Service Employees International Union Local 204 v. Loomis Messenger Service, 1985 CanLII 1007

[1985] OLRB Rep. July 1131

0254-85-R Service Employees International Union Local 204 Affiliated with the S.E.I.U. A.F.L., C.I.O., C.L.C., Applicant, v. Loomis Messenger Service, a division of Loomis Courier Service Limited, Respondent, v. Group of Employees, Objectors

BEFORE: M. G. Mitchnick, Vice-Chairman, and Board Members A. Grant and W. F. Rutherford.

APPEARANCES: L. A. Richmond, A. Ferens, R. Davidson and G. Singh for the applicant; Carl Peterson and Donald Petras for the respondent; Gary Kennett and Roderick Wood for the objectors.

DECISION OF THE BOARD; July 19, 1985

1. This is an application for certification.

2. The name of the respondent is amended to read: "Loomis Messenger Service, a division of Loomis Courier Service Limited".

3. The application covers "drivers" and "walkers" engaged in the respondent's messenger service, operating out of Richmond Street premises in downtown Toronto, and Universal Road in Mississauga. All of the individuals involved are retained on a contractor basis, but the respondent conceded that they would be "dependent" contractors in any event, and the Board, after hearing the submissions of some of the contractors, confirmed the view of the respondent.

4. The respondent's primary challenge to the application was on the basis that its labour relations fell under federal jurisdiction, and the Board accordingly heard the evidence and submissions of the parties on that constitutional issue.

5. The Universal Drive facility in Mississauga houses the Messenger drivers dispatch, as well as the administrative staff for the full Toronto Messenger Service. Richmond Street is a sub-depot for the service, being a pick-up and delivery point for all documents emanating from or destined for the downtown core. It also serves as a dispatch centre for the "walkers". The "walkers" are messengers who travel by foot or by bicycle in the central downtown area, where traffic and parking problems make driving less efficient, except where the size of a particular package demands it. The central downtown core is referred to by Loomis as the "streaker" zone, and is an area bounded by Front, Victoria and Queen Streets, and University Avenue. Beyond this "streaker" zone, pick-ups and deliveries are handled by the drivers.

6. While the Loomis Messenger Service offers out-of-the-province service to certain cities, no employee of that Service ever leaves the province. In Toronto documents are collected by the drivers and walkers, and delivered to Richmond Street. From there a Messenger driver will take the load of out-of-province documents to the Expedair counter at Pearson International Airport. Loomis Messenger Service neither owns nor operates any equipment transporting goods outside the province. When a customer calls for out-of-province service (apart from Quebec), he is given the common carrier's schedule which will govern delivery of his parcel. Loomis Messenger Service will then arrange for pick-up and delivery of the parcel at the other end, either through a Loomis office or an agent of Loomis.

7. The only additional service which the Loomis Messenger office in Toronto offers is "facsimile transmission", a form of telecopying between compatible equipment in different cities. Once again Loomis does not own the equipment used for this service, but rather rents and operates it through a combination of Bell Canada and CN-CP Telecommunications. Loomis does have some compatible machines in other cities that it serves, but often the customer will use the Loomis machine in one city to transmit to the customer's own compatible machine in another. This "facsimile transmission" as a whole constitutes only a tiny percentage of the respondent's operation, and the respondent placed no reliance on it in argument.

8. On these facts, therefore, it is apparent that Loomis Messenger Service by itself stands in the same position as other provincially-based "forwarding" companies, and its labour relations would fall within the exclusive jurisdiction of the province. See, e.g. Emery World­Wide, [1984] OLRB Rep. Oct. 1412; Cottrell Forwarding Co. Ltd., (1981) 1981 CanLII 1896 (ON HCJ), 33 O.R. (2d) 486 (Div. Ct.); Cannet Freight Cartage, (1975) 1975 CanLII 2218 (FCA), 60 D.L.R. (3d) 473 (F.C.A.). And as the Board indicated in Airgo Agency Limited, [1982] OLRB Rep. Sept. 1233, the matter is not affected by the forwarder also acting as the receiver at the other end, so long as it does not operate the actual transport equipment in between.

