The British Columbia Labour Relations Board recently ruled that although a new employer was obligated to negotiate a collective agreement with the union, the recent purchaser of the company was not bound to the current collective agreement. The employer had challenged the validity of a collective agreement which was negotiated while the sale of the business was being finalized. The union claimed that the collective agreement was valid because the management bargaining committee had ostensible authority to bargain on behalf of the new owners.
The Labour Relations Board concluded that the union was aware the business was being sold. The Board also found that the members of the management bargaining committee were never held out as employees of the new employer and that the union ought to have clarified the authority of the bargaining committee. The Board accordingly ruled that the collective agreement was not valid.