[ Page 1575 ]

CONTENTS

Routine Proceedings

Oral Questions

Writ filed by Attorney-General. Mr. Harcourt –– 1575

Mr. Sihota

Hearing on patent act. Hon. Mr. Dueck replies –– 1577

Industrial Relations Reform Act, 1987 (Bill 19). Committee stage. (Hon. L. Hanson) –– 1578

Mr. Williams

Mr. Gabelmann

Mr. Sihota

Mr. Clark

Mr. Peterson

Mr. Barnes

Mr. Jansen

Mr. Miller

Appendix –– 1598

The House met at 2:09 p.m.

MR. PELTON: Mr. Speaker, with your forbearance, I have a number of introductions to make today. First of all, in the members' gallery are three of a number of very special people in my life. I refer to my wife Louise and two of our five daughters. Our daughter Ardith is here from Menomonie, Wisconsin, and Lesley is from Kingston, Ontario. I would ask the House to help me express to them how very pleased I am that they have been able to come to visit their mother and me.

And on your behalf, Mr. Speaker, I would like the House to welcome here this afternoon Mrs. Helen and Mr. Jim Bottomley of Victoria, Hon. Ron Huntington, a former minister of the Crown and former Member of Parliament for West Vancouver, and Mr. John Sherman, a businessman from West Vancouver. Would the House please make them all welcome.

MR. ROSE: A great number of names were read off by my hon. friend from Dewdney. I know only two of them: Mrs. Pelton and Hon. Ron Huntington, a colleague of mine in Ottawa for a number of years, and a friend. Also, he was a minister of the Crown, so I would take great pleasure in welcoming Mr. Huntington on behalf of this side of the House, and I hope everybody else can make him welcome once again.

HON. MR. DUECK: Mr. Speaker, in your gallery today are three special friends from the central Fraser Valley. One is Percy Siemens and his wife Leslie; another special friend is my girlfriend, my wife Helen.

MR. BLENCOE: In the House today are two constituents from Victoria, May Henry and Lillian Branson. Will the House please make them both welcome.

MR. R. FRASER: Because of this man's particular job, any member of the House could introduce him; he has members of his association in all ridings. Harry Gray is the managing director of the Association of Professional Engineers of B.C., and is here to talk with both the opposition and the government to help us process the new Engineers Amendment Act. Would the House please help me welcome Harry Gray.

MR. VANT: Not in the House today is the hon. first member for Cariboo (Mr. A. Fraser), but I want to tell the House that his health is constantly improving. He is not here today because he is in Vancouver being recognized as the transportation man of the year for British Columbia and the Yukon, and I know the House will want to join me in all good wishes on this happy occasion for the first member for Cariboo.

HON. MR. STRACHAN: I've just noticed an old friend of this Legislative Assembly in the gallery whom I guess I would refer to as Father Smith now, and it's good to see you here. When Greg left us in 1980, 1981 to study for the priesthood, I asked him if I could have all his old ties and he hasn't supplied them yet. But he was a natty dresser, so it's room 124, Father, if you'd like to send me all your old ties. But welcome again to Victoria; it's good to see you.

MR. JACOBSEN: A couple of good friends are visiting today from Mission, Mr. and Mrs. Edley, and would the House please give them a warm welcome.

MR. JANSEN: From the wonderful constituency of Chilliwack, I would like to introduce to the House Timothy Christian School students from grade 9, together with their teacher, Mr. Teo Van de Weg and also Mr. Karl Stam. Would you please make them welcome.

Also from our constituency we have students in the precincts from Kent Elementary School, together with their teachers Mr. Fraser and Mrs. Froehlich. Would you please make them welcome.

MRS. GRAN: Mr. Speaker, in your gallery is a young man from Langley, Chris Gardner, and I'd like the House to welcome him.

MR. LOENEN: Two introductions: special friends from Edmonton, Marty and Edith Zuidhof. Please make them feel welcome. Secondly, I would like to introduce the better half for the hon. member from Columbia, Norma Crandall.

[2:15]

MR. REE: Mr. Speaker, on behalf of the Minister of Social Services (Hon. Mr. Richmond) and the second member for Saanich and the Islands (Mr. Huberts) and myself, I would ask the House to welcome a number of lovely ladies from up-Island: from Nanaimo, Aggie Flett, and from Gabriola, Irene Pallot, Liz Palmer, Gwen Honigman, Sue Matthews, Dana Baker, Edna Driedger, Sandra Peacock. Also from Nanaimo are another two lovely ladies, Laverne Kilner and Doris Sproule. Would the House welcome them to Victoria.

MR. CRANDALL: On behalf of my neighbour, the MLA for Richmond, I want to introduce his wife, the second lady for Richmond, Jayne Loenen.

MR. BARNES: Mr. Speaker, I would like the House to join me in welcoming Joan Johnston and Thelma MacMurchie of Victoria, who are actually constituents, of course, of the two members here. But I have had the opportunity to meet these people and buy them lunch. I even took the first member.... As I said, this is an unusual day, and even stranger than that, they had a raffle in which these ladies won the right for me to buy them lunch, if you can figure that one out. In other words, I paid off today, so I would like everybody to make them welcome.

Oral Questions

WRIT FILED BY ATTORNEY-GENERAL

MR. HARCOURT: Mr. Speaker, I would like to ask the Premier about the Attorney-General's application for an injunction. The Minister of Labour (Hon. L. Hanson) has confirmed that the writ filed by the Attorney-General on Monday represents, and I quote, "the philosophy of the Premier." Will the Premier now step back from the brink and order that this writ, which attacks the basic freedoms of our citizens and proposes to muzzle the media when the government makes mistakes — which is often these days — be withdrawn today, now?

[ Page 1576 ]

HON. MR. VANDER ZALM: Mr. Speaker, I don't know what is meant by "philosophy of the Premier." As a matter of fact, I doubt if that statement was made. It was referred to in the paper, and I'll certainly find out more about that.

In any event, with respect to trying to muzzle the media, I honestly would question whether in fact the hon. Leader of the Opposition did much legal research on that, because he would obviously find that there is no such intent anywhere in anything that I've seen or anyone's seen. Furthermore, he should obviously be aware, as a politician, that that sort of thing doesn't work. Just look at today's newspaper.

MR. SPEAKER: Before the Leader of the Opposition goes ahead, this matter is before the courts. I don't want to stop the general questioning, but if you get into the substance of the writ, I think we have to be very careful.

MR. HARCOURT: Mr. Speaker, I'm aware of the fact that we're not to comment on the fact that it is subjudice, but I must say that this is indeed something that has not occurred, in my memory, in this Legislature. I've heard it said that this injunction application is a grotesque form of legal shadowboxing, and I must say, the shadow is winning.

The reason I bring this up is not to deal with what's before the court, but to deal with the Premier's confidence in the Attorney-General. The Premier is saying that what is in the writ, and what he agreed to with the Attorney-General, are not the same thing. Mr. Premier, how is the Attorney-General going to be able to continue with that lack of confidence that you have in him?

HON. MR. VANDER ZALM: I doubt very much whether the hon. member will have the opportunity to learn in practice. In any event, for that reason I will try to provide a little bit of information that he should be aware of. It's not the role of a Premier or any minister in a government, regardless of where it is in this country, to start telling the Attorney-General what he ought to include in a document such as this. That is the role of the Attorney-General.

[Mr. Pelton in the chair.]

MR. HARCOURT: I may say, in response to what you have said, Mr. Premier, that you're not going to have much of a chance to practise much longer either, with this Fantasygate that's unfolding around us. You say that you cannot interfere with the action of an Attorney-General. Are you saying, Mr. Premier, that you give your Attorney-General unfettered, absolute power to interfere with the rights and freedoms of the citizens of British Columbia?

HON. MR. VANDER ZALM: No, and I think the hon. member should know this. Certainly from his background he ought to be aware that when an illegal act is committed, you don't then, as members of government, develop some sort of consensus as to how it ought to be addressed, nor do you tell the Attorney-General of a province how it ought to be addressed. The Attorney-General addresses it.

MR. HARCOURT: Mr. Speaker, as a lawyer I understand that. I also understand that it's up to the courts and judges and juries to decide whether there's an illegal act or not, not the Premier or the Attorney-General. That's very clear. There are remedies, criminal and civil, and you should know that, sit.

I have a question. I have just returned from a very successful trip to Ontario, selling British Columbia. Mr. Speaker, I may say that it was made more difficult by the Attorney-General. I want to ask the Premier if he thinks that we're going to be able to convince investment to come to this province of ours when the Premier and the Attorney-General are alleging a seditious conspiracy to overthrow the government. Do you think people are going to want to invest in a province when you make that kind of allegation?

HON. MR. VANDER ZALM: I'm confident that we're going to see tremendous investment in British Columbia and that we're going to see all sorts of opportunities. Obviously the hon. member, the leader, and I may disagree in the approach. He feels that by meeting with the leaders of the NDP in Alberta, Saskatchewan, Manitoba and Ontario he's going to sell coal. I'm glad those employed in the coal activities of the northeast and the southeast aren't banking on that, or they wouldn't have a job.

I am very confident, Mr. Speaker, that we will see much economic activity. I'll be very pleased to advise the hon. member a little later in the course of the year how things are going, but I expect they'll go very well.

MR. SIHOTA: Mr. Speaker, a question to the Premier. The Premier has conceded that the injunction requested will not be necessary when Bill 19 is passed. He's also conceded that he's not aware of any plans by the labour movement to stage another walkout. Will the Premier please explain to this House why then it is necessary to proceed with the writ, and will he not agree to withdraw that writ?

HON. MR. VANDER ZALM: Mr. Speaker, I can't answer that question, because certainly that touches on the matter before the courts.

MR. SIHOTA: Mr. Speaker, I'll move on to another question. The Attorney-General has said that there was a conspiracy to subvert the democratically elected government of British Columbia, and that's what prompted this writ. Does the Premier agree with that comment of the Attorney-General?

HON. MR. VANDER ZALM: I'm sure, Mr. Speaker, that all could agree that that will be a matter of interpretation for the court.

MR. SIHOTA: The question, Mr. Speaker, is to the Premier. Does he or does he not agree with that statement made by the Attorney-General in his news release?

HON. MR. VANDER ZALM: Mr. Speaker, that matter is now before the courts.

MR. SIHOTA: Mr. Speaker, the matter of the news release is not before the court, nor is the statement of the Attorney-General. The statement is now being put before you in this House, and we're asking for an answer: do you or do you not agree with that statement, Mr. Premier?

MR. SPEAKER: The member for Esquimalt-Port Renfrew.

[ Page 1577 ]

MR. SIHOTA: Clearly the Premier is not willing to answer questions that are legitimately put to him, so I'll move to the Attorney-General and ask him this question. The concept of sedition, according to the government, has been read into the writ by third parties. However, there is a tremendous amount of similarity between sections 60 and 61 of the Criminal Code, which talk about sedition, and the wording in the writ. Does the Attorney-General now agree, in light of those facts, that the concept of sedition was very much in his mind when he drafted that writ?

HON. B.R. SMITH: Mr. Speaker, I'm very pleased to hear so much interest in the subject of the general strike from the members opposite, and also from the Leader of the Opposition, who I thought was out counselling his colleagues in labour to obey the law. I didn't realize he was in Ontario.

AN HON. MEMBER: Where were you?

HON. B.R. SMITH: I had the honour to accompany the Premier on a very historic series of meetings in Ottawa, We have brought back constitutional changes that will greatly strengthen the role of B.C. in Confederation and allow B.C. to have a much stronger place in the fabric of Confederation.

But to come to the member's question. He knows that the drafting of a writ is done by counsel. He knows also that a writ, when drafted, is drafted in broad language, and that when a motion is applied for in a court, it's applied for in specific language. And he knows that no allegations have ever been made that there was a criminal seditious attempt by anyone to overthrow the government by physical force. He knows that.

This is clever, legalistic questioning, but he knows that the only allegation that has ever been made is that there were unlawful acts in concert which brought about an attempt to try to subvert the democratic process. That can be done by lawful acts. You can persuade people not to support government policy or to back down on legislation. You can do all of that by lawful acts but you cannot do it in concert, and that's the only allegation that was made. Only civil proceedings have been taken; no other proceedings have been taken. He also knows that no penalties were sought against anyone. All that is sought is an order of the court preventing future illegal activity, and he knows that.

MR. SIHOTA: First, the Premier said that he doesn't expect any further activity of that nature. Secondly, it's somewhat hypocritical for the Attorney-General to stand up and talk about that constitution when he's filing writs in the courts of this province that deny freedom of speech, freedom of assembly and freedom of association.

The question, again, to the Attorney-General is this: can he explain, in light of this answer, why there is such a degree of similarity between the wording in the Criminal Code with respect to sedition and the wording within the writ?

[2:30]

HON. B.R. SMITH: The member knows that conspiracy has both a civil and a criminal connotation; and he also knows that civil action has been taken here and not criminal action; and he also knows that, quite apart from trying to subvert or suppress freedom of speech, it's freedom of speech that we're trying to ensure. Freedom of speech is threatened when the press are shut down on a Monday and can't report things. Freedom of speech is threatened when the courts are not able to function, not able to adjudicate because of an illegal strike. That's what threatens freedom of speech, not the filing of a writ.

MR. SIHOTA: The writ and the intent behind the writ is to deny people the opportunity to engage in legitimate dissent. It's always been a part of our democratic traditions that people are entitled to engage in legitimate dissent.

The question to the Attorney-General is this. There are certain exemptions under the Criminal Code from sedition. Those exemptions, by coincidence, appear as a part of the injunctive relief you're seeking in court. Now is that coincidence or were you planning or were you writing this writ with sedition in mind?

HON. B.R. SMITH: The motion for an injunction, which was filed today, asks for an injunction that will stop unlawful conduct as a means of opposing government legislation. Neither the injunction nor the writ nor any action that we've taken is meant to deny people the right to peacefully and lawfully protest, to argue that government policy should be changed, to demonstrate peacefully and lawfully; but not to do things in concert that are illegal to try to bring about that change. Our system does not permit that.

HEARING ON PATENT ACT

HON. MR. DUECK: Mr. Speaker, I wish to respond to a question raised yesterday by the hon. member for Maillardville-Coquitlam (Mr. Cashore).