9. The respondent's real argument, however, is that the transportation undertaking of Loomis Courier Services Limited, of which Loomis Messenger Service is a division, falls within federal jurisdiction, and that Loomis Messenger Service is an integral arm of that undertaking. It is necessary, therefore, to examine the undertaking of Loomis Courier Service Limited, and its inter-relationship with Loomis Messenger Service.

10. Loomis Courier Service operates a cross-Canada delivery service, as well, on a limited basis, as service to certain border cities of the United States. While Loomis Messenger Service specializes in same-day delivery service, the Courier Service specializes in overnight service. The two operations are run as separate administrative and accounting units, and each advertises its own specialty in its own name. The one area within which the Messenger Service in fact offers a cheaper rate for overnight service (where that is specifically what the customer wants) is in the central area of Toronto itself. For overnight requests outside that area, customers are told by the Messenger office to contact the Courier office. It is only the Courier Service vehicles that are painted the distinctive yellow with the red and blue band; the Messenger Service trucks are designated by a decal. Courier Service drivers are also identifiable by blue uniforms and blue identification badges. Messenger Service personnel wear yellow outerwear and badges. There is a master payroll office for both of the groups in Vancouver, and it appears that the cheques for both bear the corporate name Loomis Courier Services Limited on them.

11. The Courier Service drivers operate out of a large dispatch and warehouse facility on Viscount Road in Mississauga. They are covered by a province-wide collective agreement voluntarily entered into with the Union of Loomis Drivers and Warehousemen. The Viscount Road facility acts as the main clearing house for packages both entering and leaving the province, as well as for distribution to other points in Ontario. While the evidence is not entirely clear (or critical) on this point, it appears that Messenger (as well as Courier) Service parcels from or to Quebec or other parts of Ontario are routed through the Viscount Road distribution-centre. Loomis Courier Service itself makes the Montreal-Toronto connection by having a common carrier haul a Loomis trailer as far as Kingston, where a Loomis driver and cab takes over the load. Loomis Courier drivers do, however, handle the full Ottawa-Toronto haul, and run daily routes by car into Hull and other points in that area of Quebec for pick-up and delivery, as well as regular routes through the Ottawa valley to Hawkesbury, at which point they will cross into Quebec if required. They have also run cross-overs to Buffalo and Detroit from time to time.

12. Loomis Courier drivers operate on regular routes, and Messenger drivers are frequently asked by Courier to make missed pick-ups or handle overflow on Courier orders. This is not a substantial portion of the Messenger drivers' work, and is charged back to the Courier Service at month's end at the same rate applied to other customers. Because of the inaccessibility of the downtown "streaker" area, the Courier Service relies on the Messenger "walkers" for its pick-ups and deliveries in that zone. Courier has worked out a flat rate with Messenger for that zone which is somewhat below that charged to other customers. Both "walkers" and drivers receive their normal percentage of the tariff when engaged on an order from the Courier Service. Courier has no direct radio contact with any Messenger personnel, or vice versa; all requests for Messenger's services by Courier must be routed through the Messenger dispatch, who completes the necessary paper-work for the charge-back at the end of the month.

13. Jack Slyford, the Toronto District Manager for Loomis Courier Service, testified that the "walker" service only came into operation in 1981, as part of the present Loomis Messenger Service. Prior to that time the Courier drivers had to access the downtown core themselves, but most of their business was data-bank pick-ups, which were just outside the core. To the extent downtown pick-ups were required, Courier drivers for the most part (one walker was employed) had to park their vehicles, get out, and pick up the documents. They still do that on occasion, where a large load on a dolly is involved. The present use of the "walkers", Mr. Slyford agreed, is now a "convenience" to the Courier Service. Counsel in cross-examination pursued this in the following exchange:

"The Messenger Service came in its present form in 1981 at the same time as the "walkers"?

They put the "walkers" in yes. They're part of the Richmond Street operation.

And you make use of the Richmond operation on the basis of a fee for service?

Yes.

So the Courier Service is another customer of the Messenger Service?

I guess you could look at it that way."

