A-383-78
Canadian Air Line Employees' Association
(Applicant)
v.
Wardair Canada (1975) Ltd., International Vaca
tions Ltd. and the Canada Labour Relations
Board (Respondents)
and
Canadian Association of Passenger Agents (Inter-
ested Party)
Court of Appeal, Jackett C.J., Urie J. and Kelly
D.J.—Toronto, February 6 and 7, 1979.
Judicial review — Labour relations — Application for
certification of group of employees of a company involved in
air ticket sales and in corporate relationship to air carrier —
Canada Labour Relations Board declined jurisdiction because
employer was not 'federal work, undertaking, or business" —
Whether or not Board wrongfully refused to accept jurisdic
tion — Canada Labour Code, R.S.C. 1970, c. L-1, s. 133 —
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
This is a section 28 application to set aside a decision of the
Canada Labour Relations Board dismissing (a) an application
by the applicant for certification for a unit of employees
employed as "passenger agents" by Wardair and employees
employed as "customer representatives" by Intervac and (b) an
associated application that the two respondents and their
works, undertaking or businesses be declared to be a single
employer and a single work, undertaking or business, respec
tively. Wardair carried on an air transport business restricted
to chartering its seating capacity to other companies and
• Intervac, a tour operator with a corporate relationship with
Wardair, chartered a large proportion of Wardair's seating
capacity. Although much of Intervac's seating capacity was
marketed through travel agencies, some was sold through "cus-
tomer representatives" who were the subject of the application
for certification. The sole basis for this section 28 attack is that
the Board wrongfully refused to accept jurisdiction when it
based its decision on its conclusion that Intervac's operation
was not a "federal work, undertaking or business".
Held, the application is dismissed. Where the air carrier, as
it is required to do by regulation, sells its space "wholesale" to
somebody who "retails" it, the selling activities of the air
carrier cease when it has sold what it has to sell and the re-sale
by the wholesaler is a local activity in the province where it
occurs. Even though Wardair and Intervac are related compa
nies, no case has been made out on the facts that Intervac was
being employed as an agent to carry on a part of Wardair's air
carrier business on its behalf for Wardair could not sell directly
to passengers. Intervac's position as between the air carrier and
the passengers is not different, from a constitutional point of
view, from the position of any ordinary travel agency. For
reasons given in the Cannet Freight Cartage case, persons
employed by Intervac as "customer representatives" are not
employed on or in connection with air carrier undertakings by
whose aircraft Intervac's customers are carried.
In re Cannet Freight Cartage Ltd. [1976] 1 F.C. 174,
followed. Stevedoring Reference [1955] S.C.R. 529, distin
guished. C.S.P. Foods Ltd. v. C.L.R.B. [1979] 2 F.C. 23,
distinguished.
APPLICATION for judicial review.
COUNSEL:
D. J. Wray for applicant.
P. G. Ponting and I. C. Wilkie for respondents
Wardair Canada (1975) Ltd. and Interna
tional Vacations Ltd.
G. W. Adams for respondent, Canada Labour
Relations Board.
W. L. Nisbet, Q.C. for Deputy Attorney Gen
eral of Canada.
SOLICITORS:
Caley & Wray, Toronto, for applicant.
McLennan, Ross, Taschuk & Ponting,
Edmonton, for respondents Wardair Canada
(1975) Ltd. and International Vacations Ltd.
Cassels, Brock, Toronto, for respondent
Canada Labour Relations Board.
Deputy Attorney General of Canada for
Deputy Attorney General of Canada.
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is a section 28 application to
set aside a decision of the Canada Labour Rela
tions Board dismissing
(a) an application by the applicant for certifica
tion for a unit of employees employed as "pass-
enger agents" by the first respondent (hereafter
referred to as "Wardair") and employees
employed as "customer representatives" by the
second respondent (hereafter referred to as
"Intervac"), and
(b) an associated application, under section 133
of the Canada Labour Code, R.S.C. 1970, c.
