A-281-86
In the matter of the Canada Labour Code
and
In the matter of a reference by the Canada Labour
Relations Board pursuant to subsection 28(4) of
the Federal Court Act
INDEXED AS: CANADA LABOUR CODE (RE)
Court of Appeal, Pratte, Heald and MacGuigan
JJ. — Vancouver, October 28; Ottawa, November
24, 1986.
Constitutional law — Distribution of powers — Labour
relations Applications for certification respecting employees
of construction company replacing bridges belonging to
Canadian National Railways — "Macro-relationship" be
tween subsidiary operation and core federal undertaking criti
cal factor in determining constitutional competence — No
federal jurisdiction unless high degree of operational integra
tion of ongoing nature — Case law reviewed — Upon applica
tion of case law to facts, Canada Labour Relations Board not
having jurisdiction herein — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, s. 28 = Canada Labour Code, R.S.C.
1970, c. L-1 — Constitution Act, 1867, 30 & 31 Vict., c. 3
(U.K.) [R.S.C. 1970, Appendix II, No. 5] (as am. by Canada
Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act,
1982, Item 1).
Labour relations — Certification applications — Employer
construction company having contract with CN Rail for
replacement of railway bridges — Whether Canada Labour
Relations Board having constitutional jurisdiction to entertain
union's applications — Canada Labour Code, R.S.C. 1970, c.
L-1.
Canadian National Railways undertook to replace all of the
wooden railway bridges along its British Columbia Northline
with ones of steel and concrete. Antioch Construction Corpora
tion contracted with CN Rail to replace some of the bridges.
Labour was provided by Glossop Enterprises Ltd., a subcon
tractor. Glossop's employees were at times controlled and
directed by CN Rail's employees.
On applications for certification, the Labour Relations Board
of British Columbia and the Canada Labour Relations Board
each declined jurisdiction in favour of the other. This impasse
having occurred, the Canada Board referred to the Court of
Appeal the question whether it has constitutional jurisdiction to
entertain the applications.
Held, the question is answered in the negative.
The critical factor in determining constitutional jurisdiction
in such cases is the macro-relationship between the subsidiary
operation and the core federal undertaking. The facts of this
relationship should be examined from a functional, practical
point of view and for federal jurisdiction to be established there
must be a high degree of operational integration of an ongoing
nature.
The Board found that the reconstructed bridge was expected
to last a long time but that the actual work did not. Therefore
the operational integration which may genuinely be seen to
exist between Glossop's employees and those of CN Rail was of
a temporary rather than of an ongoing nature. Unlike that of
the installers in the two Northern Telecom decisions, the work
here had no aspect of continuity or permanence.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Construction Montcalm Inc. v. Minimum Wage Com
mission, [1979] 1 S.C.R. 754; 93 D.L.R. (3d) 641; 25
N.R. 1; Northern Telecom Ltd. v. Communications
Workers of Canada, [1980] 1 S.C.R. 115; 98 D.L.R. (3d)
1; (1979), 28 N.R. 107; Northern Telecom Canada Ltd.
et al. v. Communication Workers of Canada et al.,
[1983] 1 S.C.R. 733; 147 D.L.R. (3d) 1; 48 N.R. 161.
APPLIED:
Bernshine Mobile Maintenance Ltd. v. Canada Labour
Relations Board, [1986] 1 F.C. 422; (1985), 22 D.L.R.
(4th) 748; (1985), 62 N.R. 209; Highway Truck Service
Ltd. v. Canada Labour Relations Board (1985), 62 N.R.
218.
CONSIDERED:
Canadian Pacific Railway Company v. Notre Dame de
Bonsecours (Corporation of the Parish of), [1899] A.C.
367; Reference in re Legislative Jurisdiction over Hours
of Labour, [1925] S.C.R. 505; [1925] 3 D.L.R. 1114;
Reference re Minimum Wage Act of Saskatchewan,
[1948] S.C.R. 248; [1948] 3 D.L.R. 801; Attorney-Gen
eral (Alberta) v. Attorney-General (Canada), [1943]
A.C. 356; [1943] 2 D.L.R. 1; Reference re Industrial
Relations and Disputes Act, [1955] S.C.R. 529; [1955] 3
D.L.R. 721; Commission du Salaire Minimum v. Bell
Telephone Company of Canada, [1966] S.C.R. 767; 59
D.L.R. (2d) 145; Attorney-General for Canada v. Attor
ney General for British Columbia, [1930] A.C. 111;
[1930] 1 D.L.R. 194; Association des Entrepreneurs en
Construction du Québec v. Gazoduc Trans -Québec &
Maritimes Inc. et al. (1981), 132 D.L.R. (3d) 581 (Que.
S.C.).
REFERRED TO:
Aeronautics in Canada, In re Regulation and Control of,
[1932] A.C. 54; [1932] 1 D.L.R. 58; Johannesson v.
Municipality of West St. Paul, [ 1952] 1 S.C.R. 292.
COUNSEL:
J. E. Dorsay and Vanna Spence for Canada
Labour Relations Board.
B. Laughton for Pile Drivers & Wharf Buil
ders Union.
D. Lovett for Attorney General of British
Columbia.
SOLICITORS:
Braidwood, Nuttall, MacKenzie, Brewer &
Greyell, Vancouver, for Canada Labour Rela
tions Board.
Rankin & Company, Vancouver, for Pile
Drivers & Wharf Builders Union.
Ministry of Attorney General, Victoria, for
Attorney General of British Columbia.