The Senate committee on the drug patent act had not contacted my office or any official in my ministry to invite us to attend the hearings slated for British Columbia. In fact, the Senate committee had not informed us of a date, time or location of such hearings. British Columbia has ample access to federal officials at all times to discuss matters important to the people of this province.

I have made it perfectly clear to Hon. Harvie Andre, Minister of Consumer and Corporate Affairs, to Hon. Jake Epp, Minister of Health and Welfare, to the British Columbia Tory caucus members and to all provincial Health ministers the position of this government. I will reiterate that position.

I am concerned that the proposed amendments would result in increased cost to the consumers and to governments, with no guarantee of a significant increase in research and development. I am also concerned that proposed federal compensation would not be adequate. It is my view that the present compulsory licensing provision of the Patent Act is effective in moderating pharmaceutical prices, and it should be retained.

Mr. Speaker, the chairman of the Senate committee informed the hon. member for Maillardville-Coquitlam at the hearing what British Columbia's position is, and he concurred with that position at that particular hearing.

Hon. Mr. Vander Zalm tabled answers to questions.

Orders of the Day

HON. MR. STRACHAN: Committee on Bill 19, Mr. Speaker.

[ Page 1578 ]

INDUSTRIAL RELATIONS REFORM ACT, 1987
(continued)

The House in committee on Bill 19; Mrs. Gran in the chair.

On section 25 as amended.

MR. WILLIAMS: Much of the discussion on this section has centred on the construction industry in the province and what has been a conscious effort on the part of this and the previous administration to deunionize the construction industry. That's been underway for some time. We've gone through the whole exercise, in terms of construction activities and the Expo site and many others, including some currently in my own riding of Vancouver East that are causing considerable despair on the part of people in my community who have to face deunionized construction people building their next shopping centre.

But we haven't thought, other than.... This morning the Leader of the Opposition raised the implications in terms of our truck logging industry here on the coast. That, I think, is very significant. We have 275 companies on the coast in the truck logging industry that are significant players in terms of the logging industry itself. I don't have the full number of employees in those 275 firms, but the bulk of those firms are union firms that work essentially for the major companies that have the large tree-farm licences and other licence privileges that the Crown has granted over the years.

Those union contractors have been in a squeeze for some time by the big companies, a very tough, tight kind of squeeze play in terms of the contract prices they will pay for the stump-to-dump work in logging here on the coast. They haven't had an increase in the funding of their contracts, most of them, for six or seven years.

It's being made clearer and clearer between the major companies and those contractors that what the companies want as the next stage is deunionization. "If you can't meet these costs, then get rid of the union" is the message that they're getting across this coast here. There's a conscious pressure on the part of the majors to deunionize the whole end of logging and trucking — the contracting side of this industry. What this legislation will do is make that easier, in terms of deunionizing the industry.

Some of you on the other side may have responded and clucked away this morning when the Leader of the Opposition said: "What you're talking about is safety, and what you're talking about is more deaths in this industry." We do not have a good record in this industry. There are some where we do have a decent record in this industry. It's a fairly consistent pattern. Where there is a decent record is with the major companies, by and large. Where they have safety committees that are active....

The best example on the coast in terms of a turnaround is Whonnock. Whonnock had one of the poorest records on the coast, but by consultation between the trade union and the company, action was taken that gave the safety committee executive powers to intervene in terms of procedures and standards and the rest of it. The Whonnock company ended up turning around from being one of the poorest companies on the coast to one of the best companies on the coast in terms of current safety records.

There's no question, once the pressure is put on these contractors in terms of lower contract price.... The IWA wages have continued to go up over the years, as we all know. But at the same time, the unit contract price that those contractors have been receiving has essentially remained level for half a dozen years; that's despite prices going up in pulp, in log prices. So there is terrible pressure on those contractors. The next stage of pressure on those contractors is to get out, in terms of a union operation. That's what the pressure will be in the future, and this legislation makes that much easier.

On April 28 of this year there was an ad in both major papers in Vancouver. They called it a day of mourning with respect to workers in the forest industry. In this tough, rough country of the coast of British Columbia, over 30 people were killed in this industry. This puts pressure on in terms of those safety standards; make no bones about it. The Minister of Forests (Hon. Mr. Parker) has highballers in his riding. You know, we all heard it on the newscasts: those highballers coming from the Bell-Irving country, from Meziadin Lake through to Stewart. Anybody who's been around that narrow, little road going from Meziadin to Stewart, back by the panhandle, knows that it's dangerous terrain.

The highballing is on them. They're pressured because of the price levels and all of the rest of it. By this process of deunionizing the industry, the pressure is greater. You check, and you'll find that there are greater safety measures, greater success in terms of safety, in these large unionized operations. It decreases when you get into gyppo operations and the rest of it. It's very, very clear.

We operate in the toughest terrain in the world on the coast of British Columbia, in terms of our logging shows. It's the toughest terrain in the world. By this exercise in this section you're opening it up to greater pressures, more highballing, more danger and more deaths. There's simply no question about that. We don't need it. We don't want it.

There has been a great history on this coast of building up a unionized industry, from miserable standards in the past in this century in terms of terrible working and living conditions. It's been a very tough, long fight on this coast to establish half-decent conditions, to establish safety and all the rest. The record is there. If you want to check with your Workers' Compensation Board, you'll find that the pattern is clear: the companies that are unionized, the companies that are larger, are the companies that are safer.

By opening up this opportunity for deunionizing, you're not just attacking the construction industry and living standards there; you're attacking this industry and many others, and we will all be the losers. Those trade unions have worked long and hard for decent conditions and for safe circumstances in very dangerous terrain. This pushes them back decades in terms of safety and danger, and in a modem, civilized society that simply shouldn't happen.

MR. GABELMANN: I want to ask the minister whether he's had a chance since this morning to reflect on the LRB case law that I cited in respect of at least three decisions, and would tell us whether or not he would agree that the law as it now will read will allow for double-breasting in those circumstances. Two of three, as I cited this morning, were not allowed. I'm not going to repeat all the arguments.

In the cases I cited this morning, which I do not intend to repeat, I expressed the viewpoint that with the changes that we have in section 25, double-breasting will now be allowed in those instances where previously it was not allowed, and that was a clear indication that this legislation will allow for

[ Page 1579 ]

what I keep referring to as double-breasting, but which we should probably call deunionizing, because double-breasting is a bit of an "in" term or a term that only people in the business really use or understand. Nevertheless, it's a deunionizing activity.

I just wonder if the minister has had an opportunity to reflect on those cases, and would give us an indication as to whether or not he feels that I was being excessive in the comments that I made.

[2:45]

HON. L. HANSON: Yes, I have, Madam Chairman, but I think that there's a greater assumption being made here. The previous speaker, before the member for North Island, suggested that the result of this was a total deunionization of industry. I certainly wouldn't argue with the former Minister of Forests that there have been and will continue to be a number of benefits as it relates to working conditions, safety and other things, through the organized labour community. Where I differ with him is that the results of this section will deunionize industry. I don't believe that the jurisprudence the council will develop as a result of this will do that, and I am confident that that is the case.

We have to go back to the positive side of this legislation. The intent of the legislation is to allow some flexibility in the investment in new companies and the starting of new entities. There is nothing in this legislation that I know of that precludes the union from attempting to organize any non-union operation in the province. I guess where we have the basic difference is that the assumption being made by the members on the other side is that this legislation is going to deunionize the province. Well, I just don't agree with that, and I think that the jurisprudence of the board, as it deals with the individual cases, will prove that.

MR. GABELMANN: Madam Chair, this morning I embarked deliberately on a course of action which would take out of this debate assertions and bring into the debate actual legal cases and legal definitions and some, I thought, rational way of dealing with this issue, which is an incredibly complicated and complex issue. What we get from the minister in response is a series of "I believes" or a series of assertions, or, as a variation on that theme, a declaration that there's no law that he knows of that will prevent organizing. It's not useful to the committee to know what the minister believes. I guess it's helpful to know what he believes, but it doesn't serve any purpose in terms of debating the law. What he believes is irrelevant, really. What matters is whether or not he accepts our view that the door will now be wide open for deunionizing through the mechanism commonly referred to as double-breasting.

I think this morning we cited the cases. We defined clearly the tests that the board has been required to make, and we cited clearly, I thought, the tests that will now be required. We gave examples of situations where before now, under the previous test, deunionizing through the double-breasting mechanism was precluded, and we gave at least one example where it was allowed under the previous test. We made the point that the test is now different, less onerous, and I think we made the point that the section actually does allow for deunionizing through the establishment of non-union companies by union operators, through a variety of mechanisms, whether it is the mechanism of taking two principals who own a union company and having one of those principals establish a separate non-union company using the same facilities, or whether it's by a husband and wife who own a union company having one of the partners in the marriage establish a non-union company, which is now going to be legal, or whether it's a variety of other mechanisms, the most significant of which includes the possibility of having separate and different financial control in each of the two companies.

All we have been trying to establish through this debate is that the minister's assertion that double-breasting will not be allowed is incorrect. It really doesn't matter what the minister believes; all that matters is what the words say and how the words are interpreted. We have sufficient case law in British Columbia alone, if not in the United States, on how these words are interpreted. We know from that that these words will be interpreted to allow for the establishment of nonunion operations operating in parallel with union operations. For what purpose? For the purpose of escaping the responsibilities under law that go with the fact that a collective agreement is in place or that a certification has been achieved.

What do we get in turn? We get no arguments of any consequence other than assertions, beliefs, and red herrings. I suppose the red herring is a confirmation of what we're saying. The minister's red herring was: "There's no law that I know of" — if I'm quoting him correctly — "that prevents people from going out and organizing." The logical conclusion you reach from that statement is that yes, in fact, these non-union companies operating in parallel and in tandem will be allowed to operate, but there won't be any law stopping trade union organizers going out and organizing them. We know that there's no law stopping them, and we would hope that they would be successful in their efforts if that's what the wishes of the persons in the units are. But that's not the issue. We're not talking about whether or not they have the option, ability or legal right to organize; we're talking about the fact of the possibility under the new law of the establishment of a parallel, non-union company which is set up for the purposes of escaping the collective agreement in place with the first company.

I suppose we've made the point. I know the member for Esquimalt-Port Renfrew (Mr. Sihota) wants to make some additional legal points, and I think that would be useful at this time. I want to conclude my comments on this section by saying simply that the minister has not made a case. The minister has not persuaded me or, I suspect, anyone else in this House that double-breasting will be prohibited, as he stated in the introduction of first reading in respect of the original bill. Therefore I think we are into the situation where.... We will get on to section 29 a bit later, perhaps this afternoon, and we will have some of the same kinds of arguments but of a different nature.

We are into a situation where, as the member for Vancouver East says, the potential for the deunionizing of industry in this province is going to be wide open. The minister may assert that that is not the case, but I can say, having I think made the case this morning, that in fact the member for Vancouver East is absolutely right. It will not happen across the board, and I made that point this morning as well. It will not happen in every instance. There will be certain circumstances where the invested capital is so great, and there is a desire not to move to a lease situation, so the particular contractor will say, "No, I am going to stay with my current financial structure," and not opt to evade section 37 of the Code — of the new act. That will happen.

[ Page 1580 ]

But countless contractors will be compelled, because of the price squeeze that is going on, in forestry in particular at the moment, to go to their lawyers and their financial advisers and ask them together to define a way they can escape section 37 so they can go out and hire from that pool of unemployed people which has been deliberately established by policies of governments in North America and Great Britain over the last few years in order to accomplish this very purpose of deunionizing and establishing the beginning of a downward spiral in the wage structure in our society, which as Wood Gundy economists indicated the other day has already begun to happen, where the wages in fact have already begun that downward spiral. It will continue but it will be accelerated as a result of these changes.

As I also said this morning, clearly from the 1984 government economic agenda, which I quoted this morning, it is clear that that is exactly what the government intends. I wish the minister would just say so, rather than trying to hide the issue by saying things that are not true. I'm sorry; if that is unparliamentary, by saying things that are, in fact, just not the case.

MR. SIHOTA: I want to explore a couple of things with the Minister of Labour as we go through this section. Again I am caught in the same dilemma, that I am sure the minister will say that he is not a lawyer so he cannot answer all these questions. I will probably try to quote some cases and the minister won't be aware of those cases, and it will probably dissolve into the same type of debate that we have had so far every time I get on my feet. But I am hoping again that this won't happen this time. The minister is a little bit more prepared on this section than he was on the last ones.

My thought is simply this. The minister says that this section will not allow for double-breasting. Originally, as the member for North Island said, the words "operational" and "deliberate" were incorporated into the section. They have now been taken out pursuant to the amendment, so the word "same" appears before "control and direction." Under the existing — if I can call it that — section 37, before this one passes, the word "common" appeared. Would the minister explain to me the reason for substituting the word "common" and replacing it with the word "same?"

HON. L. HANSON: Well, I think that first of all I would like to speak just a minute on my critic's presentation.

You know, the arguments and the case arguments that are being presented — I have no doubt that the member opposite has read all of those, and certainly I don't dispute what he is reading from in the case laws. I am simply saying that we have produced a new Industrial Relations Council and that we have given them new statutes to govern disputes that may come about as a result of it, and that the arguments as far as case law are concerned will certainly be made before that board as and when the cases come up. I would suggest that that is where they should be. I think where arguments of precedent and all of the others will end up is in front of the Industrial Relations Council.

The member from Esquimalt asked why we changed "common" to "same." I think we said very clearly in the opening statements that we do not want to allow employers to avoid their bargaining responsibilities as a result of what I guess is commonly known as double-breasting; but we do want to allow — which in some cases is not allowed — those same employers to go into a business that may be related but does not take away the bargaining gains that the collective agreement has given to their employees in performing their work. By changing "common" to "same, " we think we have allowed those people to start up their new business. Certainly we have allowed those employees in the new business to become unionized, as is their right, but we have also protected the bargaining rights and the gains that the employees have of that original company.

[3:00]

MR. SIHOTA: Let me just make sure that I understood properly what the minister is saying. He said, if I heard him correctly — and tell me, Mr. Minister, if I am wrong — that by putting in the word "same," you are of the view that a company can be engaged in a related field but still allow the employees to have the benefit of the collective agreement. Is that what you were saying? Maybe I didn't hear you properly. Is that what the minister was saying?

