paragraph in the Ottawa-Carleton Lifeskills decision,

8. Both parties relied on the Board’s overall “instrumental”

approach to the interpretation of this section as set out in

the oft-cited decision in Metropolitan Parking Inc., [1979]

OLRB Rep. Dec. 1193 (“Metropolitan Parking”).

In

Metropolitan Parking the Board canvassed the breadth of

the terms “sale” and “business”, and concluded that in order

to find a sale of business, there must be a transfer of a

“going concern”, which is something more than a collection

of assets or the work of the predecessor. However, what

constitutes the essential elements of business that

constitute a “going concern”, can be highly variable

depending on the nature of the business.

In critiquing Ottawa-Carleton Lifeskills, the applicant noted that

the Board had made repeated references to whether the predecessor

was a “going concern” and concluded:

24. In placing significant emphasis on whether or not the

predecessor employer was a going concern, Vice-Chair

Gedalof applied the wrong test. Had the Vice-Chair applied

the appropriate test and focused on the continuity of the

business, as set out in Accommodex, he would have held

- 38 -

that the transfer of both an authorization to perform work

and the related properties constituted a sale of business.

25. It is also noted that Vice-Chair Gedalof did not address

whether the license in question was a “business” or a “part

of a business” in the context of the continuing care industry.

This issue remains unexamined because the Vice-Chair held

that no transfer could have occurred where the predecessor

business was no longer a concern. This question is a

fundamental component of the section 69 analysis and is

one which the Vice-Chair was required to consider. The fact

that it went uncommented on further demonstrates a failure

by the Vice-Chair to properly apply the Board’s

jurisprudence.

26. Moreover, the Vice-Chair’s comments distinguishing the

Board’s prior decisions in Riverview and Thunder Bay

Ambulance are uncompelling.

27. In Ottawa-Carleton Lifeskills Inc. the licence holder

relinquished its licence and the Ministry of Health issued an

identical licence to the responding parties. That licence

included certain real property. There is no doubt that the

Ministry's purpose in issuing the new licence was to fill the

void left by the predecessor employer. In Riverview Manor,

the responding party purchased real property directly from

the predecessor employer and applied to the Ministry for a

transfer of the licence. The result is the same in both cases

— the responding party is performing the same work in the

same locations with the same clients as the predecessor

employee [sic]. Given the Board's pronouncements in

Accommodex, there is no concrete basis for these extremely

similar cases to lead to different results.

28. Similarly, Vice-Chair Gedalof distinguishes the Thunder

Bay Ambulance decision on the basis that the business in

question was established “out of the ashes” of the

predecessor while the businesses in Ottawa-Carleton

Lifeskills Inc. were not. This again evidences is a misplaced

focus on whether or not the predecessor was a going

concern.

29. The key focus for the Board’s analysis should be on the

substance of the transfer, as per the Board’s decision in

Accommodex. Vice-Chair Gedalof’s focus on the status of

the predecessor employer is misplaced and, as such, he

reaches an incorrect conclusion. As the Board has said in

numerous decisions, how the transaction occurs (i.e. the

- 39 -

form of the transaction) is of less significance than what the

transaction accomplishes (i.e. substance of the transaction).

With all respect, Vice-Chair Gedalof places undue weight on

the form (i.e. the reissuing of the license by the Ministry)

and fails to consider the substance of the transaction (i.e.

the reassignment of all rights and obligations by the Ministry

to the successor employer).

30. Moreover, the facts of the present matter underscore

that the TECNO territory was not unassigned for a significant

period of time.

The Responding Party submitted its

application for the [sic] within 47 calendar days. During that

period, the bankruptcy and liquidation of the TECNO estate

was not yet concluded. While TECNO cannot be said to have

been an active business at the time, if it had been revived

by outside investors, there is little doubt that section 69 of

the Act would apply.

The applicant responded to OGL’s argument that its

involvement in the former TECNO territory was an expansion of its own

long-standing business as follows:

31. In any event, the decisions relied upon by the Employer

with respect to the expansion of existing operations are

distinguishable in the present matter or do not otherwise

assist the Employer.

32. First, it must be noted that the fact that a successor

business is expanding its operation by acquiring a part of

(or, indeed, all of) another business does not create a bar to

the application of section 69. There is no separate test

where such an expansion occurs. As per Sofina Foods at

paragraph 77, “Fundamentally, the question always returns

to whether or not there are a sufficient constellation of

elements from the predecessor employer that can be found

in the successor employer to conclude that a sale of a

business has occurred.” Ultimately, it is incumbent on the

Board to recognize that one business may purchase another

for the purpose of expanding its own operations. The

assertion that the expansion of an existing business should

frustrate bargaining rights is fundamentally inconsistent

with the purpose of the Act. The Responding Party's

assertion that a separate or modified test applies is simply

inaccurate.

The Union noted that the Board in Sofina Foods held that the

successor employer was not bound to that applicant's collective

- 40 -

agreement; however, in doing so, the Board was said to have placed no

weight on the fact that the successor employer had expanded its

business. Rather, the Union contended, “the Board found that the work

being performed was sufficiently distinct from the work previously

performed by the predecessor employer”. Here, the applicant noted,

OGL did not establish any significant distinction between the work

performed at TECNO and the work now performed in the former TECNO

territory by the responding party.

The applicant continued in its reply submissions to distinguish

the present circumstances from those in Woodland Store Fixtures,

supra, Germag Construction, supra, and Northern Precast, supra. Here,

it argued, “the TECNO territory is fundamental to the Responding Party's

ability to operate within the TECNO territory” as it “represents a series

of rights and privileges necessary for the Responding Party to do

business” and: “It cannot have opened its new operations absent the

authorization to do so from GII”.

The Union concluded this aspect of its reply as follows:

45. Ultimately, in the various “expansion” cases relied upon

by the Employer, the Board is attempting to determine

whether the item that passed between the purchaser and

the seller was fundamental to the business, or whether it

was simply a collection of useful assets. In the present

matter, it is uncontested that if the Responding Party had

not received the TECNO Territory, it would have been

prohibited from opening the operations in question. As

such, the matter is more closely parallel to the licensing

cases relied upon by the Applicant.

46. Furthermore, to the extent that any of the cases cited

by the Responding Party stand for the proposition that a

business must be a going concern for a sale of business to

be affected, those decisions are wrongly decided for the

reasons set out in Accommodex. To the extent that any of

the cases cited by the Responding Party stand for the

proposition that an expansion of an existing business is a

bar to the application of section 69, those decisions are

wrongly decided for the reasons set out in Sofina Foods and

in Pavao.

In the final segment of its reply submissions, the applicant

returned to what it referred to as the evidence of an attempt to

circumvent the Act.

- 41 -

While maintaining that there was an ample foundation for its

assertion that there was a basis for inferring anti-union animus —

referring to the expressed concerns of both the responding party and

GII — the applicant submitted in its reply:

48. In any event, the Union has conceded that anti-union

animus is not a factor to be considered in an application

under section 69. However, as asserted in the Union’s

submissions at first instance, the Board must consider the

purpose of the Act and apply the Act accordingly. . . .

49. The fact that the Responding Party's actions were

motivated by anti-union animus is does [sic] not, ultimately,

conclusive in a section 69 application.

However, in

determining whether section 69 applies to the transaction in

question, it is incumbent on the Board to consider the

purpose of the Act and of the section. The fact that GII was

able to frustrate the Applicant’s bargaining rights is

significant because avoiding such frustration of rights is the

purpose of section 69. It is not ultimately important whether

the reason that GII disaffiliated TECNO was bona fide or

whether it was motivated by anti-union animus. What is

important is that this has occurred once and that it can occur

again.

50. The Responding Party asserts that it did not attempt to

facilitate TECNO’s closure or disaffiliation. These assertions

are beside the point. GII undertook steps to disaffiliate

TECNO, essentially driving the last nail into TECNO’s coffin

and ending any possibility for restructuring. If the transfer

of the TECNO territory is insufficient to transfer bargaining

rights (as the Responding Party asserts), then GII did not

only end TECNO’s opportunity for restructuring; it also

ended the Applicant’s vested right to represent these

employees. The potential for GII to do the same again ought

to be a significant concern for the Board.

The applicant ended its reply submissions as follows:

54. Ultimately, the theme of the Responding Party’s

submissions is that they received nothing from TECNO. This

is plainly untrue — they received a significant territory that

included a bundle of rights, privileges and associated

goodwill. The fact that this transfer was effected by GII

while TECNO was in receivership is of limited importance.

