SUPREME COURT OF
CANADA
Northern Telecom
v. Communications Workers, [1980] 1 S.C.R. 115
Date: 1979-06-28
Northern Telecom Limited Appellant; and
Communications Workers of Canada
Respondent;
and
David P. Thompson et al. Intervenors;
and
The Canada Labour Relations Board
Tribunal.
1978: November 15; 1979: June 28.
Present: Laskin C.J. and Martland, Ritchie, Spence, Pigeon,
Dickson, Beetz, Estey and Pratte JJ. —
ON APPEAL FROM THE FEDERAL COURT OF APPEAL
Constitutional law — Labour relations — Jurisdiction of the
Canada Labour Relations Board — Absence of evidence on the constitutional facts
— British North America Act, ss. 91, 92(10)(a) — Canada Labour Code, R.S.C. c.
L-1, ss. 2, 108.
On April 22, 1976, the Canada Labour Relations Board
(the "Board") certified the Communications Workers of Canada (the
"Union") as bargaining agent for the employees of Northern Telecom
Limited ("Telecom") working as supervisors in its Western Region
Installation Department. At the proceedings, Telecom did not directly contest the
jurisdiction of the Board, stating it reserved its rights on that
constitutional issue. Though no evidence was directed to the question of
jurisdiction, the Board referred to the long history of the earlier
certifications for the installers and held that Telecom's Installation
Department at least was excluded by s. 92(10)(a) of the B.N.A. Act from
provincial jurisdiction. Therefore, the Board had jurisdiction and the
supervisors were employees within the meaning of the Canada Labour Code. Telecom
unsuccessfully brought a section 28 application to set aside the order
of the Board before the Federal Court of Appeal. Leave to appeal to this Court
was granted on the question of whether the employees of Telecom are employed
upon or in connection with the operation of any federal work, undertaking or
business, within the meaning of the Code.
Held: The appeal should be dismissed.
[Page 116]
Even if the Federal Court of Appeal appears to have
treated the jurisdictional issue as one of judicial review of an administrative
board, the answer to the question posed is found in principles governing the
constitutional division of authority over labour relations. By section 108, the
Board has jurisdiction with respect to persons employed on federal works,
undertakings or businesses, as defined in s. 2 of the Code. To determine the
constitutional issues, it is clear that certain kinds of 'constitutional
facts' are required. Among these are:
(1) the general nature of Telecom's operation as a
going concern and, in particular, the role of the installation department
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.
In determining whether a particular subsidiary operation
forms an integral part of the federal undertaking, the judgment is functional
and practical, emphasizing the factual character of the ongoing undertaking. To
ascertain the nature of the operation, one must assess the normal or habitual
activities of the business, which calls for a fairly complete set of factual
findings. Here, there is some question as to the presence of both federal and
provincial undertakings, requiring careful consideration of the connection
between this subsidiary operation and the core undertakings. It is clear from
the record that there is a near-total absence of relevant and material
constitutional facts upon which such a delicate judgment must be made. Absent
these facts, this Court would be ill-advised to essay to resolve the
constitutional issue. Furthermore, Telecom did not apply to the Court, pursuant
to Rule 17 of the Supreme Court Rules for the purpose of having a
constitutional question stated. As Telecom effectively deprived a reviewing
court of the necessary constitutional facts upon which to reach any valid
conclusion on the constitutional issue, the matter will not be referred back to
the Board to hear evidence. This Court being in no position to give a definite
answer to the constitutional issue, that question awaits another day and the
appeal is dismissed simply on the basis that the appellant Telecom has failed
to show reversible error on the part of the Board.
[Page 117]
R. u. Ontario Labour Relations Board, Ex parte Northern
Electric Co. Ltd., [1970] 2 OR. 654, appeal quashed [1971] 1
O.R. 121; Jacmain v. Attorney General of Canada et al., [1978] 2 S.C.R. 15;
Construction Montcalm Inc. v. Minimum Wage Commission, [1979]
1 S.C.R. 754; Arrow Transfer Co. Ltd., [1974] 1 Can. L.R.B.R. 29;
Capital Cities Communications Inc. v. C.R.T.C., [1978] 2 S.C.R. 141; Public
Service Board v. Dionne, [1978] 2 S.C.R. 191; City of Toronto v.
Bell Telephone Co. of Canada, [1905] A.C. 52; Quebec Minimum Wage
Commission v. Bell Telephone Co. of Canada, [1966] S.C.R. 767; Canadian Pacific
Railway Co. v. Attorney-General for British Columbia, [1950], A.C. 122;
In re the validity of the Industrial Relations and Disputes Investigation Act, [1955]
S.C.R. 529; Letter Carriers' Union of Canada v. Canadian Union of Postal
Workers, [1975] 1 S.C.R. 178 referred to.
APPEAL from a decision of the Federal Court of Appeal
dismissing an application to set aside an order of the Canada Labour Relations
Board. Appeal dismissed.
William S. Tyndale, Q.C., and Robert Monette, for the
appellant.
Aubrey E. Golden and Maurice Green, for the respondent,
Communications Workers of Canada,
George Hynna, for the Canada Labour Relations Board.