HON. L. HANSON: I was saying that in this legislation we are trying to allow an employer to start another business, but we're not allowing that employer to take the business that his employees are doing under the collective agreement in that company and lose those benefits that they have gained through their collective bargaining process. We're also saying that the new company, if it is found to be a common employer, will be found to be doing the same business that they were doing under the other one, and the employer would therefore be avoiding his collective bargaining responsibilities.

All we're saying is that we are giving the employer the ability to free up some capital to start another business, as long as it doesn't take the business away that its collective bargaining unit in the other business has gained the rights to and the advantages of.

MR. SIHOTA: Perhaps the minister can explain to me how he comes to that conclusion, because my reading of the language doesn't appear to allow that. Could the minister elaborate on that point and tell me how he arrives at that conclusion?

MADAM CHAIRMAN: Shall section 25 as amended pass?

MR. SIHOTA: I was waiting for the minister to reply to my question,

MADAM CHAIRMAN: I'm sorry. Did the minister want to reply?

Would the member for Esquimalt-Port Renfrew like to continue debate?

MR. SIHOTA: I want to ask the minister again: could he explain to me how he comes to that conclusion? It strikes me, on my reading of that section, that that isn't what it says. But I want to understand, from the minister, upon what basis he arrives at that conclusion. It's not difficult. It's not a skill testing question; it's a very basic question, Mr. Minister. How do you arrive at that conclusion?

MADAM CHAIRMAN: Hon. member, perhaps I should just point out that you can ask the question but you really

[ Page 1581 ]

can't insist on an answer. The minister does not have to answer. So if you would like to continue...?

MR. CLARK: Maybe I can try, Madam Chairman. Consistently, clause after clause, the minister said: "This is what we think it does" — an assertion of opinion — and we've been giving evidence that we think proves otherwise. In this one in particular, which is the most important clause for the construction industry in terms of the change, we have made a legal interpretation. All we're asking, Mr. Minister, is that you simply explain or justify your interpretation. Give some explanation or justification for your interpretation that proves we are inaccurate in our interpretation.

HON. L. HANSON: I've already explained the intent of the legislation; I've already said that this is what we see happening. What you are giving me are arguments that should rightly be placed before the Industrial Relations Council, who will make the determinations.

MR. GABELMANN: It's difficult to restrain oneself — and I'm going to try — in the face of that kind of provocation. The comparable ministerial answer in any other legislative activity in this House would be, when a question was asked about what certain words in a bill mean: "Oh, it's not for me to say. It's for the courts to determine. The courts will tell us what the words are going to mean." We don't get that kind of — and I'll leave the adjectives out — response from other ministers when they run their bills through the House. They say: "These words mean these things, and that's what we intend." I remember that that was very clear during debate on legislation relating to motorcycle helmets. The Attorney-General said: "This is what we intend it to mean." There were occasions when the court said that it didn't quite mean that, or it couldn't have that effect. But at least we got answers, and we agreed on that issue with the minister who handled the bill. At least we got answers saying: "This is what I intend it to mean."

To go the next step, in many instances the minister would back it up by citing other references. But what we get here from this minister is: "Oh, it's the intent of the legislation; this is what I want to have happen." Then when we get into the important issue of trying to determine what the words actually mean, the minister's refuge is: "Well, that's for the Industrial Relations Council to decide."

The Legislature governs; the courts, and in this case the IRC, interpret. We have a responsibility, all 69 of us, to govern, to legislate, and we'd better be bloody well sure we know what we're legislating.

MR. JANSEN: Order!

MR. GABELMANN: It's been used in this House on many occasions by members on both sides of the House and repeatedly over the years. It's an accepted British term, and those of us from that part of the world use it frequently. It shouldn't be of any concern to the member for Chilliwack, who is not in his chair.

MR. MILLER: And very seldom on his feet.

MR. GABELMANN: Our job is to legislate, and we should know what we're legislating. We say, and I think we have demonstrated, that we are legislating a law which allows union companies to escape their certification by establishing dummy companies, through their spouse, their principal partner or one of their senior trusted staff, or using various other financial escape mechanisms. We've demonstrated that. The law is clear. It used to be that the board had to have a series of criteria all met before they could allow for the escape. Now there is a series of single criteria. I think we have made the case, and it doesn't need to be made again. I don't think we need to delay this committee on this issue, so we don't need to go through the cases again — I would hope. They're clear, they're unequivocal. The legal opinion is absolute.

The former deputy minister adds another voice to this debate, another, I might say — and I think he would understand what I am saying when I put it this way — right-wing management voice. That's his background — right-wing in the Scottish Presbyterian sense, if I can try to relax and cool this debate down by injecting the odd bit of levity. But the issue is not light. The issue is not of that kind; it's a serious issue. The minister cannot stand in this House and expect this section to pass by simply saying: "Oh, it will be up to the IRC to determine whether or not double-breasting is going to be allowed under this section." It will be allowed under this section, and the minister has not demonstrated to the contrary.

If this were a court of law, he would have lost his case.

MR. SIHOTA: With costs.

MR. GABELMANN: Would the minister tell us what he intends the interpretation of the Industrial Relations Council to be in the cases that we have cited?

Madam Chairman, I thought this section was going to be finished this morning; I thought it would be finished by 12. I then thought we would be a few minutes this afternoon, because two of our members had not had an opportunity yet to participate in the debate, and wanted to. I had finished, as far as I was concerned, but.... I have no desire or intent — nor do any persons on this side of the House — to delay this legislation unnecessarily. We've tried to be constrained in our remarks; we've tried to limit them. We have not taken the opportunity to read endless cases, to quote from them excessively. We've not done that kind of thing. We have limited our debate, but we cannot let go a section of the consequence of this one without having some clear indication from the minister that he understands what he is legislating. We must get that clear.

MR. SIHOTA: I'll defer to the minister. Was the minister preparing to get up? No?

I mean, is this democracy? We're sitting in this House dealing with legislation, and again we're dealing with one of the more significant sections. I won't call it pivotal again, because I left that for the privative clause. We're trying to get some understanding of where this government is coming from on some of these sections, to get some explanation not of what you intend, Mr. Minister.... If you wanted to circulate those sheets that you've got there or, Madam Chairman, if the minister wants to circulate that.... We can read those too, but we're trying to probe a little bit further, so that those of us who take our responsibilities in here seriously have a better understanding of this legislation and can make judgments as to whether or not our interpretation is correct or incorrect.

[ Page 1582 ]

I'd be the first person to sit down if the minister could show me where it is that my reading of this section or other sections — because I haven't been talking on this one in depth — or how it is that my interpretation differs from his.... If indeed his was superior to mine, that would be the end of the day. But it's frustrating to even get into that kind of position, when the minister sits there silently; he won't answer one detailed question that's being put.

I don't want to bring out all the cases. I've got some here that I can cite that deal with successor rights — all sorts of cases, Madam Chairman, that deal with successor rights and that really try to fine-tune the legislation. Indeed, it is difficult to understand why the courts or the Labour Relations Board allow successor status in some instances and at other times don't, and why it is that certain elements are deemed to be common and others are not. Months from now, if this draconian legislation ever passes without amendment, clearly someone is going to be sitting down in front of a counsel and saying: "Well, it used to say 'common' and now it says 'same.' There must have been intent on the part of the Legislature to bring about some type of change." Because to the layperson — and I can put aside my legal expertise for a moment — they'll look at it and say: "Well, 'same' and 'common' — there really doesn't appear to be a major difference between the two words."

I think if you look at it that way, that's quite correct, and it almost seems somewhat ironic that we would be debating the essence of the word "same" versus the essence of the word "common." Yet if you put on a legal cap, and if you realize that these types of matters are before counsel or will be in front of counsel if this legislation ever passes, then somebody.... Let's face it, there have been a lot of cases on these types of sections, so it's not beyond the structure of imagination to suggest that somebody is going to be looking at the difference in language.

[3:15]

Somebody soon, because of the number of cases.... I was looking at the number of cases this morning between 1977 and '81, and they're listed just by numbers running across the page. I would venture to say that the whole list was about an inch and a half thick, and maybe there were about 20 cases per line, so you can imagine that there are a lot of cases that deal with this very significant issue. So somebody somewhere someday soon, if this legislation passes, and later, if it doesn't, is going to be wondering why it was that the Legislature chose to replace the word "common" with the word "same."

Funnily enough, that has significant legal implications. Once again, the minister always gets very angry when I try to impose my legal knowledge onto the debate, so I'll again stray away from that. But someone is going to be wanting to interpret it and to find out why the Legislature made those changes, and they're going to come back to the debates in Hansard, because — I hate to tell the minister this — from time to time lawyers will go back to the debates in Hansard to determine what the intent of the Legislature was. In some courts and tribunals, the debate in Hansard is not admissible evidence, but in other situations it is.

For those situations where it will be, you know what they're going to see when they start reading the transcript? They're going to see a number of people asking the minister over and over again: what was the government's intention in changing this section? What was the intention of going from "common" to "same"? Not the intention in the way that appears in those draft prewritten comments that the minister has, but in terms of the real legal meaning of it, from the point of view of successor and double-breasting and deunionization. I often think double-breasting is a very inappropriate word; we should be talking about deunionization, because that's what this does. There is going to be a whole series of comments from people from this side of the House trying to probe the minister to find out why the change was made, and there's going to be silence from the government.

What type of leadership is that? What type of leadership with respect to this legislation, which is radical, as I've said many times, new, a total departure from what we've had in the past? What type of leadership is the minister demonstrating when he fails to answer even the most basic question as to government intent — the most basic question that begins to probe and scratch a little bit below the surface of that superficial comment that the minister has before him, time after time? What type of leadership is that?

The minister is not only the author of this legislation, but for the purposes of this debate he is the interpreter of this legislation. I really do not think that those of us on this side of the House who have spoken have gone too far in asking some very basic questions. I agree with the member for North Island (Mr. Gabelmann), because I can tell the minister, and if he wants I can spend the whole week — and so could the rest of us — talking on this section alone. We could read in case after case after case, and ask the minister very pointed questions on it. But we don't want to do that. We just want some clarification for the record.

By the way, I don't mean that as a threat. I don't want to get into that game, and I don't want to change some of the progress that all of us have made in terms of trying to improve the climate in this House. Perhaps my comments now are a little bit contrary to the grain of those efforts, but they are certainly not inconsistent with the frustration we feel on this side of the House when the minister refuses to answer questions.

This is out of the drama of question period: the press has drifted away, the cameras are gone and we're into the monotonous discussion of a section. It's not the time to play games. It's the time to answer some questions with a little bit of diligence, with a little bit of intellect, with a little bit of foresight. But we're not getting that from the minister, particularly on this section.

I'll give the minister a break. I won't deal with the question for the time being, with respect to saying "common." Let's deal with another portion of this section, and let's hope that this time I might get an answer that explains what the government's motivation was in making the amendment.

The word "deliberate" has been removed from this section. The clause now has the phrase "attempt to evade." As I understand it, Mr. Minister, and please correct me if I am wrong, the decision to eliminate the word "deliberate" was there simply because one did not want to get into questions of intent, or mens rea, as we call it from time to time in court. Yet you've left the words "attempt to evade" in there. Does the minister not consider that the element of intent remains when you use words like "attempt to evade"? Does he not agree that he's failed in trying to remove the very thing that he said he intended to remove from this section? May I please have an answer to that question.

HON. L. HANSON: We keep going on. I keep getting criticism for not answering the question. I have to say to the

[ Page 1583 ]

members on the opposite side that I've explained the intent of the legislation about 300 times. Because you want to make a case that should rightly go before the IRC, be my guest. Turn up there. There's no question of the intent.

I think the question was that we've removed the word deliberate with the amendment to this section. I think that there was some concern expressed, and we had heard it a number of times, that the word deliberate was too onerous to require proof that an attempt to evade collective bargaining responsibilities was in fact deliberate. Deleting the word deliberate, we believe, reduces the subjective element of the legal test to be met by trade unions attempting to protect their bargaining rights. I guess the concern there is that if there is an attempt to avoid their bargaining responsibilities, that shouldn't be allowed. It shouldn't have to be proven that the attempt was a calculated or deliberate one.

MR. PETERSON: I've been sitting here listening to this debate, and I really wonder if there should be a prerequisite for some of the members of the opposition to have their hearing checked out, because I think our minister has been giving some excellent answers. He has been telling you what the intent of section 25 as amended is, but obviously you're not listening. Perhaps the reason you're not listening is that when you stand up and make a statement, you quickly run into a huddle and not listen to what the minister's saying. Sit at your seats. Listen to what he's saying. Understand it.

MR. MILLER: You explain it.

MR. PETERSON: I thought he's been very clear on the intent.

Interjection.

MR. PETERSON: One other thing I must.... Just shut...! Excuse me. Just listen for a moment — I withdraw that remark.

MADAM CHAIRMAN: Thank you, hon. member. If you would address yourself to the section, please.

MR. PETERSON: Yes, I will, section 25. Somebody talked about leadership. I think this minister has shown excellent leadership with regard to section 25 and with regard to the whole bill. I really take issue with the member for Esquimalt-Port Renfrew (Mr. Sihota) saying he lacks it. I think he deserves full credit for listening, for answering, and I certainly support him.

MR. BARNES: I just wanted to reflect on the evolution of this document to give the assembly an opportunity to gather its thoughts on the intent of section 25 as amended. Perhaps the minister may, upon reflection, at least express his personal opinions as a lay person and a new member to the Legislature. Notwithstanding the responsibilities the minister has as Minister of Labour to interpret his legislation in as close to legal terms as possible, we realize he is not a lawyer and certainly it probably gets a little intimidating when he has such expert analysts as we have on this side of the House who are asking him questions, such as the member for North Island (Mr. Gabelmann) and the member for Esquimalt-Port Renfrew (Mr. Sihota) particularly, and to some extent other members as well.

I certainly don't intend to deal with the legalities of the section, but I question whether or not the minister is really in a position to interpret all elements of this bill because, as I said on the principle of the bill when we were in second reading, I believe that he is the messenger of a bill that was constructed by the Premier. Perhaps as a sort of an analogy to the concept of double-breasting the minister might wonder if there is a form of double-dealing going on with respect to this bill.

I hope I'm not being too far out of line, Madam Chairman, in suggesting this, because what I'm really saying is that he was also a commissioner of sorts who did conduct hearings prior to the introduction of this bill, pretty much along the same lines as the present commissioner doing a study on education, Barry Sullivan.

