Date: 20120110
Docket: A-63-11
Citation: 2012 FCA 4
CORAM: NOËL
J.A.
DAWSON J.A.
TRUDEL
J.A.
BETWEEN:
COMMISSIONAIRES
NOVA SCOTIA
Appellant
and
DAVID CROUSE
Respondent
REASONS FOR JUDGMENT
DAWSON J.A.
[1]
This
is an appeal from a decision of the Federal Court (2011 FC 125, 383 F.T.R. 277)
which allowed an application for judicial review of a decision of a referee
appointed under section 251.12 of the Canada Labour Code, R.S.C.
1985, c. L-2 (Code). The central issue before the Federal Court was whether the
Referee erred by suspending the operation of the Code until the expiration of
an existing contract between the Commissionaires Nova Scotia (CNS) and the
Halifax International Airport Authority (HIAA).
[2]
For
the reasons which follow, I conclude that the decision of the Referee was
properly set aside. I would, therefore, dismiss this appeal with costs.
The Facts
[3]
The
facts were not in dispute, and the parties proceeded before the Referee on the
basis of an agreed statement of facts. For the purpose of this appeal, the
facts may be summarized as follows:
i.
In
2000, the CNS entered into a contract with the HIAA to provide services at the Halifax
International Airport.
ii.
The
CNS employed commissionaires to provide these services. Initially, the
commissionaires employed by the CNS were not unionized.
iii.
In
July of 2005, the CNS and the HIAA entered into a new contract for the
provision of security services for a five-year term, commencing October 1, 2005
and ending on September 30, 2010 (Contract). The security services were to be
carried out by commissionaires employed by the CNS.
iv.
More
specifically, the Contract required the CNS to provide HIAA with “peace officer
patrol, security and support services. The services are to be aimed at
preventing unlawful interference with civil aviation, for the protection and
security of equipment and facilities.”
v.
The
CNS and the HIAA entered into the Contract on the basis that their legal
obligations with respect to holidays and overtime were those specified by the Nova Scotia Labour
Standards Code, R.S.N.S. 1989, c. 246.
vi.
On
August 16, 2007, the Public Service Alliance of Canada was certified by the
Canada Industrial Relations Board (Board) as the bargaining agent for “all
employees of the Nova Scotia Division of the Canadian Corps of Commissionaires
employed at the Halifax International Airport.”
vii.
In
reaching this decision, the Board determined that the services provided by the
CNS “are vital and integral to the operations of the airport.” It followed that
the labour relations of CNS employees who worked at the Halifax
International Airport were
governed by the Code.
viii.
On
November 17, 2008, David Crouse, one of CNS’s employees who worked at the
airport, filed a complaint under Part III of the Code to the effect that the
statutory conditions of employment guaranteed to employees under Part III were
not being provided to him.
ix.
An
inspector determined that the CNS owed Mr. Crouse overtime, holiday and
vacation pay for the period from August 25, 2007 to January 31, 2009, and
issued a payment order.
x.
The
CNS appealed the payment order to the Minister of Labour.
xi.
The
Minister appointed a referee to hear the appeal.
The
Decision of the Referee
[4]
In
the Referee’s view, two issues arose out of these facts. First, was the CNS
governed by Part III of the Code for the purpose of minimum statutory
employment standards? Second, if the CNS was governed by Part III of the Code,
was it nevertheless entitled to avoid the employment standards mandated by Part
III until its current contract with the HIAA expired on September 30, 2010?
[5]
The
Referee answered the first question in the affirmative. This finding was not
challenged by the parties.
[6]
The
Referee then turned to consider when Part III should apply. The Referee
determined and declared that the CNS and all of its employment contracts with
its employees employed at the Halifax International Airport (excluding two
supervisors) were governed by the minimum standards applicable under the Nova Scotia Labour
Standards Code up to and including September 30, 2010. Thereafter, the CNS
and those employment contracts would be governed by Part III of the Code.
[7]
The
Referee’s analysis on this issue was brief. At paragraphs 50 to 53 of his
reasons he wrote as follows:
[50] The first point to
consider is this. Up until the time PSAC was certified CNS considered itself
governed by provincial legislation. It acted on that understanding, and there
is no evidence that in doing so it was acting in bad faith. And indeed, it was
in fact and in law subject to provincial jurisdiction up until the moment that
jurisdiction was ousted by the assertion of a federal jurisdiction.
Employment law is prima facie a provincial matter and it is
presumptively governed by provincial legislation: Montcalm, supra. Hence
prior to the application by PSAC for certification the relations between CNS
and its employees were governed by provincial laws. CNS and its
employees contracted with each other on that basis. And CNS entered into
contracts with entities like the HIAA on the strength of that understanding.
CNS may have been subject to federal employment laws at some point prior to
PSAC’s application, but no one knew it because no one had asserted a federal
jurisdiction. And until that federal jurisdiction was asserted in such a way as
to oust the provincial jurisdiction the latter would remain in effect and in
place: see, for e.g., British
Columbia
(Attorney General) v. Lafarge Canada Inc [2007] SCR 86 at paras. 4 and 37.
[51] This then is not a
case of an employer who was at the material time subject to federal law seeking
to avoid its application by contracting out of the provisions of Part III, as
was the case in the National Bank or the Lacroix cases. Rather,
this is a case where terms of employment that were valid and binding under
provincial legislation cease to be so solely because the provincial
jurisdiction has been ousted by the federal jurisdiction. The Employer’s
argument is thus not that it should be permitted to contract out of that
federal legislation. It is rather that employment contracts that were entered
into in good faith under provincial legislation should be respected and allowed
to run their course until exhausted, at which point the federal legislation may
apply.
