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A-231-80
In re a Reference by the Canada Labour Relations Board and in re applications by Communications Workers of Canada and Canadian Union of Com munications Workers for certification with respect to employees of Northern Telecom Canada Limited
Court of Appeal, Thurlow C.J. and Ryan and Le Dain JJ.—Ottawa, March 9, 10, 11, 12, 13 and May 12, 1981.
Labour relations — Jurisdiction of the Canada Labour Relations Board — Reference under s. 28(4) of the Federal Court Act as to the constitutional jurisdiction to grant an application for certification with respect to Northern Telecom Canada Limited installers — Whether Parliament has author ity, by reason of Bell being a federal undertaking, to legislate in respect of the labour relations of the installers — Canada Labour Code, R.S.C. 1970, c. L-1, s. 108 — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28(4).
This is a reference under subsection 28(4) of the Federal Court Act by which the Canada Labour Relations Board asks the Court to determine whether the Board has constitutional jurisdiction to grant an application for certification with respect to installers employed by Northern Telecom Canada Limited ("Telecom Canada") sought to be represented by the Com munications Workers of Canada and the Canadian Union of Communications Workers respectively. The issue is whether Parliament has authority, by reason of the telecommunications undertaking of Bell being a federal undertaking and subject to exclusive federal legislative authority, to legislate in respect of the labour relations of the Telecom Canada installers. To resolve the issue, elements such as the core federal undertaking (i.e. Bell), the subsidiary operation, i.e. Telecom Canada, and the relationship of the latter's activities to the core federal undertaking must be taken into account.
Held, the question referred is to be answered in the affirma tive. The core federal undertaking (Le. Bell) includes not only the transmission of messages for customers but as well the installation of telephones, transmission equipment and exchanges necessary to provide the service. What the installers are doing, day in day out, during 80% of their working time, is participating in the carrying on of the federal undertaking itself which by reason of its nature requires a constant program of rearrangement, renewal, updating and expansion of its switch ing and transmission system and the installation of telecom munications equipment designed to carry out that need. The fact that 20% of the installers' work is not done for Bell does not change the conclusion.
Also, per Le Dain J.: The installers must be regarded as employed upon or in connection with the operation of the Bell undertaking as their work has a direct and immediate impact upon effective operation.
Northern Telecom Ltd. v. Communications Workers of Canada [ 1980] 1 S.C.R. 115, applied. The Letter Carriers' Union of Canada v. Canadian Union of Postal Workers [1975] 1 S.C.R. 178, applied. Construction Montcalm Inc. v. The Minimum Wage Commission [1979] 1 S.C.R. 754, distinguished.
REFERENCE. COUNSEL:
W. H. Deverell for Canada Labour Relations Board.
Hélène LeBel and Janet Cleveland for Com munications Workers of Canada.
Philip Cutler, Q.C. and Pierre Langlois for Canadian Union of Communications Work ers.
W. L. Nisbet, Q.C. for Attorney General of Canada.
W. S. Tyndale, Q.C. for Northern Telecom Canada Limited.
J. Cavarzan, Q. C. for Attorney General of Ontario.
Jean-François Jobin and Louis Crete for Attorney-General of Quebec.
SOLICITORS:
Deverell, Harrop, Vancouver, for Canada Labour Relations Board.
Jasmin, Rivest, Castiglio, Castiglio & LeBel, Montreal, for Communications Workers of Canada.
Robinson, Cutler, Sheppard, Borenstein, Shapiro, Langlois, Flam & Green, Montreal, for Canadian Union of Communications Workers.
Deputy Attorney General of Canada for Attorney General of Canada.
Ogilvy, Renault, Montreal, for Northern Telecom Canada Limited.
Deputy Attorney General of Ontario, Toronto, for Attorney General of Ontario.
Boissonneault, Roy & Poulin, Montreal, for Attorney-General of Quebec.