The following are the reasons for judgment
rendered in English by
MACGUIGAN J.: The problem in the present
case arises because each of the Labour Relations
Board of British Columbia ("the B.C. Board") and
the Canada Labour Relations Board ("the CLRB"
or the "Canada Board") has declined jurisdiction
in favour of the other on applications for certifica
tion by the Pile Drivers, Divers, Bridge, Dock and
Wharf Builders Union, Local 1549 of United
Brotherhood of Carpenters and Joiners of America
("the Union"). This impasse having occurred, the
Canada Board referred to this Court, for hearing
and determination under subsection 28(4) of the
Federal Court Act [R.S.C. 1970 (2nd Supp.),
c.10], the question whether it has constitutional
jurisdiction to entertain the Union's applications
for certification. On this reference the Canada
Board relies on its reasons for decision of April 15,
1986.
The employers in question are Antioch Con
struction Corporation ("Antioch"), which entered
into a contract with Canadian National Railways
("CN Rail") for the replacement of wooden rail
way bridges on CN Rail's line with steel and
concrete bridges, but which itself had no
employees on the site in question, and Glossop
Enterprises Ltd. ("Glossop"), with which Antioch
had a contract for the provision of labour for the
project.
Having found that there were insufficient facts
before it for an informed judgment, the Canada
Board assigned one of its officers to gather the
required constitutional facts. In his supplementary
report he described the background as follows,
Casebook, vol. I, pages 19-23:
Replacement (reconstruction) of wooden railway bridges
with steel and concrete structures is, as a general rule, part of
an ongoing program within CN Rail. The factors of age,
lifespan and general condition of the wooden structures have
dictated their replacement by more modern structures. A deci
sion was taken by CN Rail that commencing in 1981 it would
undertake an accelerated program of replacement of all of its
wooden railway bridges along its B.C. Northline .... The
replacement of the wooden railway bridges along this Northline
was only one facet of a $600 M capital reconstruction program
to upgrade the Northline in all aspects in order to advance it
from secondary to mainline status.
This decision to upgrade was motivated in very large meas
ure by the anticipated large increase in traffic volume over this
line as a result of the opening of the Tumbler Ridge coal fields
together with other increases in volume over this line already
being realized ....
The original plan was to replace all of the wooden bridges on
the B.C. Northline in two (2) years. Budgetary considerations
have precluded this from happening and the present goal is to
complete the bridge reconstruction to Prince George by 1987 or
1988 and the remaining bridges east of Prince George by
1991-1992. The $600 M capital reconstruction program con
cerning overall upgrading of CN Rail's Northline was intended
to span ten (10) years when first adopted. To date a total of
forty-four (44) wooden railway bridges have been replaced
between Prince Rupert and Prince George since the accelerated
reconstruction program began. A total of twenty-two (22)
bridges between these two points remain to be replaced. East of
Prince George, approximately forty (40) wooden railway
bridges on the B.C. Northline will be replaced over the life of
the upgrading program scheduled to be completed by
1991-1992.
A similar bridge replacement (reconstruction) program was
carried out in the province of Alberta in the eleven (11) year
period between 1970 and 1981....
[T]he movement of rail traffic remains paramount and contin
ues throughout the bridge reconstruction process interrupted
only for as briefly necessary to complete the final construction
phase, i.e. the placement of the steel spans.
Once permission for closure of the line is granted, CN Rail's
own employees (Brotherhood of Maintenance of Way person
nel) proceed to remove the existing track, ties and ballast. The
contractor may be asked to assist in aspects of this process of
track and tie removal given the availability of his equipment
and manpower but where such assistance is requested the
contractor's crews remain under the specific and direct control
of CN Rail's own employees at all times. After the existing
track, ties and ballast are removed the contractors crews take
over and place the new steel spans on the concrete caps. Once
this is completed CN Rail's employees again carry out the
placement of new ballast, ties and track over the steel spans.
Again the contractor's crews may be asked to assist in this
process but with the same caveat governing the removal of the
old track, ties and ballast. Namely, if requested to assist in this
manner they do so under the specific and direct control of CN
Rail's own forces. After the new rail is placed on the steel span
the contractor's crew resumes responsibility for removing the
wooden span and trestle supports of the old bridge which have
remained intact to this time. This cutting away and removal of
the wooden span and trestle supports while carried out by the
contractor's crew is monitored very closely by CN Rail person
nel. Following this removal there remains but general site
cleanup and in cases salvaging of timber for the contractor's
crew before its involvement in the project is considered
concluded.
As already stated, the movement of trains through the
construction site during the . entire reconstruction process
remains at all times under the direct and complete control of
CN Rail. When a train approaches the construction site operat
ing pursuant to appropriate slow orders, CN Rail's flagman
will alert the contractor's foreman to the effect and issue
instructions for the contractor's forces to clear the line. Aside
from the final closure to permit placement of the steel spans,
the contractor's forces must heed the flagman's directions to
clear the line and allow for passage of the train. If the
contractor's forces are involved in a particularly critical aspect
of the piledriving or capping process the flagman may hold up
the approaching train very briefly i.e. 15-20 minutes to allow
for this particular and only this particular aspect of construc
tion to be completed. This however is the exception rather than
rule.
Only about four of the forty-four bridge recon
structions carried out on CN Rail's Northline
between Prince Rupert and Prince George have
been carried out with CN Rail's own employees.
Antioch successfully bid so far on a total of five
bridges, three in the present contract and two
previously. At least on this contract Antioch sub
contracted the work to Glossop. The Glossop
employees on one project do not necessarily go
with Glossop to its next job, and may be dis-
patched anywhere within the Local's geographic
jurisdiction.
Because all three parties appearing on the hear
ing of this reference (the Canada Board, the
Union, and the Attorney General) took positions in
favour of provincial jurisdiction, we were effective
ly left without an adversary process, and so I have
been particularly careful to give full weight to
arguments which might have been raised on behalf
of federal labour relations jurisdiction.