Mind you, we don't hear very much about that right now. In fact, Bill 20 has already passed, received royal assent and is now law. There is some concern with respect to this bill and the minister, and there seem to be some parallels to be drawn. The difference, perhaps, between himself and Mr. Sullivan is that Mr. Sullivan is not going to have to come in here and answer for the faults of a bill, because what he is doing now is after the fact.

As we found out in question period in days just past, the Minister of Labour was conducting his hearings while the Premier was conducting hearings as well, privately. In that sense, I think from a personal point of view the minister may feel that he has personally experienced what it is to be a victim of double-breasting or double-dealing or deception — whatever you want to call it. I wonder whether he is in fact the true architect of Bill 19.

So this is one of the problems that we have on this side of the House. We are trying to at least ensure that the government is prepared to state its intention, notwithstanding how it may turn out when Ed Peck is addressing complaints — or the courts or wherever the issues may arise. What is the minister's position? This is the one opportunity where the minister has a chance to indicate philosophically what the intent of the section is as he sees it and not to be concerned with getting into a fight with these legal beagles on this side of the House who are experienced in these matters. I think that the minister is giving it a real good try as a new member in this House.

He has one of the toughest portfolios, and if he hasn't begun to grey, he certainly will be before he is finished his tenure in this Legislature. But there has never been an issue more vital or a statement that means more than the statements that the minister makes now with respect to the future of labour-management relations in this province. As I have suggested in previous comments, I think this House and some of the comments that we are hearing by members on both sides of the House indicate that we are going to be getting to some very elemental differences in terms of the direction that this province will be taking in the future.

What we are really saying is that there are some philosophical differences in our style and our approach. I think that the member for North Island is quite correct in saying that the section is not properly entitled; at least this double-breasting concept is probably inappropriate. I think it ties in with a philosophical direction to transform the climate in the province in terms of the marketplace — the industrial community: workers, capitalists, investors and the whole milieu — being changed to something else.

[3:30]

[ Page 1584 ]

We are not quite sure what that agenda really is, but we suspect that the government fundamentally believes that there has to be major changes to what is existing today. The problem is how it will come about. Will it come about through a process of consultation, of bargaining in the traditional, democratic ways that we have practised in the past? Or will it be by decree?

That is really, I think, where we have to begin to define what we are talking about, because the Premier is now saying that he was elected to govern. That is a tough one for us to argue against. That, in fact, is true. But the point is, to what extent does a government have the right to impose without consultation? How obligated is that government to live by the platforms that it was elected on? In other words, in a general election the government campaigned on certain policies and canvassed the voters. The voters believed that certain things would happen.

But I don't recall at any time during the last campaign where the now Premier of the province said that he would transform the methods of....

MR. DIRKS: On a point of order, I appreciate the dialogue that is going on, but I wonder if he could please get back to section 25.

MADAM CHAIRMAN: Thank you. The point of order is well taken.

MR. BARNES: Madam Chairman, it is quite well taken. I was trying to point out the difficulty that we have in attacking a minister on this section because of his failure to satisfy questioners with respect to the intent. We're somewhat hesitant to go after a person who is obviously doing his best, but the fact that the Premier installed him in this position double-breasted the minister in the first place by telling the minister that he should conduct hearings, hearings that really were a sham because the Premier himself was conducting his own study and designing his own legislation. This is why I'm saying that the ironic part of this thing is that the minister means well and was shocked to find out that all that work he had committed himself to was really not relevant in the final document. This is the problem. We want to attack this minister for his failures, not for the failures of someone else. He can't defend someone else's faults. I'm sure the minister really doesn't know how to defend this section, because it's not his.

I think the minister wanted to do something fair, something constructive. I think he wanted to make a contribution to this province. I think he and other members of that cabinet are shocked by what is going on, just as they are shocked by the writ. Even the Premier himself is trying to wash his hands of the writ to muzzle people in this province. So we want to know who's running the store. What's going on over there? It's very difficult for us to take seriously the ability of people in their positions to do their jobs. We believe there is double-breasting going on by the Premier in the whole cabinet.

I think that's the end of my comments.

MR. JANSEN: I think the member opposite made a comment that we are philosophically different, and indeed we are. But I think we are united in the view that we are living in a democracy and that we believe in freedom of choice regarding whether or not we wish association or dissociation.

We heard some comment that non-unions are second-class citizens; that people who are not union members aren't as well skilled or seem to be lesser people of our society than those who are union members. I don't subscribe to that view, and I don't think most of us here do. In fact, we feel we're all equal and have a right to associate or dissociate.

What is at question here is the right of a company to have democracy in its workplace, and we exercise that right. If that right is not being upheld, then we have a right to appeal to the council, which is democratically structured. We also have the right for a union at any time to become organized through application, through an oral process. If this government wanted double-breasting to take place, the simple resolution would be to withdraw the entire section 37. It is not the intent to allow double-breasting. We are allowing the playing field to be levelled. We're suggesting that there is opportunity to change and to allow the companies to consider the question democratically.

We're listening to so much irrelevance here. We're listening to so many things that don't really pertain to this particular section. This government is changing section 37 and allowing a decision.... We're adding retroactivity, which has not been in place in this section before. And we're adding that the council can determine whether or not there has been an attempt to evade collective bargaining. I don't understand how the members opposite could argue with that particular section. I would encourage us to concentrate our debate on the aspects of section 25 and the amendment to section 37, and request that we proceed to deal with it in an appropriate way.

MR. MILLER: We're spending a considerable amount of time on this section because it is of considerable importance. In fact, it has caused a fair amount of controversy in this province because of the intent or perceived intent by unionized workers in the construction industry. If the member opposite thinks we're simply going to let the thing go without trying to ascertain what the government's intention was in bringing in this clause, then the member is mistaken.

I would point out just a couple of recent happenings. First of all, the Arbitrators' Association of British Columbia today flatly condemned Bill 19 and suggested that the matter be hoisted. They cite a number of very good reasons, one of which is that they don't believe the government fully understands the complexities of collective bargaining and the relationship between employers and employees; that they perhaps bring a bias to the scene, and I don't mean that unfairly. There is a great deal of danger involved in proceeding with a bill without these questions being answered.

A previous clause we debated in terms of the employer's ability or right to interfere in the organizing process. There's been considerable debate in this House. We tried to extract from the minister what their intention was, and we had a long debate. The logjam was finally broken by the Minister of Social Services and Housing (Hon. Mr. Richmond), who complained that he couldn't talk to his employees and that perhaps that's why we needed it.

Here we have a report again in today's paper where an employer is suggesting that there should be incentives offered so that they won't join the union. That was almost flatly denied, that that shouldn't be the case under that previous amendment, and now we're starting to see the thing creep in. So, Mr. Member, we're doing ourselves a service, we're doing the people of British Columbia a service, by trying as

[ Page 1585 ]

best we can to extract from the minister not only what his intent is in introducing a clause but what the practical result of that clause will be. I see nothing wrong with that. I think this is obviously the forum to do that in, and I would suggest that the member should simply have some patience.

MR. CLARK: I think I'm going to wrap up this section, unless I get mad.

I would like to comment briefly, for the member for Chilliwack, because in a serious way this clause really has nothing to do with democracy in the workplace, unless you think that by democracy you mean that the owner of a unionized company should be free or allowed to create a non-union company in the same business to compete against his own company. I mean, it really doesn't.... The purpose of the double-breasting clause originally was to prevent that from happening so that workers could decide to join a union or not. But if they decided to join a union, they'd be protected by a circumvention of that collective agreement from spinning off another company.

There is an amendment to the existing clause. The minister says repeatedly that it's not his intention to allow double-breasting. The question has to be asked, and we keep asking it: well, why change it then? If it didn't allow it now — and it does actually allow a certain degree of double-breasting; it's very difficult to prove otherwise.... But if the minister's intent was not to change the existing situation, then why change the law? The only possible explanation is to make it easier to do that, and I don't think that has anything to do with the question of democracy.

Now to the minister. Debates in this assembly — and the member for Esquimalt-Port Renfrew (Mr. Sihota) has indicated that they aren't necessarily used in courts of law.... But I would like to say that debates in the assembly are currently used extensively at the Labour Relations Board. They read them. They pore over the original Code and the amendments at various stages — and, I'm sure, these debates here in committee in particular — for some clue as to how to interpret the legislation, in terms of the intent of the government and, more importantly, in terms of the minister's interpretation of the words, what they mean. It's absolutely critical to the future interpretation of this legislation. That's why we on this side feel so strongly about it, and that's why we're attempting to elicit a response other than the minister's response, which is that this should be decided by the new Industrial Relations Council. It is very important that we get some....

So I want to start off by asking just a simple question on a set of facts. The Pennyfarthing case, which I'm sure the minister is aware of — we've talked about it in this chamber.... The situation there was that the developer, Pennyfarthing, was owned 40 percent by a unionized company, Stevenson Construction. The unions attempted to have Pennyfarthing declared a common employer with Stevenson Construction, and thereby the collective agreement that prevailed at Stevenson would also apply at Pennyfarthing. That was rejected by the labour board. I don't think we need to go through any more of the facts in that case, but the reason it was rejected was that it was only 40 percent owned. That financial interest was not high enough to be perceived to be direction or control.

We now have a situation where.... At that time, all of the experts agreed, I think — and still agree — that if it were 50 percent owned by Stevenson, the case would have succeeded. I want to ask the minister: under the new language, under those sets of facts, is it your interpretation or your intent with these changes that, under a set of circumstances similar to Pennyfarthing — only Stevenson, in this hypothetical case, owns 50 percent...? Under these words, is it your interpretation that that company would then be declared a common employer, and in fact the collective agreement at Stevenson would have applied?

HON. L. HANSON: Just before I go to that, I'd like to respond a bit to the member for Vancouver Centre.

First of all, I think I'd like to acknowledge that your very civil approach, at least when you started, was much appreciated, because I do understand that.

[3:45]

MR. BARNES: You say "to start."

HON. L. HANSON: Well, I think maybe some of the remarks got you a little fired up.

We keep debating what is the intent of the legislation, and I think that I've detailed the intent many times as I've stood up. I can say it again, but what seems to be the biggest difficulty is that what we intend to do, and of course I've.... Anyone who would believe that I — as a layman, if you will, who has come into the ministry — don't get all sorts of advice from various people.... I think that the members opposite would acknowledge that they also get advice from people for various things, and of course when you get this advice, you make your final determination as to what you feel is going to result from this. I've explained that a number of times. I've explained that it's a philosophy of the government. I don't dispute your right to say that the words as you see them don't express that intent. I believe that they do express that intent, and I'm quite comfortable that they do. I'm quite comfortable that there isn't a situation, as the member suggested, where I'm being double-breasted. I'm confident that there wasn't that situation.

MR. BARNES: I don't mean the suit.

HON. L. HANSON: No. I go back as far as when double-breasted suits were the only thing worn.

In a very clear, simple statement, we don't feel that the work of the bargaining unit should not be protected. It should not be able to be performed by a parallel non-union operation. I've gone over this wording hundreds of times, and it's very clear to me that the adjudicative process which we put in place.... If I as Minister of Labour were doing the adjudication, I guess then we wouldn't need an Industrial Relations Council. It seems to me that that's where the adjudication lies, and you are quite right that when a question comes up before that council, they will get some guidance from the speaking that goes on within this House as to the intent of the legislation.

The intent is clear. I'm not a lawyer; it's certainly clear to me. It simply says that we don't want to allow the work of a bargaining unit to be performed by a parallel non-union operation. It's not in the wording, and it's not our intent to allow that, and I am absolutely sure that it won't allow that. But we have seen cases where people who are in a business want to open up another business that's not taking away from that bargaining unit or the rights that those people have

[ Page 1586 ]

achieved in that bargaining unit. They want to set up another business, but they feel that that's an impediment to doing that. I don't think that all people may look at it as an impediment, but some people do. Again, I stress that there's nothing in this section that suggests that the union shouldn't go out and organize that new entity if the employees of that entity feel that that's how they want to conduct their relations in the workplace, and we'd hope that they would be given that opportunity. We'd hope that they would be given the opportunity to decide not to do that, if they didn't want to.

As I said, I'm a layman, and it's certainly clear to me. I guess if we get a lot of legal people standing up and arguing back and forth.... I've heard some very bizarre cases, if you will, trying to be made before courts of law by legal people. That's only a layman's opinion; I'm sure it's not their opinion.

MR. MILLER: What do you think is going to happen to the council?

HON. L. HANSON: I think that through the process of the adjudication of the new IRC there will be a development of a very comprehensive direction for the people out there on what this legislation is doing. Those policies, as they are established by judicial decisions, if you will, will show that the intent that we as government have put in this bill will in fact be there.

The question that the member just asked me — you know, the Pennyfarthing site and so on — will I think be a very interesting one. Quite frankly, my personal opinion is that it will be decided the same as it was the last time. But that will come forward; that's the purpose of the IRC. Again, I'm not the commissioner or the chairman of a committee of the Industrial Relations Council, and I think we're giving here in the legislation a very clear intent. I think we're telling them exactly what we have intended by this legislation, and I think that's what legislation is for.

If there wasn't the requirement of interpretation of legislation.... I have to point out that the interpretation of legislation always relates to specifics and that the circumstances of one decision don't always completely match the circumstances in another case. There's always a variety of things that are considered. There's no question that decisions that had been made by the courts affect other decisions as they go along, and I've heard lawyers making reference to a case: "This was proved in that case." I've also heard a judge say: "Yes, but I don't agree that that decision there proves your case, because of this, this and this." That's a legal argument that continues to go on. That's why we have an IRC. But I don't think there's going to be any difficulty for the new IRC to determine the intent of the legislation, either by the wording or by the debate that we've been having.

MR. CLARK: It's clear, of course, that the IRC will do a lot of adjudication of disputes, but what we're trying to get here for their future guidance is.... The minister is the author of the bill, and the bill is supposed to reflect the minister's intent and interpretation. What I'm trying to get is a little more information about how the minister thinks certain things should be interpreted — how he intends this legislation to be interpreted — to give guidance to future adjudication of disputes.

AN HON. MEMBER: He can't.