The following are the reasons for judgment rendered in English by
THURLOW C.J.: This proceeding is a reference under subsection 28(4) of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, by which the
Canada Labour Relations Board asks the Court to determine the question:
Does the Board have constitutional jurisdiction to grant an application for certification with respect to the employees sought to be represented in these two applications for certification?
The applications referred to are separate applications to the Board made by the Communi cations Workers of Canada and the Canadian Union of Communications Workers on May 30, 1978 and September 19, 1978, respectively, for certification under Part V of the Canada Labour Code, R.S.C. 1970, c. L-1, as the bargaining agent for a unit composed of all Northern Telecom Canada Limited Eastern Region installers. These applications and the present reference represent further stages in a long series of legal disputes as to the jurisdiction of the Canada Labour Relations Board, the Ontario Labour Relations Board and the Quebec Labour Relations Board with respect to employees of Northern Telecom Limited (here- inafter Telecom) and its subsidiary, Northern Telecom Canada Limited (hereinafter Telecom Canada).
The reference to this Court was made following six days of hearing testimony and argument solely on the question of the Board's jurisdiction and the filing of a seventy-four-page document in which the Board related the history of the disputes and included a discussion of the subject and of its opinion on the matter and of its reasons for refer ring the question to the Court. The record of the proceedings before the Board, including a tran script of the evidence taken at the Board's hearings and copies of exhibits presented, constitute the material before the Court on which the question is to be determined. None of the parties sought to add anything to it. In brief, the Board's reason for referring the question to the Court was that the view it had formed was contrary to that reached by the High Court of Ontario and the Quebec Court of Appeal on facts which the Board did not consid er to be substantially different from those before it.
At one point in the hearing before this Court it was submitted by counsel for the Canadian Union of Communications Workers, though it had not been raised in its memorandum of argument, that before answering the question referred to it by the Board, the Court should undertake a study as to whether it has jurisdiction to decide it. Counsel, however, would not be drawn into taking a position on the point, preferring, as it seemed to me, to simply raise it and leave it in the air. No other counsel objected to the Court's jurisdiction or sug gested that there was any doubt about it. Indeed, they disassociated themselves from it. They sought an answer to the question referred by the Board.
For my part, I have not had any doubt as to the jurisdiction of this Court under section 28 of the Federal Court Act to entertain the reference. The Canada Labour Relations Board is a federal board, commission or tribunal within the meaning of section 2 of the Federal Court Act. It has the authority conferred on it by the Canada Labour Code. The extent of that authority depends on the extent of the authority of the Parliament of Canada. When a particular question as to the extent of the authority of the Board under the Code turns on the extent of the authority of Parlia ment, it becomes necessary, in order to determine the Board's authority, to determine as an inciden tal or involved question whether the authority of Parliament extends to the particular subject- matter. The Board has authority under subsection 28(4) of the Federal Court Act to refer to this Court for determination any question or issue of jurisdiction. In the present instance, the Board has before it two applications for certification under the Canada Labour Code which, under section 108 and Division III of Part V of the Code, the Board has jurisdiction to entertain if Parliament has legislative authority to confer such power on the Board. The question of the Board's jurisdiction is thus dependent on the extent of the authority of Parliament. Consideration of the authority of Par liament is thus necessarily involved in the con struction and application of the Code and in par ticular of its section 108. Faced with the problem, the Board could have taken a position on the question and proceeded to deal with the applica tions accordingly. Had it done so, the decision made might then have been the subject of review
in the Court under section 28 on the question of the Board's jurisdiction. Had that occurred, in my opinion, this Court would have had jurisdiction to determine the question. But the Board also had open to it the course which it adopted of referring the question to this Court for determination and in my opinion, the jurisdiction of the Court to decide the question on the Board's reference is precisely the same as it would have been on a section 28 application to review the Board's decision. In my opinion, therefore, there is no occasion to doubt this Court's jurisdiction to consider and answer the question referred to it by the Board.