L-1, that the two respondents and their works,
undertaking and businesses be declared to be a
single employer and a single work, undertaking
or business, respectively.
The sole basis for this section 28 attack on that
decision is, as I understand it, that the Board
wrongfully refused to accept jurisdiction when it
based its decision on its conclusion that Intervac's
operation was not a "federal work, undertaking or
business".
As I understand what has to be decided on this
section 28 application, it is, in effect, whether the
employees in question were employees in relation
to whom Parliament had authority to make a law
such as Part V of the Canada Labour Code as
being employees on, or in connection with, a work,
undertaking or business in relation to which Par
liament can legislate under its jurisdiction con
cerning "aeronautics" as recognized by the
Aeronautics case and the Johannesson case. 2 * If
they were such employees, the Board wrongfully
refused jurisdiction. If they were not such
employees, the Board did not have the necessary
jurisdiction.
After hearing argument for the applicant, the
Court has come to the conclusion that the section
28 application should be dismissed. I agree with
the Board's conclusion, which was, in effect, as I
understand it, that Intervac's customer representa
tives were not, on the evidence before the Board,
employed upon or in connection with a work,
undertaking or business in relation to which Par
liament has legislative authority to make a law
' [1932] A.C. 54.
2 [1952] 1 S.C.R. 292.
* The matter was argued on the assumption that Parlia
ment's legislative authority re aeronautics extends not only to
the making of laws in relation to aeronautical navigation but
also to making laws in relation to the carriage of goods or
passengers by air. Having regard to my conclusion, it is not
necessary to consider the validity of this assumption. In saying
this, I do not intend to express any doubt as to its validity.
such as Part V of the Canada Labour Code; and,
generally speaking, I agree with the reasoning
whereby the Board reached that conclusion. 3
This Court has not been asked to receive any
evidence in support of this section 28 application
but has been asked to find, on the evidence that
was before the Board, that the employees in ques
tion were employed upon or in connection with a
"federal work, undertaking or business". 4 More
over, the applicant did not attack the accuracy or
completeness of the Board's findings of fact based
on that evidence. I do not, therefore, propose to
repeat those findings at length. It is sufficient to
mention the following:
(1) Wardair carried on an air carrier business,
which consisted of transporting persons by air
under regulations that restricted it to "charter-
ing" its seating capacity to other companies,
known as tour operators, who acquired the right
of "marketing" that seating capacity to others;
(2) Intervac had a corporate relationship with
Wardair and was a tour operator which char
tered a very large proportion of Wardair's seat
ing capacity as well as some seating capacity of
other air carriers and which also carried on
other activities of the kind carried on by travel
agencies;
(3) Intervac "marketed" 80 per cent of the
seating capacity that it had chartered through
travel agencies who operated as "retailers" and
the balance through "customer representatives"
who were its employees and who were the sub
ject of the application for certification;
(4) The only relevant air carrier business or
undertaking was that carried on by Wardair or
some other charter operator.
3 In saying this, I do not intend to express agreement with the
statements or opinions in the Board's reasons that are not part
of what had to be decided. For example, I have formed no view
as to whether an undertaking such as Wardair's falls within
paragraph (e) of the definition of "federal work, undertaking or
business" in section 2 of the Canada Labour Code or whether it
falls within the introductory words of that definition.
° One of the grounds for a section 28 attack upon a decision
of a tribunal is that the tribunal wrongfully refused jurisdiction.
Such an attack could, I should have thought, be based on
evidence adduced in this Court. For present purposes, I assume
that it can, alternatively, be based on evidence that was before
the Board.
It is not feasible to make a detailed analysis of
the relevant decisions if this section 28 application
is to be disposed of at this time. In my view,
however, their general effect may be summarized
without such an analysis; and, in my view, it is
more important, having regard to section 28(5) of
the Federal Court Act, R.S.C. 1970 (2nd Supp.),
c. 10, to dispose of this section 28 application
expeditiously than it is to take time to document
what, in my view, is reasonably clear law. 5
Generally speaking, labour laws, i.e., laws regu
lating the relations between an employer and his
employees, fall within the legislative powers of the
provincial legislatures. Where, however, legislative
power in relation to a work, undertaking or busi
ness has been vested in Parliament, such power
usually includes the authority to legislate with
reference to the relations between the operator of
the work, undertaking or business and the persons
employed by him in the operation thereof.