MR. CLARK: That's exactly what we're here for. Yes, he can. The member for Chilliwack (Mr. Jansen) shakes his head. What we are here to do is not to pass laws that say: "We're trying to do this." We're here to debate it so we can find out what the interpretation is that the minister would like to see made, so we can find out what exactly and precisely this law or this section is intended to do. Not just a blanket statement but interpretation is very critical when it comes to labour relations matters, and it has been looked at historically in this province.

Let me ask you this question in a little broader sense; it's a question I asked earlier on Pennyfarthing. The old test for common employer, a major test in many respects, was the financial test. The Pennyfarthing decision clarified that financial test by saying that 40 percent wasn't enough; 50 percent was really the test. Is it the minister's interpretation of this section that there will still be a financial test and that that test will still be 50 percent? A major test in determining double-breasting in terms of dealing with the question of control or the question of ownership or direction.... Is it the minister's interpretation that 50 percent financial interest is the critical threshold?

HON. L. HANSON: Again, I say that's why we have an IRC in place. But there's no question that financial aspects of the situation will be considered. To say 50 percent is the right figure, to say 40 percent is the right figure, I don't think is the determination.

Let's say there is a company and let's say that somebody owns 40 percent of it. Let's say the other 60 percent is owned by 100 people. That circumstance is quite different than one company owning 40 percent and another company owning 60 percent, if you understand what I'm saying. So I can't say to you that 50 percent is the test, because the circumstances of whatever happens will have to be determined by the Industrial Relations Council, and they will determine how a financial interest determines their ability to manage or run or whatever.

MR. CLARK: Very briefly, then, to the minister. In your hypothetical example where 40 percent is 100 percent owned by one person and the other 60 percent is owned by a wide range of people, if that was a spinoff of a unionized firm and it was done so to essentially subvert the collective agreement, is it your interpretation that that is, and would you like to see the case be construed as, double-breasting, on the facts that you set out?

HON. L. HANSON: Well, you know, I think in the wording that the hon. member presented to me, if I heard him correctly, he said that if it was proven that it was an attempt to avoid.... Well, I think it's quite clear in the legislation that an attempt to avoid their bargaining responsibilities as related to a collective agreement would bring forward that sort of decision that says they're common employers. But again, Madam Chairman, that's why we have an IRC in place, to determine the facts in the case. When there is a proof or a decision or a situation that the IRC sees as being a loss or an attempt to subvert, or at least to get out of the responsibilities that have been faithfully and honestly bargained and put in place by a collective bargaining agreement, that shouldn't be allowed. We've stated that a number of times — that the work of the bargaining unit should not be able to be performed by a

[ Page 1587 ]

parallel non-union operation. I think that intent is simple and clear. It certainly is to me.

[4:00]

MR. CLARK: I'll just wrap up briefly. Didn't I say that a while ago?

AN HON. MEMBER: It's a good line.

MR. CLARK: Well, we on this side of the House feel very strongly about this section of the Industrial Relations Reform Act, Bill 19. We feel very strongly because this section and section 29 — and we'll have a similar debate, I think, on section 29, which deals with successor rights — are two sections which we believe very strongly are designed, or if not designed, will have an unintended effect — I find that hard to believe but they will — which will deunionize the construction industry.

There's no question in my mind that currently double-breasting takes place, and currently it's very difficult to prove, and currently the test is very hard. These amendments are dramatic in terms of the impact they will have. They're dramatic because of the simple changing of "and" to "or," which dilutes it; and they're dramatic also because of the question of proving intent. It is extremely difficult, and beyond me, why the onus would be on the union to prove that there was a deliberate intent, or if not deliberate, the same thing — "intent" — to circumvent the collective agreement; and then if they can't do that, but it simply is the case, that there's no retroactivity in terms of the penalty. It's beyond me. If the minister is clear in his intent that he doesn't want to see double-breasting, why he would deliberately weaken the clause, and why even further he would say that even if you're found guilty, you can't retroactively.... There's no penalty, essentially, unless it's proven that there was deliberate intent. "Deliberate intent" and "intent, " in my view and in the legal interpretation we have, are the same thing. In other words, the onus is on the union to somehow prove that the employer deliberately intended to circumvent the collective agreement. That is extremely difficult to prove, and I think will result in a significant increase in the amount of double-breasting in this province. This, combined with the other section that we'll get to shortly, means that.

I want to say, briefly, that the reason it's so important is the peculiar nature of the construction industry. We've got a situation where there is no seniority whatsoever for construction employees in any collective agreement. We have a situation where there is no fixed plant; there is no mine or mill — pulp mill or sawmill. This is a mobile operation. In order to deal with those peculiarities, the trade union movement has done one thing — they've got a union hiring hall — and the legislation has done another thing, which is to not allow employers to spin off non-union subsidiaries.

This really thwarts the collective security of unionized employees in the construction sector, and the American and other experience with similar legislation means there will be spinoffs. The fact that it's not retroactive, unless you can prove intent, means that in fact there will be no penalty. There will be an incentive for employers to spin off non-union subsidiaries. This is most important in the construction sector because the projects are so short in duration. By the time you go before the IRC, by the time you try to prove the case, even if you're successful, the project is completed. So there's a built-in incentive for employers to attempt to get around it. It also puts unionized employers in a very difficult situation, because they're trying to survive, and if this encourages double-breasting, as we on this side of the House think it does, it means they'll be forced to double-breast in order to compete with other companies that are double-breasting.

So it has a tremendous impact on the construction industry and on the collective security of unionized people in the construction sector. We feel very strongly about it. We think that it's going to have a tremendous impact, and it's going to bring about significant disruption. This section, almost more than most, is going to cause industrial disruption for many years to come, and it does not fulfil the objectives or purposes that the minister himself states.

Section 25 as amended approved on the following division:

YEAS  —  28

NAYS — 20

On section 26.

MR. CLARK: I have had significant experience with the previous way the board conducted certification votes. In fact, I was the first person to appear before the hearing set up by the now chairman of the Labour Relations Board, Kinzie, on the question of appropriateness of a bargaining unit. I think this section is an attempt to codify in this Code what the current practice is in terms of speedy votes and speedy determination of votes. In that respect, I think it is a step forward. But I just want to ask a couple of questions for clarification, if I could.

The way it works now, under the procedures put in place by Mr. Kinzie as a result of the 1984 amendments to the Code, is that there is a hearing very quickly, and the appropriate bargaining unit is determined before the vote; then there is a vote cast by those who are deemed to be in the appropriate bargaining unit by the industrial relations officer. This amendment says that there will be a vote before the determination of the appropriate unit, I understand. In my view, that's a positive move. Would the minister explain how the vote is taken? In other words, who gets to vote if the vote is taken before the determination of the appropriate unit? Right now they determine who is in the unit and then they all vote.

[ Page 1588 ]

If the vote is held before they determine who is in the unit, who gets to vote? Is it the union's description of the appropriate bargaining unit? Is that who votes?

[4:15]

HON. L. HANSON: If I interpret the question correctly, the answer is yes. The amendment, as the member quite rightly says, is a situation that had at times developed where, because of an application before the board, or whatever, in the determination of the correct bargaining unit, sometimes it was felt that there was too long a delay, which allowed some practices that weren't really the best to have happened.

The process would be that the union applies for certification and then the industrial relations officer would be appointed to investigate and determine the employee list, and within ten days a vote would be held. If there is a question or a challenge to that, the process would in fact be that there is a double-envelope type of situation, where it isn't determined who the inside vote is cast by. When it is determined, then if there were envelopes in there attributed to people who were not determined to be part of the correct bargaining unit, those votes would effectively be thrown out, I guess. Then the votes would be counted that were determined to be correct. I don't think there is anything that would stop the hearing of a challenge very quickly, if that were the way it went for the determination of the correct bargaining unit. It is simply to ensure that the vote must be held within ten days and to ensure that there isn't that time lag that was considered to be inappropriate.

MR. CLARK: I think, then, that this is a good amendment, but I want to make sure this is the case: the unit applied for by the union is therefore what determines who gets to vote, and if the employer wants to challenge that, then it is challenged later. All ballots are double-enveloped and the ones that are determined to be correctly challenged are destroyed and the rest counted. I think that is commendable,

I think there is, then, a mistake in the wording of this. It says that if 45 percent of the employees in the unit get to vote, then there's a vote. If a determination is not made of what the unit is, how will the IRO determine whether there is 45 percent in the unit? Does the minister understand? In other words, let me make a suggestion if I could  — a friendly amendment. Instead of saying "the unit," it should say "the unit applied for." That would clarify the intent, because as it stands now, unless the unit is determined.... It's essentially sloppy wording currently, and I don't mean that in a negative way. So the minister may consider a friendly amendment: instead of saying "the unit," it should say "the unit applied for."

[Mr. Pelton in the chair.]

HON. L. HANSON: That certainly is a valid observation, although we don't feel that that is a requirement, because the description in the Labour Code.... I might just read it: "Unit means a group of employees." The expression "appropriate for collective bargaining" or "appropriate bargaining unit," with reference to a unit, means "a unit determined by the board to be appropriate for collective bargaining, whether it is an employer unit, craft unit, technical unit, plant unit or other unit." I guess we felt that that description of a unit really handles the concern that the member mentioned.

MR. CLARK: I don't want to get into debate with the minister on this, because it's really a friendly amendment. But I really do think that unless the unit is determined by the board ahead of time, unless they have to make a judgment of what it is and then move on, it makes a lot more sense simply to add "unit applied for." Then it's clear. I think we're going to move on very shortly, but I think it's clearly a friendly amendment. It really does clarify it, and you might want to consider moving it now or shortly.

Sections 26 and 27 approved.

On section 28.

HON. L. HANSON: I move the amendment standing in my name on the order paper. [See appendix.]

On the amendment.

MR. GABELMANN: It's difficult; there is so much material and so much paper, and we've got amendments to amendments, in effect, because we're trying to deal with the old Code and Bill 19 and the amendments. Sometimes it takes a minute or two to collect one's thoughts.

Anyway, on the amendment, just a few comments. I want to repeat a comment that we made in section 25 in respect of the amendment, which — I haven't found it yet — deletes.... I'm sorry. We're on 28; I was on 29.

MR. CHAIRMAN: The amendment to 28.

MR. GABELMANN: I'll back up one file and start where I should be. I apologize to the House for that.

I want to ask the minister what it was about the existing subsection (8) in the Code that wasn't working or didn't achieve some desired goal, and so required this amendment — or either of the amendments, actually.

MR. CHAIRMAN: The Minister of Agriculture.

SOME HON. MEMBERS: Who?

MR. CHAIRMAN: The Minister of Labour. Sorry about that.

HON. L. HANSON: There has been some suggestion that I should be changing ministries, and I wondered if that had happened without my knowledge.

Interjection.

HON. L. HANSON: You wouldn't, would you, Mr. Opposition Leader?

We heard a number of concerns expressed that the council was not permitted to take into consideration evidence that the employer had acted in bad faith with regard to an application to cancel a trade union certification. We believe — and I think there is one that maybe I won't refer to by number — there was some concern about the clean-hands provision, and we think that this amendment — unfair or unreasonable conduct of the employer — is in fact consistent with the reinstatement of the clean hands provision, as is in one of the future documents. We believe it will preserve the LRB's jurisprudence as it was established in the past: whether an

[ Page 1589 ]

employer can rid itself of its bargaining responsibilities if in fact it hasn't acted unfairly or unreasonably. I guess an example of that would be consideration of contracting-out for two years and then getting a decertification. I think the amendment effectively reinstates the council's discretion to refuse an application.

MR. GABELMANN: I'm puzzled by the minister's response. The so-called clean hands section, section 91 of the Code, governs part 2 of the act. This is in part 3 of the act. As I understand it, there is no ability to apply section 91, the clean hands section, even reinstated as it will be once we get to it — preserved in its original form — to anything other than part 2 of the Code, and this section that we're amending — section 52, I believe — is in part 3 of the Code. There's no question there of clean hands, as I read it. I wonder if the minister wants to give us a new answer based on that.

HON. L. HANSON: I guess that the member, my critic, is quite right. But I think that by placing this amendment in the provision, we have made it more difficult, more stringent for the employer to get his decertification, because they have now established that they have to have been fair and reasonable. My reference to section 91 is I think a reinforcement of the fact that in the intent of all of this legislation we expect the employer to conduct his affairs in a fair and reasonable manner. But I do accept the point that the member made.

MR. GABELMANN: I accept that. We don't need to debate that further. I wonder if this amendment to the Bill 19 proposal.... I don't expect the minister to know this off the top of his head, and he may want to ask one of his advisers. Is the amendment that is being proposed to the original proposal in Bill 19 a result of concern expressed about the Wall and Redekop decision of the LRB?

HON. L. HANSON: There certainly wasn't in my mind any specific reference in this amendment to the Wall and Redekop case. It was pointed out to us that there should be a requirement for the employer to act in a fair and reasonable manner. So the specific reference — we are talking about the amendment now — is simply a requirement that the employer does act in a fair and reasonable manner. Quite frankly, I think it is a good amendment.

MR. GABELMANN: I think I agree, but I just want to be sure, Without going into the history of the Wall and Redekop case, because that would take time I don't want to take, it seemed to us that the original change as proposed in Bill 19 which we are now amending is in an effort to deal with the fact that the board refused to decertify Wall and Redekop — a certification that a union had with Wall and Redekopp — on the basis that.... The issue revolved around the question of subcontracting all of the work for two years, which was seen as an evasion of the collective agreement. Our reading of the original proposal in Bill 19 was that that would not have allowed the board to make that decision; that an automatic decertification would have had to have taken place, We now think — and I just want to be absolutely sure and have the minister concur, if he does — that with this proposal the existing law in that respect is maintained.

[4:30]

HON. L. HANSON: I do agree with the member opposite that there appeared to be some confusion. As I remember the circumstances of the Wall and Redekop case, I think the original draft may have proven that the member's concern was a possibility. Since that was not the intent, that's why the amendment....

MR. GABELMANN: That's good. I just want to say to the minister that we appreciate that. It's useful that there have been some of these kinds of changes. That's good and a positive thing. I'll say thank you. I haven't said that very much during this debate. There hasn't been much to say thank you about, but I will say it on this section.

Amendment approved.

Section 28 as amended approved.

On section 29.

HON. L. HANSON: I move the amendment standing in my name on the order paper. (See appendix.]

On the amendment.

