Teamsters Local Union No. 419 v. Westburne Industrial Enterprises Ltd., 1984 CanLII 1105

[1984] OLRB Rep. October 1525

1404-84-R Teamsters Local Union No. 419, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Applicant, v. Westburne Industrial Enterprises Ltd. Respondent

BEFORE: S. A. Tacon, Vice-Chairman, and Board Members A. Grant and L. C. Collins.

APPEARANCES: Ken Petryshen and Jim O'Donnell for the applicant; W. R. Thornton, G. S. White and R. Abrainovitch for the respondent.

DECISION OF THE BOARD; October 16, 1984

1. This is an application for certification.

2. The Board finds that the applicant is a trade union within the meaning of section l(l)(p) of the Labour Relations Act.

3. The parties have agreed on the bargaining unit description. Having regard to that agreement, the Board finds that all employees of the respondent in its Distribution Services Division in Mississauga, Ontario, save and except supervisors, those above the rank of supervisor, office and sales staff, persons regularly employed for not more than twenty-four (24) hours per week and students employed during the school vacation period, constitute a unit of employees appropriate for collective bargaining.

4. The respondent's agreement to the bargaining unit description was without prejudice to its position that this Board has no constitutional jurisdiction to hear the application. The respondent submits that the labour relations of its employees fall to be regulated under the Canada Labour Code by virtue of section 92(l0)(a) of The Constitution Act.

5. Mr. G. S. White, the General Manager, Distribution Services Division, testified concerning the business of the respondent. The facts are essentially not in dispute. Westburne Industrial Enterprises Ltd. is engaged in the purchase and resale to the wholesale market of electrical and plumbing goods. In fact, it is the largest distributor of such goods in Canada. Goods are purchased from numerous suppliers in Southern Ontario, proximate states in the U.S.A. and resold to markets across Canada. Westburne, then, is a "middleman" and does not manufacture the goods themselves. Structurally, Westburne Industrial Enterprises Ltd. comprises some fourteen Canadian Divisions and one American Division which operate as separate entities under different names, each of which purchases and resells goods. These Divisions, in turn, operate over 150 branches. The Distribution Services Division, with which we are concerned here, was described as providing transportation services for the other Divisions, as an "in-house" freight forwarding operation. Service is provided to 140 branches in total, 106 outside Ontario and 34 inside the Province. The main centre for this Division is in Mississauga with a parallel operation in Quebec and a satellite operation in Vancouver.

6. The Distribution Services Division is organized as follows. The General Manager, who reports to the Chairman of the Board of Westburne Industrial Enterprises Ltd., runs the day-to-day operations. Next are five managers in Ontario, with separate areas of responsibility, then supervisors, and then employees classified as warehousemen, warehouse clerks and drivers. There is also an office component, including accounts payable and receivable clerks and such like.

7. Product is purchased as FOB origin, FOB plant or delivered. The Distribution Services Division is not involved with goods purchased in the latter category. For goods purchased FOB plant or FOB origin, however, the purchasing Division is free to select whatever means of transportation it wishes, including using Distribution Services Division transport. Some of the Divisions have and use their own trucks for shipping at least some of the goods. The Distribution Services Division, however, is given no "preference" in the selection of a transportation service by the relevant Division and competes with other freight forwarders. However, Distribution Services Division is not a common carrier and all of its business does come from the other Divisions of Westburne Industrial Enterprises Ltd.

8. Product arrives at the Distribution Services warehouse by rail, common carrier and its own trucks, is checked for damage, consolidated into appropriate loads, etc. and shipped out on its own trucks, in other common carriers and by rail. Goods are shipped to Quebec, in particular, via CP piggyback trailers, common carriers for the overflow and Distribution Services' own trucks. These trucks operate to Quebec on a regular, ongoing basis and comprise a significant portion of Distribution Services' total operation. Some products (especially those requiring special handling) are shipped by Distribution Services using its own trucks directly to a customer rather than to another Division. At least one of these customers, Quebec Hydro, receives such shipments on a regular and ongoing basis. Details of shipments to other parts of Canada are not set out as they do not add to the factors to be examined in determining the constitutional question.

