Four B Manufacturing v. United Garmet Workers, [1980] 1 SCR 1031

Supreme Court of Canada

Four B Manufacturing v. United Garmet Workers, [1980] 1 S.C.R. 1031

Date: 1979-12-21

Four B Manufacturing Limited (Plaintiff) Appellant;

and

United Garment Workers of America and Ontario Labour Relations Board (Defendant) Respondents;

and

Chief Donald R. Brant and a group of individual employees Intervenors.

1979: June 20, 21; 1979: December 21.

Present: Laskin C.J. and Martland, Ritchie, Pigeon, Dickson, Beetz, Estey, Pratte and McIntyre JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Labour relations—Indians—Distribution of legislative authority—Provincial corporation manufacturing on Indian reserve under permit—Owned by Indian Band members and employing mainly Band members—Certification of union by Provincial Labour Relations Board—The Labour Relations Act, R.S.O. 1970, c. 232—Indian Act, R.S.C. 1970, c. I-6—Canada Labour Code, s. 108.

Constitutional law—Indians—Indian owned provincial company manufacturing on Indian Reserve—Employees largely Band members—The Labour Relations Act, R.S.O. 1970, c. 232—Indian Act, R.S.C. 1970, c. I-6—Canada Labour Code, s. 108.

Appellant Four B, incorporated under the laws of Ontario and carrying on business on an Indian Reserve established under the Indian Act, R.S.C. 1970, c. I-6, was owned by four brothers named Brant, all members of the Band. Its business was the production of leather shoe uppers on contract for Bata Shoe Co. It was in no way controlled by the Band Council but occupied premises on the Reserve on a three year renewable permit. The company received from the Government of Canada some $284,000, of which $51,000 was a grant and the remainder a loan, under various Indian Affairs programs. At the relevant time Four B employed 68 persons (48 Band members, 10 former Band members and 10 non-Indians). The issue was whether the provincial Labour Relations Act (R.S.O. 1970, c. 232) applied to the activities of the company, and arose as a result of the certification of the respondent union on January 27, 1977, as bargaining agent for the company’s production

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employees under that provincial Act. The Ontario Labour Relations Board held that the provincial Act applied without the need to resort to federal enabling legislation and the Board’s decision was affirmed, on an application for judicial review, by both the Divisional Court and the Court of Appeal.

Held (Laskin C.J. and Ritchie J. dissenting): The appeal should be dismissed.

Per Martland, Pigeon, Dickson, Beetz, Estey, Pratte and McIntyre JJ.: With respect to labour relations, exclusive provincial legislative competence is the rule, exclusive federal competence is the exception. The exception comprises, in the main, labour relations in undertakings, services and businesses which can be characterized as federal. There is nothing in the business or operation of Four B which might allow it to be so characterized as a federal business: the sewing of uppers on sport shoes is an ordinary industrial activity clearly under provincial legislative authority for the purposes of labour relations. Neither the ownership of the business by Indian shareholders, nor the employment of a majority of Indian employees, nor the carrying on of that business on the Indian reserve, nor the federal loan and subsidies, taken separately or together, can have any effect on the operational nature of that business. By both the traditional and functional tests therefore, The Labour Relations Act of Ontario applies on the facts here, and the Ontario Labour Relations Board has jurisdiction. Section 108 of the Canada Labour Code is directed at federal activities, operations or functions and not at the position of individuals, such as Indians, who might be considered to be “federal” persons or at their relationships.

Per Laskin C.J. and Ritchie J., dissenting: Sections 18 and 28 of the Indian Act, taken with ss. 20(1) and 30, whose constitutionality is beyond question, and their projection into the permit to Four B to have its factory on the Reserve, manifest an exercise of federal legislative authority in maintaining the Reserve for the use and benefit of Indians who are members of the Band for which the reserve has been set apart. The permission to operate the factory reflects the “use and benefit” to which s. 18 of the Indian Act and supporting provisions refer.

The incorporation of the appellant Four B under Ontario legislation did not change the situation. That incorporation did no more than give the Brant brothers, the only shareholders, a convenient method of carrying

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on a business operated by Indians for the benefit of Indians. That the company, qua company, is governed by Ontario legislation in respect of its corporate structure does not mean that its business is also subject to provincial legislation, as for example in respect of labour relations. The governing document in this respect is the permit agreement authorized by s. 18 of the Indian Act.