The judgment of the Court was delivered by
DICKSON J.—On April 22, 1974, over five years ago, the
Communications Workers of Canada (the "Union") applied to the Canada
Labour Relations Board (the "Board") for certification in respect of
a unit comprising some 148 employees of Northern Telecom Limited (formerly
Northern Electric Company Limited) ("Telecom"). The proposed bargaining
unit comprised:
all employees of Northern Telecom Limited working in its
Western Region Installation Department as supervisors.
The Board found that the supervisors were employees within the
meaning of the Canada Labour Code, that the proposed unit was appropriate
for collective bargaining and that the majority
[Page 118]
of the employees constituting the unit wished to have the Union
represent them as their bargaining agent. By an order of the Board, dated April
22, 1976, the Union was certified as bargaining agent for the employees in the
unit.
At first glance, this would appear to be a routine application
for certification. But the subsequent judicial history of this appeal has
proven to be far from routine and its resolution puts the Court in an unusual
and difficult dilemma. In no small part, this can be attributed to the strange
position taken by Telecom in the proceedings. In order to understand how the
situation arose, it is necessary to recount the history of this case—the
positions of the parties before the Board, the proceedings before the Board,
the Board's decision and the disposition of the section 28 application to the
Federal Court of Appeal.
THE POSITIONS OF THE PARTIES BEFORE THE BOARD
All of the employees in the proposed bargaining unit work in that
part of Canada lying to the west of Telecom's "Brighton Line", a line
drawn north from the town of Brighton in the province of Ontario, which Telecom
employs to divide the country into two regions for internal administrative
purposes. The installers in this Western Region are covered by a
collective agreement in which Telecom voluntarily recognized the same union,
the Communications Workers of Canada, as bargaining agent for the installers.
By the application which is the subject of the present proceedings, the Union
sought certification as bargaining agent for the supervisors of these
installers.
In its reply to the Union's application, the employer, then known
as The Northern Electric Company Limited, stated that its business was that of
designing, manufacturing and selling communications systems and equipments and
of installing communications systems and equipments, throughout Canada and
other parts of the world. The application was opposed principally on the ground
that the proposed bargaining unit was not an appropriate unit for purposes of
collective bargaining and further, that the supervisors performed
[Page 119]
management functions and were not "employees" within
the meaning of the Canada Labour Code. Paragraph 15 of Telecom's reply
reads in part:
15. The present application has been filed with your
Honourable Board only because the applicant knows that it cannot be certified
for this group by a provincial Board...
In his opening statement before the Board Mr. Golden, counsel for
the Union, alluded to paragraph 15 of the reply which, he said, raised inferentially,
but not directly, a constitutional issue. He said:
I would like to dispose of that to know whether, in fact,
the respondent accepts the jurisdiction of this Board to here entertain this
application on the basis of the constitution governing this country and if so,
we will not have to deal with that any further. As I say, it has not been
raised directly.
At the conclusion of his preliminary statement Mr. Golden
returned again to the question whether the employer was advancing any
constitutional challenge to the jurisdiction of the Board.
First and of course, the most important area is whether to
know or not the respondent challenges the constitutional jurisdiction because
without that unless that is beside it I don't think we can go very much
further.
Mr. Monette, counsel for Telecom, at the outset of his
preliminary statement said:
Well, Mr. Chairman and Members of the Board, with your
permission I will address myself to one question which has been raised now on
two occasions by my learned friend. Which he quotes as a constitutional issue.
You will notice, from the reply of the respondent, there is no specific
allegation where it is suggested that this Board does not have jurisdiction and
if this were to be the respondent's opinion, it would be clearly stated in one
or more paragraphs in the reply and there is nothing to that in the reply. May
I state the following. Although the respondent does not and will not contest this
Board's jurisdiction to hear the case and adjudge on its merits, I still don't
want to leave my confrère under the impression and he knows that quite well,
as much as I do, that the sole fact of one or more parties agreeing or suggesting
that you have jurisdiction entails an immediate jurisdiction on the part of
this Board and I just don't want to leave the impression that therefore it is a
final
[Page 120]
and closed case. This respondent will not contest this
Board's jurisdiction, but I still want to underline the fact that obviously you
have the jurisdiction which is defined in the Act and still it is my
suggestion, humble suggestion, that there is going to have to be an assumption
on your part of the jurisdiction somehow or another based on facts. The only
question I am saying is that even if I were to agree that you have
jurisdiction, I don't think that this creates law as far as this board is
concerned. So, I hope this answers my confrère's queries, on two occasions, on
this. Once again stated we will not contest this Board's jurisdiction.
It will be observed that counsel stated, and repeated, that the
employer did not contest the jurisdiction of the Board.
THE PROCEEDINGS BEFORE THE BOARD
The hearing continued for six days. The testimony and exhibits
fill thirteen volumes. Most of the evidence was directed to the central issue
of whether the supervisors performed management functions. That evidence
exposed the internal operating procedures and hierarchy of Telecom, focusing
upon the intricacies of the relationships between the supervisors and the
installers beneath them, and between the supervisors and the various management
personnel from the district managers on up through the departmental
establishment. Only a trifle of the evidence could be said to have been
directed to constitutional concerns or to be of relevance in resolving any such
concerns.
