Canadian Employment Law Today

Canadian Employment Law Today Canadian Employment Law Today | | 7 Canadian HR Reporter, a Thomson Reuters business 2014 Buying equipment, hiring employees of seller doesn't make a successor employer: Board A COMPANY THAT purchased another company's equipment, and hired a few of the fi rst company's workers, is not a succes- sor employer, the British Columbia Labour Relations Board has ruled. National Glass was a glass products com- pany that operated a plant in Langley, B.C. e workforce at the plant was unionized. On March 20, 2013, National announced it would be shutting down its production lines for laminated glass. Its tempered glass line would be shut down in April, except for limited production. As a result, all but seven employees were laid off . e remain- ing employees worked in shipping and dis- tribution, as National was continuing with its distribution business only. National sold its glass lamination equip- ment through an auction house, and the equipment was removed from the plant. After the tempered glass line shut down in April, that equipment was sold in July to An- neal Tempering. e glass tempering equipment was large and heavy, and it was anchored to the fl oor of the plant. Not wanting to deal with a cost- ly and complicated process of moving the equipment and rewiring it, Anneal leased the space in the plant from the plant's own- er, a third party. e glass tempering equip- ment remained in place and Anneal oper- ated it, creating tempered glass for a single customer — a company related to Anneal. e remaining distribution employees for National also continued to work in the plant, with the spaces for the two companies separated by chicken wire. Anneal employ- ees used a diff erent entrance, and neither had access to the other side. Anneal hired three former National employees to operate the glass tempering equipment. e union for National employees fi led an application under the B.C. Labour Rela- tions Code for a declaration that Anneal was a successor employer to National and was bound by the collective agreement it had with National. It argued Anneal purchased the tempered glass line, which was a "sever- able and distinct part of National's business and a functional economic vehicle in itself." Anneal also used National workers to continue operating the tempered glass line in the same location, the union said. e board fi rst examined the nature of National's business. It found National pro- duced and distributed glass products — which it fabricated at the plant using the glass lamination line and glass tempering line — to various customers. Most of Na- tional's employees worked in production, with a few in distribution. When the com- pany ceased production, it sold both lines, retaining only its distribution employees. e board found Anneal purchased Na- tional's glass tempering line so it could temper glass for its sister company. It didn't purchase any of National's "customer list, accounts receivable, goodwill, logo, trade- mark or existing contracts." e glass tem- pering line was "merely one piece of equip- ment among several" National used and sold, said the board. e board also found this lack of connec- tion between the companies prevailed even when Anneal set up shop in the plant, as its area was separately leased and separated from National's remaining employees. Ad- ditionally, Anneal didn't produce glass for any of National's clients. e board ruled Anneal and National were separate and unrelated, and the trans- action between them was only a sale of equipment, not a continuation of National's business. Anneal was not a successor em- ployer to National. See National Glass Ltd. and Anneal Tempering Inc., Re, 2014 Car- swellBC 649 (B.C. Lab. Rel. Bd.). « from BMO on page 1 the planners could get better rates. In these circumstances, the fi nancial planner didn't meet the client, but just allowed the codes to be used for better interest rates and signed the GIC renewal forms. In the spring of 2013, Mercier wanted to consolidate her mortgage and a number of debts into one loan she could manage more easily. However, BMO rejected her applica- tion for a consolidation loan. A short time later, Mercier had lunch with her friend who was a BMO client and asked for advice. e client off ered to co-sign a loan to help her out. Mercier didn't think it was a confl ict of interest and she insisted later it was her friend's idea. Mercier contacted BMO about re-ap- plying for a loan, indicating she had her friend to co-sign the $45,000 loan applica- tion. Mercier was up front about the fact her friend was a BMO customer but she had no business dealings with her so there was no confl ict of interest. e lending specialist had some concerns about a customer co- signing an employee's loan, but processed it anyway. e BMO credit department decided it wasn't comfortable with the situation and denied Mercier's loan. Mercier then applied to the Royal Bank of Canada (RBC) for a $50,000 loan — with her friend also co-sign- ing — but was denied over similar concerns of confl ict of interest. Mercier's supervisor learned of the loan application and reviewed the documenta- tion, particularly Mercier's assertion she had no business dealings with her friend. He was aware of Mercier's involvement in getting her friend better interest rates on the friend's GICs, which was processing an investment for the client in the name of her business. e supervisor found Mercier had not been truthful in her loan application. BMO interviewed Mercier's friend, who explained she had off ered to help Mercier. e friend also mentioned the denied loan request from RBC. A report was prepared in July 2013 that stated Mercier had renewed a GIC for her friend three years earlier, but was "not doing presently any kind of BMO business." However, on July 26, BMOI terminated Mercier's employment for violating its cor- porate policies and guidelines of conduct, which required employees to avoid confl icts of interest and personal fi nancial dealings with clients, including "borrowing money from clients." e court found fl aws in BMOI's rea- soning for termination. e employer in- terpreted Mercier's renewal of her friend's GICs as meaning the friend was a client of Mercier, and remained one up to the time of the loan application. However, this was the only business transaction the two were in- volved in together, and it was minor enough that Mercier likely forgot to mention it, said the court. e court found the only potential con- fl ict of interest was that Mercier's friend was a customer of the bank being applied to for a loan. However, Mercier revealed this fact right in the beginning, and the friend was a savvy businesswoman who knew the risks of co-signing the loan — and it was the friend's idea. Additionally, the court found there was nothing in the bank's policies that prevent- ed one customer from co-signing a loan for another. If there was, the bank would have immediately rejected the application, the court said. However, the application was processed and it was only eventually reject- ed by the credit department. e court determined Mercier had done nothing dishonestly and had not violated any confl ict of interest policies. BMOI was ordered to pay her four months' notice for wrongful dismissal. See Mercier v. BMO In- vestments Inc., 2014 CarswellNS 194 (N.S. Sm. Cl. Ct.). No real confl ict of interest: Court More Cases More Cases

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