MR. GABELMANN: This is another important section. It's among the dozen or so most important sections in the bill. It depends on your point of view, I guess, as to whether it's second or third on that list. Certainly in my view, it obviously goes hand in hand with a previous section that we've finished debating — section 25, in respect of 37 and 53 of the Code. This is commonly referred to as the successor rights clause. Does a collective agreement follow the sale, disposition, transfer or other activity of a company that either changes hands or location, or changes partial ownership — or whatever? There are a whole bunch of issues involved in that.

On the amendment itself, I want to deal initially with the word "deliberate." That's 29(b) — well, if you read it as it's written in the amending bill, it's 29(b)(b), which doesn't make much sense. Nevertheless, we know what we're talking about, We're talking about deleting the word "deliberate" as a modifier of the noun "attempt."

I'm not going to go through all of the evidence on this issue, but just state again something we have stated before. The word "attempt" is defined in law as being deliberate. Therefore the adjective "deliberate" modifying "attempt" makes no difference. The word is redundant. It makes, in law, no difference in terms of the test that needs to be proven. I guess it's a cute political effort — to put it kindly — to make an amendment of that kind. But it has no practical effect whatsoever in respect of decisions that will have to be made by the Industrial Relations Council as far as proving an attempt is concerned. I haven't put that in the best way by a long shot. What I'm saying is that an attempt is defined as being deliberate. Therefore there is no difference between a deliberate attempt and an attempt. There have been, I'm told — I don't practise law, so I don't know — repeated decisions that make that point, and I accept the advice I've been given on that. We need to make that point. I suppose we don't need to have a long debate about it, because we've had that debate before under section 25, and there appears to be some difference of opinion about it.

I just want to quote from a lawyer who practises — not exclusively, but primarily — in the field of 37 and 53 of the

[ Page 1590 ]

Code; that's where he makes his living. He says that the amendment to delete "deliberate" from section 29 of Bill 19 is supposed to be ameliorative of labour's concerns. It's my advice that it is not a significant change, because the word "deliberate" qualifies the word "attempt." Inherent in the notion of attempt is intent. To show an attempt in law you would have to prove intent. In order to prove intent you have to prove deliberateness. I'll just say it and leave it at that. It doesn't make a heck of a lot of difference as far as that's concerned.

Rather than asserting anything or suggesting anything, I just want to ask the minister if he would like to comment on his substitution of (1.1) and give us some explanation of what it was that went into the thinking on that?

HON. L. HANSON: If I'm correct, we're talking about the first amendment to 29. Are you referring to (1.1)? When we originally drafted it, the provision was to prevent a successorship where only the skills and abilities of an individual, or I guess in more common phraseology the key man, were transferred. But when we eliminated that key man test, the provision completely excludes the skills and abilities of an individual from the list of factors which may be used in determining whether a business, or a substantial part of it, has been transferred. Those factors would include transfer of employees, customer lists, goodwill, inventory, other assets, existing contracts, accounts receivable — the list is quite long here.

The intention was only that the skills and abilities are not to be the only factor resulting in a declaration of successorship. We believe that this amendment provides that they may still be considered as one of the factors, as they should be, for determining whether successorship should apply. It seemed to be that in eliminating that key man test, again we were completely excluding the fact that skills and abilities of an individual would be removed from the list of factors that are part of the determination of successorship.

Amendment approved.

On section 29 as amended.

MR. GABELMANN: Mr. Chairman, the amended section, as I said before, is a devastating section in terms of the ability to escape from collective agreements. We could — we won't but we could — make many of the arguments that we made in debate on section 25, because many of them apply.

The significant difference, in my understanding of this, is that small and medium contractors particularly will be able to escape their collective agreement with these changes very simply. First of all, a small or medium-sized contractor doesn't really need any assets. He might have a pickup, he might have a $2,000 or $3,000 computer, but that's really it. He rents his office and the assets really are very limited. The contractor can work from home, rent all of the equipment, and the changes that were just debated go some way to dealing with that point.

To now escape your contract, all you have to do as a small- or medium-sized contractor is sell your assets, this truck or this computer or whatever else you might have, and incorporate under another name and you're home free. It's as simple as that. You sell your limited assets, you establish another company and you go into business. Again, in this new business you can lease all of your equipment. It's no big deal to start up a new business. It's just a question of meeting the provisions of the Company Act and whatever minor legal requirements there are for that. That's all you have to do. This won't allow people who have significant assets to very easily escape their collective agreement, but anybody in construction who has few assets, as I have described, will simply escape that collective agreement. I don't know whether that's the intention of the government.

I'm fumbling a bit at the moment, Mr. Chairman, because I can't decide whether to stop here and solicit some view from the minister about his intention or to make a big speech about it. I don't want to make a big speech about it, frankly, for several reasons. One is that I'm tired of making speeches and I'd rather get on with it. Secondly, I'm not sure it's productive. It might be more useful for us to hear the minister's view of the impact of these changes to section 53 — what intent he had when drafting these changes, and what effect he thinks will come from it.

HON. L. HANSON: Just an observation. I firmly believe that the selling of the assets, as my critic described, would be caught under section 25, I guess, where it's loss of the collective agreement rights that have been bargained. But of course, again we have a difference of opinion on that. There are a number of sections to this, as the member does appreciate, and I guess we're dealing with all of them in a sort of broad scope at this moment. Is that the intent of my critic?

[4:45]

Successor rights. It's the government's philosophy or intent that when a union or whatever has obtained some bargaining rights for the group of employees it represents, they should in fact be protected. But we also have to recognize that there are circumstances that are harmful, I guess, to the economy as a whole — for example, successorship in the case of bankruptcy, which is one of the sections we talked about — or at least, it's in one of these sections. We've said that if a firm honestly and legitimately goes bankrupt and is sold under those circumstances, then there is every right for the union, I guess, to reorganize the operation. But by the same token — and I think the opposition member is going to give me some argument about this - unless there is a deliberate attempt through the process of bankruptcy to avoid their collective responsibilities, we don't feel that that is an appropriate case for successorship.

I guess the very recent case of Safeway and Thrifty's.... I don't know if that's still before the Labour Relations Board or not. It is? Well, maybe I shouldn't talk about it. In any case, the fact that a building occupied by a certain kind of a business effectively goes out and there isn't a sale or a transfer of tangible things; there isn't goodwill; there aren't accounts receivable.... In fact, there is a brand-new business started, and it may be the same kind of business. I am not suggesting that it has to be a different kind of business, or whatever. But it may be the same kind of business.

But if you start a business, you decide to get out of it and you sell off your assets, and I see that building as an appropriate building for me to start a new one in, I am not buying your customers and your equipment, and I am not buying your goodwill and all of the other things.... You have simply gone off in isolation and closed down your business. I have come along and said: "Hey, I am going to start something, and this is what I am going to start." We don't think the successorship should automatically apply to that.

[ Page 1591 ]

But again, as I have said before, we certainly don't have any argument that labour organizations have the right to certify that new operation. The test, of course, will be: have I, in starting my new business, assumed your business? You know I haven't. I have gone out and bought, in the case of a bakery, new ovens and all of those things. I am going to open a new operation.

There are a number of sections, of course, to the act. We think that we have clarified the circumstances in this bill where successor rights should apply. I guess what I just said is that we don't think successorship should apply only because the performance of a similar function occurs at the same location.

I dealt a little bit with bankruptcy. We don't believe that in the case of legitimate bankruptcies — and I guess we will get an argument on what the interpretation of a legitimate bankruptcy is.... I think that it is fairly clearly spelled out. I think that with the way the act is written we will get good jurisprudence from the Industrial Relations Council.

What we are saying is that they shouldn't be allowed, through the guise of a bankruptcy, to evade their responsibilities under the collective bargaining that their employees have attained through that process. We think that the fundamental principle remains intact. We think that when a business changes hands, the collective agreement rights that those people have bargained for should continue, and the obligation should continue to bind the new owner.

The intent is that we have tried to delineate in this bill where those rights should be transferred forward to the new owner or the replacement owner, or whatever. I think that everyone here has some knowledge of cases where bankruptcy was manipulated. We think that the jurisprudence of the IRC will catch those cases. I know that this is one of great interest to the members opposite, so I would like to hear their debate and concerns.

MR. GABELMANN: I will in a few minutes outline what I think are the four significant changes in terms of what is captured and what isn't in respect of the legislation. But I have to reflect, first of all, that it is amusing, I guess, that for the first time in this debate we have had a full, and I think fairly clear, explanation from the minister about a particular situation that he wanted to be sure was covered by the wording.

Ironically, when this is really the first time we've had it, it really touches on a case that is sitting in front of the LRB at the present time, a case that I wasn't going to talk about: Thrifty's-Safeway down the street. It may be that because Thrifty's-Safeway in James Bay is a classic case; it may be because the minister is aware of it — it's happened, in large measure anyway, during his term of office — that he's familiar with it and feels comfortable about it and therefore feels free to talk about it.

It's a wee bit ironic that that's the one case that we perhaps shouldn't be reflecting upon too much, although I have enough confidence in the board that they're not going to be influenced by us, whatever we say one way or another. They will make their decision based on the law as they see it, and if the minister comes down hard on one side and I come down hard on the other side, it's not going to matter a damn to the board. Sub judice in these cases isn't really significant, but I just must say in passing that it's interesting that we get a fairly clear and specific comment from the minister on this subject.

I guess it would be useful to identify what I think are the areas of concern.

The first area of concern relates to sale of part of the business and whether or not successor rights follow parts as they are spun off. It's our view clearly and specifically, and we need to make argument about it, although I'd prefer not to have to go through all of that.... It's clear in our view that successor rights will not apply to parts of a certified business that are sold; particularly, I suspect, if those parts are less than a significant part of the business — less than half or some other such percentage, although I don't know how that will be done.

The concern on this is widespread, particularly when there is discussion about selling off Crown corporations, for example. If B.C. Rail were to be broken up and sold off and you were to sell off the yard in Prince George and offer it up for sale on the basis that all the work done in the Prince George yard would be done by somebody else and B.C. Rail would buy the service.... Or it's similar to the yard in North Vancouver or the shop in Squamish or whatever. Or you might take other components: many of the accounting services that are done at head office, or a whole variety of things. I don't want to go into all the possible combinations. What you do is just sell off bits and pieces of the company. The certification, I believe, in the advice I'm given, will not follow with this new law, and you have effectively done two things: you've accomplished a privatization objective, which is another debate, and you've also accomplished the objective of deunionizing. So that is a real concern, in terms of successor rights, and we may well get into a lengthier debate on that issue.

Another concern — and we've had a bit of a discussion on this already — relates to the fact that the business does not include the skill and ability of an individual. I'm just looking for the amendments that we've been debating. "For the purposes of this section, the skills or abilities of an individual do not of themselves constitute a business." This is particularly true in construction, and I made this point earlier in starting off the debate. Since the skills or abilities do not constitute a business, you can therefore escape certification simply by taking your skills or abilities elsewhere and establishing another business. So that's a second area of concern.

The third is location, and I guess this is the Thrifty's issue. You have a grocery store, it's fully operating, it's unionized, and you close it down. If you sold the business as an operating business, the successor rights would, I think, still go on. If Safeway in James Bay had sold its store with all of its stock to Thrifty's and the sign changed, and the next day the business continued, then the rights of the employees under their certification would follow. But if you're more clever than that, and you sell the business, you shut her down and you have this little deal with this company that's going to buy it. You close her down, you sell the stock and you lay off the employees. You do all of that and then, after a reasonable period of time....

Interjection.

MR. GABELMANN: It disappears. The former minister is helping me. He knows what I'm talking about. It closes down, and after some reasonable period of time, presto! A new grocery store suddenly emerges. Thrifty's comes in.

[ Page 1592 ]

I had decided earlier not to talk about Thrifty's and Safeway, because it's in front of the board, but we are. I think we all agree it's not going to affect the decision.

Interjection.

MR. GABELMANN: Well, the minister and I were discussing this earlier, and we agreed it is, but we also agreed that what we say isn't going to matter a heck of a lot.

You have a situation where the law requires that if the business is sold intact and continues to operate, the successor rights apply. The contract is in place and the certification holds. But if you close it down for a while, and then re-open and conduct the same kind of business — selling groceries — it's a different company, and the successor rights don't apply. It seems to me that that is wide open for abuse. It seems to me that any company who purchased a business will make as a condition of purchase a closure, first of all, and a gap between the operations. There's a downside for businesses doing that.

Interjections.

MR. GABELMANN: Well, the first member for Boundary-Similkameen (Mr. Hewitt) is saying: "The council will find them out. That's an evasion of the law." The problem is, you have to prove beyond a reasonable doubt that there was intent — deliberate or otherwise. You have to prove that there was intent.

[5:00]

Interjection.

MR. GABELMANN: I'm sure you do, under this section. You just have to prove that in fact that mechanism was being used to avoid legal responsibilities. That's what the case will be about. You can't prove what's in people's minds. There won't be any legal documents saying: "We're doing this." It'll just be an arrangement. We know how it works.

MR. BLENCOE: Yes. It's like that residential tenancy bill you introduced.

MR. GABELMANN: Oh, let's not get into that.

MR. BLENCOE: Do you remember that crazy bill?

MR. GABELMANN: Mr. Chairman, I have a suggestion for the House. I think the second member for Victoria (Mr. Blencoe) should buy the first member for Boundary-Similkameen a cup of tea in the dining room.

MR. CHAIRMAN: That's an excellent point of order, hon. member. [Laughter.]

AN HON. MEMBER: Make it a motion.

MR. GABELMANN: We'll get a 67 to 2 vote, won't we?

Interjections.

MR. GABELMANN: I'll buy. Put it on my bill.

In any event, the problem with this issue, in terms of demonstrating whether or not this was a ruse to avoid the certification following, is that the union, presumably, who applies for a declaration that the certification continue, has to prove that in fact there was an evasion. Otherwise it's clear. Under this new law the Thrifty's situation is wide open. And the minister, I think, quite candidly said that's what he wanted. He wanted the new law to be clear, that if Thrifty's continues Safeway's business under a new name and new ownership, and everything else, they should be able to do it with new employees as well. That's the minister's position. I don't agree with it. I think it's wrong. I think that when you buy the building you buy everything that goes with it, and that includes the certification.

Interjections.