The constitutional issue raised by the question is whether Parliament has legislative jurisdiction with respect to the labour relations of the installers employed by Telecom Canada who are included in the group for which certification of the Board is sought by the two competing unions. The Com munications Workers of Canada and the Attorney General of Canada supported an affirmative answer. The Canada Labour Relations Board, Telecom Canada, Canadian Union of Communica tions Workers, the Attorney General of Ontario and the Attorney-General of Quebec sought a negative answer.
The constitutional principles applicable for resolving the issue are set out in the reasons for judgment of the Supreme Court delivered by Dick- son J., in Northern Telecom Limited v. Communi cations Workers of Canada' in a passage covering some four pages commencing at page 131. The following are excerpts from it:
In the case at bar, the first step is to determine whether a core federal undertaking is present and the extent of that core undertaking. Once that is settled, it is necessary to look at the particular subsidiary operation, i.e., the installation department of Telecom, to look at the "normal or habitual activities" of that department as "a going concern", and the practical and functional relationship of those activities to the core federal undertaking.
Any core federal undertaking present in this case must be found within the telephone and telecommunications system. [Page 133.]
1 [1980] 1 S.C.R. 115.
At a minimum, it can be asserted that Bell Canada's opera tions have been found to be a federal undertaking: see City of Toronto v. Bell Telephone Co. of Canada ([1905] A.C. 52), and Quebec Minimum Wage Commission v. Bell Telephone Co. of Canada ([1966] S.C.R. 767).
In the field of transportation and communication, it is evi dent that the niceties of corporate organization are not deter- minative. [Pages 133-134.]
Another, and far more important factor in relating the undertakings, is the physical and operational connection be tween them. Here, as the judgment in Montcalm stresses, there is a need to look to continuity and regularity of the connection and not to be influenced by exceptional or casual factors. Mere involvement of the employees in the federal work or undertak ing does not automatically import federal jurisdiction. Certain ly, as one moves away from direct involvement in the operation of the work or undertaking at the core, the demand for greater interdependence becomes more critical.
On the basis of the foregoing broad principles of constitution al adjudication, it is clear that certain kinds of "constitutional facts", facts that focus upon the constitutional issues in ques tion, are required. Put broadly, among these are:
(1) the general nature of Telecom's operation as a going concern and, in particular, the role of the installation depart ment within that operation;
(2) the nature of the corporate relationship between Telecom and the companies that it serves, notably Bell Canada;
(3) the importance of the work done by the installation department of Telecom for Bell Canada as compared with other customers;
(4) the physical and operational connection between the installation department of Telecom and the core federal undertaking within the telephone system and, in particular, the extent of the involvement of the installation department in the operation and institution of the federal undertaking as an operating system. [Pages 134-135.]
The basis for the position that Parliament has legislative jurisdiction in the matter is the work that Telecom Canada installers do in connection with the communications system of Bell Canada. It is common ground that Bell Canada operates a telecommunications system in Ontario and Quebec and that the operation is a federal undertaking. It was so held in the two Bell cases mentioned in the excerpt I have cited. The Newfoundland Tele phone Company is a subsidiary of Bell. The New Brunswick Telephone Company and the Maritime Telegraph and Telephone Company, which oper ates in Nova Scotia and owns the Island Telephone Company, which operates in Prince Edward Island, are what are referred to in the evidence as affiliates of Bell. In 1979, of some fifteen million telephones in Canada, Bell itself had in service
some nine million and its subsidiary and affiliates one million. As a federal communications under taking, it is subject to federal regulation by the Canadian Radio-television and Telecommunica tions Commission and I think it is to be assumed that the undertaking is a public utility and that in the communities that it serves Bell has a legal duty to provide telephone service.