As has been indicated, counsel for the Union attempted at the
opening of the hearing to obtain some clarification as to the confusing stance
of Telecom, but without success. In final argument, counsel for Telecom only
added to the obfuscation when he said:
The Company has stated its position on the constitutional
issue in this case, and it only wishes to reiterate that it reserves all its
rights to contest eventually with respect to constitutional grounds.
Mr. Golden was driven to make this statement on behalf of the
Union at the opening of his argument to the Board:
Firstly, I was not aware, except from having read the reply,
that there was a serious constitutional issue in this case and it is not my
opinion that there is now. My
[Page 121]
friend has reserved the respondent's rights to contest,
eventually, with respect to the constitutional area and it's always been my
understanding that with administrative law and practice, that the proper
procedure is to give the tribunal, whose constitutional authority may be
questioned, an opportunity to adjudicate on that question, itself, in order to
determine whether or not it will assume jurisdiction. My friend, on a couple of
occasions, has been invited to determine, to indicate, whether the matter is
going to be raised or not, whether it will be left lying or will be seriously
considered. He refused to abandon the position and invites this Board, in effect,
to exercise its power to decide that it has jurisdiction, without the benefit
of hearing evidence on the question of his jurisdiction and without the benefit
of having had argument on its jurisdiction. Now, I point this out because I am,
of course, inviting the Board to assume jurisdiction and to go on, hopefully,
to certify and if my friend chooses to contest, at that point, I would like it
clearly on the record, that the [employer] at no time has presented evidence or
legal argument which would indicate that the Board did not have constitutional
jurisdiction. I realize that the Board cannot, by its own decision, give
itself constitutional jurisdiction where it did not have it.
THE DECISION OF THE BOARD
The Board held against Telecom on all counts. It found that the
supervisors were employees within the meaning of the Canada Labour Code, that
the proposed unit was appropriate for collective bargaining and that the
majority of the employees constituting the unit wished to have the Union
represent them as their bargaining agent. None of these matters remains in
controversy. The only point of continuing consequence is paragraph (a) of
the Board's decision which states that the Board has:
(a) found that the employer and supervisors concerned are
engaged upon a work, undertaking or business to which the Canada Labour Code applies;
The decision of the Board is a lengthy document in which all of
the salient points are carefully reviewed. The earlier certification
proceedings are also recounted.
As Mr. Monette, counsel for Telecom, noted during his closing
argument, there is a long history of certification for the installers, East and
West,
[Page 122]
though not, of course, for the supervisors. Mr. Monette said:
There is no prior history of organization within the group
of supervisors, may (sic) they East or West, however, there is an obvious long
history of certification still in existence for the Installers, East and West.
Ever since the 1940's, there has been a certification in the Province of Quebec
and there has been a certification in the Province of Ontario. There has never
emanated a Federal certification on account of lack of jurisdiction. However,
in 1970, there were two cases that were brought in front of civil courts, one
in the province of Quebec and one in the province of Ontario. And obviously,
you know that I am referring to the judgment of Monsieur le juge Lacourcière of
the Supreme Court of Ontario, 1970, I think Mr. Chairman indicated that there
were already copies in the file, in the Board's file, of that decision.
Mr. Monette dealt at length with the judgment of Mr. Justice
Lacourcière in R. v. Ontario Labour Relations Board, Ex parte Northern
Electric Co. Ltd. to
which I will later return.
In its decision the Board detailed some of the history of the
earlier certifications, which I will summarize:
1945—Installers in Eastern Region included in certification
granted by Labour Relations Board of the Province of Quebec in a bargaining
unit described as:
All non-supervisory hourly-rated employees in the Province
of Quebec excluding watchmen and printing trades.
Later-Separate collective agreement negotiated by the employer
with installers although they remained in same bargaining unit as all other
hourly-rated employees who were, generally speaking, in the manufacturing
operations of the Company.
1958—The Union organized the installers of the Western Region and
applied to the Canada Labour Relations Board for certification. The
application was contested on constitutional grounds and the Canada
[Page 123]
Labour Relations Board declined to assume jurisdiction.
1968—The Union, although they held a collective agreement with
the Company covering employees of the Western Region with headquarters in
Toronto, save and except installation supervisors, filed an application with
the Ontario Labour Relations Board for a unit of employees described as:
All employees in the Installation and Outside Plant
Department of the respondent employed in the Province of Ontario except those
for whom the applicant already has bargaining rights.
The company contested the constitutional jurisdiction of the
Ontario Labour Relations Board and subsequently raised the same question before
the Supreme Court of Ontario by way of a writ of certiorari to quash the
decision of the Ontario Board. In the judgment of Lacourcière J., referred to
above, the Court concluded:
... I have therefore reluctantly arrived at the conclusion
that the Ontario Labour Relations Board proceeded upon an error of law ... I am
satisfied that the . company's Installation Department at least is excluded by
Section 92(10) subparagraph (a) of the British North America Act from
provincial jurisdiction. (at p. 672)
At the time of the application for certification now under
consideration there was in force the collective agreement earlier mentioned, in
which Telecom recognized the Union as sole and exclusive bargaining agent for
employees of Western Region Installation having headquarters in Toronto and
employed in connection with the installation of communications and related
equipment. The recognition clause of the agreement specifically excludes
installation supervisors. It is this group of supervisory employees which the
Union in the instant case proposed as an appropriate bargaining unit. Under
the heading "(C) Salient Facts adduced in evidence" the Board
states:
Having become aware of the considerable litigation before
the Courts as to the constitutional jurisdiction issues surrounding various
groups of employees' certifications
[Page 124]
or attempts to get certified, and having read allegation 15
in the formal Reply of the employer .. . the Board invited Company Counsel to
comment on this matter in an opening statement. They replied that there was no
contestation regarding the jurisdiction of the Board.
