Communications Workers of Canada v. CTG Telecommunications Systems, Inc., 1985 CanLII 890

Communications Workers of Canada v. CTG Telecommunications Systems, Inc.

Court File No.: 2400-82-R Date: 1985-02-14 Ontario Labour Relations Board

Re: Communications Workers of Canada, Applicant, V. CTG Telecommunications Systems, Inc. c.o.b. as Canadian Telecommunications Group, Respondent

Before: Owen V. Gray, Vice-Chairman, and Board Members J. A. Ronson and W. F. Rutherford.

Counsel: Paul Cavalluzzo, Elizabeth J. Shilton Lennon, Hank Goldberg and Tom Richardson for the applicant; E. T. McDermott, J. Hanson, T. Murphy and R. Ryan for the respondent.

DECISION OF THE BOARD; February 14, 1985

1. When this application for certification first came on for hearing, the major dispute between the parties concerned the composition of the bargaining unit, as appears from the following portions of the Board's initial decision in this matter:

2. The Board finds that the applicant is a trade union within the meaning of section 1(1)(p) of the Labour Relations Act.

3. After some discussion, the parties have reached agreement on a bargaining unit description framed as follows:

"All employees of the respondent in Metropolitan Toronto, save and except supervisors, managers, persons above the rank of supervisor or manager, sales staff, office staff, persons regularly employed for not more than twenty-four (24) hours per week, and students employed during the school vacation period."

Clarity Note:

"The term 'supervisor' as used herein does not include project supervisors. Project supervisors are included in the bargaining unit."

5. Despite the parties' agreement on the bargaining unit description, there are substantial disagreement about the actual composition of the agreed bargaining unit. The employer asserted that there were some sixty employees in the bargaining unit, but the union has raised some 29 challenges (3 additions and 26 deletions) to the employee list……. Both parties took the position that an examiner should be appointed to inquire into the employee list and the composition of the bargaining unit.

6. Having regard to the foregoing and the agreement of the parties, the Board hereby appoints a Labour Relations Officer to inquire into the employee list and the composition of the bargaining unit, including any question of the duties and responsibilities of the employees potentially affected by this application or their community of interest with the employees who will be affected by it.

7. Labour Relations Officers conducted hearings on a number of dates in the months following the Board's initial decision. The Officers' hearings resulted in a report containing 191 pages of transcribed testimony concerning the duties and responsibilities of various employees of the respondent. Copies of the report were provided to the parties in accordance with the Board's usual procedure. Counsel for both parties then wrote to the Board giving notice of their desire to make representations to the Board as to the conclusions it should reach in view of the report. Both counsel requested a hearing for the purpose of making those representations orally. In his letter, counsel for the respondent also, and for the first time, challenged this Board's jurisdiction to deal with this application, taking the position "that The Constitution Act, 1981 (formerly the British North America Act) [sic] places the Respondent's labour relations under the legislative authority of the Federal Parliament. . ." Evidence and argument with respect to the latter issue occupied two days of hearing before the Board; argument with respect to the composition of the bargaining unit occupied a third day of hearing.

8. Evidence of the nature of the respondent's operations is before us in two forms. The report of the Board's Labour Relations Officers contained a transcription of the testimony of several witnesses whose evidence had been taken for the purpose of resolving the parties' dispute about the composition of the bargaining unit. One of those witnesses was Thomas Murphy, who was the respondent's Director of Operations at the time this application was filed. While testimony before the Board's Officers dealt at length with the nature of the respondent's operations in the Municipality of Metropolitan Toronto and surrounding areas, it was not taken or offered with a view to the constitutional law issue later formulated by the respondent. At the opening of the hearings before this panel of the Board, the respondent recalled Mr. Murphy, now the respondent's Vice-President of Operations, to give viva voce evidence concerning the respondent's operations from the perspective of the constitutional law issue. The parties agreed that the transcribed testimony could also be relied upon in resolving this issue, but the viva voce evidence was to be preferred if there was any conflict between the two.

9. CTG is an "interconnect company". It sells, installs and maintains telephone and related telecommunications systems. CTG does not itself manufacture telephone or telecommunications hardware. The systems CTG sells are assembled with equipment it purchases from various manufacturers. CTG's customers are business subscribers of those telecommunications common carriers (telephone companies) who now permit the attachment of customer provided terminal equipment to their telephone and telecommunications networks. The customers served by the portion of CTG's business which is the subject of this application are subscribers of Bell Canada, a federally regulated telecommunications common carrier.

10. In November, 1979, Bell Canada filed with the Canadian Radio-Television and Telecommunications Commission ("the CRTC") an application "intended to bring before the Commission the question of whether the liberalization of the rules regarding the connection to Bell's facilities of subscriber-provided terminal devices, and particularly network-addressing terminal devices, was in the public interest and should be allowed." (See Telecom Decision CRTC 82-14, Canada Gazette Part I December 4, 1982, p. 9067 at 9068.) In an interim decision dated August 5,1980 (Telecom Decision CRTC 80-13, Canada Gazette Part I, p. 4937), the CRTC dictated the way Bell Canada was to respond to such interconnect requests pending the Commission's final determination of the issues raised by Bell's application. On November 23, 1982, the CRTC issued a final decision dealing with Bell Canada's application and similar applications concerning other federally regulated telecommunications carriers (see Decision CRTC 82-14, supra). The approach taken in the interim decision was substantially confirmed in the final decision, with differences not material to our inquiry. Both decisions required that Bell adopt a more liberal approach to the connection to its facilities of subscriber-provided network addressing terminal devices (telephone handsets and private branch exchange equipment, inter alia). Bell Canada must permit a customer to connect such devices to the Bell network if the customer provides to Bell satisfactory proof that the equipment complies with certain technical requirements. The CRTC decisions prescribe a form of agreement between Bell and the interconnecting customer, setting out their respective obligations with respect to the installation and operation by the customer of its terminal equipment. These decisions represented the point of departure for a new industry, in which private suppliers of terminal equipment competed for the attention of those Bell subscribers who wished, or could be persuaded, to exercise their right to attach to Bell's telephone lines terminal equipment purchased from these entrepreneurs. The business of these new "interconnect companies" is not limited to the sale of discreet pieces of telephone hardware. They also offer advice and assistance in selecting the terminal equipment, customizing it to the customer's requirements and installing it on the customer's premises. In addition, they offer assistance and expertise in dealing with Bell Canada, both in satisfying the subscriber's obligations under the interconnect agreement contemplated by the CRTC decisions, and in choosing from among the many different telephone services offered by Bell Canada. One of Bell's affiliates, BCSI, offers similar services and competes with CTG and others in the new "interconnect" market. Subscribers can still rent terminal equipment from Bell, but Bell cannot require them to do so as a condition of gaining assess to Bell's telephone network.

11. CTG offers a variety of telephone systems. The simplest are the "key" systems, in which incoming lines are connected directly to the telephone handsets, so that the user of a handset selects a particular Bell line by pushing one of the buttons on the handset. The more sophisticated "PBX" (private branch exchange) systems have at their heart an electronic switchboard which regulates and facilitates use of those individual telephone handsets which make up the customer's own internal telephone system. Calls can be placed from one handset to another or others within the customer's system and, subject to any restrictions which may have been incorporated into the system, any handset in the system can access any of the network lines connected to the system. If the customer has access to a variety of different telephone network services, and perhaps even to different telecommunications networks, some systems sold by CTG can be programmed to determine which of the outgoing lines will be used for any particular type of outgoing call, so that the most effective and economic use is made of the services to which the customer subscribes. Elements of a customer's telephone system may be located in more than one building occupied by the customer. If the customer owns the property under and between the buildings, those elements of its internal telephone system may be connected by cable or, as in one installation referred to by Mr. Murphy, by microwave equipment sold by CTG. If customer locations do not abut, the separated elements of the customer s system may be connected by a dedicated telephone line or "tie-line" rented from Bell.

12. The CTG employees affected by this application are employed by CTG in its Ontario Region operations department. In the organization of CTG's workforce, "operations" is a function distinct from sales, finance, human resources and head office administrative functions. At the risk of over-simplification, it may be said that the operations department supplies and services whatever the sales department sells. For the most part, the involvement of the operations department commences after a sale has been made to a customer. An exception to this involves a group of employees in the operations department known as technical support representatives ("TSRs"). They have several functions. One function is the dissemination within the company of technical information concerning equipment the company offers for sale to customers. Another is to prepare the "pre-design" and site survey for a system being offered to a potential customer. The TSR's focus in relation to a system proposal is on whether it will be possible for the operations department to make the product promoted by the salesman do what the customer wants it to do, having regard to any limitations inherent in the proposed location of the equipment or the nature of the equipment itself. The TSR's involvement at the pre-sale and sale stages is regarded by the operation's department as its "check and balance" on sales personnel.

13. Once CTG's sales force sells a system to a new customer, an operations department installation team takes over. The installation team consists of one or more each of "design reps", "project supervisors" and "customer service reps" (CSRs"). A design rep takes the pre-design work done by the TSR and works out detailed floor plans, showing the precise location of system components, and key sheets showing which telephone lines will be operative on which handsets or handsets buttons. In many cases, the functions of the telephone systems sold by CTG are determined or customized by programming them in the same sense as one speaks of programming a computer. One of the functions of the design rep is to determine what programming will be needed in order to give effect to the customer's specific requirements. Another of the design rep's functions is to work with the "operations co-ordinator" in preparing a package of information (the "CPEG Package"), which must be supplied to Bell in support of the interconnection of the installed system to the Bell network.

14. The project supervisors' functions relate primarily to the physical aspects of the installation. The project supervisor takes the design from the design rep and lays out course sheets showing where a telephone cable must go in order to connect the various components which make up the system to be installed. The respondent's practice on new installations is to sub-contract the actual installation of cable. The project supervisor co-ordinates both that sub-contract work and the balance of the physical equipment installation performed by CTG's technicians.

15. The CSR's role in the installation team is to train the customer in the use of the system once it is installed. CSRs and design reps have similar training and expertise. Indeed, at an earlier stage in CTG's development, the design rep on a CTG installation was also responsible for customer training. Before the application date, however, CTG set CSRs off as a separate group whose focus was on continuing customer contact, both during and after the installation of a system. CSRs have responsibilities which may bring them back into contact with a customer after an installation and its associated customer training are complete.

16. The time taken to install a system depends on the nature of the system to be installed. Taking into account the range from the smallest electronic key installation to the largest PBX installation, installation time for a new system can range from two weeks to six months. The evidence suggests that a typical installation involves several weeks work before any step is taken to connect the customer's new telephone system to the Bell network.

17. There is reference throughout the transcribed and viva voce evidence to the "Bell Network Package", "customer provided equipment package" or "CPEG package". These all refer to a package of information which must be supplied to Bell before a customer's terminal equipment can be connected to the Bell network. This documentation tells Bell the number and types of telephone lines the customer wishes to rent from Bell. It also gives Bell technical information about the terminal equipment the customer proposes to connect to those lines, information a customer is obliged to supply in order to satisfy the requirements which the CRTC has authorized Bell to impose in response to an interconnection request. CTG acts as its customer's agent in preparing and transmitting this material to Bell. The person at CTG who does this work in connection with new installations is the operations co-ordinator. She co-ordinates with Bell approximately 60 CTG projects per month. In addition to providing Bell with the CPEG package, the operations co-ordinator also arranges with Bell the scheduling of the "cut-over" of the new installation. In the jargon of the industry, "cut-over" describes the actual physical and electrical interconnection of the new installation with Bell network lines. Under the rules established by the CRTC, it is Bell's responsibility to bring the necessary lines to an agreed-upon point within the customer's premises, a point referred to by Mr. Murphy as the "d-mark". This is the point described in the CRTC's interim decision (CRTC 80-13, supra, at 4948) as the "interface point", and in the final decision (CRTC 82-14, supra, at pp. 9083 and 9085) as the "point of demarcation" between the carrier's facilities and the customer-supplied equipment. Bell technicians bring the Bell lines to that point prior to the pre-arranged cut-over" time. CTG's forces bring corresponding cables from the new installation to the "d-mark". At the pre-arranged time, with representatives of both Bell and CTG present, the new installation is "cut-over" by plugging the customer's cables and Bell's cables together. While the CTG installation will have been tested in a preliminary way prior to "cut-over", this is the first time at which its ability to function in conjunction with the Bell network can be assessed. If there is any difficulty, the concern of the Bell and CTG representatives is to ascertain whether the fault lies in Bell's lines or in the equipment supplied by CTG. If CTG is also installing or has installed equipment for the customer at another location, the ability of the two locations to communicate with one another over Bell's lines may be tested once the installations are "cut-over". By way of example, Mr. Murphy testified that CTG has supplied equipment to a customer at locations in Ontario and Quebec, and that the ability of Ontario based equipment to communicate with Quebec based equipment had been the subject of tests conducted by CTG over Bell's lines. The time taken in the actual "cut-over" is brief compared to the time spent installing the system prior to "cut-over".

18. CTG requires that its customers contract with it for ongoing servicing of the installation it sells. This involves a service contract which takes effect once the initial warranty period expires. One of the employees affected by this application is the Service Contract Administrator. Her function is to review each service contract when the initial one-year warranty on a new installation expires. She does a physical audit of installations which are the subject of CTG repair contracts, in order to ensure that the equipment on site corresponds with the equipment described in the service contract. CTG also enters into service contracts with respect to systems installed by other companies. In those cases, the Service Contract Administrator performs the initial physical audit of the customer's premises and checks also to see that the installation is up to CTG's technical standards.

19. When a customer has difficulty with its equipment, the first question is whether the difficulty is with Bell's lines or with the equipment purchased from CTG. Neither Bell nor CTG has either the obligation or the authority to repair equipment supplied by the other. More often than not, the fault lies in the equipment supplied by CTG. If the needed repairs cannot be effected by linking CTG's diagnostic and repair equipment to the customer's equipment over the telephone lines themselves, a CTG dispatcher dispatches a CTG repair technician to deal with the service problem.