- 42 -

55. The question for the Board is whether there is some

concrete package of assets which constitute a business. The

Responding Party asserts that the Board must determine

what the Responding Party “really received” from TECNO.

What it received was the TECNO Territory and all of the

rights which attached to it. These rights form the core of

any Goodwill operation and no Goodwill operation exists

without an assignment of territory. In the context of GII’s

structure, significant weight must attach to these rights.

The fact that the Responding Party did not also receive

material assets — products, fixtures staff, — is ultimately

insignificant in comparison with what they did receive.

Analysis and Decision

Having regard for the circumstances in which this matter arose

and in which it has been litigated, the following observations (referring

to what is now section 69) in the Accomodex, supra, analysis are

particularly apposite:

69. The issue of employer successorship arises out of a

seemingly endless variety of factual settings, with each new

case presenting some of the factors considered relevant to

the resolution of prior cases while raising other materially

altered, entirely omitted, or newly-added facts which

arguably should affect the decision on the merits. Indeed,

much of the confusion which attends successorship results

from the facility with which each case can be distinguished

on its facts from all former cases; and, quite frankly, the

results in some of the cases are difficult to reconcile -

reflecting, among other things: the quality of the evidence

before the Board in particular cases (especially before and

after the passage of what is now section 64(13)); the quality

of the argument; and the evolution of the Board's

jurisprudence as various panels, over the years, have

assessed in new factual settings, the “mischief” to which

section 64 was directed.

70. But to dismiss the difficulty so lightly would be to

disregard the fundamental differences inherent in the

various business contexts in which the successorship issue

arises. Factors which may be sufficient to support a "sale of

a business" finding in one sector of the economy may be

insufficient in another. In some industries, a particular

configuration of assets - physical plant machinery and

equipment - may be of paramount importance; while in

others it may be patents, "know-how", technological

- 43 -

expertise or managerial skills which will be significant.

Some businesses will rely heavily on the goodwill associated

with a particular location, company name, product name or

logo; while for other businesses, these factors will be

insignificant. The Labour Relations Act applies equally to

primary resource industries, manufacturing, the retail and

service sector, the construction industry and certain public

services provided by municipalities and local authorities, and

in each of these sectors the nature of the business

organization is little different. Yet in each case section 64

must be applied in a manner which is sensitive to both the

business context and the purpose which the section is

intended to accomplish. To cite but one unusual example:

in Riverview Manor, [1983] OLRB Rep. Sept. 1564

(application for judicial review dismissed February 5, 1985),

the Board found that a licence to run a nursing home

business was a critical part of that business, to which

bargaining rights could attach, even though the purchaser

of the licence later invested a substantial sum to build its

own nursing home across town. In that highly-regulated

business, the licence was viewed by the Board in that case

as the key asset - as evidenced by the substantial sum that

had been paid for it.

71. Finally, it is important to recognize that not only do the

cases arise in a variety of different contexts so that direct

comparisons are difficult, but the law itself has not been

static.

The Presence of Anti-Union Animus

One of the less than frequently occurring issues raised by this

matter is the effect or role of the alleged anti-union animus — shared

and demonstrated, the Union says, by GII, OGL, Ms. Quintyn and

Ms. Nakamura.

In its submissions, the responding party suggested that the

Union’s argument rested at least in part on the proposition that the

Board was required to act and to deal with “fraudulent schemes” or a

“fraudulent transaction”. Those assertions misrepresented the position

advanced by the Union. Its argument was not premised on allegations

of any party’s committing fraud or acting fraudulently.

As noted in Enercare, supra, at paragraph 360, this proceeding

is not susceptible to a determination framed only in terms of an unfair

labour practice:

- 44 -

Further, as emphasized by the Board at paragraphs 8 and 9

in its decision in PCL Constructors Eastern Inc., [1995

9915 (ON LRB)], in making a determination under either

subsection 1(4) or section 69, improper motive is not an

issue.

8.

In sections 1(4) and 64 [now section 69] and the

Board's jurisprudence, the focus is on trade union

collective bargaining rights; and more specifically, on

protecting a trade union's bargaining rights from being

affected by corporate or commercial activities. Neither

section 1(4) nor section 64 is an unfair labour practice

provision.

Both are concerned with the effects of

business decisions or dealings on established bargaining

rights, rather than with the motivation for such decisions

or dealings. Sections 1(4) and 64 apply equally to

commercial attempts to escape from bargaining rights

and to BONA FIDE business transactions which are not

improperly motivated but which nevertheless erode

established bargaining rights. As the Board pointed out

in KNK Limited, [1991] OLRB Rep. Feb. 209, section 1(4)

is not a penalty provision. Instead, it operates to allow

the Board to deal with business transactions from a

labour relations perspective without the constraints

imposed by the rules of common or commercial law. The

same is true of section 64.

9.

Accordingly, it does not matter whether or not

any of the business or corporate dealings which have

brought the responding parties to where they are today

were improperly motivated.

Indeed, the applicant recognized that limitation, but

nevertheless insisted on the relevance of its allegations, positing in its

submissions and reiterating in its reply:

While anti-union animus is not a factor that the Board

considers in applications under section 69, it is required to

consider the purpose of section 69. That purpose . . .

includes preventing the use of corporate or institutional

mechanisms to frustrate bargaining rights.

In its reply submissions, the applicant also asserted:

94. The evidence shows that one purpose which the GII

board considered in disaffiliating TECNO is the applicant's

- 45 -

rights to represent its employees. Ms. Nakamura made

numerous comments behind closed doors blaming the

applicant for TECNO’s failure. While Ms. Nakamura's opinion

is entirely counterfactual, it took root with Ms. Quintyn and

with GII.

The applicant would have it that TECNO and Ms. Nakamura —

and GII by extension — blamed the Union for TECNO’s financial

predicament in 2016. The Union was certified in December 2012 —

barely three years before the demise of TECNO — and could not have

accounted for financial difficulties said to have beset TECNO for the ten

to twelve years as documented in the communications generated by

Ms. Quintyn and Ms. Nakamura in 2016. Moreover, there was nothing

to establish that any opinion Ms. Nakamura had about the applicant’s

being responsible in part for the downfall of TECNO was counterfactual.

The Union could not have been responsible for any difficulties

encountered by TECNO prior to its arrival, but the evidence does not

permit a conclusion that it had no influence on the negative experiences

of TECNO after its certification.

While it might be fair to assert, as the applicant did, that

Ms. Nakamura “placed considerable blame on the applicant for TECNO’s

failure”, there was no evidentiary basis for the tied submission that

“anti-union animus was a factor in determining to disaffiliate

Ms. Nakamura [sic]” or TECNO.

There was no evidence to establish that OGL participated in any

scheme designed to subvert the applicant’s bargaining rights through

TECNO’s disaffiliation. In particular, there is nothing in the evidence to

suggest that OGL contributed to the demise of TECNO or to suggest its

having done so with a view to acquiring what would become an

unassigned territory.

Furthermore, there was no material evidence of GII’s process

or considerations in reaching the decision to end TECNO’s affiliation and,

therefore, no evidence to support the proposition that the applicant was

a consideration in GII’s decision to disaffiliate TECNO.

Mr. Gibbons’ communication within GII in which he mentioned

TECNO’s having “a very strong union” and its “not garnering the

cooperation they needed” fell a considerable distance short of

constituting evidence of the GII’s board considering the applicant’s

rights to represent employees as a factor in ending TECNO’s affiliation.

- 46 -

In the result, GII’s action in proceeding with disaffiliation was

not shown to have been motivated by anti-union animus. Moreover, the

disaffiliation of TECNO could not constitute a “sale of business” for the

purposes of the Act. Without more, any objection the Union might have

taken to that decision alone would have required action otherwise than

under section 69.

Early in 2016, TECNO presented a scenario in which it had

closed all operations, it had let go all employees other than the CEO, its

board had resigned en masse, and (as demonstrated by the subsequent

bankruptcy) its liabilities in the millions exceeded its assets sixfold. GII

was confronted with a situation in which it had little choice other than

to act, and disaffiliation was not shown to be an unwarranted reaction

on its part. I note that notwithstanding — or perhaps because of — the

evidence of the efforts of OGL and Ms. Quintyn to assist Ms. Nakamura

and TECNO after January 16, 2016, the applicant did not attempt to

establish that TECNO could have been resuscitated.

GII’s decision to install OGL as the Goodwill in what had been

the TECNO territory brings a different analysis to bear.

There was no evidence of any competition for what had been

the TECNO territory. OGL was the lone applicant and there was no

suggestion that any other possible applicant for the territory had been

ignored or “scared off”.