14. The starting point for constitutional jurisdiction over matters of labour relations has been set out many times, for example in Montcalm Construction Inc. 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754, as follows:

(1) Parliament has no authority over labour relations as such nor over the terms of a contract of employment; exclusive provincial competence is the rule.

(2) By way of exception, however, Parliament may assert exclusive jurisdiction over these matters if it is shown that such jurisdiction is an integral part of its primary competence over some other single federal subject"

The Supreme Court continued in that case as follows:

A recent decision of the British Columbia Labour Relations Board, Re Arrow transfer Co. Ltd., [1974] 1 Can. L.R.B.R. 20, provides a useful statement of the method adopted by the Courts in determining constitutional jurisdiction in labour matters. First, one must begin with the operation which is at the core of the federal undertaking. Then the Courts look at the particular subsidiary operation engaged in by the employees in question. The Court must then arrive at a judgment as to the relationship of that operation to the core federal undertaking, the necessary relationship being variously characterized as 'vital', 'essential' or 'integral'. As the chairman of the Board phrased it, at pp. 34-5:

In each case the judgment is a functional, practical one about the factual character of the ongoing undertaking and does not turn on technical, legal niceties of the corporate structure or the employment relationship."

From this one can infer that the result in this case would be no different if the respondent had incorporated a separate subsidiary company to operate its Messenger Service division. The issue, rather, is what the Courts have referred to as the "severability" of the secondary service from the main undertaking. Again in Montcalm Construction the Court observed:

"On the one hand, a single enterprise may entail more than one undertaking, e.g., Canadian Pacific Railway's Empress Hotel was found to be an undertaking separate and independent from the railway undertaking in C.P.R. Co., v. A.-G.B.C. et al., 1949 CanLII 278 (UK JCPC), [1950] 1 D.L.R. 721, [1950] AC. 122, [1950] 1 W.W.R. 220 sub nom. Reference re Application of Hours of Work Act. etc. On the other hand, two separate corporate enterprises may be found to be included within one single and indivisible undertaking, as in stevedores employed by a stevedoring company loading and unloading ships in the "Stevedoring case", Reference re Industrial Relations and Disputes Investigation Act, etc., 1955 CanLII 1 (SCC), [1955] 3 D.L.R. 721, [1955] S.C.R. 529, or a trucking company which did 90% of its business for the Post Office in Letter Carriers' Union of Canada v. Canadian Union of Postal Workers et al. (1973), 1973 CanLII 183 (SCC), 40 D.L.R. (3d) 105, [1975] 1 5CR. 178, [1974] 1 W.W.R. 452."

15. Counsel for the respondent submits that in the present case the Messenger Service is clearly "integral" to the Courier Service as a whole, and relies in particular on the fact that, as the business is presently structured, the Courier Service relies on the Messenger Service "walkers" to handle its pick-ups and complete all of its deliveries in the downtown central zone. Counsel submits that the cases require the Board to "take the operation as it finds it", and not to emasculate it by artificially severing it on the basis of other ways it "might" have chosen to carry on its business.

16. The Courts have, however, made it clear that the constitutional sense of being "integral" requires more than the provision of a "convenience" to the primary federal undertaking. See in particular the decision of Laskin, C.J.C. in the CNR/quarry case of Nor­Mm Supplies Ltd. (1976) 1976 CanLII 22 (SCC), 7 N.R. 603 (S.C.C.). In Pacific Customs Brokers Ltd., 80 CLLC 14,022, the British Columbia Supreme Court wrote:

"Customs brokers in my view do not perform any function essential to the maintenance or continuance of the customs service. Undoubtedly they simplify the collector's task because they are experts in the same way as income tax consultants are experts but they are not essential. The customs service could deal directly with the public and vice versa, if the customs broker did not exist. Albeit the process would be more cumbersome for both sides."