In this case the proper inquiry is not whether the Ontario Labour Relations Act applied to the enterprise of Four B and its employees, but rather whether Part V of the Canada Labour Code applies. The combination of circumstances in the present case bring it squarely within ss. 2 and 108(1) of that Code. The factory is operated by Indians for Indians, on a reserve in a building leased from the Band Council, under a revocable licence from the responsible federal Minister, is financed by federal funds under the special Indian Economic Development Fund and is operated under the detailed provisions in the Indian Act and under the approvals therein prescribed.

[Toronto Electric Commissioners v. Snider, [1925] A.C. 396; In the matter of a reference as to the validity of the Industrial Relations and Disputes Investigation Act, [1955] S.C.R. 529; In the matter of a reference as to the application of the Minimum Wage Act of Saskatchewan to an employee of a Revenue Post Office, [1948] S.C.R. 248; Commission du Salaire Minimum v. The Bell Telephone Company of Canada, [1966] S.C.R. 767; Agence Maritime Inc. v. Canada Labour Relations Board, [1969] S.C.R. 851; The Letter Carriers’ Union of Canada v. Canadian Union of Postal Workers, [1975] 1 S.C.R. 178; Canada Labour Relations Board, Public Service Alliance of Canada v. City of Yellow-knife, [1977] 2 S.C.R. 729; Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754; Union Colliery Company of British Columbia v. Bryden, [1899] A.C. 580; Cardinal v. A.-G (Alta.), [1974] S.C.R. 695, referred to.]

APPEAL from a judgment of the Court of Appeal for Ontario affirming a judgment of the Divisional Court[1] on an application for judicial review. Appeal dismissed with costs to the respondents, no order as to costs to or against the intervenors or the respondent Ontario Labour Relations Board, Laskin C.J. and Ritchie J. dissenting.

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Burt Kellock, Q.C., and J.T. Beamish, for the appellant.

Robert J. Reynolds, for the intervenant group of individual employees.

Ronald W. Cass, Q.C., for the intervenant Chief Donald R. Brant.

Paul Cavalluzzo, for the respondent Union.

Ian Scott, Q.C., and Harry Freedman, for the respondent Ontario Labour Relations Board.

The reasons of Laskin C.J. and Ritchie J. were delivered by

THE CHIEF JUSTICE (dissenting)—The appellant is an incorporated Ontario company which operates a factory on a designated portion of an Indian reserve, pursuant to a permit for use and occupation of the area given by the Minister of Indian Affairs and Northern Development under s. 28(2) of the Indian Act, R.S.C. 1970, c. I-6. The Reserve is one set apart for the use and benefit of the Mohawks of the Bay of Quinte Band of Indians.

The factory produces leather shoe uppers as a subcontractor of the Bata Shoe Co. The appellant company employs in the main Band members, but also has some former Band members and some non-Indians among its employees. The issue in this appeal arises as a result of the certification of the respondent Union on January 27, 1977 as bargaining agent for the production employees of the appellant company under the Ontario Labour Relations Act, R.S.O. 1970, c. 232. The contention of the appellant company, shortly put, is that the Ontario Labour Relations Board had no jurisdiction to make the certification order under a provincial statute because, under the circumstances, to which I will refer, the labour relations of the appellant company and its employees are within exclusive federal competence under s. 91(24) of the British North America Act, and are either governed by Part V of the Canada Labour Code, as enacted by 1972 (Can.), c. 18 and, if not, are in any event not subject to provincial labour relations legislation.

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The issue of its jurisdiction to entertain a certification application in respect of the employees of the appellant company was canvassed by the Ontario Labour Relations Board in extensive reasons, and the Board concluded that the Ontario Labour Relations Act was applicable of its own force and without the need to resort to federal enabling legislation such as found in s. 88 of the Indian Act. This result was affirmed by a majority of the Ontario Divisional Court, speaking through Morden J., with whom Robins J. concurred. Weatherston J., as he then was, dissented. The Ontario Court of Appeal accepted the majority judgment of the Ontario Divisional Court without finding it necessary to give other written reasons.