Most of the decisions cited relate to cases where
the question was whether or not the work, under
taking or business on which the employees in
question were employed was a work, undertaking
or business in relation to which Parliament could
make a labour law. Here the problem is different.
Where there is a work, undertaking or business
in relation to which Parliament has legislative
authority in the field of labour relations, a problem
arises as to where the line is to be drawn between
areas in respect of which Parliament can so legis
late and other areas in respect of which labour
legislation falls in the provincial domain. Certain
of the cases where this type of problem arises, may
be classified as follows:
(a) where an essential component of operating a
federal work, undertaking or business is carried
on by a person other than the principal operator
thereof under some business arrangement for
co-ordinating their activities, 6
I do not mean to say that it is law that is easy to apply in
particular cases.
6 The word "essential" is used here and in the balance of
these reasons to include the extended meaning of "reasonably
necessary".
(b) where an essential component of operating a
federal work or undertaking is carried on at a
location physically remote from the work or
undertaking,
(c) where fringe operations, reasonably inciden
tal to a federal work, undertaking or business
are carried on by the operator thereof as an
integral part of the operation thereof, even
though they are not essential to its operation,
(d) where a person other than the operator of a
federal work, undertaking or business carries on
activities that are not essential to the operation
thereof but could be carried on by the operator
thereof as reasonably incidental to the operation
of that work, undertaking or business.
These different classes of problem call for further
comment.
With reference to Class (a), when the essentials
of operating a work, undertaking or business
within the federal field are carried on in part by
one operator and in part by another, the employees
of both fall within the federal legislation field. This
can be deduced from the Stevedoring Reference to
the Supreme Court of Canada.'
The problem in Class (b) is like the problem in
Class (a). Where part of the essentials of operating
a federal work or undertaking are carried on at a
place physically remote from the work or under
taking, the employees at such a remote place
nevertheless fall within the federal field. This is
involved in what was decided by this Court last
December in the C.S.P. Foods case supra page 23.
A more difficult problem arises in connection
with Classes (c) and (d). A particular activity may
be reasonably incidental to the operation of a
federal work, undertaking or business without
being an essential component of such operation.
For example, an interprovincial railway may have
its own laundry facilities or its own arrangement
for preparing food for passengers, or, alternatively,
it may send its dirty linen to an outside laundry or
buy prepared food. Generally speaking, where
such an activity is carried on by the operator of the
federal work, undertaking or business as an inte-
7 [1955] S.C.R. 529. See also the Letter Carriers' case
[1975] 1 S.C.R. 178, the Butler Aviation case [1975] F.C. 590,
and the Holmes Transportation case [1978] 2 F.C. 520.
gral part thereof, it is indeed a part of the opera
tion of the federal work, undertaking or business.
Where, however, the operator of the federal work,
undertaking or business carries on the operation
thereof by paying ordinary local businessmen for
performing such services or for supplying such
commodities, the business of the person perform
ing the service or preparing the commodities does
not thereby automatically become transformed
into a business subject to federal regulation. Com
pare the decision of the Supreme Court of Canada
in the Construction Montcalm case (1979) 25
N.R. 1, that was delivered last December.
To sum up with reference to Classes (c) and (d),
as I understand the law, where something is done
as an integral part of the operation of a federal
work, undertaking or business and that something
is reasonably incidental to such operation, it may
be regulated by Parliament as part of the regula
tion of that work, undertaking or business even
though it is not essential to the operation of such a
work, undertaking or business; but where such a
thing is made the subject of a separate local
business or businesses, it cannot be regulated by
Parliament merely because, if it were done as an
integral part of operating a federal work, under
taking or business, it could, as such, be regulated
by Parliament.