Accordingly, there was no basis for a

determination that the territory had been assigned to OGL rather than

to any other entity as a manifestation of anti-union animus.

Even so, in the absence of any exculpatory evidence, the Board

must conclude from what was put forward by the responding party that

GII proceeded with the assignment of the territory sharing OGL’s

demonstrated commitment to ensuring to the fullest extent possible that

its presence as the Goodwill in that territory would not expose it to the

applicant or to any unionization.

The evidence about the assignment was limited to the

testimony of Ms. Quintyn who did not participate in the decision making

by the GII board and to GII documents to which Ms. Quintyn could not

speak. In the result, the evidence stopped short of establishing that the

territory would have been granted to OGL but for the confidence of GII

and OGL that the responding party was well-positioned and had a

planned course of action designed to thwart the Union and unionization

should the challenge befall it.

- 47 -

There was no room for any doubt about the desire of OGL and

GII to avoid the need for OGL to recognize and deal with the applicant

in the territory previously entrusted to TECNO. The proposal put forward

by OGL reiterated the objective of its continuing to avoid unionization.

In particular, OGL set out a scheme by which, inter alia, it would delay

resumption of operations as a Goodwill and then pick a second opening

location to test the efficacy of its avoidance strategy.

Notwithstanding the observation in OGL’s March 8, 2016 “Board

Recommendation/Decision Overview” documents that OGL was “moving

forward with hast [sic]” in part because Goodwill’s competitors were

“already engaging in the pursuit of donations” and “the least amount of

lag time, the more the effect of competition is mitigated”, OGL’s first

entry into the market previously reserved to TECNO was delayed for

three years. I return to this consideration below.

It would offend labour relations common sense for OGL to deny

its anti-union animus while setting out a structured “union avoidance”

scheme and announcing to GII and its own board members that the

union issue is “the most pressing due diligence concern and perhaps one

of the biggest risks for Goodwill Industries Ontario Great Lakes moving

forward”. Indeed, OGL’s posture in this matter was less inclined to

denying the presence of that motivation than to arguing its irrelevance

to the disposition of the Union’s application.

In any event, OGL did not explain how that “biggest risk” was

unrelated to its being obliged to recognize the Union and engage with it

in collective bargaining for a renewal agreement.

The applicant argued that a purpose of section 69 is to prevent

“the use of corporate or institutional mechanisms to frustrate bargaining

rights” and that the Board should not allow the actions of GII in

disaffiliating TECNO and transferring the territory to OGL to result in

their extinguishing the applicant’s rights. The responding party agreed

in its submissions that section 69 exists “to protect the union’s

bargaining rights against employer schemes designed to subvert those

bargaining rights”.

The Union stopped short of contending that the anti-union

animus demonstrated by OGL and GII would suffice to preserve its

bargaining rights in respect of the territory. However, it did submit that

denying GII and OGL that reward — avoiding the delivery of such a

result and precluding the operation of the processes of TECNO’s

disaffiliation and OGL’s receipt of affiliation for the territory — would be

- 48 -

consonant with the objective of section 69 to protect a trade union’s

bargaining rights in the face of business machinations over which the

Union has no other control and which would frustrate those rights if

allowed by the Board. There is, in my view, substantial and persuasive

merit in the Union’s analysis.

In this situation, GII had and exercised a controlling hand. It

determined that TECNO was no longer to be supported and subsequently

accepted OGL’s application that — throughout its development and its

presentation — had as a key feature the proposition that OGL could

successfully beat back the Union and overpower any attempt at

unionization. Simply put, given the depth and detail of the data required

to be submitted by OGL in support of its application for the territory, its

repeated references to “the union issue”, “the union concern”, and OGL’s

plans to continue its record of not having had “a brush with a union”

spoke eloquently to the significance attached by OGL and GII to the

“union issue” as a relevant factor in the awarding of affiliation and thus

the former TECNO territory.

Had GII and OGL not shared the objective of effecting the

transfer so as to avoid the impact of section 69 and the applicant’s

bargaining rights, one would not have expected either of them to have

accorded the issue of successorship or unionization the status of “the

most pressing due diligence concern and perhaps one of the biggest

risks for Goodwill Industries Ontario Great Lakes moving forward”?

If GII and OGL had not pursued that objective, I would have

expected to have heard evidence from the decision makers at OGL and

at GII to the effect that the Union’s characterization of the process and

the motivation for it was inaccurate, unfounded, and undeserving of

consideration. Without that direct evidence, there was no basis on

which to ground a finding that the disposition of the territory to OGL

would have proceeded in the absence of the assurances — and GII’s

acceptance of and reliance upon the assurances — of OGL’s “ability to

mount a successful response to potential labour issues” and to

“overpower” any attempt at unionization.

In those circumstances, I conclude that — to an undefined

extent, but without doubt — OGL was accepted as a worthy applicant

for its professed ability to avoid the Union, supported by a plan put

forward and expected to make that outcome more likely to be achieved.

In the result, the responding party did not rebut the proposition that the

transaction itself was one which was designed to defeat the rights of the

Union and thus ran contrary to the purpose of section 69.

- 49 -

That is to say — and I so find below having considered all of the

authorities and submissions advanced by these parties — a sale of

business within the terms and dictates of section 69 is made out, as it

must be. The identification of the disposition — the transfer of the

territory from TECNO and to OGL by GII — as a sale of business for the

purposes of the Act is more readily arrived at and seen to be congruent

with the objective of section 69 where, as here, the transaction is tainted

by the documented goal of the corporate parties to deny the Union the

right to continue to represent employees in the subject business, the

very rights the section was introduced to safeguard.

The second step in the process of disposition here was not

simply the grant of a territory in which a successor might operate a

business or its business. Rather, it was the grant of that singular,

critical, and exclusive asset to a party with a plan for the territory that

was predicated, at least in part, upon the elimination of rights the Act is

framed to preserve.

OGL Acquired a Business

As the applicant argued, OGL acquired significant rights that

provide it with a captured and well-protected market for Goodwill

services and custom in an area described as accounting for thirty

percent of Goodwill’s scope in Canada, drawing on a population of

almost ten million people in 2016.

OGL sought to distinguish its circumstances from those in some

of the Board’s decisions involving “captive markets” evidenced by the

predictable movement of nursing or retirement home residents with the

transfer of the business. The responding party suggested that it was

unlikely that people who had frequented TECNO’s operations “would

shop at OGL’s stores because of any previous loyalty to TECNO” and

that it was “more likely” that those customers would have “moved on to

other thrift stores in the area” in the period between the disaffiliation

and OGL’s opening its stores. There is no doubt that both observations

are valid. OGL was not presented with a “captive market” comparable

to those in Riverview Manor and Shalom Village South for examples;

however, it was granted the position as the only entity to which a

population base of ten million or more could turn as an operator with a

brand the responding party described as “one of the most recognizable

in the world”. The operators of nursing homes and many other

businesses are not afforded a scope of opportunity that comes close to

matching that obtained by OGL in the former TECNO territory.

- 50 -

The applicant’s position set out in the following submissions,

repeated here for convenience, is incontestable:

33. The assignment of the TECNO Territory confers upon the

Responding Party certain rights.

These rights are of

significant financial value. The Responding Party has an

exclusive right to operate as “Goodwill” within the territory

and to use the trademarks associated with the Goodwill

brand within the territory. Goodwill is one of the largest and

most recognizable thrift store brands worldwide. The use of

the Goodwill brand in the association with GII provides a

competitive advantage to the Responding Party as against

other thrift brands in the area. As Ms. Quintyn noted during

her testimony, the Responding Party competes with other

thrift retailers for more than just customers. They also

compete for grants, for real estate and for donations.

Ms. Quintyn also agreed that the responding party faces a

degree of competition from other retailers like Wal-Mart.

34. Moreover, the territory permits the Responding Party to

operate without competition from other Goodwills. This is a

significant distinction between GII and more traditional

franchise operations. GII protects the territory for each of

its members and as such members do not compete with

each other. This includes competition for funding, for

employees, for real estate and for sales. Instead, Goodwills

operate solely within their territories and cooperate with

other members with respect to advice, technology and best

practices.

OGL has functioned as a Goodwill in its original territory for

more than seventy years and in the former TECNO and EKL territories

since 2019. In all three territories, OGL has engaged in endeavours that

were intended to provide and did provide people in need with material

assistance for which Goodwill is well known.