MR. GABELMANN: However, if you buy that building to open a furniture manufacturing shop, then I think you've got a case. If that is what is happening, I'd be hard-pressed to argue that the retail clerks' certification should continue. So I think what we're talking about here is that when in fact the business that continues is the same business; it's just under a new name. Safeway decided it didn't want that many stores. I guess Safeway would argue that they can't compete with non-union Thrifty's in Victoria; they can't compete in this supermarket climate in greater Victoria, because the climate here is very different. But I'm not sure that....

Interjection.

MR. GABELMANN: Well, we disagree about that. I'm not sure that the law should allow for that kind of evasion of legal responsibilities, because that's really what it is. If there are back taxes owed by Safeway, you can bet the city will make sure Thrifty's pays them. Thrifty's won't be able to argue: "Oh, well, we didn't buy the back taxes owed." They will have to pay. I think they should be required to accept all legal obligations.

Anyway, that's the third of the four issues. I'm going to talk about the fourth, and then I'm going to sit down and I'm going to buy a few people a cup of tea. No, I'm not, actually; I'm going to stay for this debate, because I think it's an important one.

The fourth issue is bankruptcy. If you attempt to evade your collective agreement or your certification responsibilities by declaring bankruptcy, and it can be proven by the union, then you can't use bankruptcy as a mechanism to evade. But the fact is that you are going to find it absolutely impossible to prove why the firm went into bankruptcy. The union will not be able to produce evidence of what was going on in the minds of the owner.

This isn't true in big companies — particularly in publicly traded companies or in large enterprises. This is true in the small area, where the books of the company are run in the study of the person's home. Accounting services may be purchased on occasion, but usually the spouse ends up doing the accounting, or the owner him- or herself ends up doing it. In those cases nobody, except in very rare instances, is ever going to be able to prove intent to avoid the responsibilities of the collective agreement. It's self-evident; I think the law is clear, and we can cite cases on that.

Later I want to talk about a few cases, and I'll just mention them ahead of time. I think it's fair that the minister know what they're going to be: Frank Browne Acoustics and Gibraltar Development. Frank Browne Acoustics is 158-84; Gibraltar is 29-82; and I'll make reference again to this Concerned Contractors' Action Group, 32-86, because

[ Page 1593 ]

there's some stuff in there that I think is relevant to this debate. But we'll get to that a bit later.

I just want to say in conclusion of this part of the debate: we think that because of these four areas of escapement, these four areas where the certification can be avoided.... I've outlined the four, the third of which was the Thrifty's case. We think that the door will now be wide open for businesses, medium and small, to do what we have been warning this bill will do, which is to deunionize the province. I suppose when one makes that kind of statement, if one wants to get attention for it, one does it in a loud and rhetorical way. We're past that now. I think everybody who knows anything about this business, Mr. Chairman, has said just what we're saying and would agree with us. The only people who don't seem to agree with us on this question are the government.

MR. SIHOTA: If the minister wants to respond to what the member for North Island had to say.... It's always the wish.

I want to begin by looking at the matter of asset acquisitions and asking the minister a few questions, because it is clear now, with the amendment, that where a substantial part of the business assets has been sold they will no longer attract successorship, as I understand it. I want to crystallize that a bit more. I want to give the minister an example, and perhaps he could tell me whether, in his opinion, successorship would follow. Let us say that a company sold its assets; it was an asset sale, or asset transfer, as we call it, instead of a share transfer. There was an asset transfer to a second company. Attached to that asset — and that's all that happened, just an asset transfer, not a company — were chattel mortgages. So there were debts, obligations and liabilities arising out of those assets. I'm not trying to think of an example that is stretched, because that happens all the time: whenever there are asset transfers, there are often liabilities that go with those assets, and the succeeding company will assume responsibility for those liabilities.

The question is: is the minister saying that, with this amendment, that type of instance would be allowed to pass and not be captured by the successor provision?

HON. L. HANSON: If I understand the question correctly, in the sale of an asset.... Let's get more specific: in the sale of a Caterpillar or something, and there's a chattel mortgage attached to it, and the new owner assumes the chattel mortgage, should the certification follow?

I don't think that in itself should constitute a successorship, and I think the legislation would be interpreted that way. Again, we get into arguments that will be decisions of the IRC in the particular circumstances. I don't think that in itself — the transfer of that liability as it relates to a piece of equipment — is the determination that should be attached to successorship. I believe that if, in the sale of that piece of equipment, that is the essence of the business they were operating, and the new owner continues to do that business.... It gets a little hard to relate to one piece of equipment in a very highly unionized situation. But if the transfer of that asset does, in fact, transfer the business and the essence of it, and that person continues doing business with the same people, with the same customers and so on, I think that any obligations under a collective agreement should be recognized.

It was kind of interesting to hear the member for North Island (Mr. Gabelmann) asking me about taxes. I think we all know.... My short experience in the municipal field is that taxes are attached to the owner of the asset. There is no question that if there is a sale of a building and there are outstanding taxes on it, those taxes have to be paid. If I understand the thing correctly, they probably have to be paid before it can be transferred in terms of a title. I think the land registry office requires that, but I am not a lawyer so I don't deal with those sorts of things. Usually lawyers ask for a tax-free notice or something from the municipality. I know that we get that. But if there is a sale of a building, and if that building closes today and opens tomorrow, and it is sold by Safeway to Thrifty's, and Thrifty's opens the next day, I would suggest that there is very good reason that certification would follow it, but depending on the circumstances of the sale.

We get into these sorts of things, and I think each one is a specific that the board is going to decide as to the legislation that we have placed in front of it. But I can see the circumstance of a building being used for a particular purpose, and the purpose is the same as the operation that was there before. I can see that, as opposed to the sale of the inventory and the business, there might be an attempt in the sale of that asset to charge a figure that has some relationship to a business value that is at the location. But I think it would be determined very quickly by the IRC that it was an attempt to avoid collective bargaining responsibilities, and that in fact the business had been sold.

I think the determination of what is a substantial part will be by the Industrial Relations Council in the adjudication division on the facts of the case. They will look at all of the facts, and I know that, there being those very wise people in the world known as lawyers, they will ensure that all the facts are brought forward and that there will be proof, if it is the case that the board determines that a substantial part has been transferred. The board will, in its manner, determine what that is. It is very difficult to determine in legislation what a "part" is.

[5:15]

I guess these sort of questions that have to be answered will be determined by the facts that are presented to the adjudication division. I guess in the most violent of crimes that we have, if you want to relate it to criminal action — I don't relate it to criminal action — the determination of whether there is murder or not is determined by the facts that the court hears. We're setting up a tribunal here in the Industrial Relations Council to make determinations based on the intent of this legislation.

[Mrs. Gran in the chair.]

I think that the actual test — the old traditional test — when they are dealing with the substantial part will be that there is a discernible continuity, and I think that's as it should be. I'd like to point out that in the amendment we talked about a little earlier, for the purposes of this section, the skills or abilities of an individual do not of themselves constitute a business. But they certainly are a consideration when there's a determination of a transfer of a business, and I think that's what the IRC will determine. I don't think that the skills and abilities of an individual would be or should be the only consideration governing successorship.

I guess we have a very different opinion on the fairness of successorship being determined in a legal bankruptcy. In

[ Page 1594 ]

fact, if there is a legal bankruptcy, and then I hear an argument that it is difficult to prove whether a bankruptcy was an intent to avoid the collective bargaining responsibilities..... I would hope that our bankruptcy laws are such that that determination is able to be made. It would appear to me to be awfully strange, again from the layman's point of view, that in the case of a bankruptcy the place is sold and reopens under the same ownership that was there before. It would be a little hard to say that that was a legitimate case.

In any case, in the case of Thrifty's and Safeway, which we keep saying we shouldn't refer to, but we do refer to, quite simply stated, we don't think that successorship should be a question in that sort of situation. Again, we agree wholeheartedly that where a substantial part or the essence of a business is sold.... I think everybody understands that; I'm not sure it's definable in legal terms.

There were a number of experiences that I had over the years that I had some difficulty in understanding, but those were many years ago, and I don't know what the situation would be with those circumstances as they are today. It seems to me that there was an auto dealership which had gone bankrupt, if I remember correctly — I don't know what the determination was at the time. Another person came along and started up a new one in a different building, and everything else, and there was a long legal battle as to whether successorship should apply. I don't know what the eventual result of it was, but it appeared to me that the people in the new operation, which was totally new and at a totally different location, should have the decision whether they wanted to become unionized or not. Ultimately they did make that decision and became unionized on their own, not as a result of successorship.

MR. GABELMANN: I want to deal with an issue that combines the elements of both bankruptcy and the sale of a building. It's really more the bankruptcy issue, but it's reminiscent of the Thrifty's situation. The situation is as follows. There's a fruit-packing house in the Okanagan that the minister will be well aware of: Mac and Fitz. When I grew up in the Okanagan we called it Mac and Fitz - McLean and Fitzpatrick.

Interjection.

MR. GABELMANN: I come from the orcharding background, and the minister doesn't. But the member for Boundary-Similkameen knows Mac and Fitz.

The industry in the Okanagan is primarily cooperative, but there have been private operators as well. Mac and Fitz was one that operated through the years. It has gradually sold out most of its business and has gradually deteriorated as a business. In any event, there is a McLean and Fitzpatrick operation in the valley that has a certification with the Canadian Association of Industrial, Mechanical and Allied Workers, CAIMAW. Recently this particular packing house went bankrupt. Clause 12.02 of the collective agreement in place, signed by Mac and Fitz and its employees, reads as follows: "Successor status. All rights, privileges, obligations and conditions continued herein shall automatically be assumed by any employer who carries on the business of McLean and Fitzpatrick through the sale, lease, sublease, rental, transfer or assumption into receivership of the business carried on at McLean and Fitzpatrick."

It's a clear successor rights clause in the collective agreement. The building under discussion can only do one thing; it can only be a packing-house. That's its purpose in life, and if it's not to be a packing-house — if it's to make widgets or build camper units or whatever — it would have to be completely gutted and started again, so there's no question about what kind of business is conducted in there. There's a collective agreement in place. The employer has a strong sense of an old-fashioned value that used to be more prevalent than it is now, which is that employees should be protected, that employees are part of the business — as this employer would say, in fact, part of the family — and, as a result of that, willingly and almost aggressively insists on signing this kind of clause in the agreement protecting successor status. But he fails. He goes out of business, through a receivership process. Any new employer who comes in and assumes that business will be able to come in and not be bound by the collective agreement, as a result of these changes.

It means that people who have worked, in many cases, their entire life.... And this is an industry I know something about, because I spent my teenage years and early twenties working in packing-houses; the first union I ever belonged to was the Fruit and Vegetable Workers' Union, which is now extinct. People work in those packing-houses — many of them are women, many of them are single.... It's often the only kind of industrial activity available — increasingly less so, but for years it was — and the wages have never been particularly high in that industry. They've usually followed CUPE standards in the Okanagan, and the minister is familiar with those standards. People who have spent a lifetime — 10, 20, 30, 40 years — working in that particular packing-house are being told, despite the collective agreement that they signed in good faith with their employer, that because the employer went into receivership, any new owner of this business can go out and hire off the street and pay whatever he wants to pay.

Now it's true that there's an opportunity for a union to go in and attempt to organize, but that's difficult. In that industry it was very difficult from the beginning, and there's no guarantee that it would succeed, particularly given that the employer will be able to select the persons he wants to work for him, and can, by a very careful selection of employees, make sure that he hires people who are not interested in a union.

Be that as it may, whether an organizing drive later would be successful or not is not really the issue. The fact is that we're saying to those employees who have given their life to that particular plant, that packing-house, that industry, that they, as a result of the receivership and despite having signed an agreement protecting their jobs, can have their jobs wiped out.

Interjection.

MR. GABELMANN: The member for Yale-Lillooet (Mr. Rabbitt) says that if it went into receivership their jobs would be totally wiped out. I am making an assumption here that the packing-house resumes business under new owners, whether it's the bank or the accountants running it, or whether it's brand-new owners — whatever. If the packing-house closes and never opens again, then it's a different issue altogether. There's no question of successor rights then, and so no issue.

MR. HEWITT: Let's say it opens two years later.

[ Page 1595 ]

MR. GABELMANN: Now we're wondering about the price. The member for Boundary-Similkameen says, "Say it opens two years later" — or a year later or six months later or a day later. Where's the dividing line? At the present time, under this proposed change, the dividing line is a minute later.

MR. HEWITT: Subject to the council.

MR. GABELMANN: No, not subject to the council.

Interjection.

MR. GABELMANN: Well, yes, I think you should look. We're dealing with the clause in the amendment, section 53 of the Code, which deals with bankruptcy. Let me read it: "This section does not apply" — the successor rights and obligations section — "where a business or a substantial part of it is sold, leased, transferred or otherwise disposed of by a trustee in bankruptcy under the Bankruptcy Act (Canada), unless the council is satisfied that there has been a deliberate attempt" — we've taken out the word "deliberate" — "to evade collective bargaining obligations under this Act."

In this instance there is no attempt, deliberate or otherwise, to evade collect bargaining obligations. Mac and Fitz and that operation simply went belly up.

I'm arguing that if that operation continues with new owners — and it can only continue doing the same work, sorting and grading fruit and packing it — the people who work there should have the right to continue working there. They signed a collective agreement that says they have that right. What can possibly be wrong with that? Why don't we say to those people in that community, however many there are: "If that particular business continues in operation doing the same thing under new ownership as a result of bankruptcy, yes, you can continue with your job." What is wrong with doing that?

The converse, the policy that the government has adopted, is to say no, those jobs are gone. Those people are on the street. They're on welfare or whatever happens to people over an extended period of time when they lose their job and their UI has run out. The government seems intent that new people can come in and take these jobs, but the people who have built their lives on those jobs can't have them if the new employer so chooses. That doesn't make any sense at all, particularly when people, in good faith and honesty, signed a collective agreement which guaranteed them the right to continue on.

[5:30]

I don't know why the government would want this to happen, except that it wants to be able to allow the new employer, the new owner, to hire people for less money. When you hire people for less money in a major industry in a community, you put a pressure on the wage structure in that community. When we talked earlier — more rhetorically — about the downward spiral of wages, this is what we were talking about. This isn't the major industry in this town, but it is a significant industry. And when you say to that industry that it is free, as a result of what has happened in this case and what will happen if the business starts up again.... You say to the new employer: "Go out and pay people whatever you want to pay them." It may well be that a union will come in and organize, but it may well be that it won't. Particularly in times of high unemployment, it is very difficult. What you then do is set up this system, this structure, which in fact puts a downward pressure on wages.