The organization of the appellant company was promoted by the federal Department of Indian Affairs as a result of the interest of the Bata Company in establishing a factory in the area. Although the Band Council thought well of an Indian-operated factory on the Reserve, which would give employment to Indians, the majority of those on the Reserve were concerned about taxability of the Reserve lands if the Band owned the proposed company. In the result, four Brant brothers, who were Band members, decided to make the venture their private affair and they leased a building on the Reserve from the Band Council and had the company incorporated on June 28, 1974. Financial assistance was obtained from the federal government. Its permission as well as that of the Band Council was necessary to enable the company to carry on factory operations on the Reserve. A formal document of permission, with various conditions therein, was executed on October 9, 1974 as an agreement between the Crown in right of Canada and the appellant company, the agreement also reciting the approval of the Council of the Band.

In addition to defining the area of the Reserve where the factory would be operated, the permit agreement provided only for use and occupation for a three-year period with the possibility of renewal of the licence of occupation for two further three-year periods to be allowed by the Minis-

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ter in consultation with the Band Council. The agreement was express that no tenancy was created. In addition, it provided for payment of a fee for the permit period. Article 5 of the agreement reserved to the Minister the discretionary power to cancel the permit. The article is in these terms:

5. That this Permit may be cancelled by the Minister by a notice in writing, giving the Permittee such notice as may be considered reasonable in the discretion of the Minister; provided, however that such cancellation shall not thereby prejudice Her Majesty’s right to recover from the Permittee the fee accrued or accruing or any right of action arising from, under or in respect of this Permit.

Articles 8 and 10 are also of significance, as appears from their provisions which are as follows:

8. That the Permittee will give preference in employment to local people for work in the permit area, however, if there are not sufficient applications from local area, the Permittee shall have the right to request assistance from Canada Manpower to fill the staff requirements from the surrounding districts.

. . .

10. That the Permittee shall during the currency of this permit at its own expense promptly observe, perform, execute and comply with all applicable laws, rules, requirements, orders, directions, ordinances and regulations of every authority having competence to institute laws, rules and regulations in respect of the permit area or the use thereof.

The concluding provision of the agreement, not numbered, reads:

IT IS FURTHER AGREED that this permit shall be subject to the provisions of the Indian Act and Regulations established thereunder, which may be now in force or which may hereafter be made and established from time to time in that behalf by the Governor in Council.

In my opinion, if the Band Council or any Indians, members of the Band, were to carry on a business on the Reserve, which would have to be with the consent of the Minister and the Band Council, as provided by ss. 18 and 28 of the Indian Act, and were to employ only Indians on the Reserve as employees, it would be beyond question that provincial labour relations legislation could not constitutionally be applicable to the employees and their employer. It would not matter in such a

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case if there was no federal legislation which could be invoked by the employees to form a trade union to seek certification on their behalf. The reason for this conclusion is simply that the activity involves only Indians on a reserve, as employees and employer, and is conducted by them on the Reserve. Nothing either in Cardinal v. Attorney General of Alberta[2] or in Natural Parents et al. v. Superintendent of Child Welfare[3] militates against this conclusion.

Sections 18 and 28 read as follows:

18. (1) Subject to this Act, reserves are held by Her Majesty for the use and benefit of the respective bands for which they were set apart; and subject to this Act and to the terms of any treaty or surrender, the Governor in Council may determine whether any purpose for which lands in a reserve are used or are to be used is for the use and benefit of the band.

(2) The Minister may authorize the use of lands in a reserve for the purpose of Indian schools, the administration of Indian affairs, Indian burial grounds, Indian health projects or, with the consent of the council of the band, for any other purpose for the general welfare of the band, and may take any lands in a reserve required for such purposes, but where an individual Indian, immediately prior to such taking, was entitled to the possession of such lands, compensation for such use shall be paid to the Indian, in such amount as may be agreed between the Indian and the Minister, or, failing agreement, as may be determined in such manner as the Minister may direct.

28. (1) Subject to subsection (2), a deed, lease, contract, instrument, document or agreement of any kind whether written or oral, by which a band or a member of a band purports to permit a person other than a member of that band to occupy or use a reserve or to reside or otherwise exercise any rights on a reserve is void.

(2) The Minister may by permit in writing authorize any person for a period not exceeding one year, or with the consent of the council of the band for any longer period, to occupy or use a reserve or to reside or otherwise exercise rights on a reserve.

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Notice should also be taken of ss. 20(1) and 30 which are in these terms:

20. (1) No Indian is lawfully in possession of land in a reserve unless, with the approval of the Minister, possession of the land has been allotted to him by the council of the band.