Whereupon the Board proceeded to hear evidence and study
exhibits produced by the parties.
Later in the decision one reads:
(A) The Employer
(a) Although Counsel for the employer had stated prior to
the evidence being adduced in the instant case that they were not raising the
issue of jurisdiction, that position was qualified at the outset of the
argument in the following manner:
The Company has stated its position on the constitutional
issue in this case, and it only wishes to reiterate that it reserves all its
rights to contest eventually with respect to constitutional grounds.
(B) The Applicant
(a) This Board had jurisdiction. As regards this question,
the employer has presented no evidence and/or legal argument to substantiate a
contestation.
Later, under the heading "Reasons for Judgment",
"(A) General Comments", the Board observed that
Leaving aside for the moment the problems inherent in the
division of the employer's operations in this department between a Western and
an Eastern region and the jurisdictional complexities, the present case does
not contain any novel feature. It is strictly another application by a group of
supervisors under the authority of Section 125(4) of the Code, to obtain
collective bargaining rights .. .
Proceeding then to consider "(B) The Instant Case" the
Board commenced
1. One must first realize that we are dealing here with only
one department of this large company, that is, the department involved in the
installation of switching equipment.
Then followed twenty pages in which the Board reviewed the work
and responsibilities of the installation supervisors, concluding finally that
they did not perform management functions of such a nature as to disqualify
them from the definition of "employee" within the meaning of the
Code.
[Page 125]
The Board then turned its attention to the matter of
jurisdiction, and said this:
5. As to the jurisdiction there is a long history of
vacillating as to where the jurisdiction over the employees of this employer
lies, especially in the case of the installers and now, their supervisors.
The Board refers more particularly to the events surrounding
the certification of the installers by the Quebec Board and the attempts by
installers in Ontario to get certification from the Ontario Labour Relations Board
as well as the refusal of the predecessor to this Board in 1958 to grant
certification to the Communications Workers of America, Local C-4 for a group
of installers.
In the first place, this Board wishes to stress the fact
that it provided itself with all pertinent decisions by the Quebec and Ontario
Labour Boards as well as its own together with the judgment of the Honourable
J. Lacourcière of the Ontario Supreme Court, rendered in 1970.
Secondly, there has been a significant development in the
operations of this employer since 1950 and especially in recent years, a
development which had not fully evolved when this Board's predecessor, chaired
by C. Rhodes Smith, declined to assume jurisdiction in 1958 when dealing with
an application for certification by a group of installers of the Western Region
of this employer.
As to the import and consequences of this development on the
jurisdiction of this Board, we were particularly interested in verifying that
part of the operations of the employer consisted of
... a 'marked change in concept' whereby the company will
undertake whatever the customer requires including repairs and maintenance in
addition to installations."
Then followed two passages from the judgment of Mr. Justice
Lacourcière and this comment:
There has been no evidence in the instant case to contradict
the facts as related in the above excerpts of the judgment of Mr. Justice
Lacourcière.
The Board commended the "searching analysis" of
Lacourcière J. as to the constitutional law issues involved and the
jurisprudence, noting his conclusion as to the nature of the operations
performed in the installation division of Telecom:
[Page 126]
... I am satisfied that the system line-up testing in any
event involves the operation of an interprovincial communications system.
and drawing comfort from his further conclusion:
I am satisfied that ... the company's Installation
Department at least is excluded by s. 92(10)(a) of the British North America
Act from provincial jurisdiction and that the relevant employer-employee
relations necessarily come within the purview of the Industrial Relations
and Disputes Investigation Act.
The Board closed this portion of its decision by finding:
Therefore the Board is convinced that it has jurisdiction
in the instant case.
The application of the Union was granted and an order issued
certifying the Union as the bargaining agent of the employees of Telecom in the
proposed unit.
THE FEDERAL COURT OF APPEAL
Telecom brought a s. 28 application before the Federal Court of
Appeal to review and set aside the order of the Canada Labour Relations Board.
The court dismissed the application. The argument advanced on behalf of Telecom
that the Board acted without jurisdiction was rejected without calling upon the
Union to respond. The court held that when an applicant seeks to have a
reviewing court set aside an order as having been made outside the scope of its
jurisdiction, the onus is on the applicant to ensure that evidence of the facts
necessary to support the application is before the court. The nub of the
court's decision, delivered by the Chief Justice, is to be found in the
following paragraph:
It follows that, in this case, for the applicant to succeed
on the jurisdiction point, there must be evidence before this Court upon which
this Court can decide that the certification order was outside the scope of the
Board's jurisdiction, and it also follows that in this case the onus was on the
applicant to ensure that such facts were made to appear before this Court. The
applicant did not seek to adduce any evidence on the point in this Court and
abstained from putting the matter in issue before the Board. There is,
therefore, no evidence upon
[Page 127]
which this Court can find that the Board acted beyond its
jurisdiction.
