If your Toronto building's cleaners are unionized and you hand the contract to a different company, Ontario law usually treats the switch as a sale of a business. Under section 69.1 of the Labour Relations Act, 1995, the incoming contractor inherits the union's bargaining rights and the collective agreement for that site. That changes what bids should look like, how fast a changeover can happen and what you can realistically save.
Most property managers only hear about this rule after a tender closes, when the cheapest bidder discovers it cannot pay the wages it priced. Knowing it before you go to market saves a lot of rework.
Where the rule comes from
Ontario has long had successor rights in section 69 of the Labour Relations Act: when a business is sold, the buyer steps into the seller's union obligations. For years, losing a cleaning contract to a competitor did not count as a sale, because the two contractors had no business dealings with each other. A building could end a unionized cleaning contract, retender it, and a non-union company could start fresh.
Bill 148 (the Fair Workplaces, Better Jobs Act, 2017) changed that for building services. From January 1, 2018, section 69.1 deems a sale of a business to have happened when one building services provider replaces another at the same premises. The province rolled back several Bill 148 measures through Bill 47 in 2018, but the building services successor rule stayed in place.
What counts as building services
Section 69.1 applies to services provided for a building, which the Act and regulation describe to include cleaning, food services and security. Typical cases in Toronto:
- Office towers and commercial buildings that contract out nightly janitorial work
- Condominium corporations and property management firms retendering cleaning or security
- Hospitals, universities and other institutions using outside cleaning companies
- Retail centres and mixed-use properties with contracted day porters
The rule follows the work at a specific premises. It does not matter whether the outgoing and incoming companies ever spoke to each other.
What the new contractor takes on
When section 69.1 applies, the incoming cleaning company becomes bound by the union's bargaining rights at that site. In practice this usually means:
- Recognizing the union that represented the outgoing contractor's cleaners at your building
- Being bound by the existing collective agreement, including its wage rates, premiums and benefits
- Handling grievances and bargaining under that agreement once it expires
A recent Ontario Labour Relations Board decision (March 2026, involving a security contract transfer) confirmed that the Board takes the remedial purpose of section 69.1 seriously. It declined to wipe out a union's rights just because the new provider's workforce had blended with its own staff at the site.
Section 69.1 does not force the new company to hire every person who worked for the old one. Labour lawyers in Ontario also point to separate exposure: courts have looked at whether incoming providers carry obligations to employees of the previous contractor. That area of the law is still moving, so contractors bidding on large Toronto sites build it into their pricing.
Why it matters to owners and property managers
Your building is not the employer, but the rule still shapes your contract:
Bids built on non-union rates may not hold. A bidder who prices your tower at its usual non-union wage and then inherits a collective agreement has a gap to close. That gap tends to show up as reduced staffing, change orders or an early exit.
Changeovers take more paperwork. The new contractor needs the collective agreement, a list of covered positions and the hours worked at the site to price correctly. Share them in the tender package where you can.
Savings come from scope, not wages. When labour rates carry over, a cheaper contract usually means fewer hours, a different frequency, better equipment or reworked routes. Those are legitimate savings, but they should be visible in the bid rather than hidden.
The Employment Standards Act, 2000 also contains rules for building services providers, including information the outgoing provider may have to give the owner so it can be passed to bidders. Check the current text of the Act and its regulations on Ontario's e-Laws site, or ask your counsel, before you rely on any summary, including this one.
Planning a retender in Toronto
A smooth changeover in a unionized building usually follows these steps:
- Confirm whether the current cleaning staff at your site is covered by a collective agreement, and get a copy.
- Gather site data: square footage by area type, current hours per night, number of positions, day porter coverage and specialty work such as floor care or high dusting.
- Tell bidders in the request for proposal that section 69.1 may apply, and ask them to price under the current collective agreement.
- Ask each bidder to show labour hours separately from supplies, equipment and management fees.
- Build a 30 to 60 day transition window into the contract so keys, alarm codes, supply rooms and schedules hand over cleanly.
If you are comparing scopes before you tender, our commercial cleaning services page lists the routine and periodic work most office and mixed-use buildings include. For Toronto price context, the Toronto pricing guide covers typical cost factors by building type.
Questions to put to bidders
- Have you taken over a site where section 69.1 of the Labour Relations Act applied? How did the transition go?
- Is your price based on the wage scale in our current collective agreement?
- How many labour hours per week does your price include, and how did you calculate them?
- Who on your team handles the union relationship and grievances at our site?
- What happens to your price if the collective agreement is renegotiated during our term?
Vague or surprised answers to the first two questions are a warning sign, whatever the price.
Frequently asked questions
Does section 69.1 apply if our current cleaners are not unionized?
No union means no bargaining rights to carry over, so the successor rule has nothing to transfer. Employment standards still apply to every worker, and the incoming contractor sets its own terms with its own staff. It is still worth confirming the status with your current provider, since organizing campaigns can be under way without the building knowing.
Can we avoid successor rights by bringing cleaning in-house?
Section 69.1 is written around one building services provider replacing another, so an in-house move raises different questions under the Act. Whether it escapes successor rights depends on the facts, and a switch made to sidestep a collective agreement is the kind of move the Labour Relations Board looks at closely. Get labour law advice before choosing that route.
Does the new contractor have to hire the same cleaners?
Not under section 69.1 alone; the rule transfers the union's rights and the collective agreement, not a duty to keep each person. Many incoming contractors do offer positions to experienced site staff because they already know the building. Recent court decisions on obligations to the previous contractor's employees are another reason bidders plan the staffing transition carefully.
Is there a similar rule in Quebec or New York?
Quebec handles this mainly through the Labour Code's successor provisions and decrees that set minimum conditions for building cleaning in some regions. New York City has a 90-day worker retention law for building service contracts. Each works differently, so check the rules where your building sits.
Get a quote for your Toronto building
Tell us about your facility, its size, its schedule and whether a collective agreement covers the current cleaning staff, and we'll connect you with a commercial cleaning team that serves Toronto. Start on our contact page.