20. Changes in the needs or business locations of CTG's customers can result in what CTG describes as "moves, adds and changes". A customer may wish to change the location, number or type or telephone handsets connected to its PBX switchboard. It may wish to add to or change the number or type of Bell trunk lines accessed by its terminal equipment. It may move its offices within a building or from one building to another. In each case, the customer requires the assistance of CTG in moving, adding to or changing its telephone system. When a CTG customer requests a move, add or change, the request is normally directed to an operations department employee known as a Telco Co-ordinator. If the request involves programming or re-programming equipment, the Telco Co-ordinator may do the programming herself. If a technician or customer service representative is necessary, the Telco Co-ordinator arranges for one to be dispatched. If the move, add or change involves a change in the Bell interconnection, the Telco Co-ordinator writes the necessary CPEG Package and arranges with Bell for the "cut-over" of the new services. A move, add or change may be as involved as an initial installation. The installation aspect of a move, add or change is handled in a manner similar to new installations, except that CTG may use its own technicians to perform cable installation on smaller projects.

THE CONSTITUTIONAL ISSUE

16. The most appropriate starting point for an examination of this issue is the following passage from the judgement of Mr. Justice Dickson (as he then was) in Northern Telecom Ltd., v. Communications Workers of Canada et al., (1979), 1979 CanLII 3 (SCC), 98 D.L.R. (3d) 1 at pages 13 to 15, 28 N.R. 107 at 123 to 127 ("Northern Telecom No. 1").:

The best and most succinct statement of the legal principles in this area of labour relations is found in Laskin's Canadian Constitutional Law, 4th ed. (1975), p. 363:

In the field of employer-employee and labour-management relations, the division of authority between Parliament and provincial legislatures is based on an initial conclusion that in so far as such relations have an independent constitutional value they are within provincial competence; and, secondly, in so far as they are merely a facet of particular industries or enterprises their regulation is within the legislative authority of that body which has power to regulate the particular industry or enterprise .

In an elaboration of the foregoing, Mr. Justice Beetz in Montcalm Construction Inc. v. Minimum Wage Com'n et al. (1978), 1978 CanLII 18 (SCC), 93 D.L.R. (3d) 641, [1979] 1 S.C.R. 754,25 N.R. 1, set out certain principles which I venture to summarize:

(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.

(3) Primary federal competence over a given subject can prevent the application of provincial law relating to labour relations and the conditions of employment but only if it is demonstrated that federal authority over these matters is an integral element of such federal competence.

(4) Thus, the regulation of wages to be paid by an undertaking, service or business, and the regulation of its labour relations, being related to an integral part of the operation of the undertaking, service or business, are removed from provincial jurisdiction and immune from the effect of provincial law if the undertaking, service or business is a federal one.

(5) The question whether an undertaking, service or business is a federal one depends on the nature of its operation.

(6) In order to determine the nature of the operation, one must look at the normal or habitual activities of the business as those of "a going concern", without regard for exceptional or casual factors; otherwise, the Constitution could not be applied with any degree of continuity and regularity.

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.

Any core federal undertaking present in this case must be found within the telephone and telecommunications system. Constitutional jurisdiction over telecommunications is a difficult and controversial subject. It is a field which has been the subject of no little academic comment: see Telecommunications and the Federal Constitution of Canada by W. k. Lederman in HE. English, ed., Telecommunications for Canada, An Interface of Business and Government (Toronto; Methuen, 1973); Mullan, Attainment of Objectives and Jurisdiction in Janisch, ed., Telecommunications Regulation at the Crossroads (Dalhousie Continuing Legal Education Series, No. 13, 1976), 149; Analysis of the Constitutional and Legal Basis for the Regulation of Telecommunications in Canada, Study 1(a), The Department of Communications (1971); Cohn H. McNairn, "Transportation, Communication and the Constitution: The Scope of Federal Jurisdiction", 47 Can. Bar key. 355 (1969). Two recent judgments of this Court have dealt with constitutional jurisdiction in respect of certain aspects of telecommunications: see Capital Cities Communications Inc. et al. v. C.R.T.C. (i977), 1977 CanLII 12 (SCC), 81 D.L.R. (3d) 609, [1978] 2 S.C.R. 141, and Re Public Service Board et al. Dionne et al. and A.-G Can. et al. (1977), 1977 CanLII 207 (SCC), 83 D.L.R. (3d) 178, [1978] 2 S.C.R. 191, 18 N.R. 271.

At a minimum, it can be asserted that Bell Canada's operations have been found to be a federal undertaking: see City of Toronto v. Bell Telephone Co. of Canada, [1905] AC. 52 (J.C.P.C.) and Commission du Salaire Mimimum v. Bell Telephone Co. of Canada (1966), 1966 CanLII 1 (SCC), 59 D.L.R. (2d) 145, [1966] S.C.R. 767.

In the field of transportation and communication, it is evident that the niceties of corporate organization are not determinative. As McNairn observes in his article, supra, at pp. 380-1.

A transportation or communication undertaking is a possible corporate activity but it may or may not be segregated from the total corporate enterprise or it may even be larger in scope than a single corporate enterprise. To determine questions of this nature corporate objects have a certain relevance. But of primary concern is the integration of various corporate activities in practice (including the corporate organizations themselves if more than one is involved) and their inherent interdependence.

McNairn's comment is borne out by the cases. 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., 19551 1955 CanLII 1 (SCC), 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 S.C.R. 178, [1974] 1 W.W.R. 452.

Another, and far more important factor in relating the undertakings, is the physical and operational connection between them. Here, as the judgment in Montcalm, supra, stresses, there is a need to look to continuity and regularity of the connection and not to be influenced by exceptional or casual factors. Mere involvement of the employees in the federal work or undertaking does not automatically import federal jurisdiction. Certainly, as one moves away from direct involvement in the operation of the work or undertaking at the core, the demand for greater interdependence becomes more critical.

17. The respondent argues that the systems it sells become an integral part of Bell's telephone network, an acknowledged federal work or undertaking. Because it supplies, installs and, particularly, maintains such systems, CTG argues that its operations are an integral part of the core federal undertaking — the Bell Canada network — and its labour relations are, therefore, removed from provincial jurisdiction in accordance with the principles referred to in the above-quoted passage from the judgment of Mr. Justice Dickson in Northern Telecom No. 1. On this branch of the respondent's argument, submissions of counsel for both parties focused on the several cases in which the courts have assessed constitutional jurisdiction to regulate labour relations between Northern Telecom Canada Ltd. and its predecessors on the one hand, and various groups of its employees on the other: Regina v. Ontario Labour Relations Board, Ex. parte Dunn, 1963 CanLII 616 (ON HCJ), [1963] 2 O.R. 301 (Ont. H.C.); Regina v. Ontario Labour Relations Board, Ex parte Northern Electric Co. Ltd.,, 1970 CanLII 520 (ON HCJ), [1970] 2 O.R. 654, 11 D.L.R. (3d) 640 (Ont. H .C.); Re Northern Electric Co. Ltd., and United Steelworkers of America, Local 8001, (1972) 1972 CanLII 1220 (QC QBA), 25 D.L.R. (3d) 368 (Que. C.A.); Northern Telecom Ltd., v. Communications Workers of Canada et al., (1979) 1979 CanLII 3 (SCC), 98 D.L.R. (3d) 1, 28 N.R. 107 (S.C.C.) ("Northern Telecom No. 1"); and, Re Communications Workers of Canada et al. and Northern Telecom Canada Ltd., (1981) 1981 CanLII 4561 (FCA), 123 D.L.R. (3d) 483 (F.C.A.), upheld sub. nom. Northern Telecom Canada Ltd. et. al v. Communications Workers of Canada et al. and Canada Labour Relations Board, (1983) 1983 CanLII 25 (SCC), 147 D.L.R. (3d) 1, 48 N.R. 162 (S.C.C.) ("Northern Telecom No. 2"). On this branch of its argument, counsel for the respondent also cited Commission du Salaire Minimum and the Bell Telephone Company of Canada, 1966 CanLII 1 (SCC), [1966] S.C.R. 767 (S.C.C.) and Reference Re Validity of Industrial Relations and Disputes Investigation Act (Can.) and Applicability In Respect of Certain Employees of Eastern Canada Stevedoring Co. Ltd. 1955 CanLII 1 (SCC), [1955] 3 D.L.R. 721 (S.C.C.) ("the Stevedoring case"), while counsel for the applicant referred to Canada Labour Relations Board and Attorney General of Canada v. Paul L'Anglais Inc., J. P. L. Productions Inc., Canadian Union of Public Employees et al., (1983) 1983 CanLII 121 (SCC), 47 N.R. 351 (S.C.C.).

18. Quite apart from the nature of its connection to or relationship with Bell Canada and its telephone network, the respondent argued in the alternative that its operations by their nature alone fell within exclusive federal jurisdiction, either because they could be described as involving "telecommunications" or because the industry in which it was engaged was brought into existence by a decision of a federal regulatory authority. On the "telecommunications" branch of this alternative argument, the respondent referred to In Re Regulation and Control of Radio Communication in Canada, 1932 CanLII 354 (UK JCPC), [1932] A.C. 304 (P.C.) ("the Radio Reference") and to decisions respecting constitutional jurisdiction over cable television enterprises: Re Public Utilities Commission and Victoria Cablevision Ltd., 1965 CanLII 498 (BC CA), [1965], 51 D.L.R. (2d) 716 (B.C.C.A.) and Capital Cities Communications Inc. et al. v. Canadian Radio-Television Commission et al. 1977 CanLII 12 (SCC), [1978] 81 D.L.R. (3d) 609 (S.C.C.).

19. We propose to review the respondent's main and alternate arguments separately, beginning with the alternate argument: that the nature of CTG's enterprise makes it a federal work or undertaking, whatever its connection or relationship with Bell's federal undertaking may be. This argument rested on two bases, the first of which was that the regulation of CTG's undertaking must fall exclusively within federal jurisdiction because the interconnect industry came into being as a result of the decision of a federal regulatory agency and because in the pursuit of that business CTG must be mindful of standards set by that agency with respect to the technical requirements equipment must satisfy in order to be connected to the Bell network. Counsel cited no authority for this approach. We can find none. Indeed, there are decisions which clearly reject it.

20. The business of a customs broker is one which would not exist but for customs and excise legislation, matters within federal jurisdiction. It is necessary to obtain a license from the federal taxation authorities in order to act as a customs broker. The day-to-day aspects of the undertaking of a customs broker are greatly influenced by extensive federal regulations. In the course of this business, a customs broker regularly collects and remits taxes to Revenue Canada. In Kuehne & Na gel International Ltd., [1979] 1 Can. L.R.B.R. 156, the respondent customs broker disputed the jurisdiction of the B.C. Labour Relations Board on the basis that the factors just recited brought its operations within federal jurisdiction for all purposes, including labour relations. The B.C. Board rejected that argument. In its reasons it cited Re James Enterprises Ltd., and Manitoba Labour Board, 1971 CanLII 1005 (MB QB), [1971] 21 D.L.R. (3d) 1 (Man. Q.B.), which held that the comprehensive federal supervision of the pari-mutuel system associated with an employer's race track business did not exclude the application of provincial labour legislation to that employer and its employees. The B.C. Board had this to say at page 167 of its decision:

To appreciate the proper effect of this close supervision by Parliament of the customs brokerage business, it is of assistance to return again to the decision in Re James Enterprises. After reciting the detailed and extensive nature of the federal supervision of the operation of the pari-mutuel betting system, Wilson J. goes on to say:

I cannot agree, because of the federal power of supervision to that extent, the minister's control over the affected employees must extend to wages, hours of work, holidays and the many other matters ordinarily associated with the notion "conditions of employment".

(at page 9)

Following an examination of several authorities, the judgment concludes with this observation:

But of the instant case, the terms and conditions of employment of these employees is a matter quite apart from compliance with the federal regulations in question, nor are they to be regarded as a "facet" of the supervision deemed necessary to police the observance of those regulations. And so, provincial legislation touching upon such matters as wages, hours of work and the like have an "independent constitutional value" which persists unaffected by the existence of other (federal) rules not in conflict, and having another purpose to serve.

(at page 12)

The reference in this passage to the "independent constitutional value" of the employment relations in question in that case is, of course, a reference to the oft-quoted passage from Laskin's Canadian Constitutional Law which was set out in Part III of this decision:

Insofar as such relations have an independent constitutional value they are within provincial competence . .

With very few specific exceptions which flow out of certain heads in Section 91 of the B.N.A. Act, the employment relations in all service industries have an independent constitutional value and are thus provincially regulated. The small number of exceptions are typified by Parliament's legislative authority over banking. In that particular service industry, employment relations do not have an independent constitutional value; rather, they are but a facet of the banking industry over which Parliament has the exclusive legislative authority by virtue of head is of Section 91. 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.

In my view, the employment relations of custom-house brokers do have an "independent constitutional value" and as such are within the competence of the provincial legislature. This branch of the objection to this Board's jurisdiction therefore fails.

The "oft-quoted passage from Laskin's Canadian Constitutional Law" referred to in this passage is the one quoted by Mr. Justice Dickson, as he then was, in the earlier quoted passage from his judgment in Northern Telecom No. 1.

21. As for the "but for" argument that CTG would have no business but for the CRTC's decisions, we observe that the link between CTG's business and federal decision making is certainly no stronger than the link on which the respondent customs broker relied in Kuehne & Na gel International Ltd., supra. Unlike that respondent, CTG does not require the permission of a federal authority to engage in its business. If this branch of CTG's alternate argument had any validity, the customs broker in Kuehne & Nagel had a stronger case for its application. We think the customs broker's argument was properly rejected in that case (see also Pacific Customs Brokers Ltd. v. Office & Technical Employees' Union et al., 1980 CanLII 508 (BC SC), [1980] 4 W.W.R. 587, 80 CLLC ¶ 14,022 (B.C.S.C.), reviewed infra). We reject CTG's similar argument here.