Fundamental to OGL’s business as a Goodwill — in common with

others, including TECNO before its demise — are its donation centres

and thrift stores. Those generate substantial revenues and, no doubt,

result in the public’s association of “Goodwill” with those facilities, if not

all of the good works Goodwills undertake.

TECNO operated a number of those centres and stores in which

bargaining unit employees represented by the applicant worked. When

OGL commenced business in the former TECNO territory in 2019 it did

- 51 -

so with a public-facing donation centre and boutique store in

Newmarket, adding another centre and store in Mississauga one year

later, and a third location on Dufferin Street in Toronto. There was no

suggestion that the business carried out in those facilities was materially

different from what would have been observed in the TECNO facilities

until they were shuttered in 2016 or that the work done by TECNO’s

bargaining unit employees differed in any respect from that done by

workers in the three GTA facilities OGL has opened. In the main,

donations were and are received, sorted, displayed, and sold. To that

extent, at least, there was merit in the applicant’s submission that the

responding party’s operations in the territory were a continuation of

TECNO’s business as some of OGL’s “businesses in the TECNO Territory

[might be said to be] virtually identical to those operated by TECNO”.

The Union has also argued that it was counterfactual to assert

that OGL’s “ability to operate in the TECNO Territory was not derived

from TECNO in any way”. TECNO's presence in the territory for several

decades would almost certainly have been a factor in establishing the

Goodwill name in communities in which it operated stores; however, on

the case presented by the parties, the significance of any goodwill

attributable to TECNO per se is far from measurable and might have

been much less than the Union would claim.

There was also no suggestion in the evidence or in the material

referred to in this proceeding that the public has or had any familiarity

with either TECNO or OGL — by name or otherwise — as entities distinct

from other Goodwills or separate from their existence as Goodwill

operations. The rules enforced by GII required Goodwills to adhere to

signage and other protocols that would support the applicant’s

submission that “any passerby would not realize that the Goodwills in

the TECNO Territory are no longer operated by TECNO”.

I would go further and note that there was no foundation in the

evidence for anyone to suggest that a passerby would ever have known

that a Goodwill operation in any location was a TECNO property or was

now a property of OGL. Indeed, there was nothing to lead one to think

that a passerby would have any reason to be curious as to who or what

— other than “Goodwill” — conducted business at a location of either of

the two.

There was also no evidence to suggest that any loyalty to the

Goodwill brand was attributable to or an asset of TECNO upon its

disaffiliation and bankruptcy, and certainly nothing to support the notion

that TECNO transferred any of its goodwill to GII or OGL. In its

- 52 -

submissions, the Union referred to OGL’s “making itself the face of

TECNO’s return”.

The proposition was baseless.

There was no

foundation for the implicit suggestion that the public had noted the

departure of TECNO rather that the closing of the Goodwill operation

with which some or many residents had been familiar.

The common theme in various letters OGL submitted to GII in

support of its territory application in March 2016 was the revival or

rebuilding of Goodwill in the locales of interest to the letter writers.

Those supportive letters made no reference to TECNO, other than to

note its demise. That Mayor Tory of Toronto and others wrote to

welcome the anticipated return of Goodwill by way of OGL’s application

did not appear as a reflection of TECNO’s legacy or a function of the

writers’ identification of particular attributes of OGL, but as an

appreciation of the contribution a revived Goodwill operation was

expected to make, in keeping with standards the umbrella organization

and its constituent agencies adhered to internationally.

In arguing for the recognition of TECNO’s subsisting goodwill,

the applicant noted that OGL had acquired the lease of the property at

1224 Dundas Street East in Mississauga at which TECNO had carried on

business. The Union largely ignored the fact that those premises had

been occupied by several businesses in the interim and that the Goodwill

signage had been removed in or about February 2016, some four years

prior to OGL’s taking up that location. In the absence of direct and

different evidence, those facts alone suffice to refute the Union’s

contention that, by returning to the former Dundas Street location, OGL

drew specifically on goodwill generated by TECNO.

Indeed, there was no evidence that specific locations were

significant to the potential success of the responding party in advancing

the Goodwill business in the territory. That said, OGL’s leasing the

specific Mississauga location approximately four years after being

granted the territory adds to the assessment of its commitment to union

avoidance as evidenced by its plan to proceed with a staged reopening

and a design for the choice of locations of the first stores it was to

operate.

The responding party sought to explain the protracted delay in

opening its operation in its new territory with reference to several issues

and without mention of its documented plan to stall first openings. A

tight real estate market was a factor cited in that context; however, the

Dundas Street location to which it returned the Goodwill operation in

2020 was available no fewer than four times after TECNO’s demise. The

- 53 -

real estate situation in the GTA might have been limiting, but in light of

that evidence the state of the real estate market seems to have been

an excuse offered for OGL’s delayed return to Mississauga without

acknowledging the impact of its intentional process for union avoidance.

Given that OGL’s plan in 2016 called for a sequence of events in which

the second location would be proximate to a former TECNO site and that

the very location TECNO had leased was available as often as it was, I

have difficulty accepting the evidence as put forward by the responding

party. It would appear that, but for its union avoidance planning, OGL

might have secured that site on one of several earlier occasions.

Regardless of the Union’s unsubstantiated assertion of TECNO’s

having created a legacy of goodwill that was of benefit to OGL, I am

satisfied that the business of being the Goodwill in that territory passed

from TECNO to OGL. The territory was taken from TECNO by GII —

unsurprisingly in the circumstances that came to a head in January 2016

— and granted to OGL, on its application, fewer than twenty weeks later.

As a result of GII’s election, TECNO was barred from carrying

on as a Goodwill immediately upon its disaffiliation on February 3, 2016

notwithstanding continuing efforts of Ms. Nakamura, Ms. Quintyn, and

OGL devoted to advancing a restructuring plan. The disaffiliation

decision was fatal. Without notice or a grace period that GII might have

allowed, it denied TECNO the one asset without which its operation as a

Goodwill was impossible. Conversely, the grant of affiliation transferred

to OGL the singular asset it needed in order to have access to and to

secure control of the entire TECNO territory as the Goodwill licensed to

operate there to the exclusion of all other Goodwills and all others who

would wish to operate as a Goodwill anywhere in that immense section

of Ontario.

OGL argued that its “ability to operate [its three] Toronto

locations was not derived from TECNO in any way”. That TECNO did not

bestow any rights and benefits directly on OGL is not determinative —

neither did the hospitals in Thunder Bay Ambulance. In that case, two

hospitals had provided ambulance services until the day on which the

new contractor appointed by the Ambulance Services Branch of the

Ministry of Health (the “Ministry of Health”) took on the responsibility

and began operating the business. The new contractor advertised for

attendants and hired twenty-four of the thirty persons who had worked

in driver and attendant positions with the hospitals. The successor

received nothing directly from the two hospitals.

- 54 -

The differences between Thunder Bay Ambulance and this

matter are limited and, in my view, insufficient to warrant a different

result obtaining here.

The two hospitals chose to give up their positions as the parties

conducting the separate services in Thunder Bay rather than agree to

amalgamate their ambulance operations as proposed by the Ministry of

Health. TECNO lost the right to carry on the business of being the

Goodwill in its territory and did so, involuntarily. The upshot, however,

was the same for it as for the hospitals. All three ceased to engage in

the subject businesses.

In both instances, other entities had opportunities to acquire

and conduct businesses previously the responsibility of the hospitals and

TECNO.

Thunder Bay Ambulance Services Inc. obtained that right

through an application to and licensing by the Ministry of Health. With

the newly granted licence, and as a term of the licence, it also acquired

from the Ministry of Health the use of the physical assets used in the

provision of services to the community.

OGL was granted the right to acquire and conduct a business

previously the responsibility of TECNO through an application to GII. In

step with Thunder Bay Ambulance Services Inc., it acquired no physical

assets from the predecessor, TECNO.

The successor, Thunder Bay Ambulance Services Inc., was

started by an individual who had been responsible for the service as a

manager at one of the hospitals. Thus, the technical competence and

expertise necessary to make proper and productive use of the assets

provided by the Ministry of Health was present in the applicant, in the

person of the individual who created the entity subsequently licensed by

the Ministry of Health to carry out the service.

OGL took on none of TECNO’s managerial or other staff. Unlike

the Thunder Bay Ambulance Service start-up, but similar to its principal,

OGL had a long history of experience, expertise and success in the

business of being a Goodwill. It required nothing in the way of

infrastructure, systems or the like from TECNO. It did not need and did

not seek the addition of expertise or even familiarity with the territory

from previous employees of TECNO.