9. The respondent argues that the Distribution Services Division is the employer and its business is transportation. Since the facts established that there was regular and continuous forwarding of product to Quebec by Distribution Services' own trucks operated by Distribution Services' own employees, the "business or undertaking" is interprovincial and, hence, falls under federal jurisdiction. Ottor Freight ways , [1974] OLRB Rep. Oct. 1 and the cases cited therein were referred to in support. Cases such as Dominion Dairies Limited, [1978] OLRB Rep. Dec. 1083 and William R. Barnes Co., [1967] OLRB Rep. Sept. 566 were distinguished on the basis that "transportation" was only an "aspect" of the actual business whereas, here, transportation was the only business of the Distribution Services Division.

10. The applicant submitted that Ottor Freightways, supra, and the cases cited therein, especially, Attorney-General for Ontario et al v. Winner et al, Winner et al v. S.M. T. (Eastern Ltd.) et al 1954 CanLII 289 (UK JCPC), [1954] 4 D.L.R. 657 (J.C.P.C.) and Re Tank Truck Transport Ltd., (1961), 1960 CanLII 120 (ON HCJ), 25 D.L.R. (2d) 161 were distinguishable. That is, in those cases, the "business" was transportation and the companies were common carriers. Here, Distribution Services is merely the transportation arm of Westburne Industrial Enterprises Ltd., a company engaged in the purchase and resale of electrical and plumbing goods. The essential nature of Westburne is buying and selling goods, not transportation. Hence, the fact that there is interprovincial transportation of these goods on a regular and continuous basis is not relevant and the operation falls under provincial jurisdiction. In support of its position, the applicant referred to: William R. Barnes Co., [1967] OLRB Rep. Sept. 566; Dointar Ltd. (Trucking Division), [1970] OLRB Rep. July 495; Compagnie Miron Ltee., [1972] OLRB Rep. Dec. 1034; Dominion Dairies Limited, [1978] OLRB Rep. Dec. 1083; Humpty Dumpty Foods Ltd., [1979] OLRB Rep. Apr. 315; The Luminus Company Canada Limited, [1975] OLRB Rep. Oct. 773.

11. It is useful to refer to the Dominion Dairies case, supra, at this point:

12. This Board can only exercise jurisdiction which is lawfully conferred upon it by the Legislature. Prima facie labour relations fall within the legislative competence of the province as being within the enumerated jurisdictional head of property and civil rights within section 92(13) of the British North America Act. (Toronto Electric Commissioners v. Snider 1925 CanLII 331 (UK JCPC), [1925] 2 D.L.R. 5 (P.C.)). The labour relations of any federal work, undertaking or business are, however, within the exclusive jurisdiction of the Parliament of Canada and are regulated under section 108 of the Canada Labour Code (R.S.C. 1970, c.L-I, re-enacted by S.C. 1972, c. 18, s.l). The heading of federal undertakings material to this application is found in section 92(l0)(a) of the British North America Act which provides:

13. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subject next hereinafter enumerated; that is to say, —

14. Local Works and Undertakings other than such as are of the following Classes: —

(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Province, or extending beyond this Limits of the Province.

That section of the British North America Act and its interpretation by the courts require the Board to carefully examine the nature of the business or undertaking engaged in by the respondent. If the respondent's business is within the definition of section 92(1 0)(a) of the BNA Act then its labour relations are exclusively regulated under the Canada Labour Code.

6. The words of section 92(l0)(a) have been interpreted as applying only to "means of inter-provincial communications" (C.P.R. v. Attorney-General of British Columbia 1949 CanLII 278 (UK JCPC), [1950] 1 D.L.R. 721 (P.C.)). The fact that a business extends beyond a province will not mean that the operations of such a business will come within federal jurisdiction unless the business involves transportation or communication. In the C.P.R. case (supra), Lord Reid stated:

"There are many companies beside the appellant whose businesses extend over all or most of the Provinces. It was not and could not be suggested that the Parliament of Canada could regulate the hours of work of employees of all such companies." (p.727).

