United Steelworkers of America v. Miwy Co. Ltd., 1984 CanLII 1123

Ontario Labour Relations Board

[1984] OLRB Rep. September 1249

1275-84-R United Steelworkers of America, Applicant, v. Miwy Co. Ltd., Respondent, v. Group of Employees, Objectors

BEFORE: D. E. Franks, Vice-Chairman, and Board Members J. D. Bell and H. Kobryn.

APPEARANCES: James K. McDonald, David Nicholson and Henry Gareau for the applicant; Robert W Little and Tony Potesio for the respondent; Helen Milionis and Monica Martinez for the group of employees.

DECISION OF THE BOARD; September 17, 1984

1. This is an application for certification.

2. At the commencement of the hearing in this matter, counsel for the respondent, Miwy Co. Ltd., raised as a preliminary issue the jurisdiction of this Board to deal with this application. The respondent takes the position that the employer and the employees affected by this application fall within the federal jurisdiction rather than within provincial jurisdiction.

3. The respondent operates a bus terminal located in Thunder Bay exclusively for Greyhound Lines of Canada Limited (hereinafter referred to as "Greyhound"). The terminal is on Greyhound's Toronto to Vancouver route and primarily services the Toronto to Vancouver buses, although Greyhound has one other local route operating out of Thunder Bay. There is no dispute in this case that Greyhound is engaged in inter-provincial transportation and it is agreed that Greyhound and its employees fall within federal jurisdiction. The evidence is that Greyhound has three classes of bus terminals: Class A, Class B and Class C. This terminal in Thunder Bay is classified as a Class B terminal. The Class A terminals are apparently those found in large cities and are fully staffed with employees of Greyhound. At the other extreme the Class C terminal involves no Greyhound employees at all. These are simply agency arrangements for ticket sales and parcel express. The Class B terminal provides the same functions as a Class A terminal, however, the functions have been contracted out. The Thunder Bay terminal is a Class B terminal. The only other Class B terminal in Ontario would appear to be the Greyhound terminal in Sault Ste. Marie.

4. The relationship between the respondent Miwy and Greyhound consists of a number of service contracts. The present terminal was opened in 1980. There is no evidence as to what Greyhound did for terminal services in Thunder Bay prior to that time other than to operate out of local restaurant. Some of the contracts are for terms of five years, one contract, the maintenance contract appears to be for an annual term. All of these contracts are, of course, renewable; however, they may be terminated upon failure of the respondent to perform according to the terms of the contract. The contracts specifically consist of a ticket, baggage and parcel contract, a maintenance contract and a recently negotiated local delivery parcel contract. The respondent Miwy also apparently leases the premises for a restaurant and operates a restaurant at the terminal. Greyhound owns the total bus terminal facility. The Greyhound employees at the terminal deal only with the drivers (dispatching and other such functions); the rest of the terminal is operated by the respondent Miwy. The Greyhound employees do not supervise the Miwy employees. They can, however, request Miwy's compliance with the various service contracts. Miwy's contract is exclusively with Greyhound and requires the supplying of certain services exclusively to Greyhound. Indeed, any other carriers using the terminal must be approved by Greyhound. The evidence is that these tend to be what are called Tour Coaches and they are not an appreciable part of Miwy's business. Miwy's business is in fact totally related to Greyhound.

5. Looking at the Miwy operation in more detail, we find it can be broken down into several different functions. The first function is ticketing. The tickets are owned by Greyhound and Miwy acts as Greyhound's agent in this regard. Tickets are available to any destination in North America and this is the only place in Thunder Bay where tickets for Greyhound are available. This part of the operation requires the services of some five full-time employees and two part-time employees. Miwy is reimbursed for this on the basis of ten per cent of the value of the tickets sold. The second part of the operation involves baggage handling and parcel express. Apparently all of the passengers' baggage are handled by Miwy employees at the terminal. The parcel express operation involves handling incoming and outgoing parcels. These parcels are tariffed and the tariff collected by Miwy, and in this part of the operation Miwy employs five or six employees and is reimbursed on a basis of ten per cent of the tariff price on the parcels. Recently, a local delivery service was added by a contract with Greyhound. This, however, involves the part-time use of one of the parcel express employees. The third major function performed by Miwy deals with the maintenance of the buses. Every bus passing through the terminal is serviced by Miwy. The buses are washed, cleaned inside, and the toilet facilities are dumped and cleaned. Miwy also performs certain minor maintenance on the buses, such as replacing light bulbs and windshield wipers. It also re-fuels the buses and checks all of the various fluid requirements for the buses. This part of the service involves approximately five employees, and Miwy is paid for this according to a schedule of fees for services. As noted above, Miwy also is required to operate a restaurant and clean the facility. The evidence is that the restaurant operation amounts to about twenty-five per cent of Miwy's profit in terms of operating the bus terminal.

6. On the foregoing facts, the respondent argues that Miwy and its employees fall within the federal jurisdiction and are thus outside the jurisdiction of this Board. As previously noted, the applicant does not dispute that Greyhound falls within the federal jurisdiction in that its inter-provincial operation is regular and continuous. The respondent argues that Miwy's operation is an integral part of such a federal operation so as to remove Miwy from provincial jurisdiction. Further, the services provided by Miwy ought not to be characterized as a mere convenience which may be beneficial to the service provided by Greyhound, but not necessary to it. Rather, Miwy's services are integral to the Greyhound operation without which they couldn't function. In this regard, the respondent relies heavily on the decision in Butler Aviation of Canada Limited 1975 CanLII 2241 (FCA), [1975] C.F. 590 (C.A.). In that case, the federal court of appeal found that the baggage handling, re-fueling and operating various facilities at an airport was an integral part of the inter-provincial operations of the customers of the service at the airport. The respondent argues that Miwy operates the same sort of service for Greyhound and is thus necessarily incidental to Greyhound's operation as an inter-provincial carrier.