It hired no one previously

employed by TECNO. Obviously, it had and has utilized the capacity to

- 55 -

carry on the business of a Goodwill with which it was fully familiar,

competent, and, quite probably, expert.

OGL had all of the systems and personnel required to run a

Goodwill business. Whether it hired or transferred personnel for the

Newmarket or Dundas Street operations was not disclosed, but that was

also unimportant to the issue at hand. The applicant’s entitlement to

invoke its bargaining rights is unaffected by the departure, absence or

unavailability of the workers denied entry to the TECNO facilities on

January 17, 2016. In any event, there was no dispute that employees

in the stores operated by OGL in the former TECNO territory perform

work and jobs previously done by bargaining unit employees of TECNO.

OLG had no need to acquire any site TECNO occupied prior to

its disaffiliation or to engage any personnel to work in the donation

centres, stores or boutique as its plan was to delay opening any facility

for at least twelve months following the approval of its application by

GII.

Nevertheless, OGL was entitled to start in business as the

Goodwill in the territory formerly served by TECNO as early as June

2016. Accordingly, the business was OGL’s from that date forward; the

“sale of business” for the purposes of the Act preceded OGL’s opening

in Newmarket by three years.

No physical assets moved from TECNO to OGL, but I am

satisfied that their absence is irrelevant on the facts of this matter. The

responding party’s observation that no TECNO assets were transferred

to it is correct — in part because OGL needed no assets from any source

for a significant period after it acquired the right to carry on business as

the Goodwill in the territory. More importantly, the singular asset that

was relevant to the responding party's ability to carry on business and

without which all other assets — including OGL’s experience and

expertise — were of no use or consequence was the grant or the licence

from GII.

In the grant of territory by GII, the responding party had

everything essential to resume the operation of the Goodwill in the

territory as soon as it saw fit to do so and secured sites at which to

receive and sell donated goods, as OGL did in 2019 and 2020.

In Accomodex, the Board stated: “It is perhaps trite to say so,

but without a hotel (with its restaurants, parking lot, ballrooms, meeting

- 56 -

rooms, swimming pool and so on), one could not be in the ‘hotel

business’ at all.”⁶

Similarly, one might observe that a coffee shop proprietor could

not be in business as a Starbucks operation without an appointment by

Starbucks corporate. The operator of a Starbucks location is not in

business simply as a coffee shop. Being in business as a Starbucks, the

operator is supported and elevated in its ability to attract custom by the

substantial brand recognition and market position established by the

international Starbucks enterprise, perhaps little affected or influenced

by any independent efforts of the local operator.

And so too here, the business under consideration is that of a

Goodwill and not merely that of an undifferentiated thrift shop. The

operator of the business at issue has the exclusive right to carry on as

the Goodwill presence in any of hundreds of communities in a very large

portion of Ontario. Without the grant of its affiliation or its territory

appointment by GII, OGL could not be in business as the Goodwill

operator anywhere in what had been the TECNO territory. In abstract

theory, it might have been a thrift store there (subject to restrictions or

prohibitions under the terms of its underlying agreement with GII as the

Goodwill in Ontario Great Lakes), but without GII’s express

authorization it could not open as a Goodwill in the former TECNO

territory or anywhere in the world beyond the Ontario Great Lakes

territory it had for years before 2016 or the EKL territory it gained by

merger in 2019.

While OGL made reference to competition at the hands of Value

Village and Salvation Army thrift stores and donation centres, there was

nothing presented to equate those operations with an OGL or a TECNO

— Goodwills with the exclusive right to be the Goodwill in their assigned

territories, obliged as are all to face the competition of other brands, but

fully insulated by GII against incursions by any other Goodwills.

Accordingly, in words used by the Board in Accomodex, OGL

acquired TECNO’s “business capacity”⁷with its being assigned the

territory in June 2016. The responding party was thereafter entitled to

all of the rights, privileges, and opportunities afforded a Goodwill in the

territory that TECNO had enjoyed until the moment of its disaffiliation

by GII on February 3, 2016.

6

At para. 7.

7

At para. 45.

- 57 -

The language used in section 69 has been commented upon

many times and it is trite to observe that the inclusion of “and any other

manner of disposition” as the expansive language defining — but clearly

not limiting — the definition of “sells”, “sold” and “sale” affords an

affected bargaining agent and the Board great scope for an examination

and assessment of salient events. Simply put, GII disposed of the

business capacity that had been TECNO’s by granting the territory to

OGL with a view to re-establishing the brand that had been entrusted to

TECNO there and staunching the outflow of business to Goodwill’s

competitors as a consequence of TECNO’s demise.

The disposition was of the territory formerly controlled by and

exclusive to TECNO, and the ability to carry on business as the Goodwill

in that territory. That the grant of the territory was predicated at least

in part on the planned for elimination of the applicant’s bargaining rights

renders the disposition more obviously the proper subject matter for

attention and determination under section 69.

The only material difference between OGL’s situation and that

considered by the Board in Thunder Bay Ambulance is that, as an

essential feature of the licence it issued, the Ministry of Health provided

the successor employer with the physical assets that it was to use in the

ambulance business. By acquiring the licence on application to the

Ministry of Health, the successor was able to take up and continue the

business previously conducted by the hospitals with no hiatus and no

disruption of the ambulance service for residents and hospitals in

Thunder Bay. So too here, by successfully applying to GII for the

exclusive right to be the Goodwill in what had been the TECNO territory,

OGL acquired the business of being that Goodwill.

Conclusions reached by the Board in Thunder Bay Ambulance

apply to these facts without any alteration of any importance:

16. In a strict commercial or corporate sense, it is clear that

there has been no transfer between the predecessor

hospitals and the respondent as would constitute a sale.

Indeed, the predecessors had no assets, inventories (other

than sheets, towels and other toiletries), accounts

receivable or customer lists which could have been

transferred and they were prohibited by law from

transferring their licenses to operate. The predecessors

depended upon the maintenance of their relationship with

the Ministry and not on customer goodwill. As discussed in

para. 13 herein however, the Board must look beyond the

- 58 -

form of the transaction in determining if there has been a

"sale of a business" within the meaning of Section 55 of the

Act. Notwithstanding the absence of contact between the

hospitals and the Thunder Bay Ambulance Service, and

notwithstanding the lack of consideration given and received

between the two, the Board is satisfied that the essential

elements of the predecessors' businesses were transferred

to Thunder Bay Ambulance Services Inc. so as to constitute

the sale of a business within the meaning of Section 55 of

the Act.

17. In the view of the Board, the two essential elements of

the predecessors' businesses were transferred to the alleged

successor. Firstly, the exclusive use of the assets owned by

the Ministry of Health was transferred. Although the same

licence or piece of paper was not transferred between the

two, the Board has no hesitation in finding that the exclusive

entitlement, as embodied in a Ministry of Health Licence,

was transferred. Secondly, the predecessors' management

and organization in the person of Mr. Rudyke, and the

predecessors' employees were also transferred.

predecessors' ambulance operations were

The

largely

managerial and organizational in nature and it follows that

the transfer of managerial skills, albeit through a request for

proposal system and competition, and the continuation of

identical job functions filled by the same persons as were

employed by the predecessors must weigh heavily with the

Board.

18. Having regard to the transfer of the exclusive right to

use the Ministry's assets, to the transfer of managerial skills

and to the uninterrupted continuation of the identical job

functions, the Board must conclude that the Ministry of

Health, the entity charged with maintaining an ambulance

service in the Municipality of Thunder Bay, did not facilitate

the establishment of a similar or parallel business but rather

it served as the necessary link in the transfer of the

predecessors' businesses to the successor. It is the finding

of the Board, therefore, that a sale of a business within the

meaning of section 55 has occurred and that the bargaining

rights of the union, which were established in respect of the

predecessors' businesses, should be preserved.

The

applicant trade union was entitled to give notice to the

predecessors under section 45 of the Act and accordingly,

the Board declares, pursuant to the provisions of section 53

of the Act that the trade union is entitled to give the

respondent a written notice of its desire to bargain with a

- 59 -

view to making a renewal collective agreement. (emphasis

added)

The findings in Thunder Bay Ambulance are mirrored in what

was presented in this matter. The Board there noted that “the

predecessors had no assets”; neither did TECNO at the time of the

disposition. The predecessors “were prohibited by law from transferring

their licenses to operate; OGL could not operate in a territory as a

Goodwill without affiliation — either directly as it achieved with respect

to the former TECNO territory or by merger as it did with EKL. The

“essential elements of the predecessors’ businesses were transferred to

Thunder Bay Ambulance Services Inc. so as to constitute the sale of a

business within the meaning of section 55 of the Act” and the first of

those essential elements was “the exclusive use of the assets owned by

the Ministry of Health”. The Board held that, although the hospitals’

licences were not transferred as the successor was issued its own

licence, “the exclusive entitlement, as embodied in a Ministry of Health

Licence, was transferred”. That exclusive entitlement, essential to the

successor’s ability to succeed the hospitals, finds its mate here in the

grant of the territory by GII, transferring to OGL the exclusive right to

conduct business as the Goodwill in the former TECNO territory.