I
At first blush, the issue seems to be one of an
easily-arrived at characterization. That is how it
was seen by the Canada Board, Casebook, vol. I,
page 23:
The fundamental difference between the approaches of this
Board and the B.C. Board lies in the characterization of the
work. Is it construction within what is known in the labour
relations community as the "construction industry," or is it
maintenance of CN Rail's facilities?
The Board had already forecast its answer to this
question, Casebook, vol. I, page 4:
After considering all of the material before it the Board has
concluded that the work being performed by the employees
affected by the applications was construction work rather than
part of the operations of CN Rail or maintenance of CN Rail's
railway line and as such it could not be said to be an integral or
essential part of a federal work, undertaking or business.
The B.C. Board followed its own previous deci
sion in the Lakh Construction Corporation case
(No. 358-84, decided October 1, 1984), in which it
had held in an identical fact situation:
We have concluded that work done by the Employer falls
within the federal jurisdiction .... We have reached this con
clusion because we are satisfied that the work performed under
this contract is in the nature of upgrading of an existing railway
line. It is our view that the replacement of old wooden railway
bridges with new concrete and steel railway bridges is in no
material way different from the replacement of rails, ties or
ballast. The work being done as evidenced by the manner in
which it is being done is clearly an essential and integral part of
the operation of the existing rail line.
Depending upon the categorization, the judicial
authority relied on might be either the decision by
the Judicial Committee of the Privy Council in
Canadian Pacific Railway Company v. Notre
Dame de Bonsecours (Corporation of the Parish
of), [1899] A.C. 367, which emphasized federal
jurisdiction [at page 372] "for the construction,
repair and alteration of the railway, and for its
management" or that of the Supreme Court of
Canada in Construction Montcalm Inc. v. Mini
mum Wage Commission, [1979] 1 S.C.R. 754; 93
D.L.R. (3d) 641; 25 N.R. 1, which held for provin
cial labour relations jurisdiction over the construc
tion of airport runways at the new airport at
Mirabel.
The Notre Dame de Bonsecours case was not a
labour relations case at all, but concerned the right
of a Quebec municipality through which the rail
road ran to order it to clean and put in good order
a ditch along its right of way, in default of which it
was condemned to pay a fine of $200. The Court
observed that, by virtue of subsection 91(29) of the
Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.)
[R.S.C. 1970, Appendix II, No. 5] (as am. by
Canada Act 1982, 1982, c. 11 (U.K.), Schedule to
the Constitution Act, 1982, Item 1)], Parliament
had the sole right to legislate with respect to
classes of subjects like railways expressly excepted
from provincial legislative competence by para
graph 92(10)(a) of that Act. Therefore, even while
holding that the removal of the obstruction would
affect merely the physical condition and not the
structure of the ditch, and so was a valid exercise
of provincial jurisdiction, Lord Watson neverthe
less indicated that there were strict limits on pro
vincial competence, at pages 372-373:
The British North America Act, whilst it gives the legislative
control of the appellants' railway quâ railway to the Parliament
of the Dominion, does not declare that the railway shall cease
to be part of the provinces in which it is situated, or that it
shall, in other respects, be exempted from the jurisdiction of the
provincial legislatures. Accordingly, the Parliament of Canada
has, in the opinion of their Lordships, exclusive right to pre
scribe regulations for the construction, repair and alteration of
the railway, and for its management, and to dictate the consti
tution and powers of the company; but it is, inter alia, reserved
to the provincial parliament to impose direct taxation upon
those portions of it which are within the province, in order to
the raising of a revenue for provincial purposes. It was obvious
ly in the contemplation of the Act of 1867 that the "railway
legislation," strictly so called, applicable to those lines which
were placed under its charge should belong to the Dominion
Parliament. It therefore appears to their Lordships that any
attempt by the Legislature of Québec to regulate by enactment,
whether described as municipal or not, the structure of a ditch
forming part of the appellant company's authorized works
would be legislation in excess of its powers. If, on the other
hand the enactment had no reference to the structure of the
ditch, but provided that, in the event of its becoming choked
with silt or rubbish, so as to cause overflow and injury to other
property in the parish, it should be thoroughly cleaned out by
the appellant company, then, the enactment would, in their
Lordship's opinion be a piece of municipal legislation com
petent to the Legislature of Québec. [Emphasis added.]
The Notre Dame de Bonsecours case does not
deal with labour relations at all, but Lord Wat-
son's dictum that "the Parliament of Canada has
... exclusive right to prescribe regulations for the
construction, repair, and alteration of the railway,
and for its management" was extended by subse
quent courts to labour relations in respect of enu
merated federal powers generally.
So, in Reference in re Legislative Jurisdiction
over Hours of Labour, [1925] S.C.R. 505, at page
511; [1925] 3 D.L.R. 1114, at page 1116, Duff J.
wrote for a five-judge Court, in relation to a draft
convention limiting the hours of labour in industri
al undertakings:
It is now settled that the Dominion, in virtue of its authority
in respect of works and undertakings falling within its jurisdic
tion, by force of section 91, no. 29, and section 92, no. 10, has
certain powers of regulation touching the employment of per
sons engaged on such works or undertakings. The effect of such
legislation by the Dominion to execution of this power is that
provincial authority in relation to the subject matter is
superseded, and remains inoperative so long as the Dominion
legislation continues in force. There would appear to be no
doubt that, as regards such undertakings—a Dominion railway,
for example—the Dominion possesses authority to enact legis
lation in relation to the subjects dealt with in the draft
convention.