22. The respondent's other submission in support of its alternate argument is that by engaging in "telecommunications" or an aspect of "telecommunications", all aspects of CTG's enterprise become the subject of exclusive federal jurisdiction. This argument focused on the Privy Council decision in the Radio Reference, supra, which dealt with the extent of federal authority over radio communication, and on Capital Cities Communications Inc. et al. v. Canadian Radio-Television Commission et al., (1978) 1977 CanLII 12 (SCC), 81 D.L.R. (3d) 609, which dealt with the extent of federal jurisdiction over the activities of cable television systems.

23. In the Radio Reference case the Privy Council dealt with, inter alia, an argument that while regulation of radio transmitters might necessarily be a matter for federal jurisdiction, the same could not be said of receivers. Their Lordships noted that section 92(10) of the B.N. A. (now the Constitution Act, 1867), when read together with section 91, assigned to Parliament exclusive jurisdiction over ..... telegraphs and other works and undertakings connecting the province with any other or others of the provinces or extending beyond the limits of the province." Their Lordships concluded (pages 314-316) that:

The argument of the Province really depends on making, as already said, a sharp distinction between the transmitting and the receiving instrument. In their Lordships' opinion this cannot be done. Once it is conceded, as it must be, keeping in view the duties under the convention, that the transmitting instrument must be so to speak under the control of the Dominion, it follows in their Lordships' opinion that the receiving instrument must share its fate. Broadcasting as a system cannot exist without both a transmitter and a receiver. The receiver is indeed useless without a transmitter and can be reduced to a nonentity if the transmitter closes. The system cannot be divided into two parts, each independent of the other.

Their Lordships have therefore no doubt that the undertaking of broadcasting is an undertaking "connecting the Province with other Provinces and extending beyond the limits of the Province." But further, as already said, they think broadcasting falls within the description of "telegraphs". No doubt in everyday speech telegraph is almost exclusively used to denote the electrical instrument which by means of a wire connecting that instrument with another instrument makes it possible to communicate signals or words of any kind. But the original meaning of the word "telegraph," as given in the Oxford Dictionary, is: "An apparatus for transmitting messages to a distance, usually by signs of some kind." Now a message to be transmitted must have a recipient as well as a transmitter. The message may fall on deaf ears, but at least it falls on ears...

CTG argues that the relationship of a telephone network and the terminal equipment attached to it is analogous to the relationship between radio transmitters and radio receivers, and that if the network is "under the control of the Dominion", then the terminal equipment must share its fate.

24. In Capital Cities Communications Inc. v. Canadian Radio-Television Commission et al., supra, it was admitted that Federal Parliament had exclusive jurisdiction to regulate the reception by cable television systems of Hertzian waves. The issue was whether the local retransmission of those signals over cables, and the content of the retransmitted matter, could also be the subject of federal regulation. The majority held that the denial of jurisdiction over content would be a denial of any effective jurisdiction over reception at all. It noted that the retransmitted signals were the same ones viewers could intercept with their own receiving apparatus, and concluded (at page 623) that:

... it would be incongruous, indeed, to admit federal legislative jurisdiction to the extent conceded but to deny the continuation of regulatory authority because the signals are intercepted and sent on to ultimate viewers through a different technology. Programme content regulation is inseparable from regulating the undertaking through which programmes are received and sent on as part of the total enterprise.

CTG argues that the equipment it installs and maintains is in a position analogous to that of cable television systems in its retransmission aspect. Counsel for the respondent argues that the telephone network cannot exist without the terminal equipment supplied by CTG, that the delivery of telephone communication cannot be divided into parts and that its terminal equipment, like the receivers, dealt with in the Radio Reference and Capital Cities cases, must be subject to the same jurisdiction as the telephone network or transmitter.

25. Re Public Service Board et al., Dionne et al. and Attorney General Canada et al., (1978) 1977 CanLII 207 (SCC), 83 D.L.R. (3d) 178 (S.C.C.) was released on the same day as the Capital Cities decision. It also dealt with the subject of constitutional jurisdiction to regulate cable television stations and their programming. In that case, the Supreme Court of Canada rejected an argument for divided control over aspects of television broadcasting and receiving, holding that:

... where television broadcasting and receiving is concerned there can no more be a separation for constitutional purposes between the carrier system, the physical apparatus, and the signals that are received and carried over the system than there can be between railway tracks and the transportation service provided over them or between the roads and transport vehicles and the transportation service that they provide. In all these cases, the inquiry must be as to the service that is provided and not simply as to the means through which it is carried on. ...

However, the majority also said:

The suggested analogy with a local telephone system fails on the facts because the very technology employed by the cable distribution enterprises in the present case establishes clearly their reliance on television signals and on their ability to receive and transmit such signals to their subscribers. .

The majority decision does not say what the "suggested analogy" was, and it is not clear whether that reference is a response to the remarks of Mr. Justice Pigeon at page 184 and other points in his dissenting judgement. The reference, however, does invite caution in analyzing telephone matters by analogy with broadcast matters. If the court in this case was able, even in passing, to append the word "local" to the words "telephone system", it may at least suggest that telephone systems are not federal or non-local merely because they are telephone systems.

26. Even if it were not of doubtful validity, the analogy with radio communication and cable television enterprises would still be unhelpful in this case. In considering the Privy Council decision in the Radio Reference, for example, no one would seriously suggest that the reference to the necessity for ears, even deaf ones, stands as authority for exclusive federal jurisdiction over all of the activities of those who possess ears. Obviously, there is some limit along any line of interprovincial communication beyond which any continuing federal aspect does not exclude all provincial jurisdiction. Again, it could not seriously be suggested that federal legislative competence in the field of radio and television broadcasting and the incidental power to regulate matters involving radio and television receivers results in exclusive federal jurisdiction over the labour relations of those who receive radio and television signals on their private radio or television sets. Of course, if one is to apply the proposed analogy accurately, then it should be noted that CTG is not in a position analogous even to the listener or viewer, the recipient or user of the television or radio signals, but only to that of a supplier, installer and repairer of radio or television receivers. The logic of the Radio Reference and Capital Cities decisions does not require that the labour relations of television repairmen (that is, those who repair television receiving sets) must fall within exclusive federal jurisdiction. Even if valid, the analogy contended for by CTG offers nothing more than the potential for federal regulatory authority over the equipment supplied by CTG and its use, and could not alone support exclusive regulatory authority over all aspects of CTG's business, including its labour relations. Those labour relations do not lose their independent constitutional value merely because CTG's product, and the use of that product by CTG and others, might be the subject of federal regulation.

27. We conclude that, apart from any effect its relationship with the Bell network may have, there is nothing in the nature of CTG's business which would exclude provincial jurisdiction over its labour relations. We turn, then, to CTG's main argument: that its operations are so "vital", "essential" or "integral" to those of the Bell network that it must be regarded for constitutional purposes as a part of a federal undertaking which has the Bell telephone network at its core.

28. Northern Telecom is a corporate relative of Bell. For years, it has developed and manufactured equipment purchased by Bell and incorporated into its telephone network. Northern Telecom installers have been involved in installing and testing that equipment for Bell on Bell premises. There is a long history of litigation over whether Northern Telecom's labour relations, particularly with its installers, fall within federal or provincial jurisdiction. Counsel for both parties to this application dealt at length with the various decisions which wrestled with that question. Before reviewing those cases, it would be useful to examine some other relevant jurisprudence.

29. In the passage from Northern Telecom No. 1 quoted in paragraph 16 above, Mr. Justice Dickson summarized the principles set out in the following passage from the judgement of Mr. Justice Beetz in Montcalm Construction Inc., v. Minimum Wage Com'n et al (1978) 1978 CanLII 18 (SCC), 93 D.L.R. (3d) 641, [1979] 1 S.C.R. 754 at pages 652-653 D.L.R., 768-769 S.C.R.:

The issue must be resolved in the light of established principles the first of which is that Parliament has no authority over labour relations as such nor over the terms of a contract of employment; exclusive provincial competence is the rule: Toronto Electric Commissioners v. Snider, (1925) 1925 CanLII 331 (UK JCPC), A.C. 396. 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: In the matter of a reference as to the validity of the Industrial Relations and Disputes Investigations Act, [55 CLLC ¶ 15,223], 1955 CanLII 1 (SCC), 1955 S.C.R. 529 (the Stevedoring case). It follows that primary federal competence over a given subject can prevent the application of provincial law relating to labour relations and the conditions of employment but only if it is demonstrated that federal authority over these matters is an integral element of such federal competence; thus, the regulation of wages to be paid by an undertaking, service or business, and the regulation of its labour relations, being related to an integral part of the operation of the undertaking, service or business, are removed from provincial jurisdiction and immune from the effect of provincial law if the undertaking, service or business is a federal one; In the Matter of a Reference as to the application of the Minimum Wage Act of Saskatchewan to an employee of Revenue Post Office, 1948 5CR. 248 (the Revenue Post Office case); Commission du Salaire Minimum v. The Bell Telephone Company of Canada, 1966 CanLII 1 (SCC), 1966 S.C.R. 767 (the Bell Telephone Minimum Wage case) [66 CLLC ¶ 14,154]; The Letter Carriers' Union of Canada v. Canadian Union of Postal Workers, [73 CLLC ¶14,190], (1975) 1 5CR. 178 (the Letter Carriers' case). The question whether an undertaking, service or business is a federal one depends on the nature of its operation: Pigeon J. in [Canada Labour Relations Board. Public Service Alliance of Canada v. City of Yellowknife, 77 CLLC ¶ 14,073, (1977)1977 CanLII 230 (SCC), 2 S.C.R. 729 at 736. But, in order to determine the nature of the operation, one must look at the normal or habitual activities of the business as those of "a going concern", (Martland, J. in the Bell Telephone Minimum Wage case at p. 772), without regard for exceptional or casual factors; otherwise, the Constitution could not be applied with any degree of continuity and regularity: Agence Maritime Inc. v. Conseil Canadien des Relations Ouvrieres, (1969) 1969 CanLII 109 (CSC), S.C.R. 851 (the Agence Maritime case); the Letter Carriers' case.

The issue in Montcalm Construction Inc. v. Minimum Commission et al. was whether provincial employment standards legislation in the Province of Quebec was applicable to the employment of workers employed by a building contractor who, under contract with the Crown in Right of Canada, was building runways at the Mirabel Airport. Seeking to avoid the application of that legislation, the contractor argued that because the operation and maintenance of an airport are aspects of aeronautics, a subject within exclusive federal legislative authority, then construction of an airport must equally fall within federal authority. The majority judgment rejected that argument:

The construction of an airport is not in every respect an integral part of aeronautics. Much depends on what is meant by the word "construction". To decide whether to build an airport and where to build it involves aspects of airport construction which undoubtedly constitute matters of exclusive federal concern: the Johannesson case. This is why decisions of this type are not subject to municipal regulation or permission: the Johannesson case; Corporation of the City of Toronto v. Bell Telephone Company of Canada, (1905) A.C. 52; the result in Ottawa v. Short and Horwitz Construction Co. (1960) 1960 CanLII 409 (ON HCJ), 22 D.L.R. 247 can also be justified on this ground. Similarly, the design of a future airport, its dimensions, the materials to be incorporated into the various buildings, runways and structures, and other similar specifications are, from the legislative point of view and apart from contract, matters of exclusive federal concern. The reason is that decisions made on these subjects will be permanently reflected in the structure of the finished product and are such as to have a direct effect upon its operational qualities and, therefore, upon its suitability for the purposes of aeronautics. But the mode or manner of carrying out the same decisions in the act of constructing an airport stand on a different footing. Thus, the requirement that workers wear a protective helmet on all construction sites including the construction site of a new airport has everything to do with construction and with provincial safety regulations and nothing to do with aeronautics: see Regina v. Beaver Foundations Ltd. (1968) 1968 CanLII 280 (ON MAGCT), 69 D.L.R. 649 and Regina v. Concrete Column Clamps (1961) Ltd., Regina v. Louis Donolo Inc., 1971 CanLII 742 (ON HCJ), [1972] 1 O.R. 42. See also Re United Association of Journeymen, etc. Local 496 and Vipond Automatic Sprinkler Co. Ltd., (1976) 1976 CanLII 305 (AB SCTD), 67 D.L.R. (3d) 381, where Cavanagh J. of the Alberta Supreme Court held that "the fact of construction of a building called an air terminal does not ... show that the construction is connected with aeronautics" and that, while an aerodrome is a federal work, employees constructing such a building are subject to provincial labour relations legislation. In my opinion what wages shall be paid by an independent contractor like Montcalm to his employees engaged in the construction of runways is a matter so far removed from aerial navigation or from the operation of an airport that it cannot be said that the power to regulate this matter forms an integral part of primary federal competence over aeronautics or is related to the operation of a federal work, undertaking, service or business. .

The distinction between the construction of a federal work or undertaking, on the one hand, and the operation or maintenance of it, on the other, arose also in Northern Telecom No. 2, as we note later.

30. In Canadian Airline Employees' Association v. Wardair Canada (1975) Ltd., (1979) 1979 CanLII 4076 (FCA), 2 F.C. 91, 97 D.L.R. (3d) 38 (F.C.A.) the issue before the court was whether the Canada Labour Relations Board had wrongfully declined jurisdiction to entertain an application for certification with respect to customer representatives employed by the respondent International Vacations Ltd. ("Intervac"), when it concluded that Intervac's operations were not a federal work, undertaking or business. Intervac was a corporate relative of the respondent Wardair, which was a federally regulated air carrier then restricted by regulation to wholesale chartering of its seating capacity to tour operators. Intervac was a tour operator. It chartered a large portion of Wardair's seating capacity and sold it both through travel retailers and directly to the public by means of the customer representatives who were the subject of the application before the C.L.R.B. The Federal Court of Appeal summarized the applicable law (97 D.L.R. (3d) 38 at pages 42 and 43, (1979) 2 F.C. 91 at 95 to 97) in this way:

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;

(The word "essential" is used here and in the balance of these reasons to include the extended meaning of "reasonably necessary".)

