Federal Court of Appeal Decisions

 

Date: 20060424

Dockets: A-475-04

A-11-05

A-107-05

A-392-05

 

Citation: 2006 FCA 146

 

CORAM:               DESJARDINS J.A.

                                DÉCARY J.A.

                                NADON J.A.

A-475-04

A-107-05

BETWEEN:

TRANSPORT BESNER ATLANTIC LTÉE,

TRANSPORT BESNER CENTRAL LTÉE,

TRANSPORT BESNER INC.,

GESTION RÉSEAU BESNER LTÉE,

                                                                                                                                                                                            Applicants

and

SYNDICAT DES TRAVAILLEUSES ET

TRAVAILLEURS DE TRANSPORT BESNER (CSN),

UNION DES CHAUFFEURS DE CAMIONS,

HOMMES D’ENTREPÔTS ET AUTRES OUVRIERS,

TEAMSTERS QUÉBEC, SECTION LOCALE 106 (FTQ)

                                                                                                                                                                                        Respondents

 

 

A-11-05

A-392-05

UNION DES CHAUFFEURS DE CAMIONS,

HOMMES D’ENTREPÔTS ET AUTRES OUVRIERS,

TEAMSTERS QUÉBEC, SECTION LOCALE 106 (FTQ)

                                                                                                                                                                                            Applicants

and

SYNDICAT DES TRAVAILLEUSES ET

TRAVAILLEURS DE TRANSPORT BESNER (CSN)

and

TRANSPORT BESNER ATLANTIC LTÉE,

TRANSPORT BESNER CENTRAL LTÉE,

TRANSPORT BESNER INC.,

GESTION RÉSEAU BESNER LTÉE,

TRANSPORT TF 13

                Respondents

Hearing held at Montréal, Quebec, on March 28, 29 and 30, 2006.

Judgment rendered at Ottawa, Ontario, on April 24, 2006.

REASONS FOR JUDGMENT:                                                                                                                           DESJARDINS J.A.

CONCURRED IN BY:                                                                                                                                                  DÉCARY J.A.

                                                                                                                                                                                         NADON J.A.

Date: 20060424

Dockets: A-475-04

A-11-05

A-107-05

A-392-05

Citation: 2006 FCA 146

CORAM:               DESJARDINS J.A.

                                DÉCARY J.A.

                                NADON J.A.

A-475-04

A-107-05

BETWEEN:

TRANSPORT BESNER ATLANTIC LTÉE,

TRANSPORT BESNER CENTRAL LTÉE,

TRANSPORT BESNER INC.,

GESTION RÉSEAU BESNER LTÉE,

 

                                                                                                                                                                                            Applicants

and

 

SYNDICAT DES TRAVAILLEUSES ET

TRAVAILLEURS DE TRANSPORT BESNER (CSN),

UNION DES CHAUFFEURS DE CAMIONS,

HOMMES D’ENTREPÔTS ET AUTRES OUVRIERS,

TEAMSTERS QUÉBEC, SECTION LOCALE 106 (FTQ)

 

                                                                                                                                                                                        Respondents

 

 

 

 

A-11-05

A-392-05

UNION DES CHAUFFEURS DE CAMIONS,

HOMMES D’ENTREPÔTS ET AUTRES OUVRIERS,

TEAMSTERS QUÉBEC, SECTION LOCALE 106 (FTQ)

                                                                                                                                                                                            Applicants

 

and

 

SYNDICAT DES TRAVAILLEUSES ET

TRAVAILLEURS DE TRANSPORT BESNER (CSN)

and

TRANSPORT BESNER ATLANTIC LTÉE,

TRANSPORT BESNER CENTRAL LTÉE,

TRANSPORT BESNER INC.,

GESTION RÉSEAU BESNER LTÉE,

TRANSPORT TF 13

Respondents

REASONS FOR JUDGMENT

 

DESJARDINS J.A.

[1]               The Court has before it four applications for judicial review.

 

[2]               The first (A‑475‑04) is by the applicants Transport Besner Atlantic Ltée, Transport Besner Central Ltée, Transport Besner Inc. and Gestion Réseau Besner Ltée (the employer).  It asked the Court to quash a decision by the Canada Industrial Relations Board (the Board), decision No. 285 dated April 17, 2004 ([2004] C.I.R.B.D. No. 26 (QL)).  That decision allowed two applications made by the Syndicat des travailleuses et travailleurs de Transport Besner (the Syndicat or CSN), one concerning a sale of business declaration pursuant to section 44 of the Canada Labour Code, R.S.C. 1985, c. L‑2 (the Code), and the other a single employer declaration pursuant to section 35 of the Code.

 

[3]               The second and third applications for judicial review were filed by the Union des chauffeurs de camions, hommes d’entrepôt et autres ouvriers (Teamsters) Québec, section locale 106 (FTQ) (the Teamsters) (A‑11‑05) and by the employer (A‑107‑05).  They related to a second Board decision, No. 303 dated December 23, 2004 ([2004] C.I.R.B.D. No. 44 (QL)).  The Board determined the appropriate bargaining unit and ordered that, pursuant to subsection 29(1) of the Code, a representation vote be held for all drivers in the appropriate bargaining unit to decide whether the unit drivers wished to be represented by the Syndicat or by the Teamsters.

 

 

[4]               The fourth application for judicial review was filed by the Teamsters (A‑392‑05).  It concerned a third Board decision, No. 329 dated August 16, 2005 ([2005] C.I.R.B.D. No. 24 (QL)), which dismissed two applications to reconsider the Board’s first two decisions, one by the employer and the other by the Teamsters.

 

 

Facts

[5]               It appeared from decision No. 285 by the Board that, on September 20, 2002, a corporation known as Transport Besner Inc. (Transport Besner), whose line of business is the transportation of complete units, was doing business in Canada and the northeastern U.S. from its place of business located at Saint‑Nicolas.  The business was created in 1976 and held majority interests in two companies named Transport Besner Atlantic (Besner Atlantic) and Besner Central Ltée (Besner Central).  It was itself held by La Financière Besway Inc.