. . .

30. A person who trespasses on a reserve is guilty of an offence and is liable on summary conviction to a fine not exceeding fifty dollars or to imprisonment for a term not exceeding one month, or to both.

It appears to me that the foregoing statutory provisions, whose constitutionality is beyond question, and their projection in the permit agreement to which I have referred, manifest an exercise of federal legislative authority in maintaining the Reserve for the use and benefit of Indians who are members of the Band for which the Reserve has been set apart. The permission to operate a factory on the Reserve in a building leased from the Band Council, having regard to the terms of the permit, reflects the use and benefit to which s. 18 of the Indian Act and supporting provisions refer.

This brings me to consider whether the incorporation of the appellant company under Ontario legislation changes the situation. In my opinion, the incorporation does no more than give the Brant brothers, who are the only shareholders of the appellant company, a convenient method of carrying on a business which is a business operated by Indians for the benefit of Indians: cf. Re Kinookimaw Beach Association and Board of Revenue Commissioners[4]. Of course, the company, qua company in respect of its corporate structure, is governed by Ontario legislation, but that does not mean that its business is also subject to provincial legislation as, for example, in respect of labour relations. The governing document in this respect is the permit agreement authorized by s. 18 of the Indian Act. I do not think that this view of the matter is altered by the fact that at the time of certification not all employees were members of the Band or all were Indians. Of the sixty-eight

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employees affected by the certification proceedings, forty-eight were Band members, ten had been but were no longer Band members simply because they had married out of the Band and ten were non-Indians. The factory operation in its direction and in its complement of employees is substantially an enterprise of Indians for Indians on an Indian reserve. Indeed, this was the purpose of the permit agreement.

Cardinal v. Attorney General of Alberta, supra, was a case which turned on the effect and application of s. 12 of the Alberta Natural Resources Agreement between Canada and Alberta, an agreement which was not only confirmed by legislation by both Canada and Alberta but which was also endowed with constitutional force by the British North America Act, 1930 (U.K.), c. 26. Section 12 of the Agreement was as follows:

12. In order to secure to the Indians of the Province the continuance of the supply of game and fish for their support and subsistence, Canada agrees that the laws respecting game in force in the Province from time to time shall apply to the Indians within the boundaries thereof, provided however, that the said Indians shall have the right, which the Province hereby assures to them, of hunting trapping and fishing game and fish for food at all seasons of the year on all unoccupied Crown lands and on any other lands to which the said Indians may have a right of access.

The facts, briefly stated, were that a Treaty Indian was charged with unlawfully trafficking in big game on his Reserve, in selling to a game officer some moose meat, thus committing an offence under the Alberta Wildlife Act, R.S.A. 1970, c. 391 if the Act applied to this conduct. This was not a case of interfering with an Indian’s right to hunt for food. The majority of the Court, in upholding the application of The Wildlife Act in the situation I have described, had this to say at p. 708 in reasons delivered by Martland J.:

In my opinion, the meaning of s. 12 is that Canada, clothed as it was with legislative jurisdiction over “Indians, and Lands reserved for the Indians”, in order to achieve the purpose of the section, agreed to the imposi-

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tion of Provincial controls over hunting and fishing, which, previously, the Province might not have had power to impose. By its express wording, it provides that the game laws of the Province shall apply “to the Indians within the boundaries thereof”. To me this must contemplate their application to all Indians within the Province, without restriction as to where, within the Province, they might be.

And, again, at p. 710:

For these reasons, I am of the opinion that s. 12 of the Agreement made the provisions of The Wildlife Act applicable to all Indians, including those on Reserves, and governed their activities throughout the Province, including Reserves. By virtue of s. 1 of the British North America Act, 1930, it has the force of law, notwithstanding anything contained in the British North America Act, 1867, any amendment thereto, or any Federal statute.

Other observations in the majority reasons, from which both the appellant and the respondent sought to draw comfort must be read in the context of the issue presented to the Court, an issue removed from that involved here.