(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; and

(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, Reference re Industrial Relations and Disputes Investigation Act, etc., 1955 CanLII 1 (SCC), [1955] 3 D.L.R. 721, [1955] 5CR. 529, to the Supreme Court of Canada. See also 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 S.C.R. 178, [1974] 1 W.W.k.452;ButlerAviation of Canada Ltd., v. Int'l Ass'n of Machinists & Aerospace Workers, 1975 CanLII 2241 (FCA), [1975] F.C. 590, 12 N.R. 271, and Holmes Transportation (Quebec) Ltd., v. Transport Drivers, Warehousemen & General Workers, Local 106, 1977 CanLII 3056 (FCA), [1978] 2 F.C. 520, 20 N.R. 351.

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 [C.S.P. Foods Ltd., v. Canada Labour Relations Board et al. (No. A-201-78 1978 CanLII 3574 (FCA), 25 N.R. 91]).

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 inter-provincial 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 Montcalm Construction Inc. v. Minimum Wage Com'n et al. (1978), 1978 CanLII 18 (SCC), 93 D.L.R. (3d) 641, [1979] 5CR. 754, 25 N.R., I, 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 it 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 Court concluded that Intervac's business was not federal in nature, holding (at p. 44 D.L.R.,

98 F.C.) that:

In my view, its position, as between the air carrier and the passengers, is not different, from a constitutional point of view, from the position of any ordinary travel agency. For the reasons given in Re Cannet Freight Cartage Ltd. and Teamsters Local 419 (1975), 1975 CanLII 2218 (FCA), 60 D.L.R. (3d) 473, [1976] 1 F.C. 171, 11 N.R. 606, for holding that persons performing services for a freight forwarder are not employed on or in connection with the railway by which the forwarder carried out its engagements with its customers, I am of the view that persons employed by Intervac as "customer representatives" are not employed on or in connection with air carrier undertakings by whose aircraft Invervac's customers are carried.

As indicated, the only relevant business or undertaking for carrying passengers by air was that carried on by Wardair or some other charter operator. The real difference, from a constitutional point of view, between what was done by Intervac and what was being considered in the Stevedoring Reference, supra, is that the stevedoring companies there in question were performing on behalf of the carrier an essential part of the carrier's "shipping" contracts, namely, receiving and loading on the ships the goods to be carried and unloading such goods from the ships and delivering them to the consignees. Those operations were an essential part of what was involved in carrying goods by sea, i.e., "shipping". Intervac's customer representatives perform no comparable part of the air carrier's activity of carrying passengers by air.

31. The decision of the Federal Court of Appeal in Wardair refers to that court's earlier decision in Re Cannet Freight Cartage Ltd., and Teamsters Local 419 (1975), 1975 CanLII 2218 (FCA), 60 D.L.R. (3d) 473, [1976] 1 F.C. 174, where that court considered the position of another enterprise interposed between a federal undertaking and its customers. In Cannet the enterprise in question was that of a freight forwarder, which solicited freight from customers and arranged with the Canadian National Railway ("C.N.") for transportation of the freight in carload lots. Cannet employees worked in premises leased from C.N., where they loaded the freight collected by their employer into freight cars provided by C.N. Cannet made all the arrangements with the customers and C.N., and arranged for unloading and delivery of the freight when it reached its destination on the railway line. The Federal Court of Appeal did not agree with the submission that Cannet's employees were, in these circumstances, employed "on or in connection with the operation of an interprovincial railway", so as to bring them within the ambit of the Canada Labour Code:

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.

When the problem in this case is so approached, in my view, it is clear that the employees in question were not employed upon or in connection with the Canadian National Railway. They were employees of the applicant loading freight on a railway car under arrangements whereby the car was to be loaded by the shipper and not by railway employees.

The Court also rejected the argument that the freight forwarding business was itself an undertaking extending beyond the limits of a province or connecting one province with another:

... In my view, the only interprovincial undertaking involved here is the Canadian National interprovincial railway. Clearly, a shipper on that railway from one Province to another does not, by virtue of being such a shipper, become the operator of an interprovincial undertaking. If that is so, as it seems to me, the mere fact that a person makes a business of collecting freight in a Province for the purpose of shipping it in volume outside the Province by public carrier, does not make such a person the operator of an interprovincial undertaking.

32. Cannet was a subsidiary of the freight forwarding company whose activities were in question in Re The Queen and Cottrell Forwarding Co. Ltd., (1981) 1981 CanLII 1896 (ON HCJ), 33 O.R. (2d) 486 (Ont. Div. Ct.). There the court considered whether a similar freight forwarding operation was a federal work or undertaking not subject, for that reason, to provincial licencing requirements. The court reviewed the applicable jurisprudence, and particularly the decision of the Federal Court of Appeal in Cannet Freight Cartage Ltd. and Teamsters Local 419, supra. At page 491 of the report of its decision, the Court said:

... While the decision of the Federal Court of Appeal is not binding upon this Court it is certainly persuasive. In any event, I agree with the decision with certain amplifications. The railway company is the only body carrying on the interprovincial undertaking and it has the physical works as well. Clearly, if an individual customer of Cottrell wished to ship goods to the west, it could contract with the railway company to ship such goods. The mere fact that by contract Cottrell agrees with that individual customer to enter into the contract with the railway company and become the shipper itself, does not make Cottrell anything other than a shipper. The shipment is merely part of an over-all contract and a person who has no tangible or physical property under its control to operate an undertaking cannot, by contract, make himself a person carrying on an undertaking within the meaning of s. 92(JOfta) of the British North America Act. 1867. Cottrell is not carrying on an undertaking or operation but is merely providing a service by contract. To hold otherwise would mean that any travel broker or other person engaged in general commerce could, by contract, provide interprovincial undertakings, even though he had no facilities whatsoever, and thereby claim that he was not subject to provincial jurisdiction. This would be unreasonable interpretation of the section in question.

(emphasis added)

33. The courts' determinations in the Cannet and Cottrell cases were anticipated by this Board in Otter Freightways Limited, [1975] OLRB Rep. Jan. 1. The respondent in that case was engaged in a freight forwarding business in which one of its regular activities was to make deliveries in the Hull area from its Ottawa terminal across the Ontario-Quebec border. Although the Board found that it was without jurisdiction for that reason, it emphatically rejected the argument that the respondent's operations fell within federal jurisdiction on the theory that it was an integral part of the operation of the railway over which it shipped its customers' goods. After reviewing the authorities in detail, the Board noted, at paragraphs 12 and 13, that:

12.... Canadian Pacific Railway has not sought out the respondent and engaged it to perform an integral aspect of the railway's responsibilities. Rather, the respondent is primarily engaged in servicing its own customers (i.e., delivering their goods, etc.) and it has chosen to do this, in part, by rail as opposed to "over the road". Therefore while Canadian Pacific Railway obviously enjoys such patronage it is in no way an integral part of its operations. It is convenient but is in no way necessary or integral to the operation of a railway. In other words while it is convenient to the railways to have only one customer the primary purpose or benefit of freight forwarding is to serve the many customers who deal with the freight forwarders, and therefore the benefit flowing to the railways is only of tertiary nature. (This perspective is very nicely developed in relation to airline limousine services in Re Colonial Coach Lines Ltd. et al and Ontario Highway Transport Board et al, supra, p. 277.) Accordingly an enterprise cannot parasitically and unilaterally make itself an integral part of a federal undertaking unless it is performing a service that is of a primary value to that undertaking and requested by the federal undertaking on that basis. In the facts before us the respondent has merely agreed to transport its customers goods to some other geographical point and has elected to do this by rail. It could have elected to do it by truck or by air but chose the rail. This election is to its own benefit and convenience and is not an integral part of Canadian Pacific Railway's activities. (Canadian Pacific Railway is only a passive medium in the relationship with the respondent.)

13. Or another way to phrase this same perspective is to examine the primary purpose and function of the respondent's business. This perspective forces one to look to the respondent's customers — not to Canadian Pacific Railway. The respondent delivers matters to and from railroad terminals for the customers — not the railroad. In other words its primary value, or nature of the respondent's business, is that of a parochial delivery agent and only incidentally does the railroad become involved. It is this perspective which distinguishes these facts from Letter Carriers' Union of Canada v. Canadian Union of Postal Workers and M & B Enterprises Ltd. 1973 CanLII 183 (SCC), [1974] 1 W.W.R. 452 (S.C.C.), where a trucking firm had been engaged by the Canada Post Office to handle and collect mail. There the company was working for the Canada Post Office performing one of its functions and the company was therefore an integral part of that activity; (see also City of Kelowna v. Labour Relations Board of British Columbia and C.U.P.E., Local No.338,74 C.L.L.C. 14,207 (B.C.S.C.). Whereas had the arrangement been one of numerous customers asking the trucking firm to deliver mail to the Post Office the relationship with the Post Office would have been quite collateral or secondary.

14. In Airgo Agency Limited, [1982] OLRB Rep. Sept. 1233, the Board, following decisions respecting railway freight forwarders, concluded that the operations of an air freight forwarder were not excluded from provincial jurisdiction. The business in question in that case was much like that of the railway freight forwarders, in that it sold to consignors, at their behest, air cargo space for which it contracted with their carriers. In that case, the respondent employer also acted as agent of airlines in booking air cargo space on their behalf. The Board concluded that the sale of air cargo space and services did not amount to engaging in interprovincial transport or aeronautics, even when the engagement was by the federally regulated supplier of such services rather than by a local customer. The latter activities, the Board held, were analogous to the activities of Intervac in the Wardair case. The Board also noted that the respondent's involvement in customs matters did not alter its status.

15. We noted earlier that in Kuehne & Na gel International Ltd., supra, the B.C. Labour Relations Board found that federal jurisdiction to regulate the customs related activities of customs brokers was an insufficient basis on which to rest a claim that the labour relations of customs brokers was a subject excluded from provincial jurisdiction. In Pacific Customs Brokers Ltd., v. Office & Technical Employees' Union et al., 1980 CanLII 508 (BC SC), [1980] 4 W.W.R. 587, 8OCLLC ¶ 14,022 (B.C.S.C.), the court rejected another customs broker's argument that either the nature or the extent of federal control over the business of a customs broker made it a "creature of Parliament" and brought its labour relations within exclusive federal jurisdiction. The employer there emphasized that the vast majority of importations into Canada were processed by brokers who, in the result, collected from their clients and remitted to federal authorities a significant portion of the tax revenue arising out of importations. It argued on these facts that a customs broker's undertaking is integral and essential to the operation of the federal customs service. The court also rejected this argument, and succinctly characterized the customs brokers' position in the following way:

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.

36. Circumstances of the sort described in paragraph (c) of the Wardairjudgement arose in a telecommunications context in Canada Labour Relations Board et al. v. Paul L'Anglais Inc. et al., (1983) D.L.R. (3d), 1983 CanLII 121 (SCC), 47 N.R. 351 (S.C.C.). There the Canadian Union of Public Employees had applied to the Canada Labour Relations Board for certification with respect to the employees of Paul L'Anglais Inc. and J. P. L. Productions Inc. Both employers were subsidiaries of Tele-Metropole Inc., a television broadcasting business. C.U.P.E. was also seeking a declaration pursuant to section 133 of the Canada Labour Code that the parent company and its two subsidiaries were a single employer. Paul L'Anglais Inc. was in the business of selling sponsored television air time for its parent company and, to a much lesser extent, for other unrelated broadcasters. J.P.L. Productions Inc. was a producer of commercials and of television and other programming, both for its parent company and, to a much lesser extent, for others. Neither subsidiary broadcast programmes or commercials itself. The two subsidiaries objected that neither of them was a business within federal jurisdiction, although the business of their parent admittedly was. The C.L.R.B. ruled that the subsidiaries were within federal jurisdiction, and they then sought judicial review. The question ultimately came before the Supreme Court of Canada. Mr. Justice Chouinard quoted the passages from Montcalm Construction Inc., v. Minimum Wage Commission, supra, and Northern Telecom No. I, supra, cited in paragraphs 29 and 16 of this decision. He then analyzed the businesses in question in the manner described by the B.C. Labour Relations Board in Aero Transfer Co. Ltd., and approved by the Supreme Court in Northern Telecom No. 1. He concluded that the activities in question were not themselves federal in character, and that their link with the operations of Tele-Metropole, the "core" federal undertaking, was not "vital", "essential" or "integral":

……..in my opinion the facts alleged do not show a "vital", "essential" or "integral" relationship between the operation of Tele-Metropole Inc. and those of its subsidiaries.

It was admitted that respondents are subsidiaries of Tele-Metropole, which is their principal, though not their sole, customer, that the Boards of directors of the three companies have certain directors in common and that various services are shared.

The sales which are made by respondents' employees and the programs they produce serve Tele-Metropole. The activities of respondents' employees are conducted on a continuous and regular basis. These facts do not necessarily create the requisite relationship between the respective operations of the businesses. A television broadcasting undertaking may well sell no sponsored air time and produce no programs, yet remain a television broadcasting undertaking. Conversely, an undertaking may sell sponsored air time for another or produce programs which it sells to another undertaking without thereby becoming a television broadcasting undertaking.

It may be asked whether these activities would fall within the field of television broadcasting if they had been undertaken by companies completely unrelated to the parent company. I think the answer to this question is clearly so. Selling sponsored air time and producing programs and commercial messages does not make the seller or producer a television broadcaster. Furthermore, these activities are not indispensable to the TeleMetropole Inc. operation.

The Attorney-General of Quebec wrote, correctly in my view (translation):

In the case at bar we do not contend that no relationship existed between the activities of Tele-Metropole Inc. and those of Paul L'Anglais and J.P.L. Productions Inc., or that the fact that a television broadcasting station has its air time sales company or production company does not constitute a benefit to its operations. We are simply saying that these links with a television broadcasting undertaking do not have the effect of making the undertaking which produces the programs and the undertaking which sells air time component parts of the television broadcasting in all respects. We argue that Paul L'Anglais Inc. and J.P.L. Productions Inc. are not engaged in television broadcasting, but rather in the sale in the one case, and production in the other, of television programming.

(Pages 218 to 219 D.L.R., 376-378 N.R.)