7. When a company carries on a single undertaking which is fairly characterized as inter-provincial communications or transportation it is well settled that its activities are regulated by federal jurisdiction within section 92( l0)(a) of the British North America Act, (Attorney-General of Ontario v. Winner 1954 CanLII 289 (UK JCPC), [1954] A.C. 541 (P.C.)). The characterization of the undertaking is not, of course, an "all or nothing" proposition. The courts have recognized that a company may be engaged in more than one undertaking and that certain aspects of its business may be regulated federally while other aspects fall within provincial jurisdiction. In the C.P.R. case the Judicial Committee of the Privy Council determined that although the Empress Hotel in Victoria was owned and operated by the Canadian Pacific Railway, the operation of the hotel was sufficiently distinct and unrelated to the corporation's rail-roading endeavours as to be subject to provincial regulation of the hours of work of the hotel's employees. Counsel for the respondent submits that the severability doctrine enunciated in the C.P.R. case applies in the instant case. He argues that the trucking and delivery component of the respondent's business are sufficiently separate from its manufacturing activity that the labour relations of employees engaged in trucking and delivery are exclusively within federal jurisdiction.

8. In the past this Board has been required to determine whether a manufacturing operation with trucking facilities would be held to be one undertaking and, if so, whether it would be subject to provincial or federal regulation. When a company operates as a common carrier and its business takes it beyond provincial boundaries its labour relations are exclusively under federal jurisdiction. (Re Tank Transport Ltd., (1960)1960 CanLII 120 (ON HCJ), 25 D.L.R. (2d) 161 (Ont. H.Ct.0). Where, however, a company is not a common carrier and the essence of its business is manufacturing or processing, the undertaking is within the constitutional jurisdiction of the province for the purposes of regulating its labour relations, notwithstanding that the goods manufactured or processed by the company are sometimes sold outside the province and that the company's delivery facilities extend that far. In other words, where the activity is essentially one of manufacturing and where the manufacture and delivery of goods are integrated activities which are part and parcel of the company's total undertaking, the labour relations of all employees of the company fall within provincial jurisdiction. (Win. J~?. Barnes Company, Ltd. [1967] OLRB Rep. Sept, 566; Dointar Limited Trucking Division [1970] OLRB Rep. July 495; Crane Carrier Canada Limited [1970] OLRB Rep. Sept. 665; Compagnie Miron Ltee. [1972] OLRB Rep. Dec. lO34and [1973] OLRBRep. Jan. 61;Mason WindowsLiinited[1973] OLRB Rep. Oct. 547; F.B.I. Foods Ltd. [1975] OLRB Rep. June 522; Catalano Produce Ltd. [1975] OLRB Rep. Oct. 743). In the instant case, therefore, the issue is whether the trucking and delivery aspect of the respondent's business is sufficiently integrated with its food processing activity as to form part of one undertaking or whether it is severable from the manufacturing component so as to be subject to federal regulation.

9. The respondent's dairy products are distributed directly to stores on a wholesale basis or to homes on a retail basis. Some six percent of its products is distributed by the contractor-drivers who are the subject of this application. Seventy-nine percent of its product is distributed in Ontario and twenty-one percent is distributed in the Province of Quebec. The only distinction in the product which goes to Quebec at the time of the examination was metric labelling which appeared on the packaging marketed in that Province. Some 60 trucks are engaged in delivering the respondent's dairy products both in Ontario and Quebec, in what may be described as the Ottawa Valley region. The trucks fall into three categories; sixteen of them are driven by the salaried employees of the respondent, twenty are owned and driven by the contract drivers who are the subject of this application and the balance are owned and driven by some five private distributors each of whom operates a number of trucks on a contract basis with the dairy. The group of large multi-truck distributors are not a part of this application.

10. Having regard to the evidence the Board is satisfied that the processing and sale of food is the nature of the respondent's business. It is engaged in dairying, an undertaking that, in the contemporary marketplace includes the processing, distribution and sale of milk, a broad range of milk by-products and citrus juices. The respondent's distribution system through its employee drivers and franchised drivers is integral to its functioning as a dairy. While its system of delivery has gained considerable sophistication since the day of the milkman's horse, it is, nonetheless, dedicated to the same end and remains intrinsic to the overall endeavour of dairying.

is. It would strain reality to attempt to describe the Dominion Dairy as engaged in two separate businesses, one being food-processing and the other being the operation of an inter-provincial trucking business. The respondent is not a common carrier and the trucking aspects of its business have no meaning or function apart from the furtherance of its business as a dairy. For the purposes of constitutional law its distribution and delivery function cannot be seen as separate and distinct from its essential undertaking as a dairy. And the fact that the respondent's products are marketed across inter-provincial boundaries does not alter the essential nature of its business. It is, therefore, not a federal undertaking within the meaning of section 92(10(a) of the British North America Act. For these reasons the Board finds that it has jurisdiction to entertain this application.

