Building Service Providers: Giving Way To Broader-Based Bargaining Rights

The Labour Relations Act, 1995 ("LRA") deems that a sale of business occurs when a building security, cleaning or food services provider loses its contract at a building and is replaced by another building services provider. If the existing service provider was bound to a collective agreement, the employees working at the building at the time of the contract turnover will not only be permitted to maintain their employment with the new employer but will also continue to be represented by the same union under the existing collective agreement.

There are two main consequences of these "deemed sale" provisions. The first is that they restrain competition and discourage non-union building service providers from bidding on work being performed by unionized employees. There is no relief for a non-union building services provider from becoming unionized at the site following a deemed sale of business.