 

[6]               Before October 2002, Besner Atlantic only had a place of business in Moncton and a facility in Lachine.  Besner Central had only a place of business located in Mississauga and a facility in Lachine.  Besner Atlantic had about 25 drivers who were all working in Moncton, and Besner Central used the services of some 25 drivers in Mississauga through placement agencies.  These companies had no drivers in Saint‑Nicolas (at paragraphs 11-13).

 

[7]               Gestion Réseau Besner Ltée (Gestion Réseau Besner) was created in 1998.  It described itself as a transportation logistics undertaking whose principal line of business, in addition to administration, consisted in obtaining customers and then allocating contracts to transportation businesses, primarily Transport Besner, Besner Atlantic and Besner Central.  Its head office was located at the same address as Transport Besner in Saint‑Nicolas.  A significant part of its administrative and managerial staff had formerly worked for Transport Besner.  Before the creation of Gestion Réseau Besner, Transport Besner itself took care of all of its administrative activities (recruiting, training and human resource management in general).

 

[8]               On July 18, 2002, the Teamsters filed a certification application for Besner Central, and on July 24, 2002, they filed a certification application for Besner Atlantic.  Those two applications did not relate to the Saint‑Nicolas facility.  Indeed, Besner Atlantic and Besner Central had no facility at Saint‑Nicolas before the end of summer 2002.  On October 29, 2002, the Board allowed the Teamsters’ application to discontinue these two cases.

 

[9]               On August 27, 2002, two identical collective agreements were concluded between the

Teamsters and Besner Central and between the Teamsters and Besner Atlantic for the drivers in those businesses.  The Teamsters were voluntarily recognized by Besner Central and Besner Atlantic.  On November 1, 2002, they filed two applications for certification with the Board relating to all the facilities of those two businesses respectively, including that at Saint‑Nicolas.  The Syndicat had previously filed two applications for certification with the Board regarding these same two businesses, but only for their Saint‑Nicolas facility.  The Syndicat had represented the Transport Besner drivers since February 27, 1998.  The collective agreement applicable to them expired on May 31, 2002.  A transitional clause governed the drivers’ working conditions.  That clause, 32.05, read as follows:

 

[translation]

 

This agreement shall remain in effect until renewed.

 

 

[10]           In summer and fall 2002, significant changes were observed in Transport Besner’s activities.  In May 2002, the business had over 280 drivers. As of December 23, 2002, it only had 98.  In fall 2002, no more drivers were recruited for Transport Besner, but an increase in the number of drivers recruited for Besner Atlantic and Besner Central could be noted (see paragraph 22 of the reasons).

 

[11]           As early as September 2002, several drivers left Transport Besner and concluded contracts of employment with Besner Central, Besner Atlantic or other transportation businesses.  Two or three drivers for each of those businesses were posted in Saint‑Nicolas in September 2002.  In December 2002, there were some 30 drivers posted in Saint-Nicolas for each of the businesses.

 

[12]           Between May and December 2002, the Syndicat and Transport Besner undertook negotiations to arrive at a new collective agreement.  The first of these meetings were held on May 24, July 5, August 29-30 and September 5 and 6.  According to the testimony heard, the stumbling block in the negotiations concerned the booking system.

 

[13]           On October 1, 2002, the Fonds de revenu TransForce purchased the shares of Transport Besner, Besner Atlantic, Besner Central and Gestion Réseau Besner.

 

[14]           Negotiations between the Syndicat and Transport Besner broke down on December 23, 2002.  On the same date, Transport Besner closed its doors.  The last 98 drivers with the business were dismissed the same day.  On January 10, 2003, the Syndicat filed grievances with Transport Besner on behalf of the 98 dismissed drivers.

 

 

Board’s decisions

[15]           Decision No. 285 stated that, at the start of the hearing, the employer filed a motion to dismiss the application for a single employer declaration made by the Syndicat.  The reason given was that the application was moot as the employer had closed down.

 

[16]           The Board dismissed this application on the ground that the proceeding before it had concrete consequences for the rights of the parties.  In the Board’s view, an application for a single employer declaration or a sale or transfer of business declaration could not become moot simply because one of the businesses in question had closed down.  The Board felt that such a ruling would go against the purpose of the provisions of the Code on the sale or transfer of a business (see paragraph 79 of the decision).

 

[17]           The employer further contended that the Board could not make a single employer declaration because all the businesses in issue did not fall under federal jurisdiction.  In the employer’s submission, Gestion Réseau Besner had ceased the activities which made it federal since the end of December 2002 and had come under provincial jurisdiction.  The Board dismissed these arguments on the ground that Gestion Réseau Besner was a vital and integral part of Besner Central and Besner Atlantic, which were federal businesses.  Accordingly, Gestion Réseau Besner also had to be governed by the provisions of the Code (paragraph 197 of the Board’s reasons).  The Board made a single employer declaration, adding that [translation] “in the event that Transport Besner were to be reactivated as part of this group of companies, it could also be covered by the single employer declaration insofar as its activities were carried out in the same way as before its closure on December 23, 2002” (paragraph 225 of Board’s reasons).

 

[18]           As to the application for a sale of business declaration, the Board considered that the definition of a “sale” contained in section 44 of the Code should be broadly interpreted.  In its view, Transport Besner was the subject not of a sale in the commercial sense of the word but of a partial transfer (paragraph 175 of the Board’s reasons).  The Board observed that a significant part of the activities of Transport Besner had been maintained in Saint‑Nicolas by Besner Atlantic and Besner Central and that Transport Besner’s activities had not ceased, but had been largely taken over in Saint‑Nicolas by two affiliated companies, Besner Central and Besner Atlantic.  The means specific to this business, such as the equipment, customers’ usual trips and a large proportion of the drivers, had been transferred to Besner Atlantic and Besner Central (paragraph 177 of the Board’s reasons).  Accordingly, Transport Besner’s know‑how in Saint‑Nicolas, much of its staff, the customers it served and its facilities had survived the closure of December 23, 2002 (paragraph 179 of the Board’s reasons).

