Court of Appeal

CASE NO.                                                  VOLUME                                                          PAGE

Cite as: Saan Stores Ltd. v. Nova Scotia (Labour Relations Board), 1999 NSCA 26

SAAN STORES LIMITED                                                       LABOUR RELATIONS BOARD

                                                                                                                              (NOVA SCOTIA)

                                                                        - and -

(Appellant)                                                                                                                (Respondent)

- and -             RETAIL, WHOLESALE CANADA

                                                                                                 CANADIAN SERVICE SECTION

                                                                                 DIVISION OF UNITED STEELWORKERS

                                                                                                            OF AMERICA, LOCAL 596

                                                                                                                                   (Respondent)

C.A. No. 148507                                     Halifax, N.S.                                         HALLETT, J.A.

APPEAL HEARD:                                        January 5, 1999

JUDGMENT DELIVERED:             February 2, 1999

SUBJECT:           Trade Union Act, R.S.N.S. 1989, c. 475, s. 31(1)

Bankruptcy & Insolvency Act, R.S.C. 1985, c. B-3, s. 69.3(1); s. 215

SUMMARY:        Gendis Inc. was in effect the parent company of both Greenberg and Saan.  Greenberg owned and operated the Metropolitan chain of stores in Canada.  Saan operated another chain of stores.  Greenberg was suffering serious financial losses in its operation.  Greenberg made an assignment in bankruptcy and on the same date the trustee sold the 89 stores to Saan who took over the operation of the Greenberg stores, including a store at Glace Bay. 

The Union representing the employees of the Glace Bay store applied to the Labour Relations Board for a declaration that Saan was the successor employer within the meaning of s. 31(1) of the Trade Union Act.  The Board concluded that notwithstanding the fact that the sale was by way of an agreement between a trustee in bankruptcy and Saan, in reality it was a sale by the employer Greenberg to Saan that had been arranged by the parent Gendis.  The Board, therefore, concluded that on the facts applying the test in W.W. Lester (1978) Ltd. v. U.A. Local 740 (1990), 76 D.L.R. (4^th) 389, Saan was the successor employer.

Saan applied to the Supreme court of Nova Scotia to quash the decision. The application was dismissed.

Saan appealed that decision to the Appeal Court which dismissed the appeal.

The Appeal Court held that although bankruptcy terminates employment contracts as between the bankrupt and its employer, s. 31(1) of the Trade Union Act is not rendered inoperative by the bankruptcy.  The Appeal Court further held that s. 68.3(1) and s. 215 of the BIA were not engaged on the facts of this case.

The Appeal Court held that the Board acted within its jurisdiction and its decision was not patently unreasonable.

The principal cases considered and applied: Rizzo and Rizzo Shoes Ltd. (Bankrupt) Re (1995), 80 O.A.C. 201; 30 C.B.R. (3d) 1; Re St. Mary’s Paper Inc. (Bankrupt) Re: (1994), 73 O.A.C. 1, 26 C.B.R. (3d) 273 (C.A.).