That is made evident in considering the dissenting as well as the majority judgments in the Cardinal case. The Alberta Natural Resources Agreement, in s. 10, expressly confirmed federal authority in respect of lands included in Indian reserves, and the difference between the majority and dissenting judgments turned on whether the provision in s. 12 for the application of game laws of the Province “to the Indians within the boundaries thereof” should be construed as excluding Indian Reserves, although they were geographically within the provincial boundaries. It was with reference to this point of construction that both the majority and dissenting judgments considered how far or to what extent Indian reserves were federal “enclaves” beyond the application to them of any provincial legislation. As was pointed out by Martland J., in canvassing relevant case law, there is authority to support the application of provincial legislation to Indians off a reserve unless it is directed to them as Indians. Similarly, there is authority to support the application of provincial legislation to non-Indians for violations thereof on a reserve, unless the legislation is directed to the

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use or regulation of the reserve lands, as, for example, was the situation in Corporation of Surrey v. Peace Arch Enterprises Ltd.[5] Where, however, the issue concerns the conduct of Indians on a reserve, provincial legislation is inapplicable unless brought in by referential federal legislation or, as in the Cardinal case, brought in by a constitutional qualification of the federal power in relation to “Indians, and Lands reserved for the Indians”.

Even more removed from the present case is the judgment in Natural Parents v. Superintendent of Child Welfare, supra. It involved not a constitutional question nor one concerning any activity on a Reserve, but rather one concerning personal relationships involving Indians and non-Indians with respect to the adoption of Indian children by non‑Indians. It concerned, at bottom, the question of whether or how Indian status would be affected by subjecting Indian children to provincial adoption legislation, either of its own force or through the application of s. 88 of the Indian Act. The question of “Indianness” discussed in the Natural Parents case related directly to the question of survival of Indian status and, obviously, could have no bearing on the problem before this Court in the present case.

The proper inquiry in this case is not whether the Ontario Labour Relations Act applies to the enterprise of the appellant company and to the employees thereof, but rather whether Part V of the Canada Labour Code applies to them. In my opinion, however general be the application of the Ontario Labour Relations Act to businesses in the Province and to the employees thereof, it must give way in respect of businesses which are within federal regulatory authority and to federal legislation such as Part V of the Canada Labour Code embracing such businesses.

The key references to Part V of the Canada Labour Code are s. 108.(1) and the definition s. 2, and they read as follows:

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108. (1) This Division 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 with such employees and in respect of trade unions and employers’ organizations composed of such employees or employers.

2. In this Act

“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:

(a) a work, undertaking or business operated or carried on for or in connection with navigation and shipping, whether inland or maritime, including the operation of ships and transportation by ship anywhere in Canada;

(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;

(c) a line of steam or other ships connecting a province with any other or others of the provinces, or extending beyond the limits of a province;

(d) a ferry between any province and any other province or between any province and any other country other than Canada;

(e) aerodromes, aircraft or a line of air transportation;

(f) a radio broadcasting station;

(g) a bank;

(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;

The combination of circumstances which govern the operation of the factory in the present case bring it, in my opinion, squarely within ss. 2 and 108(1) of the Canada Labour Code. There is the fact that the factory is operated by Indians and for Indians; it is operated on a reserve in a building leased from the Band Council; it is operated under a revocable licence issued by the responsible federal Minister with the approval of the Band Council and under terms set out in the licence or permit; it

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is financed by federal funds provided under the special Indian Economic Development Fund pursuant to four agreements of September 9, 1974, October 11, 1974, and two on July 8, 1976 for the stated purpose “of employing members of the Band in all positions possible and...for the benefit of the Band as a whole to improve their economic position and provide continuing employment for Band members”; and it is operated under the detailed provisions in the Indian Act and under the approvals therein prescribed.

These circumstances bring the appellant enterprise squarely within the opening words of s. 2 aforesaid, as being “an undertaking or business that is within the legislative authority of the Parliament of Canada”. Consequently, in the words of s. 2(i), it is an undertaking or business outside the exclusive legislative authority of provincial legislatures. Section 108 applies to the employees of the appellant company since they are employed in connection with the operation of the appellant company’s factory on the Reserve. It follows, therefore, that certification to enable a trade union to represent the employees of the appellant company must be sought under the Canada Labour Code.

I would, accordingly, allow the appeal, set aside the judgments below and quash the certification order made by the Ontario Labour Relations Board. The appellant company has not asked for costs and there will, therefore, be no order as to costs as between the parties and there will be no costs to or against any of the interveners.