 

[19]           The Board ordered the parties herein, namely the Syndicat, the group of businesses Besner Central, Besner Atlantic, Gestion Besner and Gestion Réseau Besner and the Teamsters, to undertake negotiations to arrive at an agreement on the number of appropriate bargaining units and the bargaining agent for each unit.  In the absence of an agreement, they were to discuss among themselves any question relating to a possible vote, including eligibility criteria.

 

[20]           The parties were not able to come to terms.  They submitted their comments to the Board, which had to make a ruling.

 

[21]           In its decision No. 303 of December 23, 2004, the Board considered that a single unit combining all the locations of the employer’s companies was the appropriate bargaining unit (paragraph 24 of the Board’s reasons).  It ordered the holding of a secret representation to decide on the bargaining agent.

 

[22]           The right to vote was given to all drivers working for Gestion Réseau Besner, Besner Atlantic and Besner Central on April 17, 2004, who were still employed by those businesses on the date of the vote.  The right to vote was also available to the 98 drivers dismissed on December 23, 2002 at Transport Besner and to Martin Alain, the CSN union representative who was dismissed on or about December 16, 2002.

 

[23]           Finally, it appeared that in reconsideration decision No. 329 of April 16, 2005, the Board rejected as follows the arguments by the employer and the Teamsters that the initial panel had made an error of law when it held that the 98 dismissed drivers still had rights of recall:

37                In the case before us, the evidence presented indicates that, at the time the transfer of the business pursuant to section 44 of the Code was finalized, that is, on December 23, 2002, the working conditions of the 98 Transport Besner drivers were governed by a bridging clause of the expired CSN collective agreement.  This bridging clause was agreed to by the CSN and Transport Besner and stipulated that the terms and conditions of that collective agreement (including the arbitration procedure) would apply until these parties entered into a new collective agreement.  The collective agreement contained clauses relating to the recall rights of employees.

 

38                For that reason, the original panel concluded that the bargaining and representation rights of the union of the Transport Besner employees, including the 98 laid-off drivers, had been transferred pursuant to section 44 of the Code to Besner Central and Besner Atlantic (and subsequently included in the single employer declaration).

 

39                In the original panel’s view, since the lay-offs took place prior to the closing of Transport Besner on December 23, 2002, the dispute to which the lay-offs gave rise was also transferred pursuant to section 44 of the Code.  The original panel found that the union had filed the grievances relating to these lay-offs within the time period provided for in its collective agreement.  Since section 44(2)(d) of the Code states that the purchaser becomes a party to any proceeding taken under Part I of the Code that affects the vendor’s employees, the purchaser inherits pending grievances.

 

40                The reconsideration panel has given due consideration to the employer’s argument that the union did not file its grievances against the lay-offs of December 23, 2002 until January 10, 2003, after the transfer pursuant to section 44 of the Code.  According to the employer and the Teamsters, these grievances therefore could not bind the purchaser.  However, this reconsideration panel is of the opinion that, since the union filed its grievances as soon as possible after the closure, it was appropriate, in this very specific and exceptional case, to consider the grievance process to have been initiated on the date of the sale of business.  Since the proceeding had already begun, the filing of the grievances on January 10, 2003 should not be an obstacle to the application of section 44 of the Code.

 

. . .

 

46        It is not the role of the Board to assess the legitimacy or admissibility of the union’s grievances.  Under section 46 of the Code, however, the Board must determine any question that arises under section 44 of the Code.  A Board panel hearing a dispute enjoys considerable discretion.  In keeping with the provisions of section 35 and 18.1(4)(a) of the Code, the original panel in this case decided to order a representation vote to determine the bargaining agent.

 

 

[24]           At the start of the hearing before this Court, the Teamsters confirmed to the Court that a representation vote had been held in which the 98 dismissed drivers could participate (not all exercised their right to vote) and that the Teamsters had won the vote and been certified.  However, the point raised in the case still remained relevant, in the submission of the Teamsters, as [translation] “the Board’s decision had the effect of transferring to the Teamsters grievances which, if interpreted according to the wishes of the Syndicat and of the Board, and if allowed, would have the effect of giving the ‘98’ the right to work for the buyer, which would involve the displacement and lay-off of an equal number of drivers and put in doubt the seniority list (when drivers were hired by Besner Atlantic and Besner Central a new rank was given to them regardless of where they had worked before)” (see applicant’s record, vol. II, at page 267, in case A‑392‑05 of the Court).

 

 

Legislative provisions

[25]           The Code’s provisions pertaining to these decisions are sections 22, 35, 44, 45 and 46, the relevant portions of which read as follows:

 

 

 

Applicable standard of review

[26]           There was no dispute between the parties as to the standard of review applicable in the case at bar.  The Board’s decisions are protected by a full privative clause (section 22 of the Code), the issues fall under the exclusive jurisdiction of the Board under section 46 of the Code and the case law is well settled (Canadian Broadcasting Corporation v. Canada, [1995] 1 S.C.R. 157; Ivanhoe v. United Food and Commercial Workers, Local 500, [2001] 2 S.C.R. 565, at paragraphs 24 to 34 [Ivanhoe]; Pushpanathan v. Canada (Department of Citizenship and Immigration), [1998] 1 S.C.R. 982).  The findings of fact made by the Board and the rulings on points of law which are within the Board’s jurisdiction can only be reviewed if they are patently unreasonable (Dayco (Canada) Ltd. v. National Automobile, Aerospace and Agricultural Implement Workers Union of Canada (CAW-Canada), [1993] 2 S.C.R. 230, at page 307).  However, want or excess of jurisdiction by the Board or its refusal to exercise its jurisdiction are reviewable according to the correctness standard.  In addition, any act or omission amounting to a violation of an applicable rule of natural justice would warrant the Court’s intervention.