Similarly in Reference re Minimum Wage Act
of Saskatchewan, [1948] S.C.R. 248; [1948] 3
D.L.R. 801, where the postmistress of a revenue
post office was prosecuted under the Saskatche-
wan Minimum Wage Act [R.S.S. 1940, c. 310] for
paying a temporary employee whom she had
engaged from her commission at wages below the
minimum prescribed by the Act,' it was held that
the employee had become part of the postal ser
vice, and was therefore under subsection 91(5) of
the 1867 Act subject to the exclusive control of the
federal parliament. Several of the judges quoted
the dictum of Viscount Maugham in Attorney-
General (Alberta) v. Attorney-General (Canada),
[1943] A.C. 356, at page 370; [1943] 2 D.L.R. 1,
at page 9, that "legislation coming in pith and
substance within one of the classes specially enu
merated in s. 91 is beyond the legislative compe
tence of the provincial legislatures under s. 92."
Again, in Reference re Industrial Relations and
Disputes Act, [1955] S.C.R. 529; [1955] 3 D.L.R.
721 (the Stevedores' case), sections 1-53 of the
Act (on which argument alone was heard) were
held to be intra vires the Parliament of Canada,
either under subsection 91(10) relating to naviga
tion and shipping, or under subsection 91(13) on
international or interprovincial ferries, or under
subsection 91(29) completed by paragraph
92(10)(a), and consequently applied in respect of
all employees employed upon or in connection with
the operation of the work, undertaking or business,
whether manual or clerical. In the words of Abbott
J. at pages 592 S.C.R.; 779-780 D.L.R.:
The right to strike and the right to bargain collectively are
now generally recognized, and the determination of such mat
ters as hours of work, rates of wages, working conditions and
the like, is in my opinion a vital part of the management and
operation of any commercial or industrial undertaking. This
being so, the power to regulate such matters, in the case of
undertakings which fall within the legislative authority of
Parliament lies with Parliament and not with the Provincial
Legislatures.
' Since the conviction was not appealable to the Supreme
Court of Canada, the matter had to be referred to the Court by
the Governor-in-Council.
Finally, in Commission du Salaire Minimum v.
Bell Telephone Company of Canada, [1966]
S.C.R. 767; 59 D.L.R. (2d) 145, the Supreme
Court reiterated that the regulation of the labour
relations of a federal undertaking, service or busi
ness is a matter for exclusive federal control.
Martland J. wrote for the seven judges, at pages
777 S.C.R.; 153 D.L.R.:
In my opinion, regulation of the field of employer and employee
relationships in an undertaking such as that of the respondent's,
as in the case of the regulation of the rates which they charge
to their customers, is a "matter" coming within the class of
subject defined in s. 92(10)(a) and, that being so, is within the
exclusive legislative jurisdiction of the Parliament of Canada.
Consequently, any provincial legislation in that field, while
valid in respect of employers not within exclusive federal
legislative jurisdiction, cannot apply to employers who are
within that exclusive control.
II
Turning to the other approach as found in the
Construction Montcalm case, we come to an area
of federal jurisdiction, aeronautics, which is not a
class of subject expressly enumerated in section 91,
but was found to be under the federal general
power over peace, order and good government as
"a class of subject which has attained such dimen
sions as to affect the body politic of the Domin
ion": Aeronautics in Canada, In re Regulation and
Control of, [1932] A.C. 54, at page 77; [1932] 1
D.L.R. 58, at page 70. 2
•
It might perhaps therefore be argued that the
result in the Construction Montcalm case went
against federal jurisdiction because the power in
question fell under the second of Lord Tomlin's
constitutional propositions in Attorney-General
for Canada v. Attorney General for British
Columbia, [1930] A.C. 111; [1930] 1 D.L.R. 194,
(the Fish Canneries case), rather than under the
2 Their Lordships principally rested federal jurisdiction on
section 132 of the Act of 1867, but as that section is now spent,
Canada no longer being "Part of the British Empire" continu
ing federal jurisdiction over aeronautics has to be based on the
general power. The transition was made by the Supreme Court
in Johannesson v. Municipality of West St. Paul, [1952] 1
S.C.R. 292.
first and third propositions concerning enumerated
heads of power and their necessary incidents, but
in fact there would be no support for such an
interpretation in the majority judgment in Con
struction Montcalm.
On the facts of the case a Quebec construction
company, which was constructing runways on fed
eral Crown land at the new Mirabel airport was
sued on behalf of its employees by the Quebec
Minimum Wage Commission to recover wages,
paid vacations and holidays, health insurance pre
miums and other social security levies, together
with ancillary levies and penalties.
The reasons for decision of the seven judges in
the majority were delivered by Beetz J., at pages
770-777 S.C.R.; 654-659 D.L.R.; 7-12 N.R.:
The construction of an airport is not in every respect an
integral part of aeronautics. Much depends on what is meant
by the word "construction". To decide whether to build an
airport and where to build it involves aspects of airport con
struction which undoubtedly constitute matters of exclusive
federal concern: the Johannesson case. This is why decisions of
this type are not subject to municipal regulation or permis
sion .... Similarly, the design of a future airport, its dimen
sions, the materials to be incorporated into the various build
ings, runways and structures, and other similar specifications
are, from a legislative point of view and apart from contract,
matters of exclusive federal concern. The reason is that deci
sions made on these subjects will be permanently reflected in
the structure of the finished product and are such as to have a
direct effect upon its operational qualities and, therefore, upon
its suitability for the purposes of aeronautics. But the mode or
manner of carrying out the same decisions in the act of
constructing an airport stand on a different footing. Thus, the
requirement that workers wear a protective helmet on all
construction sites including the construction site of a new
airport has everything to do with construction and with provin
cial safety regulations and nothing to do with aeronautics ....