The Board in Thunder Bay Ambulance identified “the transfer of

the exclusive right to use the Ministry’s assets”, “the transfer of

managerial skills” and “the uninterrupted continuation of the identical

job functions” in finding that the Ministry of Health “served as the

necessary link in the transfer of the predecessors’ businesses to the

successor”. As is the case with GII’s grant of the territory to OGL, the

licence issued by the Ministry of Health to the successor was the truly

essential element as the managerial skills of its founder and the

availability of many of the attendants to work for the successor were of

no use to Thunder Bay Ambulance Services Inc. if it were not granted

the licence to operate the service with access to the Ministry’s assets.

The cases make it clear that the predecessor need not be a

party to or the source of that which constitutes the business disposed of

in the section 69 sale. Rather, the business or the means of entering

into and carrying on the business can be provided to the successor by a

third party. That is at the heart of the decision in Thunder Bay

Ambulance. The Ministry of Health granted the licence and owned all of

the operating assets used by the successor in carrying on the business

of providing the ambulance service. The predecessors transferred

nothing to Thunder Bay Ambulance Services Inc.

- 60 -

The Board in Accomodex commented on the viability of “sale of

business” applications where the business was transferred through the

interposition of receivers rather than directly from predecessor to

successor.⁸Moreover, the point was stated succinctly in Metropolitan

Parking, supra: “The manner of disposition is irrelevant so long as a

transfer has, in fact, taken place. The interposition of a third party,

acting as an agent or conduit, does not affect the result”.⁹

The Union argued from Thunder Bay Ambulance that “the Board

should have no difficulty concluding that GII served as a necessary ‘link’

in the transfer, notwithstanding the fact that it is a third-party actor”. I

agree. GII was not only the “necessary link” in this instance, it was

entirely responsible for the events that unfolded following the

developments at TENCO on the night of January 15, 2016. Once GII

disaffiliated TECNO, the territory reverted to GII. It then controlled and

delivered the “essential element” of the predecessor’s business — the

grant of the territory without which neither TECNO nor OGL could

conduct business as a Goodwill — just as the Ministry of Health selected

Thunder Bay Ambulance Services Inc. as the party to be licensed and to

succeed the hospitals in providing service to that community.

Accordingly, I agree with the applicant’s submission: it is not an

answer to the Union that nothing passed from TECNO as its assets had

been disposed of (and not to the responding party) or that the ability of

the responding party to conduct the business of being the Goodwill in

the territory was granted by GII and not received from TECNO. Rather

the disposition of the business previously conducted by TECNO was a

two-step process: first, with apparent good reason, GII disaffiliated

TECNO and, secondly, GII granted OGL the entire territory that had been

TECNO’s, together, of course, with all of the established benefits that

permitted OGL to develop the business on its schedule free from any

intervening competition at the hands of another Goodwill.

GII’s grant of the territory provided OGL all that it needed to

take on and take over the business previously conducted by TECNO.

That grant was the sine qua non for OGL’s right to be the Goodwill in

the former TECNO territory. The affiliation grant is essential to the

business. It is integral. No entity may function as a Goodwill without

that asset. Other than premises from which to conduct the bricks-and-

mortar public-facing aspect of its business as the Goodwill, OGL required

8

See para. 73 and the reference to Hughes Boat Works Inc., [1977] OLRB Rep. Dec. 815, at

para. 75.

9

At para. 28.

- 61 -

nothing in order to resume the business TECNO had engaged in for

decades.

OGL might have had access to the TECNO territory without the

approval or involvement of GII by way of merger — just as it acquired

access to the EKL territory in 2019. However, a merger with TECNO

would have required the continued recognition of the Union — just as

OGL has been obliged to deal with Unifor as the bargaining agent of

some of EKL’s employees. Furthermore, the acquisition of access to the

TECNO territory by merger would have required OGL to come to terms

with the management of TECNO’s indebtedness and longstanding

financial difficulties. The closing words in evidence were Ms. Quintyn’s

unquestionably valid explanation that a merger with TECNO was a risk

that OGL, as a charity, could not contemplate.

In addition to the analysis in Thunder Bay Ambulance — in my

view, a most relevant decision sufficient to ground the disposition of this

application — the parties also referred to “tavern cases”, Riverview

Manor (singled out by the Board in the Accomodex commentary), and

other nursing or long-term care homes wherein licensing was recognized

as a significant or essential element of the disposition found to constitute

a sale of business for the purposes of the Act.

The Board’s ruling in Vivace Tavern, supra, was of some

assistance here. While the Board characterized the fact that the parties’

commercial agreement “purports to convey to the respondent . . . any

right title or interest of the vendor in existing liquor licenses for the

named tavern” to be of “even greater significance” than the fact that

chattels which would allow the uninterrupted operation of the business

were to be transferred, the facts were significantly different from those

presented here. All of the commonplace assets of a tavern business

passed to the successor; staff were retained; and the purchaser

operated the business for five weeks before closing it for one week to

re-open as the House of Lancaster, featuring so-called adult

entertainment and partially clad dancer-entertainers serving food and

drinks when not performing. The Board noted:

The respondent attached great importance to the licenses,

particularly to the adult entertainment license, since no new

entertainment licenses are being issued in Metropolitan

Toronto and the respondent was dependant [sic] upon the

predecessor's previously acquired rights in having an

application for such a license accepted. The transfer of the

two liquor licenses avoided the delay of the normal waiting

period for new licenses and allowed continuity of the

- 62 -

business without interruption. The right to use the name

Hollywood Tavern meant that the respondent could continue

the business "as is" without risking tarnishing the name

House of Lancaster until he was ready to carry on the style

of business he believes that name to represent. In addition,

the respondent continued the same food operation with the

same concessionaires, an operation essential to the dining

lounge license. On these facts and all of the facts set out

herein, the Board concludes that there has been a sale of a

business . . . to the respondent within the meaning of

section 63 of the Act and, therefore, the respondent is the

successor employer within the meaning of that section.¹⁰

The licenses in Vivace Tavern might have been of critical

importance in attracting the purchaser to the transaction and of greater

significance to that purchaser than other elements of the transaction,

but, unlike the facts presented by OGL and GII, those licenses alone

were not what constituted the business transferred to the purchaser.

The grant by GII had far greater significance in that it did not merely

identify what had attracted OGL’s interest or affect the time at which

OGL could become the Goodwill for the former TECNO territory, it was

the single asset or attribute without which OGL could never achieve that

status. The purchaser before the Board in Vivace Tavern might have

had no interest in the acquisition if the adult entertainment licence or

the liquor licences had not been available for inclusion in the bundle of

assets the parties sought to convey, but the facts that it also took up

virtually all other elements of an ongoing business and continued that

business distinguish Vivace Tavern from the facts in this matter.

Similarly, in Krush, supra, another of the “tavern cases”, the

Board identified as “the most critical elements of the business . . . the

premises and the liquor license, both of which passed to [the successor]

either directly or indirectly as a result of the sale”. The Board noted that

purchaser

suggested that the licence was unimportant to him

since he could simply have applied for a new licence.

However, he conceded that transferring the licence

previously issued for the same location was faster, and

it is apparent from the sequence of events, including

the amendment to the purchase and sale agreement

and the dispatch with which he applied for the liquor

10

At para. 13.

- 63 -

licence transfer after the sale closing, that the licence

played a significant role in the transaction.¹¹

Again, the licence’s “playing a significant role” in characterizing

a transaction differs markedly from its being the transaction, the

singular matter disposed of in circumstances argued to evidence a “sale

of business” within the meaning attributed to those words by section 69

and the jurisprudence. GII’s grant of the territory to OGL does that and

more. The decision by GII permitted OGL exclusivity in the former

TECNO territory and allowed OGL to take as long as it wished — up to

five years under GII’s terms — to develop the territory.

The successors in the tavern cases had the option of applying

independently of the predecessors or the subsisting licensing to obtain

liquor licences outside the transaction. Here the licence or the authority

over the territory could be obtained only from GII and was itself the

entirety of the transaction.