This case clearly illustrates the care with which the words "vital", "essential" or "integral" must be used when examining the relationship between a core federal work or undertaking and a business somehow associated with it, when determining whether the latter is to be regarded as part of the former in the assessment of constitutional jurisdiction over the latter's activities. A commercial television broadcast enterprise might well regard the sale of its air time and the revenue generated by it as "vital", "essential" or "integral" to its continued existence. It might say that the production of commercials and programming must take place or there would be nothing to broadcast, and is therefore equally "vital", "essential" or "integral" to the existence of the federally regulated core activity. The jurisprudence we have reviewed to this point makes it clear, however, that these words are used in a very narrow sense, with special emphasis on the word "integral", and they do not embrace economic or physical essentiality or interdependence as a sufficient condition to the extension of exclusive federal jurisdiction over the labour relations of entities on which a federal undertaking is merely economically or physically dependent.

37. The cases which received the most attention in argument were a series of decisions dealing with constitutional jurisdiction over the labour relations of employees of Northern Telecom and its predecessor companies. The first of these in time was Regina v. Ontario Labour Relations Board ex parte Dunn, supra. There an order of prohibition was sought to prevent the Ontario Labour Relations Board from dealing with an application for certification with respect to employees of Northern Electric at one of its manufacturing plants. On the rather sketchy evidence before the Court, it appeared that Northern Electric was owned almost entirely by the Bell Telephone Company Limited. The plant in question manufactured switching equipment of the sort then used in Bell's central offices and in the offices of subscribers who had private branch exchange systems. Ninety-five per cent of the plant's output was received by Bell, and one hundred per cent of the equipment used by Bell was manufactured by Northern Electric. Chief Justice McRuer rejected the argument that Northern's supplying of equipment essential to the operation of the Bell system resulted in Northern becoming an integral part of or necessarily incidental to the operation of Bell's undertaking:

... The manufacturing of crossbars at the Bramalea plant does not necessarily become an integral part of telephone communication because they are purchased by and used by the Bell company. The process of manufacture could be carried on by any other company, or crossbars could be purchased, no doubt, in many countries of the world if Northern Electric ceased to manufacture them. The fact that a large portion of the output is bought by the Bell company surely cannot determine whether the relationship between the employers and employees of Northern Electric comes under the Dominion Act or the Provincial Act. I do not think the Stevedoring case goes so far as to bring Northern Electric operations at the Bramalca plant within the jurisdiction of the Parliament of Canada.

38. The next in this line of cases is Regina v. Ontario Labour Relations Board, ex parte Northern Electric Co. Ltd. 1970 CanLII 520 (ON HCJ), [1970] 2 O.R. 654, 11 D.L.R. (3d) 640 (Ont. H.C.). There Northern Electric applied for judicial review of a decision of the Ontario Labour Relations Board granting certification with respect to employees of the company in its installation department. Northern Electric's principal customer was Bell Telephone, its parent company. Employees in Northern Electric's installation department were involved in the installation and testing of equipment sold by Northern to Bell. The Court noted at page 661 O.R., 647 D.L.R. that:

Testing of such equipment may be a very simple or a very complex operation depending upon the equipment or system used. Such testing may involve the internal testing of the individual unit installed or it may be on a system, from one point to another, which is known as systems line-up testing. Many of these system line-up tests cross provincial boundaries in the course of testing. This type of test is performed over radio, line or cable depending on the type of system installed. The purpose of such testing is to ensure that the system meets its performance requirements as outlined in the specification requirements.

Northern Electric argued that the OLRB was without jurisdiction over its labour relations with these employees, because they were engaged in an integral part of the operation of an inter-provincial communication network. Mr. Justice Lacourciere found that the systems line-up testing performed by Northern Electric installers involved the operation of an interprovincial communication system. He framed and answered the question before him in this way: (at page

669 O.R., 655 D.L.R.):

Apparently the principal customers of the applicant come within the legislative jurisdiction of Parliament. The difficult question, which is a factual one, is whether the work of systems installations and line-ups, and the extension and updating of the communication networks, is an integral and necessarily incidental part and parcel of the federal customers activities.

There can be no doubt that the telephone, telegraph and telecommunication companies could not function without the initial installations, and their continuous improvement, extension and expansion. With great respect and deference I cannot adopt the distinction made by the Board; it would seem to me that, if a separate stevedoring company whose employees are engaged in the loading and unloading of cargo can be said to be an undertaking forming an integral and necessarily incidental part of a shipping company, afortiori a company whose installers create the operational systems of communication companies must stand in the same relationship. These communication systems could not exist without the creation and installation of these systems.

…..The examiner's report makes it clear that Northern Electric Co. Ltd. enters into contracts for installation work of a large number of general trade privately owned telephone companies across Canada: and it will install not only its own equipment but telecommunication systems or equipment manufactured by other companies such as Marconi, Radio Corporation of America (RCA) and General Electric. It would appear, however, that Bell is still the major customer with its coast to coast microwave network. The relationship between the installation department of Northern Electric Co. Ltd., and the Bell Telephone Co. is such that I must conclude that, on balance, the former forms an integral and necessarily incidental part of the latter.

39. In Re Northern Electric Co. Ltd. and United Steelworkers of America, Local 8001, supra, the Quebec Court of Appeal, in a brief decision, concluded that labour relations between Northern Electric and installers it employed in Quebec to install equipment for Bell Telephone fell within federal jurisdiction. The court's decision says little about what the installers did in the course of their work, and appears to be based on the view that Northern Electric was an alter ego of Bell Telephone and that its employees should be treated, for constitutional purposes, as though they were employed by or as a department or division of the parent company. The result of this decision, as with the result of the above-noted decision of Mr. Justice Lacourciere, was that a provincial labour relations tribunal was found to be without jurisdiction to deal with an application by a trade union to represent employees of Northern Electric. In 1974, the Communications Workers of Canada sought to represent certain employees at Northern Telecom Limited, (formerly Northern Electric Company Limited). No doubt mindful of the earlier court decisions, that union made its application for certification to the Canada Labour Relations Board. Northern Telecom expressly declined to challenge the CLRB's jurisdiction while the matter was before that Board, but did so afterwards before the Federal Court of Appeal and the Supreme Court of Canada. That challenge was dealt with in Northern Telecom No. 1, and it was in that context that Mr. Justice Dickson set out the principles quoted earlier at paragraph 16 of this decision. He noted pointedly and repeatedly that the approach of Northern Telecom before the CLRB had resulted in a record wholly inadequate as a basis on which to so apply those principles as to find reversible error on the part of the CLRB. The court therefore rejected Northern Telecom's challenge to the CLRB's jurisdiction.

40. In 1978, the Communications Workers of Canada and the Canadian Union of Communications Workers both made application to the Canada Labour Relations Board to be certified as bargaining agent for a unit of installers of Northern Telecom. This time, Northern Telecom did challenge that Board's jurisdiction while the application was still before it, and that Board's hearings dealt extensively with the "constitutional facts" necessary to an assessment of that jurisdictional challenge. On the basis of that evidence, the Canada Board concluded that the installers were not employed upon or in connection with a federal work, undertaking or business and that, therefore, it was without jurisdiction to entertain the applications. As this conclusion was contrary to that reached by the Ontario High Court and the Quebec Court of Appeal in the cases cited earlier, the CLRB referred to the Federal Court of Appeal the question whether it had constitutional jurisdiction to entertain the applications. In Re Communications Workers of Canada et al and Northern Telecom Canada Ltd., (1981), 1981 CanLII 4561 (FCA), 123 D.L.R. (3d) 483, that Court concluded, on the facts found by the CLRB, that that Board did have jurisdiction over Northern Telecom's labour relations with its installers. Northern Telecom appealed.

41. When the matter reached the Supreme Court of Canada, a majority of that Court concluded, with some hesitation, that the work of the appellant's installers, and hence their labour relations, fell within federal jurisdiction. Mr. Justice Estey, with whom Justices Ritchie, Mcintyre and Lamer concurred, summarized the facts which led him to that conclusion in the following manner (at p. 180 N.R.):

... The almost complete integration of the installers' daily work routines with the task of establishing and operating the telecommunications network makes the installation work an integral element in the federal works. The installation teams work the great bulk of their time on the premises of the telecommunications network. The broadening, expansion and refurbishment of the network is a joint operation of the staffs of Bell and Telecom. The expansion or replacement of the switching and transmission equipment, vital in itself to the continuous operation of the network, is closely integrated with the communications delivery systems of the network. All of this work consumes a very high percentage of the work done by the installers.

(emphasis added)

Mr. Justice Dickson, as he then was, concurred in the result. He described the installers' work this way:

... The installers have nothing to do with the actual manufacturing of equipment. They never actually work on Telecom premises; they work on the premises of their customers. In respect of Bell Canada, the installation is primarily on Bell Canada's own premises and not on the premises of Bell Canada's customers. The Telecom installers install equipment necessary to the functioning of the general system, not the equipment required by the average user. The installers usually install Telecom equipment, but they are capable of installing, and sometimes do install, equipment manufactured by others. The installers have no real contact with the rest of Telecom's operations.

I agree that the mere fact that installers do on-site testing does not per se mean the installers are operating the federal undertaking. I also agree that the fact installation is a complex procedure is not determinative. I do not, however, agree that installers' work is properly characterized as construction as in Montcalm, supra. The respondent Communication Workers of Canada gives the following analysis of the work of installers:

The overwhelming majority of N.T.C. installation work involves rearranging, updating or adding to the capacity of the existing, operational facilities of the telephone network. N.T.C. installers work in existing operational central offices and radio relay stations, improving the network as the needs of the customers of the telephone company evolve. As such their work is not preliminary to the set-up of the telephone network, but rather part of its ongoing expansion and modernization. In the General Switching Division, at least 80% to 90% of the work done by installers involves rearrangements or additions to existing switching equipment in operational central offices. The same figures apply in the Transmission Installation Division, where installers rearrange, improve or expand the capacity of existing radio relay stations.

This is not construction in the sense in which construction was held to be under provincial jurisdiction in Montcalm. In Montcalm, once the airport was completed, the construction workers would have nothing more to do with the federal undertaking. Bell Canada's operations are much different. The nature of Bell Canada's telecommunications system is that it continually is being renewed, updated, and expanded. Bell's system is highly automated, constantly being improved. It is the installers who perform this task. Although their job is not "maintenance" in the strict sense of the word, I think it is analytically much closer to maintenance than to ordinary construction of a federal undertaking. The installers' work is not preliminary to the operation of Bell Canada's undertaking; the work is an integral part of Bell Canada's operations as a going concern. It was earlier noted the installers have no contact with the rest of Telecom employees. In contrast, they do have contact with, and must closely co-ordinate their work with, Bell Canada employees. In this overall context, installation is not the end of the manufacturing process. It is not even properly described as the beginning of the operation of the federal undertaking. It is simply an essential part of the operations process. The installers' work is not the same kind of participation in the day-to-day operations of the federal undertaking as was present in the Stevedoring case or the Letter Carriers case, supra, in the sense that Telecom installers ordinarily do not directly service users of the federal undertaking. That does not, however, render the installers' work any less vital to the federal undertaking.

Justices Beetz and Chouinard dissented, holding that the installation of components in a federal undertaking remained distinct from the operation of the undertaking:

Because provincial competence is the rule and federal competence is the exception, the onus is on the party who invokes the exception to establish the constitutional facts necessary for the exception to come into play. Failing such a demonstration, exclusive provincial competence must govern.

At best, "the case is nicely balanced" as Le Dam, J., put it in the Federal Court of Appeal. If it be so, then what should tip the balance is not the ongoing or regular character of the work of the installers, which cannot be assimilated to maintenance. Nor is it the fact that the work of the installers is an indispensable requisite to the operation of the federal undertaking, which does not make it part of this operation. What should tip the balance in a "nicely balanced" case is, in my view, the general rule of provincial competence.

42. CTG argued that its product becomes part of Bell's network when installed, just as did the equipment installed by the Northern Telecom installers. It submitted that jurisdiction over its labour relations with its employees must be federal, as with the labour relations of Northern Telecom and its installers, not only because its employees install components of the network, as the Northern Telecom installers did, but also because they maintain that part of the network after it is installed. The applicant noted that CTG was not engaged by Bell, its employees did not spend any of their working time on Bell premises and the equipment they install is not thereafter owned or under the direct control of Bell. It argued that these distinctions from the facts stressed by the Supreme Court of Canada in Northern Telecom No. 2 were material. Counsel for the applicant argued that there was nothing inherently federal about telephones. He noted that the physical works of most telephone companies are wholly situate within a province, and those companies were, in practice, regulated by provincial authorities and not by federal agencies. Counsel for the respondent observed that the de facto exercise of jurisdiction over telephone companies was not determinative of the correct allocation of jurisdiction as a matter of constitutional law, and that the correctness of the defacto regulatory arrangements was a serious outstanding question, citing Hogg, Constitutional Law (The Carswell Company Limited, Toronto (1977)) at pp. 343 and 344.

43. The issue whether there is federal jurisdiction to regulate any aspect of the business of "provincial" telephone companies has been the subject of scholarly analysis in the articles cited by Mr. Justice Dickson in Northern Telecom, supra, at p. 14 D.L.R., pp. 125-126 N.R. (reproduced above at ¶ 16) and in more recent writings: Brait, The Constitutional Jurisdiction To Regulate the Provision of Telephone Services in Canada, 13 Ottawa Law Review 54 (1981); and, Buchann and Johnston, "Telecommunications Regulations and the Constitution: A Lawyer's Perspective" in Telecommunications Regulation and the Constitution (Montreal,' The Institute for Research on Public Policy, 1982). When we heard the parties' oral argument, this question had not been the subject of direct judicial examination. It has since been considered in Alberta Government Telephones v. Canadian Radio-Television and Telecommunications Commission and C.N.C.P. Telecommunications, (F.C.T.D.), 1984 CanLII 5297 (FC), 29 ACWS (2d) 138, a decision of Madam Justice Reed released October 26, 1984.