 

 

The Doctrine of Mootness and Borowski v. Canada

[27]           The Board dismissed the employer’s motion to dismiss because, in its view, there was a concrete dispute between the parties.  The Board explained that the possible application of sections 35 and 44 of the Code following the closing of Transport Besner would have an impact on the parties’ rights; therefore, it was essential that the Board exercise its jurisdiction and resolve the dispute between the parties (paragraphs 80 to 87 of the reasons).  Accordingly, in the Board’s view, the point was far from moot.

 

[28]           The employer was unable to show the Court that, based on Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, this decision by the Board was patently unreasonable.

 

 

Unreasonable findings of fact

Violation of natural justice

[29]           The employer contended that the Board ignored the evidence adduced by the employer as to the causes of the problems that arose at Transport Besner Inc. in fall 2002.  It argued that the Board ignored evidence showing that several drivers had voluntarily decided to resign from Transport Besner Inc. to go and seek employment with Besner Atlantic or Besner Central because they disagreed with the arguments advanced by the Syndicat to slow down the employer’s activities (paragraph 16 of employer’s memorandum – plaintiffs in case A‑475‑04).

 

[30]           The employer further submitted that the Board had prevented the employer from offering all of its evidence relating to the drivers no longer working for Transport Besner Inc.  The employer added that it intended to show that they had no intention whatever of returning to work for that company (paragraph 26 of employer’s memorandum – applicants in A‑475‑04).

 

[31]           In view of the absence of an official transcript of the testimony heard by the Board and the exchanges during the hearing and as there are no opposing affidavits, the employer was unable to discharge the heavy burden of proof upon it of establishing that the findings of fact made by the Board were patently unreasonable.

 

[32]           Further, in my view, in this case, there has been violation of the rules of natural justice by the Board.  The case law is clear: “the concept of procedural fairness is eminently variable and its content is to be decided in the specific context of each case” (Knight v. Indian Head School Division No. 19, [1990] 1 S.C.R. 653, at page 682, cited in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, at paragraph 21 [Baker]).

 

[33]           Further, in International Woodworkers of America, Local 2‑69 v. Consolidated-Bathurst Packaging Ltd., [1990] 1 S.R.C. 282, at paragraph 69, Mr. Justice Gonthier said:

 

69     I agree with the respondent union that the rules of natural justice must take into account the institutional constraints faced by an administrative tribunal.  These tribunals are created to increase the efficiency of the administration of justice and are often called upon to handle heavy caseloads.  It is unrealistic to expect an administrative tribunal such as the Board to abide strictly by the rules applicable to courts of law.  In fact, it has long been recognized that the rules of natural justice do not have a fixed content irrespective of the nature of the tribunal and the institutional constraints it faces.

 

 

[34]           Finally, in Baker, the Supreme Court of Canada gave a non-exhaustive list of five criteria applicable in defining the procedural rights required by the duty of fairness in given situations: (1) the nature of the decision being made and the process followed in making it; (2) the nature of the statutory scheme and the terms of the statute pursuant to which the body operates; (3) the importance of the decision to the individual or individuals affected; (4) the legitimate expectations of the person challenging the decision; and (5) the choices of procedure made by the agency itself (Baker, supra, at paragraphs 23‑28; see also Suresh v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 3, at paragraphs 114-120).

 

[35]           In this case, in view of those criteria, it cannot  be said that there was a violation of the rules of natural justice in the circumstances, as alleged by the employer.  In particular, the administrative nature of the decision, the specialized function of the Board in the legislative scheme and the choices of procedure made by the Board within its expertise in industrial relations indicate that the procedural rights applicable in this case are not as strict as those applicable to courts of law.  Since the Board’s decision is final and bears on the rights of individuals, however, the duty of fairness is not minimal: as this Court explained in Bunge of Canada Ltd. v. Canadian Union of Public Employees, Local 3711 (1995), 181 N.R. 382 (F.C.A.), at paragraph 25, “[u]ltimately the Court must ensure in each specific case that the way in which the tribunal acted was not or could not reasonably have been seen as depriving the individual of an opportunity to present his views before the decision‑makers in an open and cordial atmosphere”.

 

[36]           However, the Board has full control over its own procedure.  Further, it has the discretion to decide whether a particular question requires that a hearing be held as this requirement does not apply in the context pursuant to the audi alteram partem rule (section 16.1 of the Code; see also NAV Canada v. International Brotherhood of Electrical Workers, Local 2228 (2001), 267 N.R. 125 (F.C.A.), at paragraphs 9‑10; Raymond v. Canadian Union of Postal Workers (2003), 318 N.R. 319 (F.C.A.), at paragraph 4).  When there is a hearing, the Board may refuse to hear part of the oral evidence offered by a party when such additional evidence relates to facts that have already been established.  In this case, the employer questioned five drivers, but wanted to question each of the other 93 dismissed drivers in relation to the same facts.  In these circumstances, the Board’s refusal does not amount to a violation of the rules of natural justice.

 

 

Single employer declaration

[37]           The employer submitted that the Board made a serious error of fact and law and exceeded its jurisdiction by illegally assuming jurisdiction over Gestion Réseau Besner, a business which, in the employer’s submission, was clearly within the scope of provincial jurisdiction under the Constitution.  Gestion Réseau Besner, it said, was a logistics company which was not involved in any transportation activity, hired no drivers, had no transport licences, operated no trucks and owned no trailers.  It operated as a business broker that purchased and allocated trips.  Further, in order to exist and survive, Gestion Réseau Besner had no need of Besner Atlantic nor Besner Central, since it used and has always used a range of additional carriers.

 

[38]           Based on this argument, the employer challenged on constitutional grounds the argument that the Code to Gestion Réseau Besner was inapplicable.