17. Where the subordinate operation is carrying on an independent local operation of its own, only one facet of which is the servicing of the primary federal undertaking in question, the clear predominance of the jurisprudence is to find that operation severable, and provincial in jurisdiction. The question of constitutional control clearly cannot vacillate back and forth depending on the customer. In Cannet Freight Cartage Ltd., (1975) 1975 CanLII 2218 (FCA), 60 D.L.R. (3d) 473, [1976] 1 F.C. 174, for example, the Federal Court of Appeal wrote:

"In my view, whether or not employees whose work is physically upon or in connection with a railway may be said to be employed 'upon or in connection with' the railway within s. 108 read with s. 2 of the Canada Labour Code must be determined, keeping in mind the constitutional limitations on Parliament's powers in the labour field, having regard to the circumstances in which the work takes place. Clearly a person employed by the railway company to carry out a part of the transportation services provided to its customers falls within those words even though he does not physically come in touch with the right of way or rolling stock. Just as clearly, a person working for a local businessman in a Province does not fall within those words even though his work, in connection with that man's purely local operation, requires that he perform a large part or all of his services physically on the railway's right of way or rolling stock.

For example, if the railway has pick-up service in a city as a part of its overall transportation service, I should have thought that the employees concerned would be regarded as employed in connection with the railway. If, on the other hand, the railway merely supplies railway cars to its customers to be loaded by them and unloaded by consignees, I should have thought that the employees of the consignor, while loading the car for their employer, would continue, from a constitutional point of view, to be working upon or in connection with their employer's business and would not pro tem become railway workers."

Similarly, the British Columbia Labour Relations Board observed in Kuehne & Nagel International Ltd., [1979] 1 Can L.R.B.R. 156, at page 167:

"But it is a mistake to assume that because a service offered by an employer relates to or is somehow connected with a branch of the Federal Government, the employment relations of that employer lose their independent constitutional value. If that were so, then an employer whose employees offer counsel or advice in relation to Federal income tax laws and, to carry the analysis to its absurd extreme, a lawyer offering advice and legal services to clients in relation to all manner of federal agencies and programs, would be subject in their employment relations to the Canadian Labour Code. The point is that the services offered by such employers, like the services offered by a custom-house broker, are extended and provided to the public. The services are not conceived nor made available for the purpose of becoming or being an indispensable cog in the great wheel of the Federal Government; the Federal Government is quite capable of carrying on its functions in the absence of the employers and their employees who may earn a livelihood by assisting members of the public in their relations with the Government."

[emphasis added]

18. On the other hand, when the only, or virtually only, raison d'etre of the subordinate undertaking is in fact to service the federal undertaking, to be "a cog in its wheel", as the above passage put it, the jurisprudence points the other way, whether it be the provision of local cartage service for a cross-Canada trucking terminal, as in Reimer Express, [1969] OLRB Rep. April 58, or office services for the same, as in Direct Winters Transport, [1973] OLRB Rep. Aug. 430, or ticketing and baggage handling for an inter-provincial bus line, as in Miwy Co. Ltd., [1984] OLRB Rep. Sept. 1249. That, however, is not the situation in the present case. The respondent herein clearly does have an independent local business purpose, serving the public at large, and the Loomis Courier Service is, and is treated by the respondent as, simply another of its customers.

19. The Canada Board decision in Patry, released August 13, 1982 and the cases cited therein, demonstrate how a single operating enterprise can be split for constitutional purposes into differing jurisdictions, so long as its component parts are severable. In light of the collective agreement voluntarily entered into here by Loomis Courier Service Limited to cover only its Courier Service employees, counsel for the respondent is left with little room to argue before the Board that its overall operation is one and indivisible for the purposes of labour relations, and that any declaration by the Board to the contrary would "emasculate" its present organization.

20. Accordingly, even assuming that the Loomis Courier Service meets the test for federal jurisdiction set out in such cases as A-G. v. Winner, 1954 CanLII 289 (UK JCPC), [1954] 4 D.L.R. 657 (P.C.) and Tank Truck Transport, (1960) 1960 CanLII 120 (ON HCJ), 25 D.L.R. (2d) 161 (Ont. H.C.), we do not find the operation of the respondent Loomis Messenger Service to be so "integral" to the Courier undertaking, as that word is used in the cases, as to have the regulation of its labour relations fall outside the provincial sphere.

21. As agreed, the Board will await the further advice of the parties with respect to the description of the appropriate bargaining unit.