In another paragraph the court added:
I have not, moreover, overlooked the existence of evidence
put before the Board in connection with the issues that were raised before the
Board from which, taken by itself, some conclusions might be drawn with regard
to the nature of that part of the applicant's business operations that are
involved in this matter. In my view, in the absence of agreement that such
evidence reveals an accurate picture of such operations from a jurisdictional
point of view, it having been led before the Board in respect of entirely
different issues, it cannot be used by this Court, as a reviewing court, to
make findings of fact on the jurisdictional question. In my view, such a use of
evidence led with reference to one issue with which a hearing is concerned to
make findings on an issue with which a hearing was not concerned is not, in the
absence of agreement or other special circumstances, sound. It might be added
that, in my view, the facts raise a very difficult question from a
jurisdictional and constitutional point of view, upon which this Court should
not make a pronouncement in the absence of a full exploration of the facts
relating to the jurisdictional and constitutional question as such.
THE ISSUE BEFORE THE COURT
Telecom then sought leave to appeal to this Court and leave was
granted on this single question:
Did the Federal Court of Appeal err in holding that the
Canada Labour Relations Board had jurisdiction to deal with an application for
certification on behalf of the employees concerned in respect of the question
raised whether they are employed upon or in connection with the operation of
any federal work, undertaking or business?
In order to understand the nature of the question upon which
leave was granted, one has to consider the provisions of the Canada Labour
Code, R.S.C. 1970, c. L-1 which delimit the Canada Labour Relations Board's
jurisdiction in certification matters. Part V of the Canada Labour Code, is the
"Industrial Relations" portion of the Code and s. 108 states:
108. This Part applies in respect of employees who are
employed upon or in connection with the operation of any federal work,
undertaking or business and in respect of the employers of all such employees
in their relations
[Page 128]
with such employees and in respect of trade unions and
employers' organizations composed of such employees or employers.
The definition of "federal work, undertaking or
business" is found in s. 2 of the Code and the relevant portions read as
follows:
"federal work, undertaking or business" means any
work, undertaking or business that is within the legislative authority of the
Parliament of Canada, including without restricting the generality of the
foregoing:
(b) a railway, canal, telegraph or other work or undertaking
connecting any province with any other or others of the provinces, or extending
beyond the limits of a province;
(h) a work or undertaking that, although wholly situated
within a province, is before or after its execution declared by the Parliament
of Canada to be for the general advantage of Canada or for the advantage of two
or more of the provinces; and
(i) a work, undertaking or business outside the exclusive
legislative authority of provincial legislatures;
Clause (b) of the definition is merely a restatement of a portion
of s. 92(10)(a) of the British North America Act, one of the classes of
works and undertakings withdrawn from the provinces and rendered a matter
exclusively federal by the terms of s. 91(29), i.e. "Such Classes
of Subjects as are expressly excepted in the Enumeration of the Classes of
Subjects by this Act assigned exclusively to the Legislatures of the
Provinces". Similarly, clause (h) is a restatement of s. 92(10)(c)
with the addition of the words "or undertaking". Clause (i) above
would appear to be an effort to apply the general or residual power of the
federal Parliament to the field of works and undertakings or it may stem from a
federal perception of the effect of s. 92(10)'s exceptions from "Local
Works and Undertakings".
Colin McNairn in his "Transportation, Communication and the
Constitution: The Scope of Federal Jurisdiction" (1969), 47 Can. Bar
Rev. 355, at 393, took the view that the exceptions as exceptions ought to
be narrowly construed against federal power. W.R. Lederman in his illuminating
[Page 129]
article, "Telecommunications and the Federal Constitution of
Canada" in H.E. English, ed., Telecommunications for Canada (1973),
339 at 360, puts much greater stress upon the effect of s. 91(29) in
converting these exceptions to an exclusive head of federal power and thus
supports a broader reading of federal authority.
The importance of ss. 108 and 2 of the Canada Labour Code read
in conjunction with ss. 91 and 92 of the British North America Act is the
recognition of the essentially constitutional nature of the problem of
jurisdiction raised in this case. There can be no doubt that the administrative
jurisdiction-apart from constitutional questions—of the Canada Labour
Relations Board in this case has been effectively engaged. Ignoring the
constitutional issue, the general subject-matter of the dispute before the
Board lies at the very heart of a labour board's administrative law
jurisdiction. No jurisdictional error was committed by the Board in the course
of the inquiry. In its purely administrative aspects, the Board's decision was
not challenged in this Court.
The appellant and the respondent attempt to bolster their
respective arguments by adverting to principles of judicial review of
administrative action. Telecom argues that there is operative in this case a
"double presumption" against the jurisdiction of the Board-flowing
from the reinforcing effects of the Board being an inferior tribunal of
restricted jurisdiction and labour relations being as a rule within provincial
jurisdiction. By means of this "double presumption" against
jurisdiction, Telecom argues that the burden of proof rested upon the applicant
Union before the Board. The respondent Union opens its factum with an argument
based upon Jacmain v. Attorney General of Canada and Public Service Staff
Relations Board, namely,
that a question of "jurisdictional fact" arises. Accordingly,
suggests the Union, the Board should be allowed "a degree of
latitude" in its jurisdictional findings, only requiring "substantial
evidence for its decision of fact and a rational
[Page 130]
basis for its decision of law". The courts should therefore
exercise restraint in declaring the tribunal to be without jurisdiction, when
it reached its decision honestly and fairly, and with due regard to the
material before it. In effect, the Union argues that the burden of proof lies
upon Telecom who now challenges the jurisdiction of the Board.