The judgment of Martland, Pigeon, Dickson, Beetz, Estey, Pratte and McIntyre JJ. was delivered by

BEETZ J.—This is an appeal from an order of the Ontario Court of Appeal dismissing an appeal by the Appellant, (Four B) from an order of the Divisional Court for the Province of Ontario dismissing an application for judicial review of two decisions of the Ontario Labour Relations Board, (the Board). The application for judicial review

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sought inter alia (1) an order quashing an order of the Board certifying the United Garment Workers of America as the bargaining agent for the employees of Four B at its plant on the Tyendinaga Indian Reserve No. 38; (2) an order quashing another decision of the Board directing Four B to reinstate four of its employees; and (3) a declaration that the Board was without jurisdiction to make the said decisions or to apply the provisions of The Labour Relations Act, R.S.O. 1970, c. 232, to the activities of Four B or its employees on the Reserve.

The facts do not appear to be in dispute.

Four B was incorporated pursuant to the laws of Ontario to carry on business as a manufacturer of shoes on the Tyendinaga Indian Reserve No. 38, a reserve set aside for the Band of Indians known as the Mohawks of the Bay of Quinte. All of the issued shares of Four B are held by four brothers named Brant, all of whom are members of the Band.

The business or operation of Four B consists entirely in the sewing of uppers on contract for the Bata North Star Jogger, a shoe manufactured by the Bata Shoe Company.

Four B is in no way owned or controlled by the Band Council which will have no share in its profits. It had first been contemplated that the plant be owned and operated by the Band, but the majority of the Band voted against this project, apparently for some fiscal reasons; it was at that point that the Brant brothers decided to own and operate the plant privately, originally under the corporate name of Tyendinaga Mohawk Limited. However the Band Council took the view that the use of this name would not be in the best interest of the Reserve and it was changed for the present one.

Four B occupies premises upon the Reserve pursuant to a three year renewable permit issued by Her Majesty the Queen in right of Canada with the approval of the Band Council. The permit,

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which creates no tenancy and can be cancelled at the discretion of the Minister of Indian Affairs and Northern Development, provides in part as follows:

That the Permittee will give preference in employment to local people for work in the permit area, however, if there are not sufficient applications from local area, the Permittee shall have the right to request assistance from Canada Manpower to fill the staff requirements from the surrounding districts.

Four B has received from the Government of Canada a total of $284,000 of which $51,000 represents a grant and the remainder borrowed funds. These monies were advanced pursuant to programs of the Department of Indian Affairs and Northern Development, designed to promote co-operation between Indian and non-Indian businessmen in order to assist Indians in developing and expanding viable businesses and to create jobs for Indians, on and off reserves.

At the relevant time, Four B employed 68 persons, of whom 48 were Band members, 10 were former Band members and 10 were non-Indians.

The issue is whether The Labour Relations Act applies to the activities of Four B and its employees and the Board had jurisdiction to make the two decisions under review.

In my view the established principles relevant to this issue can be summarized very briefly. With respect to labour relations, exclusive provincial legislative competence is the rule, exclusive federal competence is the exception. The exception comprises, in the main, labour relations in undertakings, services and businesses which, having regard to the functional test of the nature of their operations and their normal activities, can be characterized as federal undertakings, services or businesses: Toronto Electric Commissioners v. Snider[6]; In the matter of a reference as to the validity of the Industrial Relations and Disputes Investigation Act[7], (the Stevedoring case); In the matter of a reference as to the application of the

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Minimum Wage Act of Saskatchewan to an employee of a Revenue Post Office[8]; Commission du Salaire Minimum v. Bell Telephone Company of Canada[9]; Agence Maritime Inc. v. Canada Labour Relations Board[10]; The Letter Carriers’ Union of Canada v. Canadian Union of Postal Workers[11]; Canada Labour Relations Board, Public Service Alliance of Canada v. City of Yellowknife[12]; Construction Montcalm Inc. v. Minimum Wage Commission[13].

There is nothing about the business or operation of Four B which might allow it to be considered as a federal business: the sewing of uppers on sport shoes is an ordinary industrial activity which clearly comes under provincial legislative authority for the purposes of labour relations. Neither the ownership of the business by Indian shareholders, nor the employment by that business of a majority of Indian employees, nor the carrying on of that business on an Indian reserve under a federal permit, nor the federal loan and subsidies, taken separately or together, can have any effect on the operational nature of that business. By the traditional and functional test, therefore, The Labour Relations Act applies to the facts of this case, and the Board has jurisdiction.

