Date:
20121214
Docket:
A-67-12
Citation: 2012 FCA 329
CORAM: BLAIS
C.J.
NADON
J.A.
TRUDEL
J.A.
BETWEEN:
NATIONAL AUTOMOBILE, AEROSPACE,
TRANSPORTATION AND
GENERAL WORKERS UNION OF CANADA (CAW-CANADA) and its
LOCAL 114
Applicant
and
PACIFIC COACH LINES LTD.,
CANTRAIL COACH LINES LTD.
Respondents
REASONS
FOR JUDGMENT OF THE COURT
Introduction
[1]
This
is an application for judicial review from a decision of the Canada Industrial
Relations Board (the Board) issued on January 24, 2012, reported at 2012 CIRB
623 (the Decision).
[2]
By
its Decision, the Board adjudicated on an application brought by the National
Automobile, Aerospace, Transportation and General Workers Union of Canada
(CAW-CANADA) and its Local 114 (the Union) for a declaration of single employer
and a declaration of sale of business pursuant to section 35 of the Canada
Labour Code , R.S.C., 1985, c. L-2 (the Code), which for the purposes of
the hearing and determination by the Board, was consolidated with an unfair
labour practice complaint also filed by the Union.
[3]
Subsection
35(1) reads as follows:
|
Board
may
declare single employer
35. (1) Where,
on application by an affected trade union or employer, associated or related
federal works, undertakings or businesses are, in the opinion of the Board,
operated by two or more employers having common control or direction, the
Board may, by order, declare that for all purposes of this Part the employers
and the federal works, undertakings and businesses operated by them that are
specified in the order are, respectively, a single employer and a single
federal work, undertaking or business. Before making such a declaration, the
Board must give the affected employers and trade unions the opportunity to
make representations.
|
Déclaration d’employeur unique par le Conseil
35. (1) Sur
demande d’un syndicat ou d’un employeur concernés, le Conseil peut, par
ordonnance, déclarer que, pour l’application de la présente partie, les
entreprises fédérales associées ou connexes qui, selon lui, sont exploitées
par plusieurs employeurs en assurant en commun le contrôle ou la direction
constituent une entreprise unique et que ces employeurs constituent eux-mêmes
un employeur unique. Il est tenu, avant de rendre l’ordonnance, de donner aux
employeurs et aux syndicats concernés la possibilité de présenter des
arguments
|
[4]
Within
the context of the application for a declaration of single employer, the Board
issued an interim decision (2010 CIRB LD 2427) determining that both of the
employers concerned with the Union’s application, i.e. Pacific Coach
Lines Ltd. (PCL) and Cantrail Coach Lines Ltd. (Cantrail) were subject to
federal jurisdiction for labour relations purposes. In January 2011, both the Union and the Board were informed by PCL that it no longer engaged in extra-provincial
work. This significant change raised the question of the Board’s authority to
consider the Union’s application and complaint as one of the two employers
concerned by the application was allegedly no longer a federal undertaking. As
a result, the Board’s jurisdiction to seize itself with the matter became a
threshold issue.
[5]
In
the end, the Board found that it had no jurisdiction to entertain the
application. As a consequence, it also found that the unfair labour practice
was moot. These findings form the basis of the application for judicial review
in front of our Court.
[6]
At
the heart of this application for judicial review is an intensely factual
question about the relationship between PCL and Cantrail. PCL is a privately
owned company operating regularly scheduled bus services and charters solely
within British Columbia since January 12, 2011. In August 2005, PLC, whose
workers are unionized, acquired Cantrail, an independent corporation then under
receivership, whose workers are not unionized. After PCL’s acquisition,
Cantrail continued to operate as a separate entity, with its own buses,
employees and corporate branding. Cantrail also maintained its extra-provincial
activities.
[7]
The
question with respect to the relationship between the two corporate entities
drives the essentially dispositive issue concerning the jurisdiction of the
Board to decide the matter before it: as of January 2011, PCL operates only
within British Columbia. Thus, it is only if PCL is determined to be an
integral part of Cantrail, an extra-provincial operator that the Board will be
able to properly assert jurisdiction over what could otherwise be characterized
as a provincial entity for labour relations purposes.