It will be seen, upon reflection, that there is here neither a
"double presumption" against the Board's jurisdiction, nor is there
occasion for applying the "jurisdictional fact" doctrine upon review.
As I have pointed out, there is no question of the Board's administrative or
subject-matter jurisdiction.
The Federal Court of Appeal appears to have treated the
jurisdictional issue in this case as one of judicial review of an
administrative board which has taken jurisdiction in an administrative sense.
On this view, quite clearly, the onus would rest upon the applicant for
judicial review and not, by implication, upon the Union. But what is in question
here is not the Board's administrative jurisdiction in the classic sense of
that term, but whether the jurisdiction given by Parliament to the Canada
Labour Relations Board, through s. 108 of the Code, extends to the labour
relations of the employees engaged in the work, undertaking or business here at
issue, i.e., the installation department of Telecom. The answer to the question
posed in the order granting leave must be found, not in the principles of
judicial review of administrative action, but in the principles governing the
constitutional division of authority over labour relations.
THE GRANTING OF LEAVE TO APPEAL
At the time leave was granted in this appeal, the Court had
before it only the reasons for decision of the Canada Labour Relations Board
and the judgment of the Federal Court of Appeal. As I have explained above, an
important and difficult constitutional
[Page 131]
question would appear to have been raised on the record then
before the Court.
When it came time to hear the appeal, the full record of some
2,479 pages was before the Court. In addition, an appendix containing the oral
submissions of the parties before the Board was filed. It is to that record
that we must look in resolving the case.
What became apparent in the course of oral argument was that
serious problems existed in the scope and cogency of the evidence relating to
the constitutional question, as a consequence of the position taken by Telecom
before the Board. The Court was directed by counsel to some of the passages in
the evidence that might afford the factual basis for a determination of the
issue before the Court. Before delving into that evidence, we must consider
the board constitutional principles applicable to the field of labour relations
in order to determine the "constitutional facts" that are relevant
and material to the decision this Court is being called upon to make.
THE CONSTITUTIONAL PRINCIPLES
The best and most succinct statement of the legal principles in
this area of labour relations is found in Laskin's Canadian Constitutional
Law (4th ed., 1975) at p. 363:
In the field of employer-employee and labour-management
relations, the division of authority between Parliament and provincial
legislatures is based on an initial conclusion that in so far as such relations
have an independent constitutional value they are within provincial
competence; and, secondly, in so far as they are merely a facet of particular
industries or enterprises their regulation is within the legislative authority
of that body which has power to regulate the particular industry or enterprise
...
In an elaboration of the foregoing, Mr. Justice Beetz in Construction
Montcalm Inc. v. Minimum Wage Commission set
out certain principles which I venture to summarize:
[Page 132]
(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
prevent the application of provincial law relating to labour relations and the
conditions of employment but only if it is demonstrated 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 these 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.
A recent decision of the British Columbia Labour Relations Board,
Arrow Transfer Co. Ltd., provides
a useful statement of the method adopted by the courts in determining
constitutional jurisdiction in labour matters. 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:
[Page 133]
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.
Any core federal undertaking present in this case must be found
within the telephone and telecommunications system. Constitutional jurisdiction
over telecommunications is a difficult and controversial subject. It is a field
which has been the subject of no little academic comment: see Telecommunications
and the Federal Constitution of Canada by W. R. Lederman in H. E. English,
ed., Telecommunications for Canada, An Inter-face of Business and Government
(Toronto; Methuen, 1973); Mullan, Attainment of Objectives and
Jurisdiction in Janisch, ed., Telecommunications Regulation at the
Crossroads (Dalhousie Continuing Legal Education Series, No. 13, 1976),
149; Analysis of the Constitutional and Legal Basis for the Regulation of
Telecommunications in Canada, Study 1(a), The Department of Communications
(1971); McNairn, "Transportation, Communication and the Constitution: The
Scope of Federal Jurisdiction" (1969), 47 Can. Bar Rev. 355. Two
recent judgments of this Court have dealt with constitutional jurisdiction in
respect of certain aspects of telecommunications: see Capital Cities
Communications Inc. v. C.R.T. C. and Public
Service Board v. Dionne.
At a minimum, it can be asserted that Bell Canada's operations
have been found to be a federal
[Page 134]
undertaking: see City of Toronto v. Bell Telephone Co. of
Canada, and
Quebec Minimum Wage Commission v. Bell Telephone Co. of Canada.
In the field of transportation and communication, it is evident
that the niceties of corporate organization are not determinative. As McNairn
observes in his article, supra, at pp. 380-1:
A transportation or communication undertaking is a possible
corporate activity but it may or may not be segregated from the total corporate
enterprise or it may even be larger in scope than a single corporate enterprise.