In my opinion what wages shall be paid by an independent
contractor like Montcalm to his employees engaged in the
construction of runways is a matter so far removed from aerial
navigation or from the operation of an airport that it cannot be
said that the power to regulate this matter forms an integral
part of primary federal competence over aeronautics or is
related to the operation of a federal work, undertaking, service
or business. (For the purpose of the main submission, it is
unnecessary to express any view as to whether Parliament
could, in a provision of an ancillary nature, incidentally touch
upon the conditions of employment of workers engaged in the
construction of airports.)
In the case at bar, the impugned legislation does not purport
to regulate the structure of runways. The application of its
provisions to Montcalm and its employees has no effect on the
structural design of the runways; it does not prevent the
runways from being properly constructed in accordance with
federal specifications; nor has it even been shown, assuming it
could be, that "the physical condition" of the runways, as
opposed to their structure, is affected by the wages and condi
tions of employment of the workers who build them.
In submitting that it should have been treated as a federal
undertaking for the purposes of its labour relations while it was
doing construction work on the runways of Mirabel, Montcalm
postulates that the decisive factor to be taken into consideration
is the one work which it happened to be constructing at the
relevant time rather than the nature of its business as a going
concern. What is implied, in other words, is that the nature of a
construction undertaking varies with the character of each
construction project or construction site or that there are as
many construction undertakings as there are construction
projects or construction sites. The consequences of such a
proposition are far reaching and, in my view, untenable: consti
tutional authority over the labour relations of the whole con
struction industry would vary with the character of each con
struction project. This would produce great confusion. For
instance, a worker whose job it is to pour cement would from
day to day be shifted from federal to provincial jurisdiction for
the purposes of union membership, certification, collective
agreement and wages, because he pours cement one day on a
runway and the other on a provincial highway. I cannot be
persuaded that the Constitution was meant to apply in such a
disintegrating fashion.
To accept Montcalm's submission would be to disregard the
elements of continuity which are to be found in construction
undertakings and to focus on casual or temporary factors,
contrary to the Agence Maritime and Letter Carriers' deci
sions. Building contractors and their employees frequently work
successively or simultaneously on several projects which have
little or nothing in common. They may be doing construction
work on a runway, on a highway, on sidewalks, on a yard, for
the public sector, federal or provincial, or for the private sector.
One does not say of them that they are in the business of
building runways because for a while they happen to be build
ing a runway and that they enter into the business of building
highways because they thereafter begin to do construction work
on a section of a provincial turnpike. Their ordinary business is
the business of building. What they build is accidental. And
there is nothing specifically federal about their ordinary
business.
It does not appear to me that Montcalm's position is support
ed by any aspect of the Revenue Post Office case or the
Stevedoring case. It was held in the former that the Saskatche-
wan Minimum Wage Act did not apply to a person temporarily
employed by the postmistress of a revenue post office to work
exclusively in post office operations. But the temporary employ
ment was employment in the continuous operation of a federal
service. In the Stevedoring case this Court held that a stevedor-
ing organization servicing ships engaged exclusively in interna
tional shipping was subject to federal law with respect to its
labour relations; this was a reference and the order of reference
recited that the operations of the stevedoring company during
the relevant navigation season consisted exclusively in the
loading and unloading of ships engaged in international ship
ping; the Court (Rand J. dissenting) took the view that it could
not go beyond the order; Kellock J. said (at p. 561 [S.C.R.; 753
D.L.R.]) that the issue had to be considered "on the footing of
the continuance of the situation" and Cartwright J. (as he then
was) said (at p. 584 [S.C.R.; 773 D.L.R.]) that the answer to
the constitutional question "should be based on the assumption
that the operations of the company are as ... described" in the
order.
A possible interpretation of Beetz J.'s words is
that the decisive distinction is that between con
struction and maintenance, and it was to such a
position that Laskin C.J.C. (supported by Spence
J.) in the minority strongly reacted at pages 761-
762 S.C.R.; 647 D.L.R.; 33-34 N.R.:
The contention that there can be a differentiation for consti
tutional purposes between construction and maintenance or
operation of a federal work or undertaking is inconsistent with
a line of cases beginning with C.P.R. v. Notre-Dame de
Bonsecours ([1899] A.C. 367), dealing with railways which
come under federal regulatory authority. In that case, the Privy
Council supported the exclusive authority of the Parliament of
Canada to prescribe regulations for the construction, repair and
alteration of the railway and for its management. It also said
that a Province would be exceeding its powers "if it attempted
[to interfere] with the structure or management of a work
withdrawn entirely from provincial jurisdiction, such as a work
authorized by the Dominion by legislation in execution of its
powers under s. 92(10)(a)" (at p. 226). What is true as to
railways must be equally true as to airports. I do not see how it
can be suggested that construction referable to a railway is
within exclusive federal competence but construction in respect
of a federal enterprise, like an airport or a uranium mine that
does not move across provincial boundaries is not. If a company
engaged in the construction of an interprovincial railway was
working across provincial boundaries, could it be suggested that
its employees would be subject to provincial wage legislation
according to which side of a provincial boundary it was working
on at a particular period?
It appears to me, with respect, that, whereas this
objection is well taken with respect to a construc-
tion—maintenance dichotomy, this was not the
gravamen of the majority decision in Construction
Montcalm as is made clear by the Court's decision
in the two subsequent Northern Telecom decisions:
Northern Telecom Ltd. v. Communications Work
ers of Canada, [1980] 1 S.C.R. 115; 98 D.L.R.
(3d) 1; (1979), 28 N.R. 107, and Northern Tele-
com Canada Ltd. et al. v. Communication Work
ers of Canada et al., [1983] 1 S.C.R. 733; 147
D.L.R. (3d) 1; 48 N.R. 161.