44. In Alberta Government Telephone v. Canadian Radio Television and Telecommunications Commission et al., ("the AGT case") C.N.C.P. Telecommunications had applied to the C.R.T.C. for an order requiring Albert Government Telephones ("AGT") to permit interchange of telecommunication traffic between its telegraph and telephone systems and those of AGT. AGT applied to the Federal Court Trial Division for a writ of prohibition to prevent CRTC from proceeding with that application. It asserted that the CRTC was without jurisdiction on two grounds: that AGT was a local work or undertaking not within the constitutional jurisdiction of Parliament and that AGT was a provincial crown agent and therefore not bound by the relevant federal legislation. AGT ultimately prevailed on the latter ground. The relevant legislation was not expressly binding on the Crown, either in right of Canada or in right of the Province of Alberta. The Court concluded that, by reason of sections 16 and 28 of the federal Interpretation Act, the relevant legislation could not be interpreted as binding upon the Crown in any of its emanations, including the Crown in right of the Province of Alberta, and could not, therefore, be interpreted as applying to an agency of the Crown in right of the Province of Alberta, as the Court found AGT was. It is implicit in the decision that Parliament could, if it wished, amend the relevant federal legislation so as to bind the Crown in the right of the Province of Alberta and its agencies to the relevant federal legislation. It is for that reason, no doubt, that the decision dwelt at length on the question whether the business of AGT would, by its nature, fall within federal jurisdiction.

45. Madam Justice Reed summarized the facts in AGT as follows:

... the telecommunications facilities of AGT are physically connected to the systems of other telecommunications carriers outside the province of Alberta: by microwave at two places on the Saskatchewan border, at two places on the British Columbia border, at one location on the United States border and at one location on the border with the Northwest Territories, and by buried cable across the borders at various points. In describing this microwave linkage as physical I am using that word in its broadest sense. I am not unmindful of Lord Porter's comments in Attorney General for Ontario v Israel Winner, 1954 CanLII 289 (UK JCPC), [1954] AC. 541 at 574, that to characterize the flow of an electric discharge across the frontier of a province as a physical connection is a fanciful suggestion. However, it is clear from the Supreme Court decision in Capital Cities Communications Inc. v Canadian Radio-Television Commission, 1977 CanLII 12 (SCC), [1978] 2 S.C.R. 141 at 159, that the technology of transmission is not the legislatively significant factor.

AGT takes signals emanating from its subscribers telephone sets and transmits them to points outside Alberta; it takes signals emanating from outside Alberta and transmits them to the intended receiver in Alberta; and in some cases it may transmit signals through Alberta (refer TCTS-Teleglobe agreement, paragraph 6.)

AGT's physical telecommunications facilities not only connect at the borders, there is also a more pervasive integration. The same telephone sets, line, exchanges and microwave networks are used for the provision of local and interprovincial services as well as international ones. It is clear that many AGT employees are involved in the provision of both intraprovincial and extra provincial services without distinction.

On the organizational level there exists an uncorporated entity, TCTS, composed of the various member telecommunications carriers, each having an equal voice. This organization, of which AGT is an integral part, both at the managerial level and seemingly at the staff level, engages in planning for the construction and operation of the overall network which is comprised of each members facilities; sets technical standards; establishes terms and conditions under which telecommunications services will be provided by the members; performs a joint marketing function; determines rates; acts as the pivotal entity for negotiating and implementing agreements for the provision of international services; operates a system of revenue sharing through the TCTS Clearing House.

AGT's argument is summarized in the following passage:

…..there is agreement that AGT's enterprise constitutes an undertaking as that term has been used in section 92(10). The dispute is whether it should be characterized as a local undertaking, or as one "connecting the Province with any other or others of the Provinces, or extending beyond the limits of the Province."

The evidence seems to leave little scope for anything but a conclusion that ACT engages in a significant degree of continuous and regular interprovincial activity, and therefore must be classified as the latter.

ACT's argument that this is not the case focuses on two aspects of its undertaking: (1) its physical facilities do not extend outside the boundaries of the province of Alberta (if one ignores the Lloydminster situation and the spill-over along the border which occurs in the case of the mobile service), and (2) TCTS is not a legal entity — the organizational structure of TCTS is such that each member retains ultimate control over its own telecommunications system, thus the proper characterization of the enterprise is an aggregation of local systems, not an integrated national system.

Madam Justice Reed rejected the first argument because, as the Privy Council noted in Re.' Regulation and Control of Radio Communication in Canada, 1932 CanLII 354 (UK JCPC), [1932] A.C. 304, "'Undertaking' is not a physical thing, but an arrangement under which of course physical things are used" and so the "undertaking" may extend beyond the physical works used in it. She also noted that, as the Supreme Court of Canada has said in The Public Service Board et al v Dionne et al, 1977 CanLII 207 (SCC), [1978] 2 S.C.R. 191 (at 197), ". . .the inquiry must be as to the service that is provided and not simply as to the means through which it is carried on." Focusing on the nature of the enterprise itself, Madam Justice Reed observed that AGT offered its customers international and interprovincial telecommunication services, as well as local services, using the same physical facilities without discrimination. In determining what the undertaking of AGT was, it was impossible to ignore AGT's role as one of the ten telecommunications carriers comprising the Trans Canada Telephone System, now Telecom Canada. That involvement was pivotal in the determination at which Madam Justice Reed arrived:

This then brings us to AGT's second argument. It argues that the second requisite element for the finding of an interprovincial undertaking (what I will call sufficient organization interconnection) is not present. To paraphrase the argument: TCTS is not a legal entity and thus cannot be said to provide services to anyone; the contracting parties provide services to their own customers in their own systems and interchange traffic with other carriers; that is so even though, for commercial or public relations reasons, ACT has chosen to represent itself (in conjunction with other telecommunications undertakings) as jointly operating a national telecommunications network; and while the parties have agreed to unanimously agree, they retain ultimate control over their own telecommunications systems.

I do not find this argument convincing. It seems to me it gives too much importance to the niceties of legal structure rather than focusing on the realities of the situation. Implicit in the argument is an admission that if TCTS were an incorporated organization it would clearly be an interprovincial undertaking. This is too fine a legal distinction on which to base what is really a factual determination. I note that in [Northern Telecom Ltd. v. Communications Workers of Canada et al, 19801 1979 CanLII 3 (SCC), 1 S.C.R. 115,132-3 the Supreme Court quoted from the British Columbia Labour Relations Board decision in Arrow Transfer Co. Ltd. [1974] 1 Can. L.R.B.R. 29:

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.

The issue in those cases was, of course, whether the respective enterprises were extra provincial so as to fall within federal labour relations jurisdiction.

In my view, the existence of TCTS, and ACT's participation in it, demonstrates the common and joint telecommunications enterprise which exists. It demonstrates that ACT operates its telecommunications undertaking as an interprovincial undertaking and not as one merely local in nature. Also, as a legal proposition ACT may retain control over its own facilities; but as a practical reality it could not separate itself from the joint TCTS enterprise without destroying its telecommunications system in its present form. The fact that unanimous agreement is required by TCTS members should not disguise the constraints, the existence of the integrated system and the interdependence of the members will impose.

Repeated reference was made to the fact that the federal Parliament and government have never attempted, during the 80 years or so during which telephone systems have grown up, to regulate ACT. Bell Canada, which operates in Ontario and Quebec and which has been declared pursuant to section 92(1 0)(c) to be a work for the general advantage of Canada, has been federally regulated; so has the British Columbia Telephone Company (also the subject of a section 92(1 0)(c) declaration) and CN with respect to its "Northwest Telephone system". Telesat Canada is, of course, federally regulated. The fact that constitutional jurisdiction remains unexercised for long periods of time or is improperly exercised for a long period of time, however, does not mean that there is thereby created some sort of constitutional squatters rights. (refer: Attorney General of Manitoba v Forest, 1979 CanLII 242 (SCC), [1979] 2 SCR. 1032 for a case in which unconstitutional action had remained unchallenged for ninety years.)

I conclude, therefore, that ACT is a non-local undertaking as described in section 92(l0)(a) of the Constitution Act, 1867.

(emphasis added)

46. As the question of federal jurisdiction to regulate "provincial" telephone companies had been addressed in the argument before us, we directed the Registrar to write to counsel and invite them to provide written submissions concerning the relevance of the AGT decision to the circumstances of the case before us. Both counsel responded to the invitation. The respondent argued that the AGT decision supported its position, both as to the result and the reasoning which should lead to the result, and that the undertaking of the respondent was entirely analogous to the undertaking of Alberta Government Telephones. The reach of the latter submission can be seen in this extract from the respondent's written argument:

While it is true that the physical facilities which are installed, maintained and repaired by the Respondent are located at the customers' operations, as the AG Tease demonstrates, what is important is that it is an undertaking which connects the province with any other or others. That is to say that Respondent, like the ACT, offers to its customers local, interprovincial and international telecommunications services. Moreover, the system which is installed, maintained and upgraded by the respondent controls the way in which the respondent's customers utilize the Bell Network and the facilities of other TCTS members.

Counsel for the applicant argued that the importance of the AGT decision lies in the emphasis it places on the nature of the enterprise in question; he submitted that CTG's enterprise is much different from that of Alberta Government Telephones.

47. Before considering the specific applicability of the AGT decision, we will examine first the general argument that CTG's labour relations must be within federal jurisdiction because CTG's operations form an integral part of the operation of Bell Canada's telephone network. Analysis of this argument should proceed on the course identified by the B.C. Labour Relations Board in Arrow Transfer Co. Ltd., and approved by the Supreme Court of Canada in Northern Telecom No. 1. As in the Northern Telecom cases, any core federal undertaking must be found within "the telephone and telecommunications system". There are various descriptions of telephone systems in the court decisions and articles referred to earlier in this decision. Hardly any of the testimony in this case focused on the nature of Bell Canada's works and undertaking, however. Armed only with that testimony, we would understand no more about the telephone network than the average Bell subscriber does, and that may be succinctly stated this way: if I tell the telephone system who I want to speak to, it will (usually) connect me with that person and carry our signals back and forth between us until one of us tells the system to stop. The average user does not know, and we do not know from the testimony before us, how the network actually makes, maintains and breaks connections between one user and another. What average users see, and what the testimony before us focused on, are the terminal devices used to signal user requirements to the network, convert user signals to the form required by the network and convert signals carried to him by the network back into a form intelligible to the user. It is, perhaps, some measure of the relationship between CTG and Bell that counsel considered it unnecessary for us to know anything about Bell's core federal undertaking.

48. Before the CRTC's interim decision in 1980, the telephone user's connection to the telephone company's network was, usually, mechanical and acoustic. The telephone handset represented the terminus of the network from the perspective of the user. He would signal his needs to the network mechanically, by "dialing" (which today often involves pushing buttons), or acoustically, by speaking to the operator. Once the requested connection with another user was made, the interface with the network was typically acoustic — the user sent and received audio signals through the mouth and ear pieces of the handset. The function of the handset and any associated PBX equipment was and is to convert the acoustic and mechanical signals of the user into electrical signals which travel from the user's premises over telephone lines to the local telephone exchange office, whence they are retransmitted in whatever form and by whatever means may be appropriate to the nature of the communication.

49. In its interim decision in 1980, and its final decision in 1982, the C.R.T.C. "unbundled" the provision of terminal equipment from the provision of telephone network services. The electrical signal received by the network over the local loop may now be generated either by a handset or other equipment provided by the telephone company or by functionally compatible equipment supplied by the user. CTG argues that user-supplied equipment remains part of the network for the purpose of constitutional analysis, and for that proposition depends heavily on the emphasized portionsof the following passage from the decision of the Federal Court of Appeal in Northern Telecom No. 2, at pp. 487-488 (D.L.R.), where Chief Justice Jackett described what he understood to be the core federal undertaking in that case:

The object of the undertaking is to transmit messages for subscribers for a fee or toll. But the undertaking is not confined to that. In order to provide the service telephones with lines to them must be installed in subscribers' premises. Bell's undertaking includes that. It is not unheard of for telephone companies to charge for that service. The work is mostly done by Bell's own technicians and no one questions that both installations and removals and repairs to keep the telephones in operation are part of the Bell undertaking. Telephone lines must also be installed to connect subscribers' premises to Bell's central exchanges where a subscriber's call is switched to the line of the subscriber who is being called. Such work is also carried out by Bell and again no one questions that it is part of Bell's telecommunications undertaking.

The system also requires the installation of equipment for Bell's central exchanges. It requires as well, on a continuing basis, the maintenance, renewal, rearrangement, addition to and updating of such equipment as it becomes necessary to meet the expanding demands of a growing population of subscribers and to keep the system abreast of technical developments in the telecommunications field. The day to day maintenance of such central exchange equipment is, as I understand it, generally carried out by Bell technical personnel. However, in general, the installation of additional and renewal equipment as well as the rearranging and updating of existing equipment is done by Telecom Canada installers. The installation, rearrangement and improvement and the expansion of the capacity of microwave radio transmitting equipment for Bell in relay stations, to perform the function of and eliminate the need for long distance cables, is also carried out by Telecom Canada installers.

Bell's policy with respect to the provision of new or additional switching and transmission equipment is to have it installed and ready for operation, as nearly as possible, just in time to meet the forecast requirement for it.

So much for what is referred to as the core federal undertaking. In my view, it includes not only the transmission of messages for customers but as well the installation of telephones, transmission equipment and exchanges necessary to provide the service.

(emphasis added)

The issue now before us could not have arisen in 1979, when the facts in Northern Telecom No. 2 were heard by the CLRB, because then only network carriers normally supplied their customers' telephones and PBX equipment. The C.R.T.C.'s interim decision came some months after the CLRB decision. Nothing in the Federal Court of Appeal judgment suggests that it considered the C.R.T.C.'s decision and its implications when describing Bell Canada's activities in the paragraph in question. It was not necessary in that case to determine whether the telephone network could be considered to extend beyond the physical facilities and equipment provided and controlled by Bell Canada to equipment or persons which a telephone user may attach to Bell's lines or equipment, since the installers worked on Bell equipment on Bell's premises at the behest of Bell.

