THE COURT OF APPEAL FOR SASKATCHEWAN SERVICE EMPLOYEES' INTERNATIONAL UNION, LOCAL 336 (Applicant) RESPONDENT and EASTEND WOLF WILLOW HEALTH CENTRE (Respondent) RESPONDENT and CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 2297 (Respondent) APPELLANT and SASKATCHEWAN LABOUR RELATIONS BOARD (Respondent) RESPONDENT Coram: The Honourable Mr. Justice Cameron The Honourable Madam Justice Gerwing The Honourable Mr. Justice Sherstobitoff COUNSEL: Mr. N.R. McLeod for the appellant Mr. D.E.W. McIntyre for the respondent Wolf Willow Mr. T.F. Koskie Ms. St. Cyr for the respondent Service Employees Mr. P.N. McDonald for the respondent Labour Relations Board DISPOSITION: Appeal Heard: 22 January 1993 Appeal Allowed: 22 January 1993 (orally) Reasons: 28 January 1993 On Appeal From: Q.B. 2717/92, J.C. of Saskatoon Appeal File: 1331 Reasons by: The Honourable Madam Justice Gerwing In concurrence: The Honourable Mr. Justice Cameron The Honourable Mr. Justice Sherstobitoff GERWING J.A. This is an appeal from an order setting aside, as premature, an order of the Labour Relations Board directing that a vote be held to determine which of two unions should represent the employees of the Eastend Wolf Willow Heath Centre (the "Centre"). Two health care institutions, one residential lodge and one hospital, each of whose employees were represented by different union, were to be integrated into one new institution, this Centre. It was undisputed that the long term intent was this integration. The application to the Board, by of the appellant C.U.P.E. to determine if it represented majority of the employees, was made under s. 37 of The Trade Union Act, R.S.S. 1978, c. T-17. That sections reads as follows: 37 Where business or part thereof is sold, leased, transferred or otherwise disposed of, the person acquiring the business or part thereof shall be bound by all orders of the board and all proceedings had and taken before the board before the acquisition, and the orders and proceedings shall continue as if the business or part thereof had not been disposed of, and, without limiting the generality of the foregoing, if before the disposal trade union was determined by an order of the board as representing, for the purpose of bargaining collectively, any of the employees, affected by the disposal or any collective bargaining agreement affecting any of such employees was in force the terms of that order or agreement, as the case may be, shall, unless the board otherwise orders, be deemed to apply to the person acquiring the business or part thereof to the same extent as if the order had originally applied to him or the agreement had been signed by him. The Labour Relations Board concluded, after reviewing the state of integration and the degree of operation of the Centre, that its jurisdiction was engaged and, further, that it was appropriate to make the order sought. The Board said, inter alia: Under Section 37 of The Trade Union Act, it is the transfer of something which is recognizable as the same `business' or at least `part of business' that serves to impose on the successor the obligation to assume the collective bargaining relationship to which the predecessor was party. The Board is satisfied that, whatever the outcome of the current consultation and approval process, the Eastend Wolf Willow Health Centre will provide services which go beyond those provided in long-term care facility, and which will comprehend services which continue or resemble those provided up to now at Eastend Union Hospital. We are also satisfied that the Health Centre is correct to regard itself as successor employer to both of the institutions which previously served Eastend. When the matter was raised in Queen's Bench Chambers on an application to quash, many issues, including the use of the transcript and the current state of the law in the Supreme Court on the standard of review of decisions of board of this type were raised. The chamber judge did indeed, after concluding it was appropriate for him to do so, conduct an analysis of the evidence, addressing what he thought to be the pivotal question, that is, was there any evidence upon which the Board could conclude that the Centre was successor employer. He said: However, the Board goes on to say that `the employer (i.e. the Centre) characterizes itself as successor employer for employees of both of the previously existing facilities'. In my view, this statement is not supported by the evidence—the evidence of Mr. Grant does not indicate that he considers that the Centre is presently the employer of the employees previously employed by the Lodge and the Hospital, although it is fair to say that he envisages this will be the case when the appropriate agreements have been made, the necessary legislation passed, the additional construction completed and all of the employees then being housed in the new buildings. But my above review of the evidence makes it clear that none of these steps had occurred at the time of the hearing. Taking this view, he then quashed the order for vote as premature. In the notice of appeal issue was taken with, inter alia, the use of transcript and the question of the current status and the degree of review, particularly as set forth in National Corn Growers