The object of the undertaking is to transmit messages for subscribers for a fee or toll. But the undertaking is not confined to that. In order to provide the service telephones with lines to them must be installed in subscribers' premises. Bell's undertaking includes that. It is not unheard of for telephone companies to charge for that service. The work is mostly done by Bell's own technicians and no one questions that both installations and removals and repairs to keep the telephones in operation are part of the Bell undertaking. Tele phone lines must also be installed to connect sub scribers' premises to Bell's central exchanges where a subscriber's call is switched to the line of the subscriber who is being called. Such work is also carried out by Bell and again no one questions that it is part of Bell's telecommunications undertaking.
The system also requires the installation of equipment for Bell's central exchanges. It requires as well, on a continuing basis, the maintenance, renewal, rearrangement, addition to and updating of such equipment as it becomes necessary to meet the expanding demands of a growing population of subscribers and to keep the system abreast of technical developments in the telecommunications field. The day-to-day maintenance of such central exchange equipment is, as I understand it, general ly carried out by Bell technical personnel. How ever, in general, the installation of additional and renewal equipment as well as the rearranging and updating of existing equipment is done by Telecom Canada installers. The installation, rearrangement and improvement and the expansion of the capaci ty of microwave radio transmitting equipment for Bell in relay stations, to perform the function of
and eliminate the need for long distance cables, is also carried out by Telecom Canada installers.
Bell's policy with respect to the provision of new or additional switching and transmission equip ment is to have it installed and ready for opera tion, as nearly as possible, just in time to meet the forecast requirement for it.
So much for what is referred to as the core federal undertaking. In my view, it includes not only the transmission of messages for customers but as well the installation of telephones, transmis sion equipment and exchanges necessary to provide the service.
I turn now to the subsidiary operation i.e. the installation department of Telecom Canada, its normal and habitual activities and the relationship of those activities to the operations of Bell's tele communications system.
Telecom Canada, the employer of the installers in question, is a subsidiary of Telecom which is 60.5% owned and is controlled, at the board of directors' level, by Bell Canada. Though it is a subsidiary and indeed an offshoot of Bell's under taking, Telecom is in itself a large undertaking with subsidiaries operating in a number of coun tries. The combination makes up the sixth largest telecommunications manufacturer in the world, the second largest in North America and the largest in Canada. It has assets of some 1.3 billion, it operates some 56 manufacturing plants through out the world, has some 32,000 employees and in 1978 had 1.5 billion in sales.
The largest of Telecom's subsidiaries is Telecom Canada. It has some 15,000 employees, operates 26 plants in Canada and in 1978 had about 1 billion in sales.
Telecom Canada is a manufacturer and supplier of telecommunications equipment. It also instals such equipment, whether of its own make or that of another manufacturer. Telecom Canada's larg est customer is Bell Canada. It sells the bulk of its
products to Bell on contracts which include instal lation of the equipment on Bell premises or on premises of Bell's subscribers. It also instals for Bell equipment that Bell buys elsewhere, chiefly equipment manufactured in the United States by another Telecom subsidiary.
Bell buys 90% of its switching and transmission equipment from Telecom Canada and 95% of all such equipment bought by Bell is installed by Telecom Canada. Installation work for Bell accounts for 80% of the work of the Telecom Canada installers. A more simple procedure for concluding contracts between Telecom Canada and Bell, than between Telecom Canada and its other customers is in effect and as the largest customer of Telecom Canada, Bell has the benefit of lower prices. When urgent short term installa tion work is required by Bell, the ordinary contract procedure is by-passed.
Of the 15,000 employees of Telecom Canada, some 820 are installers, 460 of whom are included in the bargaining unit here in question. They are based in the company's Eastern Region, which includes the Eastern part of Ontario, the Province of Quebec and the Atlantic Provinces. The other 360 are based in the company's Western Region.
