A-343-74
In re the Canada Labour Code and in re an order
issued by the Canada Labour Relations Board
wherein the said Board purported to certify Team
sters Local 419 as the Bargaining Agent for a
Unit of Employees of Cannet Freight Cartage
Limited
Court of Appeal, Jackett C.J., Heald J. and Hyde
D.J.—Ottawa, June 26 and 27, 1975.
Judicial review—Labour relations—Canada Labour Rela
tions Board certifying bargaining agent for unit of employees
engaged in freight forwarding business—Whether Board has
jurisdiction—Whether employees employed "upon or in con
nection with ... any federal work,, undertaking or business"—
Canada Labour Code, R.S.C. 1970, c. L-1, ss. 2, 108—British
North America Act, s. 92(10)(a)—Industrial Relations and
Disputes Investigation Act, S.C. 1948, c. 54, s. 53.
The Board certified a bargaining agent for a unit of
employees who loaded freight on railway cars for transport by
Canadian National Railway. Applicant, engaged with an
associate company in the freight handling business, objected on
the ground that the Board lacked jurisdiction. Two bases for
upholding the decision were advanced. (1) The loading of
boxcars is an integral part of, or necessarily incidental to the
operation of a railway. (2) The employees, as part of an
integrated service involving both companies, were part of an
undertaking involved in the interprovincial distribution of
goods. ,
Held, setting aside the Board's order, the Board did not have
jurisdiction.
Per Jackett C.J.: (1) Employees were not employed upon or
in connection with the C.N. railway. They were employees of
applicant, loading freight under arrangements whereby loading
was done by the shipper and not by railway employees. (2)
Activities do 'not constitute an undertaking under section
92(10)(a) of the British North America Act, or within the
definition of "federal work, undertaking or business" in the
Canada Labour Code; the only interprovincial undertaking is
the C.N. interprovincial railroad.
Per Heald J.: (1) Applicant's entire sphere of operation is ,
local; it is C.N. that transports the cars interprovincially.
Cannet's employees are engaged in Cannet's business, not
C.N.'s. '(2) A shipper from one province to another does not by
such activity, become the operator of the railway; it is unimpor
tant to determine whether the two forwarding companies are
separate or integrated entities.
Per Hyde D.J.: (1) The situation is similar to the Murray
Hill Limousine situation. C.N. did not provide applicant's
services for its customers. Unlike the Eastern Canada Steve-
doring situation, services were not "pursuant to contracts
... with shipping companies to handle all loading and unload
ing of their ships".
In re validity and applicability of the Industrial Relations
and Disputes Investigation Act [1955] S.C.R. 529 and
Letter Carriers Union of Canada v. Canadian Union of
Postal Workers [1975] 1 S.C.R. 178, distinguished.
Harris v. Best Ryley & Co. (1) 7 Asp. M.C. 274; Butler
Aviation of Canada Ltd. v. International Association of
Machinists [1975] F.C. 590, applied. Murray Hill Limou
sine Service Ltd. v. Batson [1965] Q.B. (Que.) 778, agreed
with.
JUDICIAL review.
COUNSEL:
J.' Roland for applicant.
R. Cumine and G. F. Henderson Q.C., for
respondent.
SOLICITORS:
Osler, Haskin & Harcourt, Toronto, for
applicant.
McLean, Lyons & Kerr, Toronto, for
respondent.
Gowling & Henderson, Ottawa, for
respondent.
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is a section 28 application to
set aside an order of the Canada Labour Relations
Board certifying a bargaining agent for a unit of
the applicant's employees on the ground that the
Board was without jurisdiction to make the order.
The facts are not in dispute. The applicant is a
company related to Cottrell Forwarding Company
Limited, which company is engaged, as its name
indicates, in a business of the class sometimes
referred to as freight forwarding. Cottrell solicits
freight from customers in the Toronto area for
forwarding to Western Canada and makes the
necessary arrangements with Canadian National
Railway Company for the transportation of such
goods in carload lots; and the applicant picks such
goods up by trucks operated by independent con
tractors and takes them to premises leased from
Canadian National where the employees in ques-
tion remove them from the pickup trucks onto its
dock and load and stow them in the railway cars
provided by Canadian National pursuant to the
arrangements made by Cottrell. Cottrell makes all
arrangements with the customers and Canadian
National; and arranges for unloading, etc., at t the
other end.