I turn to considering the question raised by this
section 28 application.
If the operator of an air carrier business has its
own staff to "sell" space directly to potential
passengers, such selling operation would ordinarily
be an integral part of the air carrier business.
However, where, as here, the air carrier, as it is
required to do by regulation, sells its space "whole-
sale" to somebody who "retails" it, the selling
activities of the air carrier cease when it has sold
what it has to sell and the re-sale by the wholesaler
is a local activity in the province where it occurs.
While it is not too clear to me on the evidence as
to how it is accomplished, what Intervac does is
make arrangements with Wardair, and to a lesser
extent with other air carriers, whereby it acquires
the right to confer on its customers the right to be
passengers on the air carrier's aeroplanes. In my
view, its position, as between the air carrier and
the passengers, is not different, from a constitu
tional point of view, from the position of any
ordinary travel agency.' For the reasons given in
the Cannet Freight Cartage case, 9 for holding that
persons performing services for a freight forwarder
are not employed on or in connection with the
railway by which the forwarder carries out its
engagements with its customers, I am of the view
that persons employed by Intervac as "customer
representatives" are not employed on or in connec
tion with air carrier undertakings by whose air
craft Intervac's customers are carried.
As indicated, the only relevant business or
undertaking for carrying passengers by air was
that carried on by Wardair or some other charter
operator. The real difference, from a constitutional
point of view, between what was done by Intervac
and what was being considered in the Stevedoring
Reference ]° is that the stevedoring companies
there in question were performing on behalf of the
carrier an essential part of the carrier's "shipping"
contracts, namely, receiving and loading on the
ships the goods to be carried and unloading such
goods from the ships and delivering them to the
consignees. Those operations were an essential part
of what was involved in carrying goods by sea, i.e.,
"shipping". Intervac's customer representatives
perform no comparable part of the air carrier's
activity of carrying passengers by air.
The recent decision of this Court in the C.S.P.
Foods case supra page 23 is even more remote.
Intervac's customer representatives do nothing
that is a component of the charter air carriers'
undertaking or business, which is restricted by law
to granting charters and does not extend to selling
space to individual passengers.
$ Such a business is a local business in the province or
provinces where it is carried on and cannot be, as such, the
subject of regulation by Parliament merely because a substan
tial part of its business is the sale of "air travel" any more than
grain elevators could, prior to 1925, be regulated by Parliament
because the trade in grain was largely an external trade. Cf. R.
v. Eastern Terminal Elevator Co. [1925] S.C.R. 434.
9 [1976] 1 F.C. 174.
10 [1955] S.C.R. 529.
It should also be said, although it may be the
same thing put another way, that this is not a case
where the employees in question are agents of the
air carrier to "sell" to prospective passengers the
right to travel on its aeroplanes. Even though
Wardair and Intervac are related companies, no
case has been made out on the facts that Intervac
was being employed as an agent to carry on a part
of Wardair's air carrier business on its behalf. 11
Indeed, as already indicated, it is clear from the
regulations set out in the Board's reasons that,
being a purely charter operator, Wardair could not
legally "sell" directly to passengers the right to
travel on its aeroplanes. 12 The corporate relation
ship between Wardair and Intervac would, there
fore, appear to be irrelevant to the constitutional
question.
For the above reasons, I concluded that the
section 28 application should be dismissed.
* * *
URIE J. concurred.
* * *
KELLY D.J. concurred.
11 Contrast such cases as the Palmolive case [1933] S.C.R.
131, the Noxzema case [1942] S.C.R. 178; and the Canada
Rice Mills case [1938-39] C.T.C. 328.
12 Not only does it appear that there was no suggestion before
the Board that the arrangement between Wardair and Intervac
was such that "sales" to passengers would be made as agent for
Wardair but, had such been established, it would appear that
Intervac would thereby have become disqualified as a tour
operator for the purpose of the, regulations and the function of
the customer representatives, who are the subject of the
application to the Board, would be destroyed.
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.