Within Telecom Canada there are four manu facturing groups designated as (1) Switching Group (2) Transmission Group (3) Cable Group and (4) Subscriber Equipment Group. The install- ers are personnel of the Switching and Transmis sion groups. The former manufactures central office switching equipment. It has 4,833 employees of whom 665 are installers. The latter group manufactures microwave radio systems, multiplex systems, line carrier systems, line conditioning equipment and subscriber carrier systems. The group has 2,097 employees of whom 155 are installers. While within the company organization, the installers are personnel of these two groups they never work on their employer's premises. They report for work only on customers' premises or the premises of the customer's subscribers. That is because they are engaged exclusively in install ing the equipment for use by the customer or its
subscribers. They have nothing to do with the manufacture of the equipment they instal and there is no contact at work between the installers and the manufacturing personnel of the group to which they belong. As a class, they are readily identifiable and severable from the other employees of the Switching and Transmission groups. To the extent that their duties involve contact or cooperation with personnel other than their own supervisors, they work or cooperate with Bell employees.
As the Bell communications network has been set up and in operation over a long period, what the installers are chiefly engaged in doing for Bell is the installation work involved in the ongoing overall expansion and modernization of the net work. The bulk of this work consists in rearrang ing, updating and adding to existing installations. This involves their doing their work in ways and by means and with the cooperation of Bell personnel so arranged as to permit the system to be kept, so far as possible, in operation while the work is being done.
With respect to the corporate relationship be tween Telecom Canada and the companies it serves, I have already mentioned that Telecom, which owns 100% of Telecom Canada, is 60.5% owned and is controlled by Bell Canada. Telecom, when set up, was known as Northern Electric Company Limited. It was at one time owned 60% by Bell and 40% by Western Electric. Thereafter for some years prior to 1973, it was 100% owned by Bell but, since expanding its business into coun tries other than Canada, a part of the stock has been sold to the public.
Bell's share may drop from its present 60.5% holding but Bell intends to retain control. Since December 1979, the Chairman and Chief Execu tive Officer of Bell has been the Chairman of Telecom. Since early 1980, the President and Chief Executive Officer of Telecom has been a director of Bell. There is some movement of man agement personnel between the companies. Bell does not intervene in the day-to-day operations of
Telecom. There is close collaboration between Bell and Telecom in research and the development of new product lines. It does not appear that there is any corporate relationship between Telecom Canada or Telecom and any other customer of Telecom Canada.
The position taken by the parties who seek a negative answer to the question referred by the Board focussed on a view of the Bell telecommuni cations undertaking as consisting of the transmis sion of messages for customers for a fee, on the treatment of the work of the installers as the final phase of the performance by Telecom Canada of its contracts for the sale of its equipment on an installed basis and to some extent on the fact that Telecom Canada installers do not work exclusively on installations of equipment sold to Bell. These views of the situation tend to suggest that jurisdic tion over the labour relations of the installers is in the provincial field. But I do not think it advances the solution to dwell unduly on aspects of the situation which tend to show that the jurisdiction is provincial. The jurisdiction is provincial—unless it is federal. The only inquiry, therefore, that is necessary is whether the jurisdiction is federal, that is to say, whether Parliament has authority, by reason of the telecommunications undertaking of Bell being a federal undertaking and subject to exclusive federal legislative authority, to legislate in respect of the labour relations of the Telecom Canada installers.
In the view I have of the matter the close corporate relationship between Bell and Telecom Canada is of little or no consequence. It is some thing of a makeweight, in the sense that the com panies are closer than if there were no such corpo rate relationship, but, without the features mentioned in what follows, the relationship would be consistent with either conclusion. Of somewhat greater importance is the fact that these installers have really no relationship with the other employees of Telecom Canada, but have some relationship in their work with personnel of Bell, do not work on their employer's premises, but do most of it on Bell premises, and are a class by themselves doing a kind of work different from
that being done by the engineering and manufac turing employees of Telecom Canada. They also have no function but to instal telecommunications equipment, mostly for Bell.