It is common ground that, under section 108 of
the Canada Labour Code, the Board had jurisdic
tion to make the order under attack if, and only if,
the employees in question are employed "upon or
in connection with the operation of any federal
work, undertaking or business" as defined by sec
tion 2 of the Code, which reads in part:
"federal work, undertaking or business" means any work,
undertaking or business that is within the legislative author
ity of the Parliament of Canada, including without restrict
ing the generality of the foregoing;
(b) a railway... or other work or undertaking connecting
any province with any other or others of the provinces, or
extending beyond the limits of a province;
Counsel for the Union and the Board supported
the Board's jurisdiction on the basis that the
employees in question were employed upon or in
connection with the operation of an interprovincial
railway and, alternatively, on the basis that they
were employed on an undertaking (the freight
forwarding operation) extending beyond the limits
of a province.
The first contention was based, essentially, on
the fact that the employees in question are
employed, in so far as their physical activities are
concerned, in the loading of freight on railway cars
for transportation by Canadian National, which
operates an interprovincial railway, and was sup
ported by reference to the Eastern Canada Steve-
doring Company Limited case,' as well as to the
recent decision of this Court in the Butler Aviation
case 2 .
In my view, whether or not employees whose
work is physically upon or in connection with a
railway may be said to be employed "upon or in
[1955] S.C.R. 529.
2 [1975] F.C. 590.
connection with" the railway within section 108
read with section 2 of the Canada Labour Code
must be determined, keeping in mind the constitu
tional limitations on Parliament's powers in the
labour field, having regard to the circumstances in
which the work takes place. Clearly a person
employed by the railway company to carry out a
part of the transportation services provided to its
customers falls within those words even though he
does not physically come in touch with the right-
of-way or rolling stock. Just as clearly, a person
working for a local business man in a province
does not fall within those words even though his
work, in connection with that man's purely local
operation, requires that he perform a large part or
all of his services physically on the railway's right-
of-way or rolling stock.
For example, if the railway has pick-up service
in a city as a part of its overall transportation
service, I should have thought that the employees
concerned would be regarded as employed in con
nection with the railway. If, on the other hand, the
railway merely supplies railway cars to its custom
ers to be loaded by them and unloaded by con-
signees, I should have thought that the employees
of the consignor, while loading the car for their
employer, would continue, from a constitutional
point of view, to be working upon or in connection
with their employer's business and would not pro
tern become railway workers.
When the problem in this case is so approached,
in my view, it is clear that the employees in
question were not employed upon or in connection
with the Canadian National Railway. They were
employees of the applicant loading freight on a
railway car under arrangements whereby the car
was to be loaded by the shipper and not by railway
employees.
I have even less trouble with the submission that
the freight forwarding operation was an undertak
ing connecting one province with another or
extending beyond the limits of a province. Even if
the applicant's activities and those of the Cottrell
Company are viewed as integral parts of a whole,
in my view they do not constitute an "undertak-
ing" that falls within section 92(10)(a) of the
British North America Act or within the definition
of "federal work, undertaking or business" in the
Canada Labour Code. In my view, the only inter-
provincial undertaking involved here is the
Canadian National interprovincial railway. Clear
ly, a shipper on that railway from one province to
another does not, by virtue of being such a shipper,
become the operator of an interprovincial under
taking. If that is so, as it seems to me, the mere
fact that a person makes a business of collecting
freight in a province for the purpose of shipping it
in volume outside the province by public carrier,
does not make such a person the operator of an
interprovincial undertaking.
In my view, the Board, on the evidence before it
in this case, did not have jurisdiction to make the
order attacked and it should be set aside.
* * *
The following are the reasons for judgment
delivered orally in English by
HEALD J.: This is a section 28 application to
review and set aside a decision of the Canada
Labour Relations Board (hereafter the Board) cer
tifying Teamsters Local 419 as the bargaining
agent for a unit of employees of Cannet Freight
Cartage Limited (hereafter Cannet). The sole
issue before the Board and on this application is
whether the Board has jurisdiction to make the
order.
The evidence which the Board had before it in
reaching the decision that it had jurisdiction estab
lished that Cannet, an Ontario corporation, began
operations in 1969 in the freight cartage business.