In my view, the nursing home cases were more directly relevant

to the disposition of this matter. They dealt with licensing that was

without question the focal point of the transactions, similar in many

respects to the essential Ministry of Health licence in Thunder Bay

Ambulance and the singular grant of territory by GII to OGL.

In Riverview Manor, the sale of the nursing home property was

contingent of the Ministry of Health’s approval of a transfer of the long-

term care licence. The Board found that a sale of business had occurred.

Here, as noted, the Union relied on the following comments at paragraph

38 of the decision:

Riverview obtained two major assets from Balmoral, the

licence and the land.

The transfer of the licence is

particularly significant, because it led most Balmoral

residents to move to Riverview Manor. . . In this sense, the

license is the essence of the businesses. (emphasis added)

The words quoted by the Union were preceded in the paragraph with

the following:

As to customers, the vast majority of the former residents

of Balmoral Lodge are now residing at Riverview Manor.

That is not surprising. An employer who gives up a licence

or government contract, voluntarily or otherwise, can no

11

At para. 17.

- 64 -

longer service its former clientele. Along with the licence or

contract, the successor often receives a captive market that

is free of competition, not only from the predecessor, but

also from others who lack the necessary authorization to

carry on business. (emphasis added)

As the Board observed in Accomodex,¹²the licence was the

critical element in Riverview Manor: “In that highly-regulated business,

the license was viewed by the Board in that case as the key asset”. Here

TECNO and OGL were highly regulated by their obligatory adherence to

the requirements established by GII as conditions of their being granted

the status of Goodwills.

In Caressant Care, supra, the Board, having received evidence

about the process of “transferring” nursing home licenses (by the

Ministry’s issuance of fresh authorities rather than the operators’

“handing over” their licences to successors), had this to say about

Riverview Manor:

16. In the Riverview Manor case, supra, the operator of

Balmoral Nursing Home in Peterborough also was in financial

trouble and having difficulty meeting the standards of the

Ministry, and ultimately "sold" its licence and some vacant

land it held in Peterborough to Daynes Health Care Ltd., an

established Nursing Home operator located elsewhere in the

Province. Daynes then built a new facility on the land it

acquired, and used it to operate the beds formerly under

licence to Balmoral. The Board, relying principally on the

"transfer" of the licence, found that a "sale" of Balmoral's

"business" had taken place.

. . .

19. While it is true that the same kind of detailed evidence

of the Ministry was not placed before the Board in Riverview,

there is nothing in that decision which now suggests that the

Board in any way misconceived the nature of the transaction

before it. The Board, in finding a "sale of a business" in that

decision appears to have focussed on the importance of the

licence, owing to the limited availability of such licences in a

given geographic area, and the evidence before the Board

in this case only tends to confirm that thinking.

12

At para. 70.

- 65 -

In my view, even more so than in the tavern and long-term care

homes cases, the grant or licence issued by GII is the essence of the

business of the Goodwill in its territory. Unlike the licences in the tavern

cases and the long-term care home cases, the licence granted OGL by

GII bars all others — Goodwills and thrift shop operators alike — who

would compete with OGL as a Goodwill. The GII grant or licence does

not impede anyone’s competing in the territory as a thrift store, but it

does preclude any entity that would wish to operate and compete with

OGL as a Goodwill.

OGL acquired access to the entire population of its new territory

without competition from its predecessor or any other entity that would

aspire to the status of a Goodwill as all those other entities lack GII’s

“necessary authorization to carry on business” as a Goodwill in that

territory. That TECNO had the licence taken away is immaterial to a

determination of the status and obligations of OGL. It received the

exclusive right to conduct the business which was denied TECNO by the

disaffiliation.

In the result, I am satisfied by the jurisprudence — particularly

the Board’s acceptance of licences as the essence of the nursing home

business, an essential element supporting the finding of a sale in

Thunder Bay Ambulance, and of significance in the tavern cases — that

the unique licence taken from TECNO and granted to OGL is sufficient

to ground a finding of a disposition and sale of business for the purposes

of section 69.

If OGL were not restricted by GII’s rules and if it had been free

to move into the territory upon TECNO’s disaffiliation and bankruptcy —

that is without applying to GII for and being granted the territory —

there would have been no disposition and no sale of business for the

purposes of section 69. However, the scenario presented by the

hypothetical differs fundamentally from the history in evidence as in

those circumstances, OGL would not have obtained what TECNO had, a

licence that afforded the holder exclusivity and the right to be the only

Goodwill allowed to operate as such anywhere in the territory. In the

hypothetical, OGL would be exposed to all manner of competition and

would not have received the exclusive right to carry on the business that

had been TECNO’s to the date of its disaffiliation.

The Irrelevance of TECNO’s Defunct Status

The responding party made the submission that it is trite to say

that section 69 of the Act “exists . . . to preserve a union's bargaining

- 66 -

rights in respect of a particular business when that business is sold but

continues to operate”.¹³The words “but continues to operate” are

potentially misleading. If the business is never conducted after a sale,

an affected union would have no interest in pursuing the application of

section 69 as the business would employ no one the union might claim

to represent. Here OLG’s delay in opening until 2019 ensured that there

were likely to be no individuals immediately available to be hired into

what might be seen to be bargaining unit positions.

The cases are clear in establishing that a business might be

shuttered for a period of time with no adverse effect on bargaining rights

attached to the business. When business resumes and employees who

might be represented by the bargaining agent are engaged, the union’s

rights are again relevant and might be asserted as the applicant did

here. The passage of time alone will not terminate a union’s bargaining

rights. The predecessor business need not be a “going concern” and

need not be in operation at the time of the event put forward or

identified as constituting a sale of business within the meaning of the

Act — here, in June 2016.

TECNO was not a going concern as a Goodwill after its

disaffiliation. TECNO had no assets by June 2016 when GII approved

OGL’s application for the territory. None of the assets TECNO had

controlled was transferred to OGL. Its fundamental and essential asset,

the license argued for by the applicant, was taken away — not by OGL

but by GII. The license alone, however, afforded OGL the opportunity

and the exclusive right to conduct business as a Goodwill — to be the

Goodwill — in the territory granted it by GII. It was able to be that

Goodwill and to insist on the exclusion of all others as early as June

2016.

In my view, the analysis in Accomodex is unassailable and

constitutes a sufficient to answer to any argument based on the need

for evidence of a “going concern” to engage section 69. The Board’s

review repays an extensive excerpt:

72. In cases which arose when the economy was buoyant,

or transactions involved a whole, ongoing business, the

Board once tended to focus on the dynamic quality of a

business or its operation as a "going concern". If that

dynamic quality was lacking, the Board was inclined to hold

13

The emphasis is mine and, as noted earlier, the responding party’s submission added fairly

and correctly: “and [section 69 exists] to protect the union's bargaining rights against employer

schemes designed to subvert those bargaining rights.”

- 67 -

that there had been no transfer of a business but merely a

disposition of assets. In more recent years and more

troubled economic times, the absence of this dynamic

quality has been accorded less significance.

73. Quite apart from questions of successorship, it has

become much more common in recent years for businesses

(or parts of them) to shut down for periods of time and lay

off employees, then reopen again when the market

improves - without anyone suggesting that the union's

bargaining rights or the employees' recall rights, for that

matter, have disappeared.

In this era of corporate

"restructuring", it has also become much more common for

businesses to discontinue or hive off portions of their

operation or undertaking, which then become the nucleus or

even the entire undertaking of the "new" business

organization. If instead of reopening on its own, or reviving

this commercially-moribund portion of the operation, it was

transferred to someone else - as increasingly happened

through receivers - it was much less clear than it once might

have been, that bargaining rights should disappear merely

because that portion of the idle undertaking was now owned

by someone else - especially since the purpose of section 64

is to eliminate the significance of the fact that a new legal

entity owns the "things" that have been transferred. Clearly

there is a potential tension between commercial law

considerations, a layman's view of the "business", and the

objectives reflected in the Labour Relations Act, but it has

become much less evident in recent years that this tension

should be resolved by the Board "reading into" the statute

the words "as a going concern", after the word "business" in

section 64(2). The concept of a "going concern" and the

words "as a going concern" are not unknown in law, but in

drafting section 64, the Legislature has not injected that

phrase and it is not intuitively obvious that the Board should

be doing so as a matter of interpretation. This is not to say

that the absence of ongoing activity is irrelevant; merely

that it may not be determinative.

