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Slaw: No continuity of business: Target not the successor employer of Zellers employees

Written with Christina Catenacci LL.B.

On November 8, 2012, Ritu Mahil, Vice-Chair of the British Columbia Labour Relations Board decided that there was not a continuity between Zellers’ business at the Brentwood Mall in Burnaby, B.C. for its employees to be successively employed by Target in Canada. Although the employees would perform similar jobs at Target stores as they had at Zellers, and the transaction agreement confirmed the transfer of leases, pharmacy records and the brand waiver, these things were not sufficient to conclude that there would be a handover of these employees. As a result, the union’s application under Section 35 of the Labour Relations Code (“Code”) for a declaration that Target is a successor employer to Zellers with respect to the business carried on by Zellers at the Brentwood Mall in Burnaby, B.C.was dismissed.

Facts of this case

As it has been widely publicized, Target transacted with Zellers in 2011 with a purchase price of $1.825 billion dollars to have the right to select up to 220 leasehold interests held by Zellers. The goal was to convert the locations into Target stores.

The union at the one location at the Brentwood Mall represented 137 employees in the bargaining unit. There was a collective agreement in force up until March 31, 2013, and Zellers continued to operate 223 stores in Canada.

Subsequently, in July 2012, Zellers announced the closure of the Brentwood Store effective March 14, 2013.

The union argued Target was the successor employer under Section 35 of the Code:

To read more, look at my latest post on Slaw.

Christina Catenacci and Yosie Saint-Cyr
First Reference Human Resources and Compliance Editors

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Yosie Saint-Cyr

Managing Editor at First Reference Inc.
Yosie Saint-Cyr, LL.B., is a trained lawyer called to the Quebec bar in 1988 and is still a member in good standing. She practiced business, employment and labour law until 1999. For over 15 years, Yosie has been the Managing Editor of the following publications, Human Resources Advisor, Human Resources PolicyPro, HRinfodesk and Accessibility Standards PolicyPro from First Reference. Yosie is one of Canada’s best known and most respected HR authors, with an extensive background in employment and labour across the country. Read more
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