But the feature of the case that appears to me to be of the greatest importance and to point with telling effect to the conclusion that the jurisdiction is federal is the fact, as I see it, that what the installers are doing, day in day out, during 80% of their working time, is participating in the carrying on of the federal undertaking itself which by reason of its nature requires a constant program of rearrangement, renewal, updating and expansion of its switching and transmission system and the installation of telecommunications equipment designed to carry out that need. With 80% of the work these installers are doing on a continuing basis being work done in Bell's undertaking, I am of the opinion that there is a foundation for the assertion of federal jurisdiction over their labour relations and that the Board should assume and exercise it in accordance with the Canada Labour Code. Further, in my view, the fact that 20% of the installers' work is not done for Bell does not change the conclusion 2 .
I do not propose to review the many cases to which we were referred. They are all different in one way or another on the facts and some differ as well by reason of their being concerned with areas of federal jurisdiction other than that in relation to federal undertakings. I would answer the question referred in the affirmative.
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RYAN J.: I agree.
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The following are the reasons for judgment rendered in English by
LE DAIN J.: I agree that the question put by the Board should be answered in the affirmative on the ground that the installers of Northern Telecom
2 Compare The Letter Carriers' Union of Canada v. Canadi- an Union of Postal Workers [1975] 1 S.C.R. 178. The fact that some of the work of the employees in question was done for customers other than the Post Office did not influence the result.
are employed upon or in connection with the oper ation of a federal undertaking or business within the meaning of section 108 of the Canada Labour Code. The case is nicely balanced, as the Board suggested, but I think that the close functional relationship of the work of the installers to the operation of the Bell undertaking tips the balance in favour of federal jurisdiction. There are obvi ously two undertakings or enterprises involved: the Bell undertaking, which is federal, and Northern Telecom, a manufacturing enterprise the labour relations of which are prima facie within provin cial jurisdiction. While the operation carried on by Northern Telecom was in its origin a department of the Bell undertaking, it has grown to be an enterprise with a life of its own, with public par ticipation in its ownership and a substantial share of its market with customers other than Bell. Clearly a decision was taken by Bell at one point to let it develop to its maximum potential as a self-sustaining operation so that it could be a supplier of equipment to Bell on the most favour able terms. Bell retains control of it and remains its most important customer, but Northern Tele- com has become a major manufacturing enterprise in its own right. Installation is an important, if not essential, part of its operation. Because of the highly technical nature of the equipment it manu factures and sells, a high proportion of its sales contracts calls for installation, which is really only a particular form of delivery. It is this aspect of the case which argues strongly for provincial juris diction. But the installation is related in a very close and complex manner to the operation of the telecommunications equipment which is the heart of the Bell undertaking. Because of the effect which installation necessarily has on operation there must be close cooperation and coordination between the installers and the Bell technicians responsible for operation. In order to assure the maintenance of operation as effectively as possible installation is carried out according to an agreed predetermined plan or schedule. The installers and Bell technicians work side by side in this process which is going on all the time as part of the effort to improve capacity. The work of the installers has a direct and immediate impact upon effective operation. For this reason I think they must be regarded as employed upon or in connection with the operation of the Bell undertaking. Their rela tionship to the operation of the Bell undertaking is
more dominant and critical from a labour relations point of view than their relationship to the manu facturing and sales aspects of the Northern Tele- com operation. I come to this conclusion by application of the test affirmed by Mr. Justice Dickson in Northern Telecom Limited v. Com munications Workers of Canada [ 1980] 1 S.C.R. 115 at page 133: the "practical and functional relationship" of the work of the installers to the Bell undertaking.
Those who appeared in support of provincial jurisdiction placed particular reliance on the implications of the judgment of the Supreme Court of Canada in Construction Montcalm Inc. v. The Minimum Wage Commission [ 1979] 1 S.C.R. 754. I do not, with respect, think there is any real analogy between the construction by a general contractor of airport runways in accordance with specifications laid down by the federal authority and the regular or virtually continuous installation of new or replacement equipment into an operating telecommunications system.
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RYAN J.: I agree.
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