Assn. v. Canada (Canadian Import Tribunal) (1990), 1990 CanLII 49 (SCC), 74 D.L.R. (4th) 449 and W.W. Lester (1978) Ltd. v. U.A., Local 740 (1990), 1990 CanLII 22 (SCC), 76 D.L.R. (4th) 389. However, before these issues need to be canvassed, one must turn to more fundamental question. Facts, of course, do not exist in vacuum. The Labour Relations Board and the chamber judge both focused on facts they found to be significant. More fundamentally, however, each had in mind an interpretation of s. 37. An analysis of the facts is impossible without deciding what the superstructure, that is, the meaning of s. 37, is. The Board, in our view, took less rigorous and legalistic view of the meaning of successor in s. 37 than that ultimately taken by the chamber judge. The Board, in its decision, was not prepared to limit itself to indicia of transfer of title or assets of nature which might be more pertinent in the context of, for example, financing arrangements, insurance contracts or other such matters. It determined that for the purposes of labour relations less rigorous characteristics than formal legal transfer were adequate to engage s. 37. It concluded it ought, as it put it, to attempt to "discern the beating heart of an enterprise" and relied on factors such as the fact that the Centre had been incorporated with board of directors, which board was composed of the directors of the two founding institutions. It also noted that funding had been approved, new building had been built and the first phase of construction was complete. Employees had been selected in the name of the Centre and had begun work. Further administration was being carried out in the name of the Centre and residents had moved into the new building. It saw this as adequate to find the new entity to be successor employer. The chamber judge turned his attention to these facts, and concluded as noted above that they were not in his view adequate to engage s. 37. However, it is clear that his analysis and rejection of the evidence before the Board was based on more strict and rigorous definition of what constitutes successor employer under s. 37. We are of the view that the fundamental question which he failed to answer was whether the Board's interpretation of s. 37 was patently unreasonable. To emphasize facts of lesser traditional legal significance in the Board's judgment and those of more concrete significance in parallel areas for example, property law, begs the real question. The authorities, including Corn Growers, supra, make it clear that it is within the purview of the Board to interpret s. 37 and on an application to quash, the first question to be asked by the reviewing court is whether the interpretation is patently unreasonable. To jump immediately to an analysis in the facts premised on different interpretation does not serve. In the circumstances we have looked at the interpretation of the Board of s. 37 and cannot in the circumstances find it to be patently unreasonable. It does not, as noted, apply to other areas of the law, such as financing, conveyance of property or insurance, where a more precise and predictable delineation of the moment of transfer may be appropriate. The Board is interpreting s. 37 for the purposes of labour law alone. This is its function. We cannot say that the lesser test set by it is patently unreasonable in context. We are of the view that this is the first issue which should have been addressed by the chamber judge. The review of the evidence, given this answer, should have been conducted on the definition put forward by the Board, not on the more restrictive definition of the chamber judge. In summary we are of the view that the Board's findings of fact were unimpeachable, that its construction of s. 37 was not patently unreasonable, and that its conclusion ought not therefore to have been interfered with. We make it clear that in the circumstances, the other issues addressed in the judgment of the chamber judge and sought to be raised in this appeal need not be determined by this Court at this time and we expressly do not comment on them. In the end result, the appeal is allowed with costs on double Column V except, of course, to the Labour Relations Board which has not asked for costs.
Appeal from an order aside, as premature, an order of the Labour Relations Board directing that a vote be held to determine which of two unions should represent the employees of the Health Centre. Two health care institutions, one a residential and one a hospital, each of whose employees were represented by a different union, were to be integrated into one new institution, this Centre. HELD: It is within the purview of the Board to interpret s.37 and on an application to quash, the first question to be asked by the reviewing court is whether the interpretation is patently unreasonable. To jump immediately to an analysis of the facts premised on a different interpretation does not serve. The interpretation of the board of s.37 was not patently unreasonable. It does not apply to other areas of the law, such as financing, conveyance of property or insurance, where a more precise and predictable delineation may be appropriate. The Board is interpreting s.37 for the purposes of labour law alone. Appeal Allowed.