 

[39]           The Board explained in detail, at paragraphs 191 to 197 of its reasons, the factors favouring the application of the Code to Gestion Réseau Besner.  It wrote:

 

191     Concerning Besner Network, the Board cannot accept the respondents’ argument that this company is under provincial jurisdiction because it has no trucks, does not hire drivers and does not carry out any transport movements.  The evidence submitted shows that Besner Network was established in 1998 and defines itself as a transportation logistics company.  It is an entity in which were consolidated the operational and administrative services previously provided by Transport Besner.  Further, the testimony heard by the Board revealed that although the senior management of Besner Network, such as the Vice-President and General Manager, Equipment Co-ordinator, Vice-President, Operations, Sales Director and Training Director, perform their work at Besner Network, their responsibilities also encompass Besner Central and Besner Atlantic.  All these managers, except for the Vice-President, Operations, used to work for Transport Besner and they all work at Transport Besner’s original address, that is, 354 du Pont, Saint‑Nicolas.

 

192     The Board has considered the respondents’ argument that Besner Network is basically a logistics company, which offers transport movements to its customers and allocates the contracts it thus obtains to different transportation companies.  Moreover, the Board has noted that Besner Network sometimes assigns customers’ transport movements to companies other than Besner Central and Besner Atlantic to ensure that delivery dates are met; however, the great majority of trips (between 75% and 95% in the last few years) are assigned to these two companies.  The respondents’ testimony shows that the transport movements of these two companies are centralized and administered by Besner Network.  According to some of the testimony heard, including that of the Head Dispatcher for Besner Atlantic in Moncton, Besner Network is viewed as the “head office” by the other Besner companies.

 

193     Further, it has been shown that the transport movements carried out by Besner Central and Besner Atlantic were assigned to these companies by Besner Network.  The Besner Network Equipment Co-ordinator clearly explained that this company centralized customers’ transport requests.  He also clearly explained that he had to assign transport movements to Besner Central and Besner Atlantic (and Transport Besner until December 23, 2002) in accordance with the location and availability of equipment, the type of equipment required and the customer’s delivery date.  Thus, the Besner Network Sales Department provides centralized services from which Besner Central and Besner Atlantic (and Transport Besner until December 23, 2002) benefit.  These companies themselves do not have Sales Departments, which would enable them to have customers and allocate transport requests directly.

 

194     There are, essentially, two ways for a company to be considered as coming under federal jurisdiction: first, if in itself it constitutes a single federal work, undertaking or business because its activities come under the exclusive jurisdiction of Parliament under section 92 of the Constitution Act, 1867; or second, if it is part of an existing federal work, undertaking or business.  (See United Transportation Union v. Central Western Railway Corp., [1990] 3 S.C.R. 1112.)  In Westcoast Energy Inc. v. Canada (National Energy Board), [1998] 1 S.C.R. 322, the Supreme Court of Canada asserted that an undertaking can be a single federal work or undertaking in one of two ways.  It can be recognized as a federal work, undertaking or business: (a) on its own account, or (b) because it is operated as a single enterprise in common with one or more federal undertakings, which together come under federal jurisdiction.  (See also Day & Ross Nfld. Limited, [1999] CIRB no. 4; and 53 CLRBR (2d) 50; and City‑TV, CHUM City Productions Limited, Much Music Network and Bravo!, Division of CHUM Limited, [1999] CIRB no. 22; and 53 CLRBR (2d) 161.)

 

195     In this matter, Besner Network is not a work or undertaking that comes under federal jurisdiction directly or on its own account, as are Besner Central and Besner Atlantic.  However, the Board is satisfied that Besner Network forms an integral part of the federal undertakings Besner Central and Besner Atlantic (and Transport Besner until December 23, 2002) and carries out its common activities with them, and that all these companies are jointly operated.

 

196     The Board also considered the jurisprudence submitted by the union, particularly Rivtow Marine Ltd. and Tiger Tugz Inc., supra.  In that case, the Board stipulated that a company that may at first sight appear to be under provincial jurisdiction can nevertheless be a federal undertaking if it constitutes a vital or integral part of federal works or undertakings.  The Board set out the following principles:

 

	[19] An undertaking which prima facie falls within provincial jurisdiction because its works and operations are confined to a single province may nevertheless come under federal jurisdiction, if it can be shown to be part of a broader federal undertaking.  This may occur if the disputed operation, notwithstanding its structure as a distinct undertaking performing essentially local activities, can be shown to be operated in common with a federal undertaking as a single enterprise . . . For a local undertaking to be found to be a single enterprise for constitutional purposes, there must be substantial integration of the management and operation of the two undertakings (see Westcoast Energy, supra; and Medalta Distribution Services Ltd. and Exalta Transport Corp. (1995), 98 di 6 (CLRB no. 1117).
	[20] If the disputed operation is not federal on its own account, then it may also come under federal jurisdiction if it is found to be integral, vital or essential to a core federal undertaking in a regulatory sense.  This would occur if it can be shown that an existing federal undertaking is dependent upon the local undertaking for the performance of an essential of its operation (see United Transportation Union v. Central Western Railway Corp., [1990] 3 S.C.R. 1112; Re Eastern Canada Stevedoring Company Limited, [1955] S.C.R. 529, at page 534 [the “Stevedores Reference”]; and Letter Carriers’ Union of Canada v . Canadian Union of Postal Workers et al., [1975] 1 S.C.R. 178 [the “Letter Carriers’ case”]).  “Essential” in this context has been interpreted to include the extended meaning of “reasonably necessary” (see Canadian Air Line Employees’ Association v. Wardair Canada (1975) Ltd. et al., [1979] 2 F.C. 91 (C.A.)).
	(pages 9; and 208-209)

 

197     In the light of the submitted evidence and the applicable jurisprudence, the Board has no choice but to find that Besner Network constitutes a vital and integral part of the operation of the federal undertakings Besner Central and Besner Atlantic.  The sales, driver training, equipment maintenance and logistics services are essential to the transportation activities carried out by Besner Central and Besner Atlantic.  Consequently, Besner Network must also be subject to the provisions of the Code.