Before moving to those decisions, I would note
that in Association des Entrepreneurs en Con
struction du Québec v. Gazoduc Trans -Québec &
Maritimes Inc. et al. (1981), 132 D.L.R. (3d) 581
(Que. S.C.), on a fact situation very similar to that
in the instant case, Hannan J. distinguished Con
struction Montcalm and held that the labour rela
tions of workers involved in the construction of a
natural gas pipeline in the Province of Quebec, as
part of an interprovincial natural gas pipeline
system, are within federal jurisdiction. He said, at
pages 609-611:
The Court is of the opinion that the present case relating to
the construction of the extension of a natural gas pipeline,
interprovincial, not to say international in its extent, is in its
essence, much more clearly analogous to a telephone network
or a railway system than to the construction of airport facilities.
However, the construction of the work, prior to its becoming an
integrated part of such pipeline system will be subject to valid
provincial legislation where such would neither interfere with
the operation of a federal undertaking nor result in the dismem
berment of the federal work, and as long as the undertaking
was not a federal undertaking subject to exclusive federal
control: see Beetz J. in Montcalm Construction ... .
The core federal undertaking within the pipeline system of
T.C.P.L., and thus, T.Q.M., and the involvement of Universal
in the operation and institution of the federal undertaking as an
operating system lead the Court to conclude, with respect for
the other opinion, that the undertaking, service or business of
T.Q.M. in constructing the natural gas transmission pipeline
extension is a federal one, and is removed from provincial
jurisdiction and immune from the effect of provincial law.
III
Northern Telecom No. I arose from a challenge
by the employer to the jurisdiction of the CLRB to
certify a union as the bargaining agent for certain
of its employees. In the absence of sufficient con-
stitutional facts to decide the jurisdictional ques
tion, the Court dismissed the appeal, but not
before setting out the relevant law.
Dickson J. (as he then was), writing for the full
Court, summarizes Beetz J.'s judgment in Con
struction Montcalm in six principles, at pages 132
S.C.R.; 13 D.L.R.; 124-125 N.R.:
(1) Parliament has no authority over labour relations as such
nor over the terms of a contract of employment; exclusive
provincial competence is the rule.
(2) By way of exception, however, Parliament may assert
exclusive jurisdiction over these matters if it is shown that such
jurisdiction is an integral part of its primary competence over
some other single federal subject.
(3) Primary federal competence over a given subject can pre
vent the application of provincial law relating to labour rela
tions and the conditions of employment but only if it is demon
strated that federal authority over these matters is an integral
element of such federal competence.
(4) Thus, the regulation of wages to be paid by an undertaking,
service or business, and the regulation of its labour relations,
being related to an integral part of the operation of the
undertaking, service or business, are removed from provincial
jurisdiction and immune from the effect of provincial law if the
undertaking, service or business is a federal one.
(5) The question whether an undertaking, service or business is
a federal one depends on the nature of its operation.
(6) In order to determine the nature of the operation, one must
look at the normal or habitual activities of the business as those
of "a going concern", without regard for exceptional or casual
factors; otherwise, the Constitution could not be applied with
any degree of continuity and regularity.
It is clear from the ultimate principle that the
heart of the test is an operational one. In this vein
Dickson J. immediately continues, at pages 132-
135 S.C.R.; 14-16 D.L.R.; 125-127 N.R.:
A recent decision of the British Columbia Labour Relations
Board, Arrow Transfer Co. Ltd. ([1974] 1 Can. L.R.B.R. 29),
provides a useful statement of the method adopted by the
Courts in determining constitutional jurisdiction in labour mat
ters. First, one must begin with the operation which is at the
core of the federal undertaking. Then the Courts look at the
particular subsidiary operation engaged in by the employees in
question. The Court must then arrive at a judgment as to the
relationship of that operation to the core federal undertaking,
the necessary relationship being variously characterized as
"vital", "essential" or "integral". As the chairman of the Board
phrased it, at pp. 34-5:
In each case the judgment is a functional, practical one
about the factual character of the ongoing undertaking and
does not turn on technical, legal niceties of the corporate
structure or the employment relationship.
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.
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.
This functional, practical approach to the factu
al character of the ongoing undertaking is further
amplified in Northern Telecom No. 2. In this case
the CLRB declined jurisdiction on applications for
certification concerning installers who were
engaged in the physical installation of the manu
factured products of their employers where eighty
percent of the installation was carried out on the
telephone company's premises. However, the
CLRB then made a reference on a constitutional
question to this Court pursuant to subsection 28(4)
of the Federal Court Act, which held that there
was federal jurisdiction. A seven-judge Supreme
Court dismissed the appeal, Beetz and Chouinard
JJ. dissenting.
Estey J., in delivering the reasons for judgment
of the majority, described Dickson J.'s fourth prin
ciple in Northern Telecom No. 1 as "the principal
and dominant consideration," at pages 755 S.C.R.;
26 D.L.R.; 173 N.R.:
I. The principal and dominant consideration in determining the
application of the principle enunciated in the Stevedores'
case is an examination of "the physical and operational
connection" between the installers of Telecom and the feder
al core undertaking, the telephone network, and in particular
the extent of the involvement of the installers in the estab
lishment and operation of the federal undertaking as an
operating system. I have here taken the liberty of paraphras
ing in the terminology of the present record consideration
numbered 4 above as enunciated by Dickson J. in the 1980
judgment of this court.
Dickson J., in his own concurring judgment, refers
to the same principle, at pages 772 S.C.R.; 5
D.L.R.; 183 N.R. as the "most critical factor" in
determining constitutional jurisdiction.