The Union’s position
[8]
In
front of the Board, as well as in this Court, the Union has argued that the
Board should have considered its application on the basis of the facts as they
existed before PCL ceased offering extra-provincial services. It argued that
to act otherwise defeats the labour relations purpose of section 35 of the Code
by allowing PCL to escape the application and effect of section 35 through
arrangements made or conditions arising post-application, whether done so
deliberately for that purpose of not (Decision at paragraph 20).
[9]
Alternatively,
the Union has argued that PCL remains in federal jurisdiction despite its
restructuring because PCL and Cantrail are a single enterprise. Moreover,
PCL’s operations are essential to the core of Cantrail’s operations, not only
in terms of Cantrail’s reliance on PCL’s service and maintenance facilities,
but also in terms of physical integration, financial dependence and integration
of labour relations management (ibidem at paragraphs 21 and 23).
[10]
The
Union notes that PCL owns and controls Cantrail; both companies carry on the
same business. This scenario, it submits, points to a classic case of
"double-breasting" where two related companies carry on business and
offer services in the same market or industry.
[11]
Finally,
the Union submits that PCL "farms out" work to Cantrail, which
amounts to "contracting-in” with a wholly-owned subsidiary, evidencing the
labour relations harm that is created by permitting Cantrail to operate as a
non-union enterprise. PCL is said to have no incentive to develop its own fleet
to meet the true requirement of its business or any future business while it
farms out its overload work to Cantrail (ibidem at paragraph 27).
Another example of labour relations harm that could be avoided by a single
employer declaration, according to the Union, is the fact that the management
of PCL decides which of PCL or Cantrail will bid on the work that becomes
available directing significant work opportunities to its non-union operation.
[12]
Finally,
the Union submitted that the evidence supports a finding that there has been a
partial sale of the extra-provincial business from PCL to Cantrail, such that
the Union should benefit from the succession rights provisions contained in
sections 44-46 of the Code.
The Board’s
decision
[13]
The
Board considered first the argument advanced by the Union that PCL and
Cantrail, while notionally distinct, in fact formed a "single,
indivisible, functionally integrated federal undertaking" subject to
federal jurisdiction under the legal doctrine of undivided jurisdiction. The
Board held that there was "little or no evidence that the companies are
functionally integrated" (ibidem at paragraph 69).
[14]
The
Board considered next whether PCL was integral or essential to Cantrail holding
that there was "no intermingling at the operational level": both
companies maintaining separate workplaces and workforces (ibidem at
paragraph 74). As for PCL providing maintenance and repair services to
Cantrail, the Board found that these services were not sufficient to justify a
finding that PCL was essential to Cantrail (ibidem at paragraph 81).
The Board found that PCL offered the same services to other bus companies, also
for a fee. On the facts before it, the Board held that this aspect of PCL’s
business, although important to Cantrail, was not dedicated exclusively or even
primarily to Cantrail’s operations (ibidem at paragraph 76).
[15]
As
well, the Board disposed of the farming-out issue by saying that it was unable
to find any physical or operational connection between PCL and Cantrail that
would suggest that Cantrail was dependent on PCL for its work (ibidem at
paragraph 85). Finally, on the facts of the case the Board was unable to find
that PCL’s discontinuance of its inter-provincial work constituted a sale of
the inter-provincial portion of PCL’s business to Cantrail (ibidem at
paragraph 94).
[16]
The
Board’s ultimate conclusion on the jurisdictional issue reads as follows:
[86] Considering all of these
factors, the Board is unable to find that the effective performance of
Cantrail’s operations is dependent upon the services of PCL. Accordingly, it is
unable to conclude that PCL is integral to Cantrail’s operations and thus
within federal jurisdiction. As a result, the Board has determined that it
does not have jurisdiction over PCL.
[17]
Having
so concluded, the Board determined that the Union’s unfair labour practice
complaint was moot and declined to rule on it.