Cannet conducts its business pursuant to a public
commercial vehicle operating licence issued by the
Ontario Ministry of Transportation and Com
munications under which it is authorized to carry
goods within an area described in the licence as
being in the vicinity of and including Metropolitan
Toronto. Cannet carries goods from the premises
of customers to its own premises in Concord,
Ontario, where the goods are unloaded by its
employees onto docks and from there loaded by its
employees onto freight cars supplied by the CNR
which cars are pulled into three sidings alongside
said docks. Cannet organizes the rail cars on a
pool car basis so that the goods of more than one
customer will frequently be loaded into the same
car for eventual shipment to Western Canada
where most of said freight is destined. The prem
ises used by Cannet are rented from the CNR on
the basis of the tons of freight handled and Cannet
also pays the CNR for the rail service in providing
the sidings and the railway cars. The cartage
operation is performed for Cannet by independent
truckers, who own the vehicles used for cartage
purposes. These vehicles are, however, licensed
under Cannet's operating licence from the Ontario
Ministry of Transportation.
Said independent truckers are directed to their
destinations by a dispatcher who is an employee of
Cannet but who is not included in the bargaining
unit herein certified. If Cannet is required to pick
up freight outside the area of its licence it uses
other carriers but all freight which is picked up is
within Ontario. Cannet is a related company to
Cottrell Forwarding Company Limited (hereafter
Cottrell) although the exact nature of the relation
ship was not made clear at the Board hearing
other than the fact that the President of Cannet
appears to be a Vice-President of Cottrell. Cottrell
solicits freight from customers who wish to ship it
to Western Canada. Cannet provides the loading
and cartage services as described supra and is paid
for these services by Cottrell. Cottrell bills the
customer for the entire service including pick up,
loading, shipping and unloading. Cottrell obtains
the orders for shipping from customers and pro
vides all bookkeeping, accounting, management
and sales services.
In my opinion, the Board erred in law, in con
cluding on the evidence before it that it had juris
diction under section 108 of the Canada Labour
Code over Cannet's employees. Accordingly, the
Board's decision certifying Teamsters Local 419 as
the bargaining agent for Cannet's employees
should be set aside.
Counsel urged, before us, a twofold basis for
upholding the Board's jurisdiction on the facts
here present. The initial basis urged upon us was
that the loading of boxcars as performed by
Cannet is an integral part or necessarily incidental
to the effective operation of a railway and as such,
legislation in relation thereto can only be compe
tently enacted by the Parliament of Canada. The
main authority advanced in support of this submis
sion is the Eastern Canada Stevedoring Co.' case
and particular reference was made to the judg
ments therein of Estey J. at pages 568 and 569, of
Locke J. at page 578 and Taschereau J. at page
543. In that case, Eastern Canada Stevedoring
supplied stevedoring and terminal services in
Toronto consisting exclusively of services rendered
in connection with the loading and unloading of
ships, pursuant to contracts with seven shipping
companies to handle all loading and unloading of
their ships arriving and departing during the
season. All these ships were operated on regular
schedules between ports in Canada and ports out
side of Canada.
In - my opinion, the factual situation in that case
is quite different from that present in the case at
bar. It is clear from page 578 of the judgment of
Locke J. that he reached his conclusion "upon the
ground that, upon the facts stated in the reference,
it appears that the loading and unloading of cargo
are part and parcel of the activities essential to the
carriage of goods by sea, and that, as in the case of
the seamen, legislation for the regulation of the
relations between employers and employees is, in
pith and in substance, legislation in relation to
shipping." Likewise, Taschereau J. at page 543
quoted with approval the following statement by
Lord Esher in Harris v. Best Ryley & Co. (1) (7
Asp. M.C. 274):
Loading is a joint act of the shipper or charterer and of the
ship owner, neither of them is to do it alone but it is to be the
joint act of both ... by universal practice the shipper was to
bring the cargo alongside so as to enable the ship owner to load
the ship ... it is then the duty of the ship owner to be ready to
3 [1955] S.C.R. 529.
take such cargo on board and to store it on board. The stowage
of the cargo is the sole act of the ship owner. [Emphasis is
mine.]
