Labor laws in Canada provide that the purchaser of a business will generally “take over” any collective bargaining agreements (CBAs) between a union and the vendor. The purchaser becomes the “successor employer” and becomes bound by the vendor’s existing CBAs. In this situation, the union continues to represent unionized employees after the sale or transfer of the business to the new owners or operators.
In addition to the continuation of bargaining rights after a sale or transfer, two companies that are under “common control or direction” can be held to constitute a single or common employer for labor relations purposes. Such a finding can mean that the union’s bargaining unit encompasses employees of both companies.