Estey J. continues, at pages 766-767 S.C.R.;
34-35 D.L.R.; 180 N.R.:
We are not here concerned with micro-differences between
the function of the installers and that of comparable Bell
employees but rather with the macro-relationship between the
work of the installers in the subsidiary operation and the
functioning of the core undertaking. It is, with all respect to
those who have down through the long years of this process
otherwise concluded, my view on an examination of the record
now before this court, that an application of the ratio decidendi
of the Stevedores' case, supra, and the tests for the determina
tion of the appropriate constitutional classification prescribed
in this court in Telecom 1980, supra, leads inexorably to the
assignment of the labour relations of these employees of Tele-
com to the federal jurisdiction. In the words of Beetz J. in
Montcalm, supra, at page 768 [S.C.R.; 652 D.L.R.]:
... but only if it is demonstrated that federal authority over
these matters is an integral element of such federal compe
tence....
The facts I have already set out either by excerpts from
testimony or from the Board award or the reasons for judg
ments below. The almost complete integration of the installers'
daily work routines with the task of establishing and operating
the telecommunications network makes the installation work an
integral element in the federal works. The installation teams
work the great bulk of their time on the premises of the
telecommunications network. The broadening, expansion and
refurbishment of the network is a joint operation of the staffs of
Bell and Telecom. The expansion or replacement of the switch
ing and transmission equipment, vital in itself to the continuous
operation of the network, is closely integrated with the com
munications delivery systems of the network. All of this work
consumes a very high percentage of the work done by the
installers.
While it undoubtedly simplifies and clarifies the debate to
attempt to define the work of the installers as being either the
last step in manufacture or the first step in the operation of the
telecommunications network, it is in part misleading to do so.
Where the product loses its functional identity upon installation
in a large system, it perhaps is not completely accurate to
describe its integration as related to its manufacture. Manufac
turing in its ordinary connotation refers to the fabrication of a
product either from raw material to the complete finished state
or the assembly of components and sub-assemblies into a
finished product. Here the transmission and switching equip
ment as such are complete either on delivery to Bell or prior to
its connection to the network. The connection to the network is
simply putting the product, when finished, to work. The net
work is not complete without the product but the product is
complete without the network. Thus it can be said with accura
cy and logic that the installation is a step in the expansion or
reconstitution of the federal works, the operating telecommuni
cations network.
Dickson J. in his concurrence made the same
point in similar language, at pages 772-773
S.C.R.; 6-7 D.L.R.; 183-184 N.R.:
The appellants argue that the installers' work is merely the
end of the manufacturing process; installation is simply effec
tive delivery. The fact that installation of sophisticated equip
ment is no simple task and involves a significant amount of
on-site testing makes no difference. It should be noted that the
testing is primarily internal to the system just installed and
does not normally involve testing along Bell's full network. It is
also conceded that once installation is completed, the equip
ment is turned over to Bell Canada and it is Bell Canada's
employees who are responsible for ordinary maintenance. It is
argued that installers essentially do construction work as was
found to be under provincial jurisdiction in Montcalm, supra.
I agree that the mere fact that installers do on-site testing
does not per se mean the installers are operating the federal
undertaking. I also agree that the fact installation is a complex
procedure is not determinative. I do not, however, agree that
installers' work is properly characterized as construction as in
Montcalm, supra. The respondent Communication Workers of
Canada gives the following analysis of the work of installers:
The overwhelming majority of N.T.C. installation work
involves rearranging, updating or adding to the capacity of
the existing, operational facilities of the telephone network.
N.T.C. installers work in existing operational central offices
and radio relay stations, improving the network as the needs
of the customers of the telephone company evolve. As such
their work is not preliminary to the set-up of the telephone
network, but rather part of its ongoing expansion and mod
ernization. In the General Switching Division, at least 80% to
90% of the work done by installers involves rearrangements
or additions to existing switching equipment in operational
central offices. The same figures apply in the Transmission
Installation Division, where installers rearrange, improve or
expand the capacity of existing radio relay stations.
This is not construction in the sense in which construction was
held to be under provincial jurisdiction in Montcalm. In Mont-
calm, once the airport was completed, the construction workers
would have nothing more to do with the federal undertaking.
Bell Canada's operations are much different. The nature of Bell
Canada's telecommunications system is that it continually is
being renewed, updated, and expanded. - Bell's system is highly
automated, constantly being improved. It is the installers who
perform this task. Although their job is not "maintenance" in
the strict sense of the word, I think it is analytically much
closer to maintenance than to ordinary construction of a federal
undertaking. The installers' work is not preliminary to the
operation of Bell Canada's undertaking; the work is an integral
part of Bell Canada's operation as a going concern. It was
earlier noted the installers have no contact with the rest of
Telecom employees. In contrast, they do have contact with, and
must closely co-ordinate their work with, Bell Canada
employees. In this overall context, installation is not the end of
the manufacturing process. It is not even properly described as
the beginning of the operation of the federal undertaking. It is
simply an essential part of the operations process. The install-
ers' work is not the same kind of participation in the day-to-day
operations of the federal undertaking as was present in the
Stevedoring case or the Letter Carriers' case, supra, in the
sense that Telecom installers ordinarily do not directly service
users of the federal undertaking. That does not, however,
render the installers' work any less vital to the federal
undertaking.
I conclude from the two Northern Telecom
cases that the critical factor in determining consti
tutional jurisdiction in such cases is the "macro-
relationship" between the subsidiary operation and
the core federal undertaking. The facts of this
relationship should be examined from a functional,
practical point of view, and for federal jurisdiction
to be established (1) there must be a high degree
of operational integration and (2) it must be of an
ongoing nature. Construction Montcalm, there
fore, must also be interpreted in this light.
These conclusions exactly fit the results in the
two cases written by Urie J. for this Court since
the Northern Telecom decisions. In Bernshine
Mobile Maintenance Ltd. v. Canada Labour Rela
tions Board, [1986] 1 F.C. 422; (1985), 22 D.L.R.