74. If a new investor bought the controlling shares in a

dormant company with idle assets and brought them to life

with an injection of capital, there is little doubt that the

union's bargaining rights would continue in respect of that

company now that it had become active. A union would not

need to invoke section 64 because, although there had to be

a "sale of a business" in common parlance and commercial

law terms, the legal entity with which it has bargaining rights

- the “owner” of the assets - would be unchanged.

- 68 -

Bargaining and collective agreement rights would continue.

Should the result be different from a collective bargaining

point of view, if the same investor used the same funds to

purchase the assets themselves rather than controlling

shares in the corporate envelope, but, as before, revived the

business as a going concern under new ownership?

75. With the experience of two recent recessions and a

considerable amount of corporate restructuring, the Board

is less inclined than it once might have been, to give

overriding significance to the absence of ongoing business

activity at or before the point of alleged "sale". A business

shut-down or closure remains significant, but it is not always

determinative.

As the Board noted recently in New

Dominion Stores, [1989] OLRB Rep. May 473:

Similarly, hiatus between closure and opening [of a

business] is not determinative, but only one factor. The

fact that the hiatus between the closure of Dominion

Store #986 and the opening of the A & P Store was quite

long, twenty-two months, does not itself mean that the

business of the former has not been transferred to the

successor. There is no temporal bright line beyond

which bargaining rights will not transfer. If all the

circumstances yield a conclusion that a business, or part

thereof, has been transferred, then the appropriate

declaration will issue, whether the interval be twelve

months or twenty-two months".

Thus, in Hughes Boat Works Inc., [1977] OLRB Rep. Dec.

815 (application for judicial review dismissed: (1979) 1979

1853 (ON SC), 26 O.R. (2d) 420 (Div. Ct.)), the

predecessor "North Star" encountered economic difficulties,

ceased operations ("went out of business" in layman's

terms) and closed its plant which was transferred after

several months by a receiver to "Hughes" which began to

build boats again. Hughes claimed that the predecessor's

business had failed - as demonstrated by the plant closure -

and that it had merely purchased the asset shell. But the

Board found that Hughes was a successor employer within

the meaning of section 55 [now 64] of the Act.

The Board’s analysis with its focus and commentary on the

absence of any reference in section 69 to a requirement of a “going

concern” has subsisted now for more than a quarter century.

Nevertheless, the Legislature has not “corrected” the Board by injecting

language to restrict the application of section 69 to dispositions of active

- 69 -

businesses, operating and identifiable as “going concerns”. By its

inaction on that front — while making many amendments of the Act —

the Legislature must be taken to have confirmed that it considers the

Board to have correctly captured its intent on that point in section 69.

In Accomodex, the hotel, then under the name “Skyline

Triumph Hotel”, had been closed to the public from July 19, 1991,

subjected to a receivership, and re-opened as the “Howard Johnson

Plaza North York” on December 1, 1992. Notwithstanding the break in

continuity and name change, the Board determined that the transaction

by which the new owners of the hotel had acquired “the land, premises,

trade fixtures, etc. formerly used by the Triumph” was a sale of business

for the purposes of the Act.¹⁴

Similarly, in Long Lake Forest Products, supra, the Board was

asked to take into account “the significant hiatus, a period in excess of

seven years between the closure of the mill, its subsequent sale and

current revival”.¹⁵In response to the submission that what had been

purchased was not a “going concern” and that the long period between

the closure and sale was significant, the Board adopted the statements

at paragraphs 72 through 74 in Accomodex.¹⁶

The Board in Long Lake Forest Products also emphasized the

statement in New Dominion Stores (cited in Acccomodex, at paragraph

75 and also reproduced above): “There is no temporal bright line beyond

which bargaining rights will not transfer”.¹⁷The Board then concluded

that the transaction in question constituted a sale of a business within

the meaning of what is now section 69 of the Act and declared that “the

union continues to be the bargaining agent in respect of the Longlac

sawmill operations. . . .”¹⁸

I decline to follow the decision in Ottawa-Carleton Lifeskills to

the extent that it was at odds with the analysis Accomodex adopted

above, particularly as the parties in that matter might be taken to have

sought a determination consistent with a notional pre-condition

requiring the subsistence of a “going concern” for the application of

14

At para. 82.

15

At para. 43.

16

At para. 49.

17

At para. 50.

18

At para. 56.

- 70 -

section 69. Moreover, the Board’s finding in Ottawa-Carleton Lifeskills

that the Ministry’s need to locate new contractors qualified to look after

residents — and not Ministry’s authorization to carry on the business —

was determinative is distinguishing. GII did not need to find a successor

for TECNO as evidenced by its forbearance in respect of OGL’s extended

delay in servicing the fourth largest Goodwill territory. Furthermore, the

determination in Ottawa-Carleton Lifeskills that the successor’s business

had not “arisen from the ashes of the predecessor” is also problematic.

The hospitals in Thunder Bay Ambulance continued to operate, with the

result that Thunder Bay Ambulance Services Inc. might have succeeded

to a “going concern”, but it did not arise from an entity reduced to ashes.

TECNO ceased to be a “going concern” four or five months

before GII assigned the territory to OGL; however, I adopt the analysis

in Acccomodex and attach no significance to the hiatus between the

disaffiliation of TECNO and GII’s granting the territory to OGL, and no

significance to the delay in OGL's emergence in Newmarket in June

2019. This was not a situation in which the responding party might

argue that the hiatus was a function of TECNO’s being absent from the

marketplace for three years before OGL acquired the territory. Rather,

OGL applied for and was granted the territory within five months of

TECNO’s shutting down in January 2016. Moreover, the delay after June

2016 was controlled by OGL and, in part, an element of a scheme — to

“expand into the territory in a careful and timely manner” — devised to

avoid the Union and the succession OGL described as “perhaps one of

the biggest risks . . . going forward” with its acquisition of the territory.

Expansion of OGL’s Business

As for the responding party's argument that it was simply

expanding its business by seeking and achieving GII’s grant of the

territory, I observe that it had ample opportunity and complete freedom

to expand its business by entering into municipalities in its original

territory where it had yet to set up a donation centre, store or other

facility. However, in order to expand its business in the former TECNO

territory it was obliged either (i) to secure a merger with the territory

holder, TECNO, before its disaffiliation, or (ii) to secure GII’s

authorization to take over the territory, the disposition at issue in this

litigation. Otherwise, and simply put, OGL had no business in that

territory, could have no business in that territory, and, therefore, had

no opportunity to expand in that territory.

OGL’s choosing to characterize its acquisition of the right to be

the Goodwill in the former TECNO territory as an expansion of its

- 71 -

business was not persuasive.

Its belief or impression is of no

consequence in the determination of this application. The responding

party would not risk a merger with a stricken entity on the brink of

bankruptcy. OGL was barred from entry into the territory as a Goodwill

and gained that from GII — as the only means of entering the market

and, in my view, as a consequence of a sale of business within the

meaning of the Act.

In this context I adopt the course followed by the Board in

Pavao Meats, supra. Dealing with the submission that there was no sale

of business but merely an expansion of an existing business, the Board

in Pavao Meats¹⁹wrote:

I prefer the approach taken in Accommodex. In particular,

on the facts before me, I find the focus by Pavao on the fact

that it was “expanding its business”, as in Woodland, to be

unhelpful. It is obvious that a business can expand its

business by buying another business.

Therefore, the

question is not whether Pavao was expanding its business,

but whether it bought a business in order to do so. There is

no doubt, also, that one can buy a business through a

purchase of assets. Again, the question is not whether the

assets were purchased or whether the assets were idle, but

whether those assets together constitute a part of a

business.

Here, OGL had no ability to expand its business into the former

TECNO territory except by acquiring the right as a result of GII’s

disposition of the territory to OGL. OGL’s acquisition of the territory from

GII — succeeding TECNO as the Goodwill in the territory — was the

disposition of the essential business capacity without which OGL had no

business or opportunity in the territory.

DISPOSITION

For all of the foregoing reasons, I find that there has been a

sale of business within the meaning of section 69 of the Act and the

application is granted.

Accordingly, as requested by the applicant, the Board declares

as follows: there has been a sale of business within the meaning of

section 69 of the Act; Goodwill Industries Ontario Great Lakes is bound

to the applicant’s collective agreement; Goodwill Industries Ontario

19

At para. 2.

- 72 -

Great Lakes has a duty to bargain in good faith with the applicant; and

copies of this decision are to be posted in prominent locations in the

responding party’s premises within the former TECNO territory so as to

ensure that they will be accessible to OGL’s employees in those

locations.

“Derek L. Rogers”

for the Board