 

 

[40]           The employer, that is arguing that the Code does not apply to Gestion Besner, did not give the Board or the Court a notice of a constitutional question, as required by section 57 of the Federal Courts Act.  I also note that the parties submitted extensive evidence of relevant constitutional facts to the Board and that the Board’s decision on this point is particularly well reasoned.  The circumstances of this case differ significantly from those that gave rise to the decision of the Supreme Court of Canada in Northern Telecom Ltd. v. Communication Workers of Canada, [1980] 1 S.C.R. 115, at pages 131, 139 and 140, and to the decisions of this Court in Halifax Longshoremen’s Assn., Local 269 v. Offshore Logistics Inc. (2000), 257 N.R. 338 (F.C.A.), in Trevor Jacobs v. Sports Interaction, 2006 FCA 116, in Ardoch Algonquin First Nation v. Canada (Attorney General) (F.C.A.), [2004] 2 F.C.R. 108, at paragraphs 49 and 50, and in Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage) (F.C.A.), [2004] 3 F.C.R. 436, at paragraphs 75 and 76.  I will thus refrain from deciding whether the absence of notice of a constitutional question is fatal in itself (a point left open by Mr. Justice Rothstein in Offshore Logistics Inc., at paragraph 58), and like Mr. Justice Dickson in Northern Telecom, I will simply find that the employer “was unable to show that the Canada Industrial Relations Board had made an error which could be a basis for quashing its decision” (at page 141).

 

 

Sale of business and sections 44 and 46 of the Code

[41]           Section 44 of the Code contains a statutory definition of what it means to “sell” a business:

 

The current version of this definition was adopted in 1998 (S.C. 1998, c. 26, s. 21).

 

[42]           Previously, since 1972 (S.C. 1972, c. 18, s. 1, amending inter alia s. 144 of the Code, the former version of the present s. 44), the statutory definition of the word “sell” in the Code was as follows:

 

According to the current statutory definition, in section 44 of the Code the word “sell” is enlarged in scope, thus goes beyond the strict limits set by the private, civil and common law.

[43]           In contradistinction to Union des employés de service, local 298 v. Bibeault, [1988] 2 S.C.R. 1048 [Bibeault], that bore on specific facts and provisions of the Quebec Labour Code in effect at the time, under the current Canada Labour Code a sale does not require a legal relationship between successive employers.

 

[44]           In Bibeault, supra, Mr. Justice Beetz clearly indicated that, for section 45 of the Quebec Labour Code (as it then stood) to be applicable, there had to be a consensual legal transfer of the business from one employer to another.  However, as Madam Justice Arbour later explained in Ivanhoe, supra (at paragraph 47 of her reasons):

. . . it is in a very specific context, in terms of both the fact situation and of the case law which existed that this Court held, in Bibeault, that s. 45 cannot apply where work has been contracted to a series of subcontractors by the same party, in respect of which no certification has ever been granted.  The conclusions stated by Beetz J. regarding the definition of an undertaking and the legal relationship that must exist between the former employer and the new employer must be understood in that context, and this makes it easier to understand the influence of the decision in Bibeault on the case at bar.

[Emphasis added.]

 

 

[45]           Madam Justice Arbour further noted, at paragraph 27 of Ivanhoe, that there have been significant changes since Bibeault.  Not only, she explained, has the standard of review changed (at paragraph 58), but the labour commissioners have developed their own expertise in the area (at paragraph 28), and in particular the wording of section 46 of the Quebec Labour Code has been changed.  Following Bibeault, the Quebec legislature wished to express quite clearly its intention: deciding on the existence of a transfer or grant of a business was to be exclusively within the jurisdiction of the commissioner.

 

[46]           On the other hand, at the time Bibeault was decided, the Canada Labour Code, section 46 (that is, the former subsection 144(5)), gave the Board greater power than the Quebec Labour Code gives the commissioner.  Thus in Bibeault, Mr. Justice Beetz said at page 1094:

The powers conferred on the commissioner by s. 46 [of the Quebec Labour Code] are fundamentally different from those given to the Canada Labour Relations Board under s. 144(5) of the Canada Labour Code, R.S.C. 1970, c. L-1, which Chouinard J. discussed in National Bank of Canada v. Retail Clerks’ International Union, [1984] 1 S.C.R. 269, at p. 276:

 

In my opinion, however, when faced with a provision as clear as subs. (5) of s. 144, cited above, for which there is no equivalent in the Manitoba statute, no preliminary question is presented and there is no doubt that the Board had jurisdiction to determine the question: “(5) Where any question arises . . . as to whether or not a business has been sold . . . the Board shall determine the question”.

 

 

[47]           Madam Justice Arbour adopted and confirmed the organic concept of the business formulated by Mr. Justice Beetz in Bibeault (at paragraphs 45, 46, 49, 65, 66 and 70 of Ivanhoe), which also serves to define the word “business” in section 44 of the Canada Labour Code.

 

[48]           Then, at paragraph 94 of Ivanhoe, supra, she added that the question of whether an undertaking has been transferred must be analyzed according to flexible tests that are, for the most part, to be assessed by the administrative tribunals having jurisdiction.  She relied on Ajax (Town) v. National Automobile, Aerospace and Agricultural Implement Workers Union of Canada (CAW-Canada) and its Local 222, [2000] 1 S.C.R. 538, in which Chief Justice McLachlin wrote at paragraph 2:

 

In my view, the historical and functional connection between Charterways and the Town of Ajax constitutes evidence upon which the Board would rationally have based conclusion of successorship.

 

[Emphasis added.]

 

 

[49]           Madam Justice Arbour also cited Mr. Justice Goudge, whose reasons ((1998), 41 O.R. (3d) 426) (C.A.), were approved in their entirety by the Supreme Court of Canada in Ajax, and who wrote at page 439 concerning the Ontario Labour Relations Act, R.S.O. 1990, c. L.2:

 

The statutory definition is inclusive: “ ‘sells’ includes leases, transfers and any other manner of disposition”.  Because of the remedial purpose of s. 64, namely the preservation of bargaining rights, this definition is to be given a broad and liberal interpretation.

