How corporate change can result in unionization

The Supreme Court of Canada uses successorship to extend unionization.
By Brian Johnston
|Canadian HR Reporter|Last Updated: 04/12/2001

On April 27, 2000, the Supreme Court of Canada made a decision that surprised many. After Town of Ajax vs. Charterways more questions were raised than answered regarding what constitutes a “sale of business.” This is an issue key to determining the transfer of union obligations and as such, is of great concern to employers in an increasingly service-based, “contracting-out” economy.

At one level, the judgment in Town of Ajax vs. Charterways could be said to represent nothing more than the Supreme Court’s deference to a labour board decision.

As Chief Justice Beverley McLachlin concluded in her majority decision, the Ontario Labour Board’s finding of a “sale of business” on the facts of the case was not “clearly irrational,” and hence the majority of the court did not disturb the decision.