7. Both the respondent and the applicant relied on the analysis of the constitutional division of power over labour relations by Chief Justice Jackett in the Canadian Air Line Employees' Association vs. Wardair Canada (1975) Ltd. 1979 CanLII 4076 (FCA), [1979] 2 F.C. 91 at p. 95:

"Generally speaking, labour laws, i.e., laws regulating the relations between an employer and his employees, fall within the legislative powers of the provincial legislatures. Where, however, legislative power in relation to a work, undertaking or business has been vested in Parliament, such power usually includes the authority to legislate with reference to the relations between the operator of the work, undertaking or business and the persons employed by him in the operation thereof.

Most of the decision cited relate to cases where the question was whether or not the work, undertaking or business on which the employees in question were employed was a work, undertaking or business in relation to which Parliament could make a labour law. Here the problem is different.

Where there is a work, undertaking or business in relation to which Parlia­ment has legislative authority in the field of labour relations, a problem arises as to where the line is to be drawn between areas in respect of which Parliament can so legislate and other areas in respect of which labour legislation falls in the provincial domain. Certain of the cases where this type of problem arises, may be classified as follows:

(a) where an essential component of operating a federal work, undertak­ing or business is carried on by a person other than the principal operator thereof under some business arrangement for co-ordinating their activities,

(b) where an essential component of operating a federal work or under­taking is carried on at a location physically remote from the work or undertaking,

(c) where fringe operations, reasonably incidental to a federal work, undertaking or business are carried on by the operator thereof as an integral part of the operation thereof, even though they are not essential to its operation,

(d) where a person other than the operator of a federal work, undertak­ing or business carries on activities that are not essential to the operation thereof but could be carried on by the operator thereof as reasonably incidental to the operation of that work, undertaking or business.

These different classes of problem call for further comment.

With reference to Class (a), when the essentials of operating a work, undertaking or business within the federal field are carried on in part by one operator and in part by another, the employees of both fall within the federal legislation field. This can be deduced from the Stevedoring Refer­ence to the Supreme Court of Canada.

The problem in Class (b) is like the problem in Class (a). Where part of the essentials of operating a federal work or undertaking are carried on at a place physically remote from the work or undertaking, the employees at such a remote place nevertheless fall within the federal field. This is involved in what was decided by this Court last December in the C.S.P. Foods case supra page 23.

A more difficult problem arises in connection with Classes (c) and (d). A particular activity may be reasonably incidental to the operation of a federal work, undertaking or business without being an essential component of such operation. For example, an interprovincial railway may have its own laundry facilities or its own arrangement for preparing food for passengers, or, alternatively, it may send its dirty linen to an outside laundry or buy prepared food. Generally speaking, where such an activity is carried on by the operator of the federal work, undertaking or business as an integral part thereof, it is indeed a part of the operation of the federal work, undertaking or business. Where, however, the operator of the federal work, undertaking or business carries on the operation thereof by paying ordinary local busi­nessmen for performing such services or for supplying such commodities, the business of the person performing the service or preparing the commodi­ties does not thereby automatically become transformed into a business subject to federal regulation. Compare the decision of the Supreme Court of Canada in the Construction Montcalm case (1979) 1978 CanLII 18 (SCC), 25 N.R. 1, that was delivered last December.

To sum up with reference to Classes (c) and (d), as I understand the law, where something is done as an integral part of the operation of a federal work, undertaking or business and that something is reasonably incidental to such operation, it may be regulated by Parliament as part of the regulation of that work, undertaking or business even though it is not essential to the operation of such a work, undertaking or business; but where such a thing is made the subject of a separate local business or businesses, it cannot be regulated by Parliament merely because, if it were done as an integral part of operating a federal work, undertaking or business, it could, as such, be regulated by Parliament."

(emphasis added)

The position taken by the respondent was that the relationship between Miwy and Greyhound falls within the Class (a) referred to by Chief Justice Jackett, whereas the applicant takes the position that Miwy falls within Class (d). The applicant argues that Miwy's relationship to Greyhound cannot be essential, given the fact that the bus terminal was only opened in 1980. In our view, however, that does not go to the root of the matter. We have no evidence as to what Greyhound did prior to the opening of the present terminal in 1980, and indeed, the evidence we must look at is the present relationship between Miwy and Greyhound. While it may be, as the applicant argues, that the restaurant operation of Miwy is hardly an integral part of Greyhound's inter-provincial operation, it is clear on the evidence that the restaurant is not the major part of Miwy's operation. The major part of Miwy's operation is in our view an integral part of the inter-provincial bus service provided by Greyhound. Thus, we are not prepared to find that the ticketing and parcel handling and maintenance function performed by Miwy are other than essential services to an inter-provincial operation. Thus, although they have been contracted out, they are still covered by the federal jurisdiction and do not become, by virtue of this contracting out, a local undertaking over which this Board has jurisdiction.

8. Counsel for the applicant also referred the Board to the Airgo Agency Limited case [1982] OLRB Rep. Sept. 1233 and other cases which deal with what might be called "express forwarding operations". In our view, these cases are quite distinguishable from the present case in that the use of an inter-provincial carrier, is in those cases only incidental to the more basic operation of a freight forwarding company which is a local undertaking and thus regulated by provincial labour law. Here the evidence is clear that the relationship between Greyhound and Miwy is for Miwy to perform services for Greyhound and these are services which Greyhound must have performed in order to carry on its operation.

9. For the foregoing reasons, therefore, this application is dismissed.