Date: 20110526
Docket: A-329-10
Citation: 2011 FCA 179
CORAM: NOËL
J.A.
NADON
J.A.
EVANS
J.A.
BETWEEN:
XL DIGITAL SERVICES INC.
doing business as
DEPENDABLE HOMETECH
Applicant
and
COMMUNICATIONS, ENERGY AND
PAPERWORKERS UNION OF CANADA
Respondent
REASONS FOR JUDGMENT
EVANS J.A.
Introduction
[1]
This is an
application for judicial review by XL Digital Services Inc. doing business as
Dependable HomeTech (HomeTech) to set aside a decision of the Canada Industrial
Relations Board (Board) (2010 CIRB 543), dated September 28, 2010.
[2]
In that
decision, the Board dismissed HomeTech’s objection to an application by the
Communications, Energy and Paperworkers Union of Canada (CEP) under section 24 of
the Canada Labour Code, R.S.C. c. L-2 (Code), for certification as the
sole bargaining agent of a unit of HomeTech’s employees working in and out of
London, Ontario. The Board held that the employees were employed in connection
with the operation of a federal undertaking as defined in section 2 of the Code,
and that the regulation of their labour relations was therefore within the
Board’s constitutional jurisdiction.
[3]
If the
Court sets this decision aside, HomeTech requests that the Court also set aside
the interim order of the Board (Interim Order No. 9919-U), dated August 23,
2010, certifying CEP as the bargaining agent for the employees in question.
[4]
HomeTech
contracted to provide various services to Rogers Cable Communications Inc.
(Rogers): installing cable and related equipment to connect Rogers’ residential
customers’ equipment to its cable, telephone and internet services; and performing
“troubleshooting” and other customer service functions related to technical
problems experienced by Rogers’ customers. The HomeTech employees in question
in this application performed this work.
[5]
HomeTech says
that the Board made two errors in concluding that it had jurisdiction to hear
and determine CEP’s certification application. First, contrary to the Board’s
finding, Rogers’ federally regulated, core business does not extend to bringing
cable service into customers’ homes, but stops at the Rogers’ cable system “outlets”
situated nearby. Second, even if Rogers’ federal undertaking includes the
delivery of a signal into customers’ homes, the Board erred in concluding that the
work performed by HomeTech’s employees, namely, connecting Rogers’ customers equipment to the
network, was an integral or essential part of Rogers’ core business.
[6]
In my
opinion, the Board decided both questions correctly. Accordingly, I would
dismiss HomeTech’s application for judicial review.
Factual background
[7]
In its
reasons for decision, the Board set out at length the facts concerning the
nature of HomeTech’s business and its relationship with Rogers, the services it
provides to Rogers through its employees, and
the components of a cable network. For this reason, and because the Board’s
findings of fact are not in dispute in this application for judicial review,
the following merely highlights the most salient facts.
[8]
First, a
cable network can be divided into three principal parts: the “headend” which
receives signals transmitted from across and outside Canada, and converts them
for redistribution; the “nodes” which distribute the signals to a location
closer to customers; and the “distribution taps” (or outlets), to which the
network distributes the signals, located on residential streets or telephone
poles, or, in the case of a multi-dwellings building, in a panel box.
[9]
HomeTech’s
work starts at the distribution taps and ends at the equipment in the
customer’s home that it connects to Rogers’
network. Whether this connection itself forms part of the cable network for
regulatory purposes is the basis of the dispute in this case.
[10]
Second, HomeTech
and its ultimate parent company, Cancable Inc., are incorporated under the laws
of the Province of Ontario. They are owned independently of Rogers. However, all HomeTech’s
revenues come from its contract with Rogers.
The contracts have been for terms of three years. Rogers, on the other hand, does not rely
exclusively on HomeTech for the services in question, but also contracts with
HomeTech’s competitors and uses its own employees for some of the work.
[11]
Third, HomeTech
provides installation and related services to cable service providers in the
Ontario cities of London, Kitchener and Ottawa. In addition to the
installation and “troubleshooting” services, HomeTech’s London-based employees
perform some audit and marketing services for Rogers. While HomeTech trains its employees to
a standard prescribed by Rogers, and provides the cables and
other equipment needed for the work, Rogers
supplies the digital boxes, schedules work as it comes in, and assigns it to an
available HomeTech technician.
Issues and Analysis
Two preliminary matters
(a) standard of review
[12]
The questions
in dispute in this appeal concern the application to undisputed facts of a question
of constitutional law: were the HomeTech employees for whom CEP sought
certification as their bargaining agent employed in connection with the
operation of a federal undertaking within the jurisdiction of the Board.