To determine questions of this nature corporate objects have a certain
relevance. But of primary concern is the integration of the various corporate
activities in practice (including the corporate organizations themselves if
more than one is involved) and their inherent interdependence.
McNairn's comment is borne out by the cases. On the one hand, a
single enterprise may entail more than one undertaking, e.g. Canadian
Pacific Railway's Empress Hotel was found to be an undertaking separate and
independent from the railway undertaking in Canadian Pacific Railway Co. v.
Attorney-General for British Columbia.
On the other hand, two separate corporate enterprises may be found to be
included within one single and indivisible undertaking, as in stevedores
employed by a stevedoring company loading and unloading ships in the Stevedoring
case, or a trucking company which did 90 per cent of its business for the
Post Office in Letter Carriers' Union of Canada v. Canadian Union of Postal
Workers.
Another, and far more important factor in relating the
undertakings, is the physical and operational connection between them. Here,
as the judgment
[Page 135]
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 undertaking does not automatically import federal jurisdiction.
Certainly, 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 constitutional
adjudication, it is clear that certain kinds of "constitutional facts",
facts that focus upon the constitutional issues in question, 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 department 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.
It is with these evidentiary requirements in mind that I turn to
review the record which is now before the Court in this appeal.
THE EVIDENCE
In the proceedings before the Board, there was some evidence
concerning the general nature of Telecom's business and the role of the
installation department within the company. No evidence was led to reveal the
nature of the corporate and business relationships between Telecom and Bell
Canada. All of the relevant evidence is found in
[Page 136]
the testimony of Mr. Lloyd Watt, at the time Director of S.P. 1
Installations for Northern Electric. As to the general nature of the business
of Northern Electric, Mr. Watt said:
Northern Electric Company designs, manufactures, sells
communications equipment, cables in Canada and else-where in the world. The
installation organization of Northern installs communications equipment in
Canada and other countries of the world.
Watt clarifies this with the comment that Northern also installs
other manufacturers' equipment, apart from that of Northern, "as an
integral part of the system". This is followed by a description of the
equipment installed, "basically, what we term central office switching and
transmission equipment" and then he details the various types of such
equipment.
The most detailed description of Northern's customers is
contained in the following general comment:
Q. Generally speaking, Mr. Watt, who are the customers or
what is the type of customers Northern Electric has?
A. The major customers are various telephone companies
whether they be independent public utilities or government telephones, many
small telephone companies, government agencies such as, the Department of
Defence Production. We have had contracts with NATO for communications
equipment installations.
I guess looking at the Canadian telephone industry, we have
worked for British Columbia Tel., Quebec Tel., Bell of course, the Manitoba
Telephone System, Saskatchewan Government Telephone, City of Edmonton
Telephones, Alberta Government Telephones. Basically, in the communication
industry in Canada and in foreign countries such as, Turkey, it is called the
P.T.&T. Post Telegraphs, and so on, Nigeria, that is for the Nigerian
Government, Jamaica for an independent telephone company, that type of
customer.
Watt describes installation within the company as "a
department within a division". According to Watt, Telecom has seventeen
manufacturing plans in Canada.
[Page 137]
One can read through the thirteen volumes of evidence, only to
find that that is the sum total of the evidence on the corporate and business
relationships of Telecom.
As for the role of the installers within the system, there is
some testimony on the part of Watt in response to questioning by the Chairman
of the Board:
The functions of the installer are to broadly put, assemble,
cable, wire, adjust or verify and test a given piece of equipment, system or
whatever, depending on the man's skill.
In other words, if you could visualize this room without any
furniture or equipment in it, that is what the central office looks like when
we first arrive. The equipment is laid out and structures are erected to
support the components to be assembled.
The next natural sequence, of course, is to cable it to the
various frames, interconnecting bays, switchboards, whatever, to bring it all
together. The installer's work is limited to taking it to what we call the main
frame, if you will, and from there on out it is the telephone cable that go in
the manhole and the poles, etc., are usually installed by the telephone
companies.
However, in some contracts that we have had, we have taken
it all on, that is the outside cabling and the construction of the building,
almost like a turnkey operation, so the installer works, generally, within a
central office. Although we have transmission installers who will work on
towers on the wave guides, horns, reflectors and so on.
Q. Does the work encompass after that the maintenance of
that equipment?
A. We, as a general rule, do not do maintenance unless it is
a specific request of the customer for one or two installers or supervisors to
stay behind to help train the customer and maintain the office. And they are on
separate orders.
We do provide customer training and we will, if requested by
the customer, leave a skilled person or manager there to help him to get his
system into service. That is generally what happens in the U.S.A.
Q. An, therefore, in those circumstances, your installers in
fact operate the system?
A. In some instances.
[Page 138]
In response to questions from counsel for Telecom on
re-examination, with respect to the importance of the various functions of the
installation department, Watt observed:
The large bulk of our work consists of installing new and/or
re-used equipment and testing it. The predominance of our work is in that
area. The .. .
CHAIRMAN: Can you get any closer than that, 75% 80%?
A. Oh! I would say that it would be in the high 90's, of the
kinds of work we do. Relating to instructing customers or assisting them on
maintenance, a very small percentage occasional customer's request as distinct
to in the U.S.A. of course, our people usually remain there for the cut-over
and perhaps a week or two after assisting the telephone company. But in volume
of work and time, it is a very small percentage.