(4th) 748; (1985), 62 N.R. 209, CLRB jurisdic
tion was upheld where a business of providing tire
repair services and tractor and trailer washing
services was found vital to the operation of a
federal undertaking of interprovincial truck trans
portation. In Highway Truck Service Ltd. v.
Canada Labour Relations Board (1985), 62 N.R.
218, the Court similarly upheld federal jurisdiction
where a company provided continuous mainte
nance for transport truck tractors used by an
interprovincial trucking company.
IV
The full analysis by the CLRB of the critical
factor in the constitutional determination is as
follows, Casebook, vol. I, pages 31-33:
We come finally to the fourth and most important factor, the
physical and operational connection between the core federal
undertaking and the particular subsidiary operation. Even if the
first three factors pointed to federal jurisdiction (which they do
not) we would reach a conclusion of provincial jurisdiction on
the basis of the weight of the fourth factor alone.
We cannot see that the reconstruction of a bridge by an
outside contractor is any more an integral part of CN Rail's
operations as a going concern than would be the building of a
new railway station at Vancouver or the addition of ten storeys
to its head office in downtown Montreal.
From the officer's report it is clear that it is CN Rail's
employees who ensure that the railway continues to operate as
a going concern, in as close to a normal fashion as possible.
That is not what the contractor is trying to achieve—it is
simply building a bridge. The railway continues to operate as a
going concern in spite of, not because of, the railway bridge
reconstruction.
The B.C. Board found in favour of federal jurisdiction
because it found the work to be maintenance of the railway.
Maintenance is considered to be integral to a federal undertak
ing because it is necessary to the day to day operations of the
undertaking, (see the Board's decision in Bernshine, supra). We
have great difficulty characterizing the work as maintenance
work, and as part of the operation of the railway as a going
concern. The reconstruction of the bridges is an exceptional
circumstance, not a normal part of the operation. The recon
structed bridge is presumably expected to last a long time but
the actual work does not. That is what distinguishes this case
from Telecom no. 2, supra, where installation of new equip
ment was constantly part of Bell's continuous pattern of mod
ernization. Although day to day track maintenance is part of
the day to day activities of an operating railway, where an old
structure is completely taken away and reconstructed, that is
beyond maintenance. It is simply construction.
Certainly, if CN Rail had used its own maintenance of way
employees to do the work it would make no difference whether
it was called construction or maintenance, the work would
remain in federal jurisdiction. But that conclusion would have
less to do with the nature of the work as such than with the fact
that it would be a non-severable part of a core federal under
taking. Those are the quirks of constitutional law. However, in
the circumstances before us where CN Rail has made a con
scious decision to contract out work and seeks tenders for
construction work from the construction industry, it has clearly
made it a construction project severable from the railway. It is
in that context the constitutional jurisdiction must be assessed.
Treating the work as construction, the leading case in point is
undoubtedly Construction Montcalm Inc. v. Minimum Wage
Commission, supra, wherein the majority of the Supreme
Court of Canada, per Mr. Justice Beetz, held that construction
of an airport runway was not within federal competence over
labour relations. We would apply the same test to the recon
struction of the railway bridge near Smithers, B.C. as the
Supreme Court did to new construction in that case. As we
intimated earlier, we see no significant difference between new
construction to reconstruction, be it a runway, a highway, a
pipeline, a building, or a railway bridge. If the work is being
done in the construction industry within the boundaries of any
province it is our respectful opinion that the primary provincial
competence over labour relations should govern. We would find
that the labour relations of Antioch and Glossop were regulated
by the laws of the province of British Columbia for the
purposes of the construction of the bridge near Smithers, B.C.
In my respecful view, the CLRB has too much
in mind a clearcut distinction between construction
and maintenance. As Dickson J. pointed out in
Northern Telecom No. 2, supra, at pages 773
S.C.R.; 6 D.L.R.; 183 N.R., those terms are often
not so much identical as analogical:
Although their [the Northern Telecom installers] job is not
"maintenance" in the strict sense of the word, I think it is
analytically much closer to maintenance than to ordinary con
struction of a federal undertaking.
The fact that the ongoing operation of the railway
during construction is the particular responsibility
of the railway employees is to my mind a neutral
factor, which could equally well go to show the
close intermeshing of the subsidiary and core oper
ations, in that the subsidiary employees are at
times controlled and directed by the core
employees.
Moreover, I do not find decisive CN Rail's
decision to contract out the construction work, a
point which in oral argument before us counsel for
the CLRB contended was the primary factual
datum to be considered. No doubt a decision to
have the work done in-house, as was apparently
the case with four bridges, would render the work
"a non-severable part of a core federal undertak
ing," as the Board avers. But the converse does not
follow. If it did, it would be impossible to justify
this Court's decisions in the Bernshine and High
way Truck Service cases, which upheld federal
jurisdiction despite contracting-out arrangements.
Nevertheless, it requires only a minimal
refocussing of the CLRB's reasons for decision to
come to the same conclusion as the Board on the
basis of the two Northern Telecom decisions as I
have analyzed them. The operational integration
which may genuinely be seen to exist between
Glossop's employees and those of CN Rail are of a
temporary rather than of an ongoing nature. As
the Board itself put it, "The reconstructed bridge
is presumably expected to last a long time but the
actual work does not." The work here, whether
thought of as construction or as maintenance, is
discrete in nature and temporary in duration.
Unlike that of the Northern Telecom installers,
the work here has no aspect of continuity or
permanence. The work is limited and terminal.
I would therefore answer the question referred
in the negative.
PRATTE J.: I agree.
HEALD J.: I agree.
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.