Sobeys Collective Agreement

1. To avoid an erosion of bargaining rights 2. Removal of roadblocks for viable tariff structures 3. To ensure that a union representing workers can deal directly with the person who has real economic control over them (not with someone who is only on behalf of the employer), United Food and Commercial Workers International (the Union) and Safeway negotiated a collective agreement lasting from April 1, 2013 to March 31, 2023. The collective agreement contains a re-opening clause for mid-contract negotiations. It also contains an article stating that Sobeys and the Union will enter into negotiations for an appropriate collective agreement for professional activity if Sobeys decides to open stores under a new banner. Sobeys and the franchisees (with respondents) stated that the form of the business relationship they were adopting was not a new approach and that the franchise relationship with which the Union was involved was not fundamentally related to other long-standing franchise agreements in Canada. 6. The interaction and interdependence of operations.

The Board of Directors found that all of the following points were favourable to the interaction of operations: that franchisees had benefited from Sobey`s competitive price creation; manage Safeway store transformations at their own expense in Fresco stores; Create the initial inventory and transfer operations through the franchising agreement. The board also found that the franchisees benefited from sobeys providing pharmacy and lottery services through franchisees whose profits benefit sobeys. In addition, the Commission considered that the shareholders` pact was a relevant factor, given that Sobeys, by its structure, took the power to control franchisees. 4. Industrial Relations Control. The Board of Directors agreed that franchises, in addition to certain Sobeys participations in the initial phase, were solely responsible for labour relations, including recruitment, dismissal, discipline, budgeting, timing and complaint management. Sobeys provided staff, but there was no obligation for franchisees to follow Sobey`s advice. Similarly, the activity of paying service provider and the provision of uniforms that franchise staff do not have to endure were factors that favoured the respondent`s position. Sobeys, however, requires some training and, although Sobeys dissociates itself from the dismissal decisions of employees who fail the training, Sobeys acknowledged that the franchisee`s decision to retain such employees could jeopardize the franchise agreement, which the Board found to be a remarkable example of labour relations control. Sobeys operates a national wholesale and retail trade in the food retail trade in different retail food formats, each with different “banners” (trade names) and different market benchmarks. For several decades, Sobeys has entered into franchise agreements with franchisees to operate stores across Canada. Franchisees operate their own retail business under one of the Sobeys service formats and banners, while Sobeys operates a wholesale business that provides products and branding to franchisees.

The two banners relevant to the application in this case are “Safeway” and “FreshCo.” 5. Common management.

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