What is submitted on behalf of appellant is that the matter to be regulated in the case at bar is the civil rights of Indians on a reserve; that this matter falls under the exclusive legislative authority of Parliament to make laws relating to “Indians and Lands reserved for the Indians” pursuant to s. 91.24 of the British North America Act, 1867; that provincial law is inapplicable to this matter even in the absence of relevant federal law; and, alternatively, that the field is occupied by the paramount provisions of the Canada Labour Code, R.S.C. 1970, c. L-1. It is argued that the functional test is inappropriate and ought to be disregarded where legislative competence is conferred not in

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terms relating to physical objects, things or systems, but to persons or groups of persons such as Indians or aliens.

I cannot agree with these submissions.

The functional test is a particular method of applying a more general rule namely, that exclusive federal jurisdiction over labour relations arises only if it can be shown that such jurisdiction forms an integral part of primary federal jurisdiction over some other federal object: the Stevedoring case.

Given this general rule, and assuming for the sake of argument that the functional test is not conclusive for the purposes of this case, the first question which must be answered in order to deal with appellant’s submissions is whether the power to regulate the labour relations in issue forms an integral part of primary federal jurisdiction over Indians and Lands reserved for the Indians. The second question is whether Parliament has occupied the field by the provisions of the Canada Labour Code.

In my opinion, both questions must be answered in the negative.

I think it is an oversimplification to say that the matter which falls to be regulated in the case at bar is the civil rights of Indians. The matter is broader and more complex: it involves the rights of Indians and non-Indians to associate with one another for labour relations purposes, purposes which are not related to “Indianness”; it involves their relationship with the United Garment Workers of America or some other trade union about which there is nothing inherently Indian; it finally involves their collective bargaining with an employer who happens to be an Ontario corporation, privately owned by Indians, but about which there is nothing specifically Indian either, the operation of which the Band has expressly refused to assume and from which it has elected to withdraw its name.

But even if the situation is considered from the sole point of view of Indian employees and as if the employer were an Indian, neither Indian status is

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at stake nor rights so closely connected with Indian status that they should be regarded as necessary incidents of status such for instance as registrability, membership in a band, the right to participate in the election of Chiefs and Band Councils, reserve privileges, etc. For this reason, I come to the conclusion that the power to regulate the labour relations in issue does not form an integral part of primary federal jurisdiction over Indians or Lands reserved for the Indians. Whether Parliament could regulate them in the exercise of its ancillary powers is a question we do not have to resolve any more than it is desirable to determine in the abstract the ultimate reach of potential federal paramountcy.

The conferring upon Parliament of exclusive legislative competence to make laws relating to certain classes of persons does not mean that the totality of these persons’ rights and duties comes under primary federal competence to the exclusion of provincial laws of general application. In Union Colliery Company of British Columbia v. Bryden[14], the British Columbia Coal Mines Regulations Act, 1890 provided that “no boy under the age of twelve years, and no woman and girl of any age shall be employed in or allowed to be for the purpose of employment in any mine to which the Act applies, below ground”. The provision was amended by the insertion of the words “and no Chinaman” after the words “and no woman and girl of any age”. The amendment was held to be ultra vires of the Province as relating to naturalization and aliens. But it was never suggested that the general prohibition to employ boys under the age of twelve years and women and girls of any age in any mine was not applicable to naturalized persons and aliens including persons of Chinese extraction.

A similar reasoning must prevail with respect to the application of provincial laws to Indians, as long as such laws do not single out Indians nor purport to regulate them qua Indians, and as long

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also as they are not superseded by valid federal law. In this connection, it must be noted that whereas the Indian Act, R.S.C. 1970, c. I-6, regulates certain Indian civil rights such as the right to make a will and the distribution of property on intestacy, it does not provide for the regulation of the labour relations of Indians with one another or with non-Indians. Nor does the Canada Labour Code so provide, as we shall see later. These labour relations accordingly remain subject to laws of general application in force in the Province as is contemplated by s. 88 of the Indian Act:

88. Subject to the terms of any treaty and any other Act of the Parliament of Canada, all laws of general application from time to time in force in any province are applicable to and in respect of Indians in the province, except to the extent that such laws are inconsistent with this Act or any order, rule, regulation or by-law made thereunder, and except to the extent that such laws make provision for any matter for which provision is made by or under this Act.