 

 

[50]           Madam Justice Arbour confirmed (at paragraph 94) that the existence of a formal juridical act of transfer is not essential.  The specific business relationship that existed between the successive employers is sufficient.  Thus, the merger of two branches of the same bank was recognized where a unionized bank had been closed and its operations transferred to a non-unionized branch (at paragraph 95 of Madam Justice Arbour’s reasons in Ivanhoe, supra; see also National Bank of Canada v. Retail Clerks’ International Union, [1984] 1 S.C.R. 269).

 

[51]           Contrary to the employer’s arguments, I am of the view that, in this case, the Board made no patently unreasonable error of law at paragraph 182 when it stated:

 

Rather, the Board finds that observing a set of factors and facts in their totality allows it to find the existence of a sale within the meaning of section 44 of the Code.  With respect to the legal relationship, the Board previously found, in Logistec Corporation et al. (1986), 67 di 120; 15 CLRBR (NS) 338; and 87 CLLC 16,008 (CLRB no. 593) and in Halifax Grain Elevator Limited, supra, that the type of relationship to be considered by the Board in determining whether a transfer had taken place was one of “continuity of the business” rather than a legal relationship.

[Emphasis added.]

 

 

[52]           In Ivanhoe, supra (at paragraph 72), the Supreme Court of Canada recognized that the labour commissions and the Labour Court had the authority to assess the respective importance of the various components of the undertaking and to hold, in the circumstances, that the transfer of a right to operate, combined with the transfer of functions, was sufficient to trigger the application of section 45 of the Quebec Labour Code in view of the organic definition of an undertaking.

 

[53]           Further, in Ivanhoe, supra, the Supreme Court of Canada acknowledged that administrative tribunals responsible for applying provisions like section 45 of the Quebec Labour Code (section 44 of the Canada Labour Code is of the same type) enjoy a wide discretion in determining and weighing the factors that apply in defining an undertaking, and are at liberty to develop specific tests to respond to the situation in a given industry (at paragraphs 66, 67, 69, 70 and 96 of the judgment in Ivanhoe).  The only requirement, as Madam Justice Arbour explained at paragraph 70 of her reasons, “is that an organic rather than a functional definition of an undertaking be adopted, although in some cases similarity of functions may still be decisive, where the undertaking has no other special characteristics (Bibeault, at page 1107)”.

 

[54]           The Board made no patently unreasonable error of law when it ruled out the concept of “legal relationship” and instead retained that of “continuity of the business” at paragraph 182 of its reasons.  Indeed, in citing Logistec Corporation et al. (1986), 67 di 120; 15 CLRBR (NS) 338; 87 CLLC 16,008 (CLRB No. 593), and Halifax Grain Elevator Limited (1991), 85 di 42; 15 CLRBR (2d) 191; 91 CLLC 16,033 (CLRB No. 867), the Board relied on those of its decisions which count as “consensus” decisions in the Board.  Thus, in Logistec Corporation, supra, it relied on Terminus Maritime Inc. (1983), 50 di 178; 83 CLLC 16,029 (CLRB No. 402), in which a full panel of the Board ruled on the meaning to be given to the concept of a business so that the decision would bind all members.  The existence of a consensus in administrative tribunals was noted by Madam Justice Arbour at paragraphs 58 and 59 of Ivanhoe, supra, as a factor that favours a very high degree of judicial restraint.

 

[55]           This situation is not like the one in Bibeault, where the party which contracted out the work was never covered by a certification (Ivanhoe, at paragraph 84), or that in Ivanhoe where, in order to give effect to the purpose of section 45 of the Quebec Labour Code, the Labour Court developed the concept of a potential employer, linked to that of retrocession (at paragraphs 96 and 98 of Madam Justice Arbour’s reasons in Ivanhoe).

 

[56]           In this case, the Board noted that the rationalizing and restructuring of the operations of Transport Besner within the Gestion Réseau Besner group gave rise to a transfer of the operations of Transport Besner to Besner Central and Besner Atlantic.  It found that there was “continuity in Saint-Nicolas of a significant portion of Transport Besner’s activities by Besner Central and Besner Atlantic” (at paragraph 177 of Board’s reasons).

 

[57]           Section 44 applies automatically.  The interpretation given by the Board to an operational transfer between related companies and the finding that it made that the first business continued through companies related to the first business was an exercise of its specialized jurisdiction, and there was nothing patently unreasonable about it.  The Board’s approach was clearly within the scope of its jurisdiction.

 

Fate of collective agreement between Syndicat and Transport Besner

- Filing of grievances

 

[58]           In decision No. 329, the Board explained that section 44 of Code applies automatically and is fully effective at the time the sale of business occurs (at paragraph 34).  Thus, the successor’s rights and obligations are automatically transferred to the purchasing employer.

 

[59]           At the time of the business transfer, on December 23, 2002, under section 44 of the Code, the working conditions of Transport Besner’s 98 drivers were governed by a transitional clause in the CSN’s expired collective agreement.  This transitional clause agreed on by the CSN and Transport Besner provided for the continuation (including the arbitration procedure thereof) of that collective agreement until a new collective agreement was concluded between the parties.  This collective agreement contained clauses relating to employees’ rights of recall.

 

[60]           The initial panel held that the bargaining and representation rights of the 98 Transport Besner drivers who were dismissed on December 23, 2002 had been transferred to Besner Central and Besner Atlantic.  The initial panel found that the Syndicat, that filed grievances in respect of these dismissals on January 10, 2003, did so within the deadline specified in the collective agreement and, under section 44 of the Code, Besner Central and Besner Atlantic, or the purchaser, inherited the pending grievances.

 

[61]           The reconsideration panel dismissed the Teamsters’ argument that these grievances were invalid because they were not pending at the time the business was transferred:

 

40     . . . since the union filed its grievances as soon as possible after the closure, it was appropriate, in this very specific and exceptional case, to consider the grievance process to have been initiated on the date of the sale of business.  Since the proceeding had already begun, the filing of the grievances on January 10, 2003 should not be an obstacle to the application of section 44 of the Code.