Administrative tribunals’ decisions on questions of constitutional law
concerning the division of powers between Parliament and the provinces under
the Constitution Act, 1867 are reviewable on a standard of correctness: Dunsmuir
v. New
Brunswick,
2008 SCC 9, [2008] 1 S.C.R. 190 at para. 58.
[13]
In contrast,
the Board is entitled to deference on its findings of fact to which the
Constitution is to be applied, including any factual inferences that it draws: Consolidated
Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53, [2009]
3 S.C.R. 407 at para. 26. However, no curial deference is owed to the Board’s
assessment of the constitutional significance of the facts.
(b) notice of a constitutional question
[14]
Counsel
for CEP drew the Court’s attention to the fact that HomeTech had not served
notice of a constitutional question on provincial Attorneys General pursuant to
section 57 of the Federal Courts Act, R.S.C. 1985, c. F-7, even though
the question in dispute is whether HomeTech employees are employed in
connection with a federal undertaking within the constitutional (and statutory)
jurisdiction of the Board. Counsel for CEP took no position on whether the
absence of a section 57 notice was fatal to HomeTech’s application and the
issue was not the subject of argument.
[15]
In
circumstances materially identical to those of the present case, the Court in Transport
Besner Atlantic Ltée. v. Syndicat des travailleuses et travailleurs de
Transport Besner, 2006 FCA 146 at para. 40 (Transport Besner) refrained
from deciding whether a failure to serve a section 57 notice in itself
invalidates proceedings. As in Transport Besner, the Board in the present
case had a complete evidential record before it and the issue of whether the
employees in question were employed on or in connection with a federal
undertaking was fully argued before it. In addition, in both cases the Court’s
decision is limited to a finding that the employer did not demonstrate any
error in the Board’s decision that would warrant setting it aside. I see no
basis for departing from Transport Besner and remitting the
matter for redetermination by the Board.
Issue 1: What is the scope of
Rogers’ federally regulated cable
network?
[16]
HomeTech agrees
that Rogers’ telecommunications and
broadcasting business is a federal undertaking, but argues that the business (the
transmission and distribution of television signals through its cable network) starts
at the headend with the capture and conversion of signals, and ends at the
distribution taps located closer to customers’ residences. The cable connecting
the network and Rogers’ customers’ equipment, it is
argued, is not part of the network. Hence, the HomeTech employees who install
it are not employed on a federal undertaking, and the presumption that labour
relations are governed by provincial law is not rebutted.
[17]
Counsel for
HomeTech notes that no judicial authority has decided that a cable network,
which is admittedly a federal undertaking, extends beyond the distribution taps
to the connection between customers’ equipment in their homes and the network. More
particularly, he relies on the decision of an Adjudicator of the Board, dated
May 28, 2008, in Jones v. Cancable Inc., [2008] C.L.A.D. No. 132 (Jones).
[18]
The
Adjudicator in Jones dismissed an employee’s unjust dismissal complaint
against an employer, Cancable Inc., which was performing for a cable network
provider in Windsor, Ontario, services similar to
HomeTech’s services to Rogers in London.
The Adjudicator dismissed the complaint as outside his jurisdiction because the
employer was not engaged in a federal undertaking. His reasons were similar to
the arguments advanced in the present case by HomeTech.
[19]
I do not agree
with counsel’s submissions. While the courts have not addressed the precise point
that arises in this case, they have consistently refused to divide up the
components of a cable network in order to identify parts that have no
extra-provincial reach. Thus, in Public Service Board v. Dionne, [1978]
2 S.C.R. 191, 197-8, the Court stated:
… [W]here television
broadcasting and receiving is concerned there can no more be a separation for
constitutional purposes between the carrier system, the physical apparatus, and
the signals that are received and carried over the system than there can be
between railway tracks and the transportation service provided over them or
between the roads and transport vehicles and the transportation service that
they provide.
… [T]he very technology employed
by the cable distribution enterprises in the present case establishes clearly
their reliance on television signals and on their ability to receive and
transmit such signals to their subscribers. In short, they rely on broadcasting
stations, and their operations are merely a link in a chain which extends to
subscribers who receive the programmes through their private receiving sets.
[Emphasis added]
[20]
Similarly,
in Capital Cities Communications Inc. v. Canadian Radio-Television
Commission, [1978] 2 S.C.R. 141, the Court rejected the argument that,
while the reception of television signals was within federal regulatory
authority, their subsequent transmission by cable within the Province was not.
It held that both were within federal competence.
[21]
Counsel for
HomeTech suggested no principled reason for insisting that Rogers’ cable network ends at the
distribution taps. In my view, the constitutionally permitted reach of federal
regulators with respect to cable networks should not be unduly dependent on the
particular technology employed for enabling customers to receive the
transmitted signals.