50. We do not regard the decisions in Northern Telecom No. 2 as determining that customer provided terminal equipment itself must be considered an integral part of the Bell telephone network for the purpose of determining whether federal regulatory authority extends to the labour relations of persons engaged in the installation and maintenance of customer provided terminal equipment. Bell still rents telephone terminal equipment to those who rent its telephone network services. We have no difficulty with the proposition that Bell's labour relations with those of its employees engaged in the installation and maintenance of the terminal equipment it rents still fall within federal jurisdiction, because of the nature of the balance of Bell's undertaking. The cases reviewed earlier illustrate that that fact is not determinative of the question whether the performance of these tasks by others not engaged by Bell would bring their labour relations similarly within federal jurisdiction. In our view, the core federal undertaking here is the transmission of messages from one user to another, just as the core federal undertaking of a railway is the carriage of people and freight by rail from one point to another. Telephone terminal devices convert the user's audio signals into electrical ones, so that — to extend the analogy — they can be "loaded" onto the network. In this regard, the relation of the terminal equipment to the network may be analogized with the relation to a railway of those who load freight into box cars. The Cannett and Cottrell cases make it clear that such workers fall within federal jurisdiction for labour relations purposes only if they are part of the railway's work force and not if they are employed by the railway's customers or by a broker interposed between the railway and its customer. We have focused on the equipment in this part of our analysis because that was the focus of a good deal of the argument. Of course, that approach does not focus directly as it should, on the nature of the putative "secondary operation" itself and its relationship to the core federal undertaking.

51. Bell's telephone network is unquestionably an interprovincial undertaking, subject in all aspects to federal regulation. Of course, not every entity which comes into contact in some way with a federal undertaking will become subject to exclusive federal jurisdiction over every aspect of its business. Telephones are ubiquitous. It is difficult to think of an enterprise which does not make use, as a customer, of the services of Bell Canada or another telephone company offering similar services. It might be said that telephone company customers "operate" the telephone network when they use it. Use of the telephone does not result in the customer becoming subject to exclusive federal regulation of those aspects of its enterprise which would otherwise fall within provincial jurisdiction. It makes no difference whether the calls placed by the user are local or long distance ones. When a telephone user speaks to another user in another province or country, he and the other user do not thereby become federal works or undertakings or necessarily integral parts thereof. The interprovincial or international undertaking continues to be that of the telecommunications carrier or carriers involved in providing the communications link, and not that of the users themselves. As a practical matter, inter-provincial and international telephone networks would not function without customers making them function. Indeed, as they have a commercial aspect to them, the networks might cease to exist in a real sense if there were no customers for these services. Telephone users and customers may be commercially "essential" to the existence of interprovincial and international telephone networks, but that does not result in telephone users being treated as part of the telephone network in assessing the constitutional division of legislative authority over the labour relations of those customers. The decision in Paul L'Anglais Inc. is clearly inconsistent with the proposition that economic essentiality to the core federal undertaking is sufficient justification for federal jurisdiction over a secondary enterprise. Of course, telephone company customers may be subject to federal regulation for reasons quite interdependent of their use of the telephone. The mere fact that a customer carries on business in more than one province, however, would not alone cause that result, nor would the result be different if employees of the enterprise at one of its locations regularly spoke to fellow employees in another province by telephone. The fact that the telephone company's customer is "connected" to the Bell network and "operates" it on a regular basis does not make the customer part of the network for constitutional law purposes.

52. It is important to an assessment of CTG's undertaking in relation to Bell's to recognize that CTG acts throughout at the behest of a Bell customer, not at the behest of Bell. It deals with Bell as agent for their shared customer, not as principal. As agent for the Bell customer, CTG seeks and obtains from Bell only what the customer could seek and obtain, and it does and is permitted to do no more than the customer is permitted to do itself. The CRTC has said that a Bell customer may attach equipment to Bell's network if it enters into a particular contract with Bell. As with any other commercial contract, performance of the one between the customer and Bell requires some coordination between the two of them. CTG takes over that coordination function from the customer, but that does not change the nature of that function. It is the coordination involved in carrying out a commercial arrangement. It does not have the result that the "broadening, expansion and refurbishment of the network" becomes a "joint operation" of the staffs of Bell and CTG, any more than those activities could be described as a joint operation of the staffs of Bell and its customers. The respondent emphasized the fact that CTG tests Bell's lines after a new installation is cut over. Indeed, there was a reference to testing new systems over Bell circuits which crossed the provincial boundary between Ontario and Quebec. Nothing in the evidence suggests that the latter activity had been anything more than "casual" in the sense intended by Mr. Justice Beetz in the latter part of the first of the passages from Montcalm Construction Inc., quoted in paragraph 29. More importantly, however, it cannot be said that such testing amounts to operating the network in the sense Mr. Justice Lacourciere meant when describing the operations of Northern Electric installers in R. v. OLRB ex parte Northern Electric Co. Ltd., supra. CTG does not test the lines for Bell, either as part of an engagement by Bell or to check work it has performed on behalf of Bell. The tests conducted by CTG over Bell's lines serve two other purposes. One is to test, in operation, the system CTG has installed for its customer. To the extent the test is concerned with the Bell line itself, the other purpose of the test, a test made on behalf of CTG's customer, is to ensure that the customer is getting what it has bargained for from Bell. Interprovincial or otherwise, these tests do not make CTG the operator of Bell's network so as to bring it within the scope of Mr. Justice Lacourciere's analysis, as the respondent argued they do, even assuming, in the face of Mr. Justice Dickson's analysis in Northern Telecom No. 2, that testing of any kind should be given the weight Mr. Justice Lacourciere gave it in his 1970 decision. There is not here the functional integration between Bell and CTG operations which existed between Bell and Northern Telecom in Northern Telecom No. 2. CTG does not perform work for Bell or on Bell's premises. The equipment on which it works is the equipment by means of which Bell's customers access the Bell network, not the network switching or transmission equipment employed in the core of Bell's federal undertaking.

53. In our view, CTG's activities do not make it a functionally integrated part of the Bell telephone network; it is in the same position as the various brokers, intermediaries, agents and independent producers with which the courts were concerned in Paul L'Anglais Inc., Cottrell, Cannett, Wardair and the other cases reviewed earlier. CTG and the services it performs simply do not have the same relationship to the core federal undertaking here as the services of the stevedores did to the core undertaking in the Stevedoring case, supra. There Eastern Canada Stevedoring Co. Ltd. entered into contracts with ship operators to supply stevedores to load and unload their ships at the port of Toronto (among others). The Court found that such work was historically the work of a ship's crew. Even when performed by a land based crew of stevedores, by merchantile custom the work was regarded as the responsibility of the shipowner or charterer, rather than of the cargo owner, and was carried on under the direction of the ship's Master. In fact, the stevedores in question performed their work under the direct supervision of ships' officers using ship equipment, and their work was paid for by shipowners or charterers. A majority of the Court concluded that these activities were an essential part of "navigation and shipping", a class of subjects over which jurisdiction was and is expressly conferred on Parliament by s.91(l0) of the Constitution Act, 1867 (formerly the BNA Act). The Court held that the enterprise of supplying stevedores in these circumstances fell within federal jurisdiction. On the facts of the case the loading and unloading could easily be described as a joint operation of the ship and stevedoring crews and their respective employers. It is not difficult to see why that case is put in the category described in the passage from (a) of the Federal Court of Appeal analysis in Wardair reproduced in paragraph 30. We feel that the installation and maintenance of telephone terminal equipment falls within the class of activities described in paragraph (c) of that analysis. CTG's operations are not "vital", "essential" or "integral" to those of Bell Canada's core federal undertaking. Whether or not there are aspects of CTG's enterprise which may be the subject of federal regulation, federal jurisdiction over CTG's labour relations is not an integral part of primary federal competence over some other federal subject. In our view, CTG's participation in the interconnect business does not immunize it from the application of provincial labour relations legislation.

54. The reasoning and result in the AGT case do not alter our conclusion that CTG's labour relations fall within provincial jurisdiction. We reject the argument that CTG's operations must be considered a federal undertaking because they are indistinguishable from those of AGT. The distinctions between the two operations are numerous, and significant. One significant distinction is that CTG does not sell message transmission services, it only supplies the means of enjoying the services made available by others. Despite the claim of counsel for the respondent in his written argument, CTG does not "operate" a telephone network or offer local or long distance telephone services of any kind. Moreover, CTG does not resell services contracted for by it with telecommunications carriers, nor does it act as agent for any such carriers. Its customers obtain telephone message transmission services directly from the telephone company and are billed by the telephone company directly for those services. AGT offered to transmit long distance messages, participated in the transmission of such messages and contracted, for its own account, with the other carriers whose facilities were needed to complete such calls. In AGT, the core federal undertaking was that of TCTS. AGT was an integral part of TCTS, and AGT's switching and transmission facilities were an integral part of the undertaking of TCTS. The Court found the functional identity of AGT submerged in a larger venture of TCTS, in which AGT was an active joint venturer. CTG's relationship with Bell cannot be described as a joint venture in any sense. In short, the undertaking of CTG is not the subject of exclusive federal legislative jurisdiction on any ground. We conclude that this Board does have jurisdiction to deal with the labour relations between CTG and any of the employees affected by this application.

COMPOSITION OF THE APPROPRIATE BARGAINING UNIT

55. As we have determined that we do have jurisdiction to entertain this application, and as the panel before whom this application was first returnable determined that the applicant is a trade union within the meaning of section 1(1 )(p) of the Labour Relations Act, the next question with which we must deal is the composition of the appropriate bargaining unit. That issue arises out of the provisions of subsection 6(1) of the Act, which reads as follows:

6.-(1) Subject to subsection (2), upon an application for certification, the Board shall determine the unit of employees that is appropriate for collective bargaining, but in every case the unit shall consist of more than one employee and the Board may, before determining the unit, conduct a vote of any of the employees of the employer for the purpose of ascertaining the wishes of the employees as to the appropriateness of the unit.

The countervailing factors which must be balanced in making the required determination were described in Canadian General Electric Company Limited, [1979] OLRB Rep. Mar. 169 at paragraphs 6, 8 and 9:

6. The Board's primary concern in evaluating the appropriateness of a suggested bargaining unit is that the unit represent a viable collective bargaining entity. In assessing the suitability of a proposed unit, the Board is generally guided by two counter-balancing concerns. Firstly, having regard to the proposed unit itself, the Board looks to whether the employees involved share a sufficient community of interest to constitute a cohesive group which will be able to bargain effectively together. Secondly, looking to the employer's operation as a whole, the Board assesses whether the proposed unit is sufficiently broad to avoid excessive fragmentation of the collective bargaining framework. A proliferation of bargaining units is not normally conducive to collective bargaining stability. Not only may it place significant strains on an employer who would be required to bargain with each group, but also it may hamper the employees' ability to bargain effectively with the employer. Under the umbrella of these two guiding principles, the Board seeks to give effect to an equally important concern: the freedom of association guaranteed to employees in section 3 of the Act. As with all freedoms, the principle of freedom of association is not unbridled and must be blended with the Board's responsibility to establish an effective collective bargaining structure. The Board seeks to balance its respect for an employee's right to associate freely on the one hand with its responsibility to establish durable collective bargaining entity on the other by requiring that a proposed bargaining unit be the unit appropriate for collective bargaining but not going so far as to insist that it be the most appropriate unit (see Parnell Foods Limited, [1969] OLRB Rep. April 38; The Board of Education for the City of Toronto, [1970] OLRB Rep. July 430; Wellesley Hospital, [1974] OLRB Rep. Jan. 55 and Livingston Transportation Limited, [1975] OLRB Rep. July 568).

7. As a general principle bargaining units limited to a particular department or a particular classification are not considered appropriate by the Board (see The Corporation of the City of Barrie, [1974] OLRB Rep. Nov. 813). There are innumerable cases where because of its aversion of fragmentation the Board has refused to recognize as appropriate a unit containing only a small segment of employees within an employer's overall operation. In the Board of Health of the York-Oshawa District Health Unit, [1969] OLRB Rep. June 340, for example, the Board stated that it would not fragment the respondent's technical employees because "to do so would create a collective bargaining situation where the respondent would be required to deal separately with clerical employees, public health inspectors, registered nursing assistants and dental hygienists." (p. 341). In Waterloo County Health Unit, [1969] OLRB Rep. Jan. 1016 the Board refused to certify the applicant for a unit composed of public health inspectors when there were other persons including dental hygienists in the health unit. Similarly, in McMaster University, [1973] OLRB Rep. Feb. 102, the Board refused to allow the applicant to carve out from the University all non-professional library employees and indicated that the appropriate unit would be all clerical, technical and office employees of the university. As well in The Regional Municipality of York, [1971] OLRB Rep. June 316 the Board denied the applicant's proposed bargaining unit of employees in the survey section of the engineering department when there were six additional branches of the engineering department (see also The Corporation of the Township of Markham, [1969] OLRB Rep. Aug. 592 and The Board of Education for the Borough of North York, [1970] OLRB Rep. Dec. 915). In cases where the Board has certified a segregated group of employees, it has generally been satisfied that the segment in question constituted a recognizable, cohesive group functioning as an independent entity. (see Ex-Cell-O Corporation of Canada, Limited, [1974] OLRB Rep. Aug. 543; The Governors of the University of Toronto, [1969] OLRB Rep. Feb. 1149, and University of Western Ontario, [1972] OLRB Rep. Dec. 1038).

8. The exercise of highly specialized skills by employees in a proposed bargaining unit, moreover, does not by itself establish that those employees form an appropriate bargaining unit. In Stratford General Hospital, [1976] OLRB Rep. Sept. 459, for example, the Board refused to recognize as appropriate a unit encompassing paramedicals employed in a professional capacity and declared instead that the unit appropriate for collective bargaining was one that would include paramedicals employed in both a technical and professional capacity thereby bringing together in one unit occupations such as psychologists, social workers, pharmacists, physiotherapists, radiological technicians and respiratory technologists. The Board was of the view that these two groups did not function independently of one another in that all the occupations in question were integrally related to the medical treatment process. The Board concluded that the group shared a functional interdependence because the paramedicals employed in a professional capacity regularly relied on information and analysis provided by the other paramedical occupations. To break the group along a technical/professional line would have, in the Board's view, caused undue fragmentation in the hospital.

(See also Canada Trustco Mortgage Company, [1977] OLRB Rep. June 330 and decisions cited therein.)