[52] In such a case there
is much merit in the observation Vice-Chair Hornung in the Thunder Bay
Telephone case that “actions taken by the parties, pursuant to provincial
legislation, are valid and binding on them even after it is determined that the
employer’s labour relations activities fall within federal jurisdiction:” Thunder
Bay Telephone, supra, p.6 of 7. As he went on to say,
“This conclusion makes the
most sense from a labour relations perspective. An undertaking is subject to
change from provincial to federal jurisdiction (and vice versa) a number of
times during its lifetime depending on the constitutional facts which are
evidenced by its day-to-day operation. It would make no labour relations sense if
the actions of the parties involved in that undertaking (collective agreement,
grievances, etc), taken pursuant to the jurisdiction which applied at a given
time, were declared null and void and became of no legal effect each time there
was a transfer of jurisdiction. Such an interpretation would compel the parties
to repeatedly return to their pre-agreement status. This would not only create
an operational and jurisdictional hiatus, but would also result in labour
relations instability and impede industrial peace:” p.6 of 7.
[53] Based on that
reasoning the CLRB in the Thunder Bay Telephone case made an order to
the effect that the existing collective agreement (which has been entered into
when the parties believed themselves governed by provincial law) would remain
in effect according to its terms until its termination date, notwithstanding
that the parties had at that point moved to the federal jurisdiction. In my
opinion, and for the same reasons, an order achieving a similar result ought to
be made in this case. I am satisfied too that in virtue of s.251.12(4) of the Code
I have the power to make “any order necessary to give effect to” my
decision: see, for e.g., Bissett v. Canada (Minister of Labour) [1995] FCJ No. 1339 (TD) at
para. 12. [emphasis added]
The Decision of the
Federal Court
[8]
The
Judge viewed the application for judicial review to raise two issues:
1.
What
was the appropriate standard of review to be applied to the decision of the
Referee?
2.
Did
the Referee err in his determination that the Code should be applied only after
September 30, 2010?
[9]
To
determine the applicable standard of review, the Judge considered the existence
of the privative provisions of the Code, the purpose of Part III of the Code,
the expertise of the Referee and the nature of the question before the Referee.
Notwithstanding the existence of the strong privative provisions of the Code,
the Judge found the applicable standard of review to be correctness. In his
view, the question before the Referee was “an issue of true jurisdiction
(provincial vs. federal), suggesting less deference” (reasons, paragraph 22).
Moreover, it was “the kind of question of law that is normally considered by
the Court and it does not engage the special expertise of the Referee”
(reasons, paragraph 23).
[10]
Having
selected the correctness standard of review, the Judge went on to find that the
Referee exceeded his jurisdiction when he decided to suspend the application of
the Code to the CNS and its employees pending the expiration of the Contract.
In consequence, the Judge set aside the decision of the Referee, and remitted
the matter to the Referee for reconsideration in a manner consistent with the
Judge’s reasons.
The Issues on Appeal
[11]
On
this appeal, the parties raise two issues:
1.
Did
the Federal Court err by applying the standard of review of correctness to the
decision of the Referee?
2.
Did
the Federal Court err in finding that the Referee exceeded his remedial
authority by delaying the application of the Code until September 30, 2010?
Consideration of the
Issues
1. The Standard of Review
[12]
On
an appeal from a decision of the Federal Court rendered on an application for
judicial review, this Court generally is required to consider whether the
Federal Court correctly selected the applicable standard of review and whether
the Federal Court then correctly applied the standard of review (Telfer v.
Canada (Revenue Agency), 2009 FCA 23, 386 N.R. 212 at paragraph 19).
[13]
The
parties devoted extensive submissions to the issue of the correct standard of
review. However, in my view, this is one of those cases where it is not
necessary to determine the correct standard because the decision of the Referee
cannot be sustained even on the deferential standard of reasonableness.
2. The Decision of the Referee was
Unreasonable
[14]
As
set out above, the starting point of the Referee’s analysis was that the CNS
was “in fact and in law subject to provincial jurisdiction up until the moment
that jurisdiction was ousted by the assertion of a federal jurisdiction.” In my
respectful view, this premise was incorrect.
[15]
As
the Board found, under the Contract employees of the CNS provided services
which were vital and integral to the operation of the Halifax International Airport. The
employees were connected to the core operations of the HIAA and functioned
essentially as an extension of the airport in ensuring security and safety
services. As such, during the currency of the Contract the CNS was subject to
federal labour relations jurisdiction in respect of its operations and
undertaking at the Halifax International Airport.
[16]
This
was not a case where the CNS’s activities under the Contract were at one time
properly governed by provincial law, but a subsequent change in its activities
resulted in the application of federal law. It follows that the Nova Scotia Labour
Standards Code never applied to employees of the CNS performing services at
the Halifax
International Airport under the Contract.
[17]
Given
that the Nova Scotia Labour Standards Code had no application to CNS
employees providing services under the Contract, it was unreasonable for the
Referee to oust the application of Part III of the Code and to declare that the
Nova
Scotia
Labour Standards Code would continue to apply until the expiration of
the Contract. It follows that the Referee’s decision was properly set aside by
the Federal Court.
[18]
It
further follows that I would dismiss the appeal with costs.
“Eleanor R. Dawson”
“I
agree.
Marc
Noël J.A.”
“I
agree.
Johanne
Trudel J.A.”
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