Counsel for appellant has also stressed that the civil rights in issue are not only the civil rights of Indians, but Indian civil rights exercised on a reserve. The import of this submission, as I understand it, is that the exclusive character of federal jurisdiction is somehow reinforced because it is derived from two related heads of federal authority instead of one, federal authority over Indians and over Lands reserved for the Indians.

In my view, this submission is an attempt to revive the enclave theory of the reserves in a modified version: provincial laws would not apply to Indians on reserves although they might apply to others. The enclave theory has been rejected by this Court in Cardinal v. Attorney General for Alberta[15] and I see no reason to revive it even in a limited form. Section 91.24 of the British North America Act, 1867 assigns jurisdiction to Parliament over two distinct subject matters, Indians

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and Lands reserved for the Indians, not Indians on Lands reserved for the Indians. The power of Parliament to make laws in relation to Indians is the same whether Indians are on a reserve or off a reserve. It is not reinforced because it is exercised over Indians on a reserve any more than it is weakened because it is exercised over Indians off a reserve. (See Kenneth Lysyk, “The Unique Constitutional Position of the Canadian Indian” (1967), 45 Can. Bar Rev. 513, at p. 515).

I attach little importance to the permit under which Four B occupies the premises. Four B could not trespass, there or anywhere else. It would have required a permit or a licence from the Crown to occupy Crown land outside a reserve. It is true that the permit may be cancelled and that it cannot be renewed without the consent of the Band Council. But, should this occur, it is not inconceivable that Four B would move its plant a few feet off the reserve and, with the same employees, continue the operation of the same business with the same overall purpose and effect. I am inclined to think that if this had occurred to start with, no constitutional or jurisdictional problem would have arisen.

I do not see much substance either in the argument that Four B was federally subsidized. The Government of Canada subsidizes a great many industries without Parliament thereby acquiring the power to regulate their labour relations.

There remains one last point namely whether the Canadian Labour Code occupies the field. The key provisions are s. 108(1) and s. 2 which read as follows:

108. (1) This Division 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 with such employees and in respect of trade unions and employers’ organizations composed of such employees or employers.

2. In this Act

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“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:

(a) a work, undertaking or business operated or carried on for or in connection with navigation and shipping, whether inland or maritime, including the operation of ships and transportation by ship anywhere in Canada;

(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;

(c) a line of steam or other ships connecting a province with any other or others of the provinces, or extending beyond the limits of a province;

(d) a ferry between any province and any other province or between any province and any other country other than Canada;

(e) aerodromes, aircraft or a line of air transportation;

(f) a radio broadcasting station;

(g) a bank;

(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;

In my opinion, the Canada Labour Code does not provide for this case. Under functional test Four B is not a federal work, undertaking or business, within the meaning of the Canada Labour Code. But should we have to solve the problem on the basis suggested by appellant, that is on the basis that Indians are “federal persons”, I would adopt the following reason of Morden J. in the Divisional Court:

Section 108 of the Code, by its language, is directed at federal activities, operations or functions and not at the position of individuals, or a class of individuals, who might be considered to be “federal” persons or at their relationships. The latter is not the subject matter of the section, (Contrast the method of defining the application of the Public Service Staff Relations Act, R.S.C. 1970, c. P-35, which is applicable to “all portions of the Public

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Service” (s. 3), and, also, the provisions of s. 109 of the Code applicable “in respect of any corporation established to perform any function or duty on behalf of the Government of Canada and in respect of employees of any such corporation”).

The appeal should be dismissed with costs to the respondents, but there should be no order as to costs to or against the intervenors.

Appeal dismissed with costs, LASKIN C.J. and RITCHIE J.dissenting.

Solicitors for the appellant: Blake, Cassels & Graydon, Toronto.

Solicitors for the respondent United Garment Workers of America: Golden, Levinson, Toronto.

Solicitors for the respondent Ontario Labour Relations Board: Cameron, Brewin & Scott, Toronto.

Solicitor for the intervenant Chief Donald R. Brant: Ronald W. Cass, Belleville.

Solicitors for the intervenant group of individual employees: Reynolds, Hunter, Sullivan & Kline, Belleville.