Why a government that proclaims itself to be so strongly akin to and in tune with the small business community would want to do that honestly baffles me. When people who work in a packing-house and make, let's say, $12 an hour — and that's a good wage in packing-houses; I could give the exact ones, but that's just in general terms — are replaced by people making $8 an hour, that will have an effect on the community along these lines: the $8-an-hour employees will be able to pay their rent; they will be able to buy their basic groceries; they will be able, over time, to buy a small car, perhaps a secondhand one. But they won't be buying new couches; they won't be buying expensive VCRs; they won't be buying new cars from car dealers in that town; they won't be spending money on what might be called optional or luxury items — going to a movie or doing a variety of other things in that community. That will have yet a further impact on the community. Other businesses will close; the marginal ones that exist will close. When that happens, more people get laid off, which drives up the unemployment rate. It begins this vicious spiral that we have argued for four years now, on this side of the House, since the restraint package came in, is destructive to our economy. We've done it rhetorically. We've done it quietly. We've done it rationally. We've done it irrationally. We've done it in a variety of ways in terms of debate in this House and outside of this House.

We have failed completely to persuade the government that they are hurting their own constituency more than almost anybody else. It's hard to comprehend why the government would be intent on that approach.

Interjection.

MR. GABELMANN: That's right, it's short-term thinking. It's counterproductive to their own political agenda, the agenda that's stated, which I believe is honestly held. It's counterproductive to all that.

I wanted to use this McLean and Fitzpatrick example because I think it clearly illustrates several things. It clearly illustrates how the downward spiral will be initiated as a result of this legislation. It also indicates an incredible lack of compassion for people's lives; for people who have invested their entire life in a job which they feel, unless major catastrophes happen in the industry, is probably theirs until they're ready to retire. If the business goes out of business, they recognize that they're out of a job, but when they watch the business come back into business and somebody else take the job they've had for decades, how do you think they feel? What does it make them think about the compassion of a government that would propose laws that would allow that? So on sheer, harsh economic terms, it's wrong. On a political agenda that the government says it has to support small business it's wrong, and on human and compassionate grounds it's wrong.

HON. L. HANSON: Madam Chairman, I hear my critic and I hear his concerns. I think he may be suggesting that bankruptcies are happening so often in such tremendous amounts that it is going to ruin organized labour in the province by this bankruptcy clause. The case that the member refers to fits. I'm very familiar with the packing-house industry. I just didn't happen to know that one because it wasn't at

[ Page 1596 ]

the north end of the Valley. But there are lots in my home riding.

But I guess as a philosophy we don't believe that two parties — and again I think that was an earlier argument — sitting down at a table should bind a third party. In the case of a legitimate bankruptcy, we just don't feel that successorship, should follow. In the case of that business being sold, then of course successorship should follow; but in the case of bankruptcy, we just don't see that as being fair and correct. I think that....

MR. WILLIAMS: You look after the bank rather than the people.

HON. L. HANSON: Well, the ex-Minister of Forests says we look after the bank rather than the people. Again, he's entitled to his opinion. It's certainly not my opinion.

The fact of the matter is that in the case of legitimate bankruptcies, the owner of that has lost everything he has anyway; and in the case of most legitimate bankruptcies there is very little left for the banker either, or for anyone else. But hopefully in the case of a legitimate bankruptcy that business will reopen and there will be a new employer providing jobs in that community. We simply believe that under those circumstances the working conditions and so on should be negotiated between that employer and its employees, and not bound by the successorship, clause.

I heard my critic say he doesn't agree with that or he doesn't believe in that. In that particular circumstance we believe that it should be that way. In the case of legitimate sales of businesses and so on, where the business is actually sold, we believe that successorship, rights should apply and that the rights and benefits that had been negotiated in the contract between the union, the employees and the employer should be honoured by the next party. But we believe that there is an interpretation at times of successorship, that isn't fair and correct in our society today; and in the case of a bankruptcy, that's when we feel it shouldn't apply.

MR. SIHOTA: Madam Chairman, I'd like to pick up on the last point that the minister made and hopefully tie it in with the question. The minister says that there are decisions made by the Labour Relations Board that it does not always consider to be proper. I'm sure I share that point of view as well. From my perspective there are decisions that are not always proper. And let me say that that will continue to be the case, no matter what happens with this legislation. There will be some cases that the minister will shake his head at, and there will be other decisions that I will shake my head at, so these amendments aren't going to stop cases from being passed that either one of us considers to be improper. That's going to continue to happen, and certainly these amendments do not go that far, thankfully, so as to come down with all sorts of cases that we consider proper or improper. So that's going to continue to happen, Madam Chairman, and there will be cases in the future that both of us will shake our heads at, for different reasons. So you haven't solved that, if that's your concern.

It's a little bit like the Criminal Code. We always hear of decisions, particularly in the news media, that we may violently disagree with, but the answer isn't to make minor or major amendments to the Criminal Code, because you still have decisions that we're going to be upset with. The point is, you try to determine what your principles are, and you hope that the vast majority of the cases that come before the adjudicating tribunal end with decisions that you can live with, because there will always be some that you can't.

Having said that, I was intrigued by the answer that the minister gave to the question I asked some time ago, because the intent in the question, really — and perhaps I didn't spell it out clearly enough — was to point out to the minister that if some contractual obligations survive, then why do other contractual obligations not survive, particularly the contractual obligations between employer and employee? But perhaps that wasn't spelled out from my end of it with the level of clarity that it should have been. But the minister, in response to that question and in response to what the member for North Island (Mr. Gabelmann) had to say at the outset, said, if I heard him right: "Look, there are a number of factors that this council is going to be looking at, and they'll base it on not one factor but a series of factors." That's clearly the way things operate now.

The Labour Relations Board will look at goodwill, logos, trademarks, customer lists, accounts receivable, employees, the hiatus in production and whether or not the relationship between the purchaser and the vendor is an arm's-length relationship. So I've listed maybe ten factors that the Labour Relations Board will look at when making these decisions.

That, I would say, is a proper way to go, and that's what I would call the sort of global approach to looking at it. I would perhaps agree that one factor in itself ought not to be the sole determinant in whether or not a successor application should go. But I don't think that was ever the case in the Thrifty's example we talked about, or in the Redskin Cedar case. In all those instances, the Labour Relations Board would look at all of the factors.

The minister has brought forward amendments to section 53 of the Code. Those amendments remove the word "assets" and talk about business in a substantial part of it. What has gone is "part of it" or "entire assets." But if the minister agrees that it's proper for the labour board to look at all of the factors, to take a global view to determine whether or not successor rights ought to apply, then why the amendment? Why the change?

I hate always asking questions this way, but why the change to eliminate the word "assets"? Should that not be one of the variables? Should it not be a variable that is given weight much as trademarks are, or logos or employees or the similarity of the operation? Similarly, should not location be one of the determining variables? If the minister agrees with this, then why the amendment? Why not let the section...? If in the past the Labour Relations Board was taking this global approach, then why the change? If the minister is saying that he wants it to continue to take the global approach, then why the change? Perhaps the minister can explain to me what the motivation was in terms of removing the provision with respect to assets or part of the business. If it was working quite well in the past, as we've said before, why try to fix it? What was wrong with the approach in the past that was sufficient to bring about the....

I see the minister has his notes there, so I am sure he will have something to say.

[5:45]

HON. L. HANSON: I am sure the member opposite knows I always have my notes.

The distinction that we feel is correct is that there should not be an impediment to the sale of assets and so on unless

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they in fact constitute the sale of a business. I think the essence of a business is easily determined. The member referred to the determination of logos and all of those other things that go along with it, that there wasn't a simple sale, there was a continuation of the operation and all the essences are all the things that involve a business. There is no doubt in our mind that if the essence of the business is sold, then that should follow. But the simple sale of assets and the simple sale of parts of the assets don't in themselves suggest that the business and all of the essence of that business have been sold.

We believe that the current reference to a part of a business or the assets of a business expands the scope for the successorship to occur. We believe that in some cases it has discouraged productive and responsible transfers of some of those assets — and beneficial ones, by the way, to the economy of British Columbia.

MR. SIHOTA: But why not also make assets a factor? I mean, if there is simply an asset sale, and if the assets are the essence of that business, then of course that factor is going to become the factor that the Labour Relations Board is going to attach the greatest weight to.

If a similarity of business is a major consideration in the minds of the board, then it is going to reflect that in its decision. It probably won't go through the list of examples that I just talked about. But why does the government want assets to be considered in a different light than all of the other things that I mentioned?

If it is simply a sale of an asset of a company, if that is all and the company remains intact, then clearly you are not going to have a problem with successors. If, on the other hand, the asset is the very essence of the company, then clearly successor rights should go. I don't think anybody in his right mind would want to create an impediment to the sale of an asset of an undertaking. But on the other hand, if that asset was the essence of it....

Perhaps the minister can tell me why he thinks that assets ought to be given different consideration than all the other factors. Should it not be thrown into the judicial pot just as all the other factors are, as one of the factors to consider? Why try to make the type of exemption you have essentially made with this section?

HON. L. HANSON: Well, again we start getting into interpretation by the IRC, but we believe — and I think the provision is quite clear on that: "Where a business or a substantial part of it is sold, leased, transferred," etc., etc. — that that will require that the board look at the asset transfer and the other things that are involved in it. I know that my friend across the way, who is a lawyer, will give me a lot of legal arguments why that is not the case, but I also have to say that the process that I have been through leads me to believe that in fact it will be a consideration.

We think that the reference to a part of a business or the assets of the business — and I think I said this earlier — did expand the scope for that successorship to apply too broadly. We believe that it discouraged productive business transfers. But we expect that assets will be a consideration when the wording that is there is considered by the new IRC where a business or substantial part of it is sold, leased, transferred or otherwise.

I can't get into a legal argument about "substantial" — whether it relates to assets or not. My advice is that it does, and my advice is that the IRC will be considering assets. But the old wording, in the government's view — and it's fairly straightforward and simple — was too broad, and we believe that there should be a narrowing of the application of the successorship, and that that application should be as it relates to a business as an entity, the essence of it.

MR. SIHOTA: I want to thank the minister for that answer, because if the minister is saying that assets will be considered, then it makes me wonder why you would want to change the section insofar as it pertains to assets. I can see — and I'll get to it later with another question — your argument, philosophically, where you're coming from, with respect to the phrase "part of it." But if you're saying that assets will still be considered, then it would seem to me to make a lot of logical sense not to have removed the reference to assets, but if you wanted to philosophically restrict it, you could have removed the reference to "part of it."

Let me get this straight by asking the minister the following question. Is he saying that his interpretation of the word "business" is such that it includes assets? In other words, a business consists of several things, one of which is assets. Is the minister saying that his interpretation of the word "business" in this section embodies assets?

HON. L. HANSON: Madam Chairman, I don't think there's any doubt or any question in anyone's mind that "business or a substantial part of it," does include assets. I don't think there's any argument; I don't think there's anyone on either side who believes that it doesn't.

MR. SIHOTA: Well, I take that to be essentially yes, to my question. I accept that and thank the minister for his answer.

Now let's deal with the other portion of the section that, if I recollect correctly, has also been removed. I think this example has been used before. Let's say a grocery store — let's say Safeway — has a unionized bakery in house, part of the grocery store operation, and it decides to sell the bakery component — in other words, part of its business. Is the minister saying that the intention in removing the words "part of it" was to allow the sale of that type of a component of the larger business without successor rights being attached to it?

HON. L. HANSON: That certainly would be determined to be a transfer of a business, because it is a discernible business within the business. I think that in the sort of case you cite — and again, I'm not going to get into a long discussion on cases, because you being a lawyer and me being a layman, you're going to have a little advantage; I'd like to have a lawyer argue with you — the wording is fair and reasonable. If a part of the business was sold and that was a discernible part, it is our understanding that the obligations would transfer with it.

MR. SIHOTA: If I understand that properly, the minister is saying that in the example that I used, a bakery being sold, the contractual obligations to the employee — in other words, the collective bargaining — would go with it, and that would be deemed a successor situation. In other words, the purchasing company would also assume the obligations of the collective agreement. Is that what the minister is saying?

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If the minister didn't hear my question, I'll ask it again. Is he saying in that type of example, where a bakery is sold out of the larger Safeway operation, that the contractual obligations or the collective agreement would go to the new purchaser? The purchaser would be obliged to honour the provisions of the collective agreement — is that what the minister is saying?

HON. L. HANSON: Well, yes. I think I can answer yes. I think that the wording that lawyers use, and the one that's been thrown at me a million times, is that.... Yes, if there is a discernible continuity, that responsibility would transfer.

MR. GABELMANN: We need to pursue that because of the deletion of the words from the original act, or part of it.

But I think it would be more appropriate to begin tomorrow morning with that particular discussion.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

HON. MR. STRACHAN: Before moving adjournment, I'll advise the House that we will sit Wednesday afternoon next.

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 5:59 p.m.

Appendix

AMENDMENTS TO BILLS

19 The Hon. L. Hanson to move, in Committee of the Whole on Bill (No. 19) intituled Industrial Relations Reform Act, 1987 to amend as follows:

SECTION 28 (b), by deleting the proposed section 52 (8) and substituting the following:

(8) Where an employer applies to the council for cancellation of the certification of a trade union as bargaining agent for his employees in a bargaining unit on the ground that the employer has not, during the 2 years immediately preceding the application, employed any person as an employee in the bargaining unit, the council shall forthwith inquire into the matter and shall complete its inquiry within 30 days after the date of the application.

(8.1) Where, on completion of the inquiry required by subsection (8), the council is satisfied that the employer has not, during the 2 years immediately preceding the application, employed any person as an employee in the bargaining unit and that the conduct of the employer is in the circumstances of the matter fair and reasonable, the council shall cancel the certification.

SECTION 29 (b),

(a) by deleting the proposed subsection (1.1) and substituting the following:

(1.1) For the purposes of this section, the skills or abilities of an individual do not of themselves constitute a business. , and

(b) in the proposed section 53 (1.3) by deleting "a deliberate attempt" and substituting "an attempt".