 

41     The employer further argues that the union has not pursued its grievances since January 10, 2003.  Without seeking to explain the union’s actions, it is nevertheless possible to understand this situation objectively.  After January 10, 2003, the union was waiting for the Board’s decision on its application for a sale of business declaration and single employer declaration.  The Board’s decision in Transport Besner Inc. et al. (285), supra, was sent to the parties on August 17, 2004.  In that decision, the Board asked the parties to come to an agreement with respect to the determination of the bargaining units and bargaining agent.  Since no agreement was reached by the parties, the Board determined the unit appropriate for bargaining in Transport Besner Inc. et al. (303), supra, issued on December 23, 2004, and ordered that a representation vote be held.  In this context, it would have been difficult for any union to move these grievances forward.  Firstly, the ultimate employer was unknown and secondly, the union was informed that it would have to wait for the outcome of a vote to find out if it would remain the bargaining agent.

 

 

[62]           Finally, the reconsideration panel noted at paragraph 46 of its reasons that the role of the Board was not to assess the legitimacy or admissibility of the union’s grievances, but to determine any question that arose under section 44 of the Code, and that under section 46 of the Code it had considerable discretion.

 

[63]           The Teamsters submitted that this decision by the Board is patently unreasonable.  They argued that paragraph 44(2)(d) deals with:

 

“. . . any proceeding taken under this Part that is pending on the date on which the business was sold . . .” [Emphasis added.]

 

 

[64]           Now, they argued that the grievances were not pending on the date of the sale.  Accordingly, they could not have been transferred to the buyer.  They added that the grievances, if valid, should have been filed with the buyer, that is Besner Atlantic and Besner Central: the Syndicat knew the new employer and filing the grievances with Transport Besner Inc., which had already closed down on January 10, 2003, could not be valid.

 

[65]           I am of the view that the interpretation given by the Board to paragraph 44(2)(d) of the Code is not in any way patently unreasonable.  It was open to it to find that, in the circumstances, a grievance that arose on December 23, 2002, and was filed with Transport Besner Inc. within the 21‑day deadline of the applicable collective agreement was “a proceeding that is pending on the date on which the business was sold” (paragraph 44(2)(d) of the Code).

 

[66]           In its decision No. 285, at paragraph 236, the Board said:

 

236     Inasmuch as Transport Besner closed down on December 23, 2002, and some of the drivers left the company to work elsewhere, or were laid off, the Board must consider the current state of the union’s bargaining rights with relation to this new reality.  A single employer declaration entrenches bargaining rights with respect to the current state of affairs, but cannot restore past power relationships.  Given that the respondents made business decisions that had the effect of terminating the employment of certain drivers, and notwithstanding any right potentially flowing from the union’s collective agreement, the Board cannot go against these business decisions and force the reinstatement of these drivers, despite its concern to balance the bargaining equation.  Greater detail on the Board’s findings in this regard will be provided with its decision on the unfair labour practice complaint (file No. 23243‑C) and its review of the structure of the bargaining units.

[Emphasis added.]

 

 

[67]           The balance of power was changed again by the vote, in favour of the Teamsters and not the Syndicat.  It is for the arbitrator to be designated to decide any questions dealing with grievances in accordance with this new balance of power and in keeping with the powers conferred by the Code.

 

Conclusion

[68]           I would dismiss the four applications for judicial review with costs.

 

 

 

 

“Alice Desjardins”

I concur.

     Robert Décary J.A.

 

I concur.

     M. Nadon J.A.

 

 

 

 

 

 

Certified true translation

François Brunet, LLB, BCL

                                                  FEDERAL COURT OF APPEAL

 

                                            NAMES OF COUNSEL AND SOLICITORS OF RECORD

 

DOCKET:                                                                             A-475-04

 

STYLE OF CAUSE:                                                            TRANSPORT BESNER ATLANTIC LTÉE ET AL.

v.

Syndicat des travailleuses et travailleurs de Transport Besner (CSN) et al.

 

PLACE OF HEARING:                                                       Montréal, Quebec

 

DATE OF HEARING:                                                         March 28, 2006

 

REASONS FOR JUDGMENT BY:                                   DESJARDINS J.A.

 

CONCURRED IN BY:                                                        DÉCARY J.A.

                                                                                                NADON J.A.

                                                                                               

DATED:                                                                                 April 24, 2006

 

 

APPEARANCES:

 

Mr. Daniel Rochefort                                                         for the applicant

 

Mr. Dany Milliard                                                               for the respondent “Syndicat des travailleuses et travailleurs de transport Besner (CSN)”

 

Mr. Stéphane Lacoste                                                        for the respondent “Union des chauffeurs de camion, hommes d’entrepôts et autres ouvriers, Teamsters Québec, section locale 106 (FTQ)”

 

Ms Marie-Claude Grignon                                                for the Canada Industrial Relations Board

 

 

SOLICITORS OF RECORD:

 

Daniel Rochefort                                                                    for the applicant

Rochefort & Associés

Montréal, Quebec

 

Dany Milliard                                                                         for the respondent “Syndicat

Proulx, Ménard, Milliard, Caux, s.e.n.c.                              des travailleuses et travailleurs de

Québec, Quebec                                                                    Transport Besner (CSN)”

 

Stéphane Lacoste                                                                  for the respondent “Union des

2450 boul. Daniel-Johnson                                                   chauffeurs de camions, hommes

Laval, Quebec                                                                        d’entrepÔts et autres ouvriers, Teamsters

                                                                                                  Québec, section locale 106 (FTQ)”

 

Marie-Claude Grignon                                                          FOR THE CANADA INDUSTRIAL RELATIONS

Canada Industrial Relations                                                 BOARD

Board                                                                                       MONTRÉAL, QUEBEC