12. This Board is of the opinion that this case more closely resembles Dominion Dairies, supra, than Ottor Freightways, supra. To be sure, Distribution Services is a separate Division of Westburne Industrial Enterprises Ltd. However, this is a function of the size of Westburne, or perhaps its corporate organizational philosophy, rather than evincing a different relationship between the transportation arm" and the enterprise itself. The fact that Westburne is engaged in buying and selling goods, rather than their manufacture, is not sufficient to distinguish the Dominion Dairies approach to the constitutional issue in view of the decision in Humpty Dumpty Foods, supra, where the operation was a distribution centre and was found to be under provincial jurisdiction. Distribution Services is not only not a separate corporate entity, it is not a common carrier. This is a crucial factor, in the Board's view. It is the status as common carrier which is determinative to the characterization of the operations in Ottor Freightways, Winner and Tank Truck, supra, as interprovincial "undertakings". Distribution Services is merely the "in-house" freight-forwarding arm of Westburne. Distribution Services derives all of its business from Westburne and is completely dependent on Westburne for its continued operation. That Distribution Services must compete with common carriers to provide transportation services for their Divisions of Westburne is merely a means of ensuring that the other Divisions in no way subsidize the operation of Distribution Services. It does not change the characterization of those operations with respect to the constitutional issue.

13. Further, although the individuals in the proposed bargaining unit work directly for Distribution Services Division, the only "legal entity" which could be the "employer" is Westburne Industrial Enterprises Ltd. Thus, the Board rejects the respondent's argument that Distribution Services is the "employer" and the "business" of the employer is an interprovincial undertaking within the meaning of section 92(l0)(a) of The Constitution Act. Moreover, Distribution Services Division, at least while it remains an in-house delivery arm of the corporation, cannot be said to operate a transportation business as did the firms in Winner, supra, Tank Truck, supra, etc. In this regard, it is interesting to note that, although the total number of persons in the bargaining unit has not been resolved, there is a maximum of fourteen (14) individuals in the respondent's view and seven (7) in the applicant's view. In Dominion Dairies, supra, there were nineteen (19) individuals in the proposed bargaining unit. This Board does not believe that the reasoning in Dominion Dairies is not applicable to this case simply because the proposed bargaining unit members here are formally within a "Division" of a corporation whereas in Dominion Dairies there was not an identical organizational structure. This would be placing form over substance. And the substance is that, in both instances, the individuals perform the same function, i.e., providing the in-house delivery service for the company. In neither instance, were the "businesses" those of common carriers so that the regular, ongoing nature of that business would properly result in characterization as "interprovincial undertakings" and, hence, under federal jurisdiction.

14. For all the foregoing reasons, then, the Board finds that it has jurisdiction to entertain this application.

15. The employer filed a list of employees in the bargaining unit described by the applicant with a total of fourteen (14) names, i.e., thirteen (13) names on Schedule A and one (1) name on Schedule D. The applicant challenged a total of seven (7) of those names, as follows:

(a) Brad Aitken, Andrea Knies and Cindy Statham, all classified as "warehouse clerk", should be excluded from the bargaining unit as "office" employees;

(b) Grant Aitken, Robert White and Scott White, classified as "warehousemen", should be excluded as part-time employees and/or students employed during the school vacation period; Andrea Knies, listed above, should also be excluded as a "part-time" employee and/or a student employed during the school vacation period;

(c) Denis Bouchard, classified as warehouseman, should be excluded as a part-time employee.

16. The Board hereby appoints a Board Officer to inquire into and report back to the Board on the duties and responsibilities of the persons listed in item (a) above and the hours worked and other matters related to the status of the persons in (b) and (c) above as part-time employees and/or students employed during the school vacation period.

17. This matter is referred to the Registrar.