[22]
Indeed, it
is counterintuitive to maintain that Rogers’
cable network ends at the outside distribution taps when the service for which customers
pay Rogers is the reception of the
signal in their homes through their television sets or other equipment. If customers
are not connected to Rogers’ network, Rogers
has no business. This view of the extent of Rogers’ business is supported by section 2 of
the Telecommunications Act, S.C. 1993, c. 38:
|
“telecommunications” means the emission,
transmission or reception of intelligence by any wire, cable, radio,
optical or other electromagnetic system, or by any similar technical system.
|
« télécommunication » la
transmission, l’émission ou la réception d’information soit par système
électromagnétique, notamment par fil, câble ou système radio ou optique, soit
par tout autre procédé technique semblable.
|
[23]
Counsel for
HomeTech also referred the Court to the decision in Fastfrate, which
reiterated (at para. 27) that labour relations normally fall within provincial
jurisdiction and that “federal jurisdiction has been interpreted narrowly in
this context.” The Court in that case held that the fact that a transportation
company, which collected or delivered freight within a province, contracted
with a third party for the inter-provincial transportation of the freight did
not make the company a federal undertaking.
[24]
However,
writing for the majority of the Court in Fastfrate, Justice Rothstein
recognized (at para. 60) that the courts have treated telecommunications
differently from transportation and that “the constitutional inquiry [in
telecommunications cases] has at times focussed on ‘the service that is provided
and not simply … the means through which it is carried on’”.
[25]
In my
opinion, HomeTech’s argument unduly elevates the particular means of delivering
the message over the nature of the service offered by Rogers, namely, the transmission of signals to a
customer’s home through a connection to its network. Connecting customers to
Rogers’ cable network so that they can view television programmes and access
the internet at home is more than “merely facilitating inter-provincial” (Fastfrate
at para. 78) communications. It is the essential final link of a functionally
single chain for the transmission and reception of signals.
[26]
Accordingly,
I am not persuaded that the Board erred when it concluded that Rogers’ federal undertaking extends
from the headend to the connection between customers’ home equipment and the
network.
Issue 2: On the
basis that Rogers’ core federal undertaking
includes the connection between the customer and the network, are the services
provided by HomeTech as a going concern vital, essential or integral to the
operation of the federal undertaking?
[27]
Counsel for
HomeTech agreed that the Board had applied the correct four-pronged test established
in Northern Telecom v. Communications Workers, [1980] 1 S.C.R. 115 at
135, for answering this question: (i) the general nature of HomeTech’s
operations as a going concern; (ii) the nature of the corporate relationship
between HomeTech and Rogers; (iii) the importance of the work done by HomeTech
for Rogers as compared with its other customers; and (iv) the extent of the involvement
of HomeTech’s employees in the operation of Rogers’ core federal undertaking.
[28]
To
paraphrase Justice Estey, writing for the majority of the Court in Northern
Telecom v. Communication Workers, [1983] 1 S.C.R. 733 at 770, the question
is: to what extent was the work of HomeTech’s employees integral to Rogers’ federal undertaking? It is
important to bear in mind here that I have already concluded that the Board did
not err in concluding that Rogers’ federal undertaking extends from
the headend to the cable and equipment connecting its customers to the network.
[29]
Nearly all
the facts point to the conclusion that HomeTech’s employees were highly
integrated into the federal undertaking. In particular, HomeTech’s operations
“as a going concern” consisted of connecting Rogers’ customers to the network and to
providing related services. Although HomeTech was independently owned, Rogers was HomeTech’s only customer,
and the HomeTech employees in question devoted all their time to performing the
work covered by the contracts between Rogers
and HomeTech. The allocation and scheduling of the employees’ work was
controlled by Rogers.
[30]
The
principal submission on this issue made in oral argument by counsel for
HomeTech was that connecting customers’ television sets to the network through
a digital box was a peripheral part of the federal undertaking. The “guts” of the
network, he said, is to capture, convert and transmit signals to the
distribution taps.
[31]
I do not
agree. Each part of the network is essential to the transmission of signals to
customers. The receipt of the signal by Rogers’ customers cannot plausibly be said to
be subsidiary to its transmission to an outlet in the street. The only purpose of
Rogers’ network is to enable its customers
to receive the signal on equipment in their homes.
[32]
To the
extent that the Adjudicator’s reasoning in Jones is inconsistent with
these reasons, it should not be followed. I would only add that, unlike the Board
in the present case, the Adjudicator in Jones did not have the benefit
of the decision in Phasecom Systems Inc., [2005] OLRB Rep. 688. In that
decision, the Ontario Labour Relations Board dismissed a union’s application
for certification, on the ground that employees who installed satellite dishes
to connect customers to a network were employed on a federal undertaking.
Conclusions
[33]
For these
reasons, I would dismiss the application for judicial review with costs.
“John M. Evans”
“I
agree
Marc
Noël J.A.”
“I
agree
M.
Nadon J.A.”
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