56. The determination of the appropriate bargaining unit in a certification application depends on the application of the Board's general principles to the facts of the particular case. Often the application is guided by the Board's experience with certification applications and their results in like or analogous enterprises or institutions. This is the first application in which this Board has had to consider the labour relations of an employer in the "interconnect" business. The relevant characteristics of that business are quite different from those of a typical manufacturing operation, health care institution, construction company, educational institution or municipal corporation, to mention some examples of enterprises in respect of which the Board has had many opportunities to struggle with the definition of units of employees appropriate for collective bargaining. This is a case of first impression, one to which the experience acquired in applying general principles in other cases can only be applied with care and caution.

57. While a case of first impression, this is not one in which the bargaining unit issue is entirely at large. Both of the parties addressed the question when this application was first filed. In its application, the applicant sought a unit defined as:

all employees of the respondent located in Metropolitan Toronto, save and except office employees, sales staff and others excluded by the Ontario Labour Relations Act.

The applicant estimated there would be approximately 35 employees in the unit so described. In its Reply, the respondent stated that the number of employees in the unit described by the applicant would be 60, and proposed that the bargaining unit be described as:

all employees of the Respondent working in and out of Metropolitan Toronto save and except Supervisors, Managers, persons above the rank of Supervisor or Manager, sales staff, office staff, persons regularly employed for not more than twenty-four (24) hours per week and students employed during the school vacation period.

Note: The term "Supervisor" as used herein does not include Project Supervisors. Project Supervisors are included in the bargaining unit.

As we noted at the beginning of this decision, the parties were able to agree on the following description of the appropriate bargaining unit, although they could not agree on its composition:

All employees of the respondent in Metropolitan Toronto, save and except supervisors, managers, persons above the rank of supervisor or manager, sales staff, office staff, persons regularly employed for not more than twenty-four (24) hours per week, and students employed during the school vacation period.

Clarity Note:

The term 'supervisor' as used herein does not include project supervisors. Project supervisors are included in the bargaining unit.

A description of this sort is often found appropriate, and most easily applied, in the typical manufacturing operation in which "blue-collar" workers toil in a plant physically and organizationally separate and apart from the body of "white-collar" workers who sell the products and perform the clerical and administrative functions associated with both plant and sales operations but who take no active part in the creation of the product sold. The parties' agreement in this case can be taken as a recognition that workers involved primarily in production of the employer's "product" may have a community of interest sufficiently distinct from those engaged in sales and administration that the production workers themselves can form an appropriate bargaining unit. The parties' disagreements, which we will outline later, reflect the difficulty of maintaining a distinction between "production" functions on the one hand, and "office" functions on the other, when the organization and nature of the enterprise depart from the mid-century industrial model. Indeed, it is worth observing at this point that this distinction is not one which is always found desirable, even if possible, when defining bargaining units. As the Board noted in K-Mart Limited, [1981] OLRB Rep. Oct. 1410 at paragraph 24:

... In applications for certification which are made with respect to manufacturing operations, there is usually a clear line of demarcation between the functions and community of interest of production and maintenance workers on the one hand and office workers on the other hand. In such manufacturing operations, production and maintenance employees are included in one appropriate bargaining unit and office or office and sales employees are included in another appropriate bargaining unit. In sales and service operations these lines of demarcation are less clear than they are in manufacturing operations. For example, in Leon's Furniture Limited, [1976] OLRB Rep. May 232, the Board included office, clerical and sales employees in one bargaining unit in a retail furniture outlet; and in Jewish Vocational Service of Metropolitan Toronto, [1977] OLRB Rep. Nov. 754, the Board included office and clerical workers, technical workers and professional workers in one bargaining unit in an organization engaged in social services.

Even in the face of a startling disagreement over the number of employees it encompassed, the parties were able to adopt a description which distinguishes between production workers on the one hand and office and sales workers on the other. The parties' major disagreements were over the application of this distinction to particular job categories. We have adopted this distinction in resolving the differences between the parties over the composition of the appropriate bargaining unit. Much of the factual context in which those differences must be resolved has already been set out in our earlier description of the respondent's operations. Some elaboration of that description will, however, be necessary.

58. On the date of this application, the respondent operated at two locations in the City of Toronto: 49 Bathurst Street and 146 Front Street. CTG's operations department had employees at both locations, and they were organized into smaller sub-departments which we will call "sections". The senior managerial person at 49 Bathurst Street was Rick Wood, the Toronto area operations manager. Three other admittedly managerial employees worked at that location and reported to Mr. Wood: Janet Gordon, assistant operations manager and supervisor of the installation section; Terry McAloon, supervisor of the "moves, adds and changes" section; and, Wentworth Small, supervisor of the repair and service section. Under his direct supervision, Mr. Small had a dispatcher, a clerk-typist/dispatcher and more than a dozen "technicians". Both the applicant and respondent agree that all these employees fall within the agreed bargaining unit description. A further group of technicians, and another dispatcher, reported directly to Mr. McAloon in the moves, adds and changes section. Again, the applicant and respondent agree that those technicians and dispatcher fall within the bargaining unit description to which they have agreed. A further group of technicians, 8 "project supervisors" and 6 "designers" reported to the assistant operations manager, Janet Gordon.

The applicant and respondent agree that the project supervisors and technicians fall within the agreed bargaining unit description. The respondent takes the position that the designers do also; the applicant trade union says they do not, arguing that their community of interest lies more with the "office staff' whom the parties have agreed to exclude. The parties also agree that an employee described as "equipment co-ordinator", and a further employee classified by the respondent as "receptionist/clerk typist", loth of whom also work at 49 Bathurst Street, would be included in the bargaining unit. There are two further employees located at 49 Bathurst Street; their inclusion is a matter of dispute. One is the operations co-ordinator, Carolyn Dunn, who reported to Mr. Wood. The other is Rainy O'Halloran, the service contract administrator, whom the respondent's organizational chart showed as reporting directly to the Director of Operations, Mr. Murphy, at 146 Front Street. The applicant argues that these two employees do not share a community of interest with the employees admittedly in the bargaining unit.

59. The customer service representatives, Telco coordinators and technical support representatives referred to earlier in this decision all work at or out of the respondent's offices at 146 Front Street. The first line manager (from the perspective of section l(3)(b) of the Act) for the customer service representatives and Telco coordinators is the manager of the customer services section. The technical support representatives are under the managerial supervision of the manager of the technical support section. Both managers reported to Mr. Murphy at the time of the application. With the exception of the managers mentioned, the respondent says that each of these groups of employees would be included in the bargaining unit, and the applicant disputes that claim. The respondent claims that one other employee at 146 Front Street would fall within the bargaining unit: Sandra Walter, who is classified as "special assignment", a category not mentioned in our earlier description of the respondent's operations. Sandra Walter has special expertise with respect to equipment described in the evidence as the I.T.T. 3100. Mr. Murphy described Ms. Walter as "a TSR, CSR, designer, project supervisor and a technician" in relation to the I.T.T. 3100, in the sense that she performs the functions of all of those job classifications on projects which involve that item of equipment.

60. The employees admittedly in the unit and the employees disputed by the applicant are all employed in the operations department which was, at the time of the application, under the ultimate management of the Director of Operations. Employees classified as "technician" or "equipment co-ordinator" were paid on the basis of an hourly wage. The other employees, including the dispatchers, receptionist/clerk typist and project supervisors, were all paid on the basis of a monthly salary. Whether salaried or hourly rated, the terms and conditions of employment of these employees were similar in other areas, such as vacations, sick benefits, paid holidays and so on. It is apparent that CTG has employees outside the operattons department who could be described as "office" staff. There is very little evidence about what they do. One would expect in any organization to find employees engaged, for example, in accounts receivable, accounts payable, payroll and other accounting functions. None of the job functions in dispute involves those activities. However limited the evidence of interchange between the disputed job functions and job functions admittedly within the bargaining unit, there is no evidence of interchange of employees between disputed job functions and "office" functions.

61. The applicant's primary argument was that technicians had a distinct community of interest because of their orientation to the hardware aspects of CTG's business. The applicant argued that these employees, together with employees who work closely with them, such as dispatchers and project supervisors, would form an appropriate bargaining unit. The applicant sought to draw the line between project supervisors on the one hand and designers and customer service representatives on the other on the basis that project supervisors had a greater "hardware" orientation than employees in the other two classifications. We are not prepared to adopt that approach. We can see no good reason why members of CTG's installation teams should be divided into separate bargaining units on the basis of whether the individual employee's focus is more on "hardware" than "software" or vice versa. The evidence suggests that the distinction would not be easy to draw, because hardware and software are functionally integrated in CTG's product, just as hardware oriented employees and software oriented employees are functionally integrated in the production and delivery of that product. Designers, for example, work out of the same premises and share the same immediate supervisor as the project supervisors and technicians. In our view, it would be inappropriate and excessively fragmentary to draw unit boundaries which separate the designers from the project supervisors and technicians with whom they work.

62. The applicant's "fall back" or alternate position on the appropriate bargaining unit dealt with the possibility that designers would be included in a unit with project supervisors, technicians and dispatchers. The applicant recognized and conceded that the job functions and interest of designers and CSRs were so similar that CSRs would also fall within the unit if designers did. The applicant argued, however, that the operations co-ordinator and service contract administrator at 49 Bathurst Street and the special assignment person, Telco co-ordinators and technical support representatives at 146 Front Street would all be excluded from a unit which would otherwise include the customer service representatives at 146 Front Street and all of the other employees at 49 Bathurst Street. The applicant did not suggest that the bargaining unit boundary should be struck so as to include only employees at one location or another. Telco co-ordinators share common supervision with CSRs. Their job functions are similar in some ways to those of CSRs and designers. There is a direct link between the work they do and the work of the repair and "moves, adds and changes" technicians. Again, we can see little reason to exclude them from a bargaining unit which includes the others with which we have dealt to this point, and to fail to include them would risk undue fragmentation of bargaining. Having brought the analysis to that point, then, we are unable to see why the operations co-ordinator, service contractor or special assignment person should fall outside of the bargaining unit when their jobs merely involve a different mix of functions similar to those performed by the others in the unit. When one approaches the matter from the perspective that CTG's "product" is a bundle of goods and services, and that the services are of a continuing nature, it is not difficult to say that all of these job functions relate more to "production" than they do either to "sales" or to the traditional sort of administrative or office functions performed by the excluded "sales staff' and "office staff'.

63. That leaves for consideration the technical support representatives. The applicant argued that these employees should be excluded from the unit because their interest lay more with the sales personnel with whom they work. Counsel for the applicant emphasized the fact that until shortly before the application date these employees had in fact been part of the sales department and not the operations department. Even within the operations department, they share supervision with the others only at the level of the Director of Operations; organizationally, although they are physically located at 146 Front Street, they are grouped with the engineering department otherwise located in Mississauga.

64. The position of the technical support representatives is certainly close to the line. However, there is no suggestion that they were moved from the sales department to the operations department in anticipation of union organizing or for some reason unrelated to their function within the organization. To the extent that "orientation" plays any part in resolving a bargaining unit issue, the undisputed evidence is that technical support representatives would, or at least should, have an operations department orientation rather than a sales department orientation. From the point of view of function, they can as easily be grouped with operations as they can with sales. Their training is closer to that of operations personnel. They would not constitute a viable bargaining unit on their own, so the question becomes whether it makes more sense to group them with the operations department than it would to group them with the sales department. We think the balance tilts sufficiently in favour of the latter that it would be inappropriate to exclude them from the bargaining unit by treating them as "sales staff' or ''office staff' in the application of the agreed bargaining unit definition.

65. In summary, then, we accept the agreed description, and find that a bargaining unit so described would include not only the employees on which the parties agree, but also the customer service representatives, technical support representatives, design representatives and Telco co-ordinators specifically named in paragraph 1 of the report of the Board Officers, as well as the operations co-ordinator, service contract administrator and special assignment person referred to by name in paragraph 2 of the Officers' report.

66. The parties were also in dispute as to whether a technician named Norm Nicholson would fall within the bargaining unit for the purpose of the count. In the period prior to the application date, Mr. Nicholson spent most of his time outside of the Municipality of Metropolitan Toronto. He worked out of premises in Whitby. His job instructions came from the dispatcher and supervisor at 49 Bathurst Street, where he attended once or twice a week. Because technicians work on customers' premises for nearly all of their working time, there is bound to be some ambiguity about the geographic location of their employment. On the evidence contained in the Officers' report, however, the primary focus of Mr. Nicholson's employment was outside the Metropolitan Toronto area during a representative period prior to the application date, and we hold that he could not be described as an employee of the respondent "in Metropolitan Toronto" on the application date.

67. Having regard to the lists originally filed by the employer, the subsequent agreements of the parties and the findings set out in this decision, we find that there were 61 employees in the aforesaid bargaining unit on the date this application was filed. The applicant has filed evidence of membership with respect to 29 of those employees. On the basis of that evidence, the Board is satisfied that more than forty-five per cent, and not more than fifty-five per cent, of the employees of the respondent in the bargaining unit at the time the application was made were members of the applicant on March 3, 1983, the terminal date fixed for this application and the date which the Board determines, under section 103(2)(j) of the Labour Relations Act, to be the time for the purpose of ascertaining membership under section 7(1) of the said Act.

68. Having regard to the provisions of section 7(2) of the Labour Relations Act, the Board hereby directs that a representation vote be taken of the employees of the respondent in the bargaining unit described in paragraph 4 of the Board's initial decision. All employees of the respondent in that unit on the date of this decision who have not voluntarily terminated their employment or who have not been discharged for cause between that date and the date the vote is taken will be eligible to vote.

69. Voters will be asked to indicate whether or not they wish to be represented by the applicant in their employment relations with the respondent.

70. The respondent devoted some argument to the proposition that the delays experienced in processing this application taken together with the provisions of subsection 2(d) of the Charter of Rights should lead the Board to direct that a representation vote be taken even if we found that more than fifty-five per cent of the respondent's employees were members of the applicant at the relevant time. The facts as we have found them did not give rise to a discretion to certify the applicant without a vote, and it is therefore unnecessary for us to deal with that aspect of the respondent's submissions.

71. This matter is referred to the Registrar.