Analysis
a) The standard
of review
[18]
The
parties agree that whether this matter falls within federal jurisdiction is a
question of law to be examined on a standard of correctness. This said, the
findings of fact on which the Board based its decision are entitled to
deference despite their constitutional significance (TurnAround Couriers
Inc. v. Canadian Union of Postal Workers, 2012 FCA 36 at paragraphs 22-23; Consolidated
Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53 at
paragraph 26). Deference is also due to the Board’s interpretation and
application of its home statute (Newfoundland and Labrador Nurses'
Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3
S.C.R. 708).
b) The
jurisdiction of the Board
[19]
The
Union’s main argument is that the Board should have examined the
jurisdictional issue as of the date of the complaint that is before PCL ceased
its extra-provincial operations. It cites several cases in support of its
argument that the "Board’s approach frustrates the remedial purpose of the
legislation by allowing a remedial gap due to changes made by the employer to
it business between when the dispute arose and when it was adjudicated"
(applicant’s memorandum of fact and law at paragraph 75).
[20]
None
of the cited cases discuss the jurisdictional issue at hand. Many of them
concern the succession provisions of the Code, which the Courts have determined
are to be given a broad and expansive interpretation that overlooks the strict
legal form of a particular business transaction in order to reflect a labour
law trend that points toward greater protection of bargaining rights (see International
Assn. of Machinists and Aerospace Workers, Local Lodge No. 99 v. Finning
International Inc., 2007 ABCA 319 at paragraphs 54-55). This principle is
not contested. It seems to us, however, that applying it to the question of
jurisdiction is extending this case law beyond the principle that it stands
for.
[21]
We
agree with the Board that the jurisdictional issue is a threshold question. The
Board could not proceed with the application without asking itself whether or
not it had the constitutional authority to make an order affecting PCL. The
facts of the case as they stood in front of the Board when the question arose
could not be ignored.
[22]
As
mentioned above, the Union’s alternate position has been that, in any event,
the Board has jurisdiction in this matter: PCL and Cantrail are a single
enterprise because they are under common management and control and also
because PCL’s operations are essential to the core of Cantrail’s operations.
For this proposition, the Union relies on the case of Westcoast Energy Inc.
v. Canada (National Energy Board), [1998] 1 S.C.R. 322, in which the
Supreme Court held that related undertakings may come within federal
jurisdiction in one of two ways: (a) if they constitute a single federal work
or undertaking, or (2) if one of the entities can " be properly viewed as
integral to an existing federal work or undertaking " (at paragraph 45).
[23]
Said
differently, in any case in which the constitutional
jurisdiction of the Board is challenged, three questions must be answered
affirmatively before the Board can properly seize itself of the matter. Those
questions are:
a. Is there
a federal work undertaking or business involved in the case;
b. If so,
is the work in question done upon or in connection with the operation of the
federal work, undertaking or business; and
c. If so,
can the employees in question be characterized as doing that work- is this work
a major or insignificant part of their total working time?
(see Marathon
Realty Company Ltd. (1977), 25 di 387,
(CLRB Decision No. 117); See also Northern Telecom Limited v.
Communication Workers of Canada, [1980] 1 S.C.R. 115; Allcap Baggage
Services Inc., (1990), 79 di 181 (CLRB Decision No. 778); Arrow Transfer Co. Ltd.,
[1974] 1 Can. L.R.B.R. 29).
[24]
In
the
case before us, there is no dispute that Cantrail remains subject to federal
jurisdiction for labour relations purposes. As a result there remained for the
Board to decide the single employer issue and that of PCL’s functional
integration into Cantrail’s operations.
[25]
In
our
view, the Board instructed itself correctly with respect to the applicable law
and applied the correct analytical framework to the questions at issue. The
Board’s decision is comprehensive and well-reasoned. On the evidence, it was
open to the Board to conclude as it did and we have found no errors of
principle or of fact warranting our intervention. As a result, the Board
correctly declined jurisdiction and, on that basis, was right to dismiss the
application for a declaration of single employer and the unfair labour practice
complaint filed by the Union.
[26]
Consequently, the
application for judicial review will be dismissed with costs.
"Pierre
Blais"
"M.
Nadon"
"Johanne
Trudel"
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