Further, on the subject of testing, Watt testified:
Q. How do you rate testing in terms of complexity by
comparison to other functions that have to be performed during an installation
job?
A. Testing is, again, depending on the system and the unit
being worked on, could be from very simple to extremely complex, solid state,
etc.
Q. What is the importance of testing?
A. This is the final analysis of what we have sold to our
customer as a product that will do a certain thing. The testing ensures that
that piece, part or system will, in fact, do what we have sold the customer and
meet the specifications.
That is the sum total of the evidence that describes, however
scantily, the relationship between installation and operation in the telephone
system.
THE DILEMMA
One thing is clear from the earlier discussion of the applicable
constitutional principles. In determining whether a particular subsidiary
operation forms an integral part of the federal undertaking, the judgment is,
as was said in Arrow Transfer, a "functional, practical one
about the factual character of the ongoing undertaking". Or, in the words
of Mr. Justice Beetz in Montcalm, to ascertain
[Page 139]
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" and the assessment of those
"normal or habitual activities" calls for a fairly complete set of
factual findings. The importance of such findings of fact is only heightened
when one considers that some question exists here as to the presence of both
federal and provincial undertakings, requiring close and careful consideration
of the connection between this particular subsidiary operation and the core
undertakings.
Equally clear from the record is the near-total absence of the
relevant and material "constitutional facts" upon which such a
delicate judgment must be made. On the evidence in the record, this Court is
simply not in a position to resolve the important question of constitutional
jurisdiction over the labour relations of the employees involved in the
installation department of Telecom.
The absence of any such evidence can be almost wholly attributed
to the ambiguous stance taken by Telecom before the Board. Counsel for Telecom
drew the Board's attention to the fact that the Telecom reply to the Union's
application did not suggest that the Board lacked jurisdiction. Counsel assured
the Board, subject to its "reservation", that "this respondent
will not contest this Board's jurisdiction" and "once again stated we
will not contest the Board's jurisdiction". As Telecom made no challenge
to the Board's jurisdiction, neither Telecom nor the Union adduced constitutional
facts, and jurisdiction was not argued, before the Board. No further evidence
was adduced before the Federal Court of Appeal on the s. 28 application to
review and set aside the decision of the Board.
I am inclined toward the view that, in the absence of the vital
constitutional facts, this Court would be ill-advised to essay to resolve the
constitutional issue which lurks in the question upon which leave to appeal
has been granted. One must keep in mind that it is not merely the private
interests of the two parties before the Court that are involved in a
constitutional case. By definition, the interests of two levels of government
are also
[Page 140]
engaged. In this case, the appellant did not apply to the Court,
pursuant to Rule 17 of the Supreme Court Rules, for the purpose of
having a constitutional question stated. If the appellant had intended to
raise a question as to the constitutional applicability of the Canada Labour
Code, then the obligation was upon the appellant to assure that the
constitutional issue was properly raised. As no constitutional question was
stated nor notice served upon the respective Attorneys General, the Court lacks
the traditional procedural safeguards that would normally attend such a case
and the benefit of interventions by the governments concerned.
There is always the overriding concern that the constitution be
applied with some degree of certainty and continuity and regularity and not be
wholly subject to the vagaries of the adversarial process. The case at bar is
an apt demonstration of the occasional vagaries of that adversarial process.
CONCLUSION
How is the Court to dispose of this case and resolve this
dilemma? The matter could be referred back to the Board to hear evidence, find
facts and consider arguments on the constitutional question. I do not think
this would be an appropriate disposition of this case. The Union applied on
April 22, 1974 to the Board for certification of the bargaining unit which is
the subject-matter of these proceedings. To refer the whole affair back to the
Board for a re-hearing would start the matter all over again. Over five years
have passed. It would work a grave injustice on the employees seeking
certification and reward the employer for the equivocal, and if I may say so,
questionable tactics which it saw fit to adopt.
Telecom did not raise the constitutional question before the
Board, nor did Telecom there take the position that the Board lacked a prima
facie basis of facts upon which it could conclude that it had jurisdiction.
Absent any serious challenge to its jurisdiction, the Board dealt with this
issue briefly and assumed jurisdiction. Telecom, by its actions, effectively
deprived a reviewing court of the necessary
[Page 141]
"constitutional facts" upon which to reach any valid conclusion
on the constitutional issue.
After consideration of the full record in all its thirteen
volumes, a record which the Court did not have available to it upon granting
leave, I have concluded that this Court is in no position to give a definitive
answer to the constitutional question raised. I think we must leave that
question to another day and dismiss the appeal simply on the basis that the
posture of the case is such that the appellant has failed to show reversible
error on the part of the Canada Labour Relations Board.
I would dismiss the appeal with costs throughout to the Union.
Appeal dismissed with costs.
Solicitors for the appellant: Ogilvy, Montgomery,
Renault, Clarke, Kirkpatrick, Hannon & Howard, Montreal.
Solicitors for the respondent: Golden, Levinson, Toronto.
Solicitor for the Canada Labour Relations Board: L. M.
Huart, Ottawa.