These two statements serve to emphasize the
clear difference between a shipping operation and
a railway operation. The factual situation in this
case is rather the exact reverse of the situation in
Eastern Canada Stevedoring. In the Eastern
Canada Stevedoring case (supra), the shipping
companies engaged Eastern Canada Stevedoring
to load and unload whereas, in the case at bar,
Cannet, in the course of its business rented from
the CNR railway cars and loaded those cars with
goods belonging to Cannet's customers in the
Toronto area. Cannet's entire sphere of operation
in its business is local, i.e., the Toronto, Ontario
area. It is the CNR that is in the business of
transporting the railway cars and their contents
across provincial boundaries, not Cannet. The fac
tual situation here present, is somewhat akin to the
situation of a grain elevator company or an
individual farmer in Western Canada who engages
the CNR to provide it or him with a grain car in
which grain is shipped to Thunder Bay or Vancou-
ver. I doubt that it could be seriously argued that
the employees of the elevator company or the
farmer's hired man who actually loaded the grain
into the railway car would come under the juris
diction of the Canada Labour Relations Board.
The hired man is engaged in the farmer's business
and the employee of the elevator company is
engaged in the business of the elevator company.
In the same manner, Cannet's employees are
engaged in Cannet's business, not in the railway
business.
The second basis advanced by counsel was that
Cannet's employees, as part of an integrated ser
vice involving both Cannet and Cottrell were part
of an undertaking involved in the interprovincial
distribution of goods, i.e., moving goods from east
to west. In support of this proposition, counsel
referred us to the case of Letter Carriers' Union of
Canada v. Canadian Union of Postal Workers'.
[1975] I S.C.R. 178.
However, in my view, that case is clearly distin
guishable from the case at bar, in that the letter
carriers' situation is similar to the stevedoring
situation, that is, the Post Office engaged the
company to handle and carry mail—a necessary
and integral part of the responsibility imposed
upon the Post Office by statute—again—a reverse
situation to the situation here present where
Cannet in effect rented railway cars from the
CNR. I agree with the view expressed by the Chief
Justice that the only interprovincial undertaking
involved in this case is that of the CNR and that a
shipper on that railway from one province to
another does not, by such activity, become the
operator of an interprovincial undertaking. On this
view of the matter, it becomes unimportant to
determine, on the facts of this case, whether
Cannet and Cottrell are to be treated as separate
entities or as part of an integrated operation.
For the foregoing reasons, I would set aside the
Board's order.
* * *
The following are the reasons for judgment
delivered orally in English by
HYDE D.J.: I share the views of the Chief
Justice that the respondent Board did not have
jurisdiction to make the order attacked by the
applicant but as I participated in the decision in
Butler Aviation of Canada Limited' rendered on
May 22, 1975, in which, on different facts, the
Court held that the Board did have jurisdiction, I
think it not inappropriate to add a few words of
my own.
As noted in my reasons in the Butler case, the
test applied by the Supreme Court in cases of this
nature, both under the Industrial Relations and
Disputes Investigation Act 6 and the Canada
Labour Code, its successor statute is whether the
business of or services supplied by the employer "is
an integral part of or necessarily incidental to the
operation of a federal work, undertaking or
5 [1975] F.C. 590.
6 S.C. 1948, c. 54, s. 53.
business"'.
In that case, we distinguished the decision of the
Quebec Court of Appeal in Murray Hill Limou
sine Service Limited v. Batson' which held that
the porters provided by the employer at the Mont-
real Airport were engaged in a work within provin
cial jurisdiction, being for the convenience of the
passengers, Montgomery J. saying (page 785):
Their services were not provided for the passengers by the
airlines as one of the services incidental to the purchase of a
ticket ....
While that was not the situation we had to deal
with in the Butler Aviation case (supra) it is, to all
intents and purposes, the type of thing we have
before us today. The CNR did not provide the
services of Cannet or Cottrell for its freight cus
tomers. These were offered to the public by the
latter who then on behalf of those customers
picked up the goods and placed them in the CNR's
cars which had been put at the latter's loading
platform for that purpose.
Unlike the situation in the Eastern Canada
Stevedoring 9 case, the services rendered by the
applicant were not "pursuant to contracts with .. .
shipping companies to handle all loading and
unloading of their ships."
For these and the reasons given by the Chief
Justice, I would set aside the order of the Board
for want of jurisdiction.
7 See reference in In re Validity of Industrial Relations and
Disputes Investigation Act [1955] S.C.R. 529 at p. 566 and
Letter Carriers Union v. C.U.P. W. [1975] 1 S.C.R. 178.
s [1965] Q.B. 778.
9 [1955] S.C.R. 529.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.