Northern Telecom v. Communication Workers, [1983] 1 S.C.R. 733

SUPREME COURT OF CANADA

Northern Telecom v. Communication Workers, [1983] 1 S.C.R. 733

Date: 1983-06-23

Northern Telecom Canada Limited and Canadian Union of Communication Workers

Appellants;

and

Communication Workers of Canada and the Attorney General of Canada Respondents;

and

The Canada Labour Relations Board, the Attorney General of Quebec and the Attorney General of Ontario Third parties.

File Nos.: 16682 and 16652.

1982: June 8 and 9; 1983: June 23.

Present: Ritchie, Dickson, Beetz, Estey, McIntyre, Chouinard and Lamer JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Constitutional law — Labour relations — Certification — Jurisdiction — Whether manufacturer's employees installing the product in federally controlled telecommunications network under federal or provincial jurisdiction — Canada Labour Code, R.S.C. 1970, c. L-1, s. 108 — Constitution Act, 1867, ss. 91(29), 92(10)(a),(c), 101.

Constitutional law — Courts — Legislative authority — Validity of Federal Court of Appeal's power to consider question referred by Canada Labour Relations Board decision — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28(1),(4).

Appellant and respondent trade unions both sought certification from the Canada Labour Relations Board, under Part V of the Canada Labour Code, as bargaining agent for installers employed by Northern Telecom. The great bulk of the installers' work was physically installing sophisticated telecommunications equipment produced by Northern Telecom—an affiliate of Bell Canada—into Bell Canada's on-going and federally regulated telecommunications network. Bell Canada, in turn, bought most of its equipment from Northern Telecom. The installation process demanded a high degree of coordination between the two companies. The Board decided that the installers did not come within the federal labour jurisdiction, but instead of dismissing the applications, made a reference on a constitutional question

[page 734]

to the Federal Court of Appeal under s. 28(4) of the Federal Court Act. That Court found that the Canada Labour Relations Board had jurisdiction to grant certification. At issue here is whether Northern Telecom's installers should be assigned to the federal labour jurisdiction, or to the provincial jurisdiction as were the bulk of Northern Telecom's other employees. Also at issue is whether or not the Federal Court of Appeal had jurisdiction to entertain the constitutional question put to it.

Held (Beetz and Chouinard JJ. dissenting): The appeal should be dismissed.

Per Ritchie, Dickson, Beetz, Estey, McIntyre, Chouinard and Lamer JJ.: Section 28(4) of the Federal Court Act is intra vires. Here, that Court was in the same position as any other statutory court and therefore could determine a constitutional issue arising as a preliminary question in the review of an administrative action based on a law of Canada.

Per Ritchie, Estey, McIntyre and Lamer JJ.: The labour relations of Telecom's installers fell under federal jurisdiction. The macro-relationship between the installers' work in the subsidiary operation (Telecom) and the functioning of the federal core operation (Bell) were of prime concern here and not the micro-differences between Telecom's installers and their Bell counterparts. The installers' work was logically a step in the expansion or reconstruction of an operating telecommunications network for the switching equipment was in its finished state on delivery and yet the network was not complete until the equipment was installed. Then too, the installers' daily work routines were almost completely integrated with the up-grading of the telecommunications system in relation to its ongoing operation and the work was primarily done on Bell's premises. The corporate relationship of Bell and Telecom did not bear on the outcome here. The fact that the employment relationship extended over five provinces, while it did not bear on the constitutional outcome, fed the result.

Per Dickson J.: The work of Telecom's installers fell within the federal Parliament's jurisdictional competence. Functionally separate from Northern Telecom's other operations, this work was performed primarily on Bell Canada's premises and formed an integral part of

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Bell Canada's federally regulated telecommunications network. The parent/subsidiary relationship existing between Bell Canada and Northern Telecom made the concept of integration all the stronger. So too, did the fact that the great bulk of the installers' work was performed for Bell Canada and the fact that the installation of new equipment in an on-going operation demanded a great deal of coordination between the companies. This work could not be considered as either maintenance or construction work in the sense used to place such work within the provincial jurisdiction.

Per Beetz and Chouinard JJ., dissenting: The Canada Labour Relations Board correctly decided that jurisdiction over the installers lay with the province. The construction and installation of certain components of the federal undertaking remained distinct from the operation of the undertaking. Provincial competence is the rule, and federal competence the exception, in the field of labour relations and the onus fell on the party seeking to establish the exception. In this "nicely balanced" case, the general rule of provincial competence should be the deciding factor and not the fact that the installers' work was on-going and indispensible to the operation of the federal undertaking.

[Northern Telecom Ltd. v. Communications Workers of Canada, 1979 CanLII 3 (SCC), [1980] 1 S.C.R. 115, affirming 1977 CanLII 3012 (FCA), [1977] 2 F.C. 406; In re the Validity of the Industrial Relations and Disputes Investigation Act (the Stevedores' case), 1955 CanLII 1 (SCC), [1955] S.C.R. 529, followed; Toronto v. Bell Telephone Co., [1905] A.C. 52; McNamara Construction (Western) Ltd. v. The Queen, 1977 CanLII 13 (SCC), [1977] 2 S.C.R. 654; Quebec North Shore Paper Co. v. Canadian Pacific Ltd., 1976 CanLII 10 (SCC), [1977] 2 S.C.R. 1054; Attorney General of Canada v. Law Society of British Columbia (the Jabour case), 1982 CanLII 29 (SCC), [1982] 2 S.C.R. 307; Valin v. Langlois (1879), 1879 CanLII 29 (SCC), 3 S.C.R. 1; The Queen v. Thomas Fuller Construction Co. (1958) Ltd., 1979 CanLII 187 (SCC), [1980] 1 S.C.R. 695; Attorney General of Canada v. Canard, 1975 CanLII 137 (SCC), [1976] 1 S.C.R. 170; Thorson v. Attorney General of Canada, 1974 CanLII 6 (SCC), [1975] 1 S.C.R. 138; Canada Labour Relations Board v. Paul L'Anglais Inc., 1983 CanLII 121 (SCC), [1983] 1 S.C.R. 147; Consolidated Distilleries Ltd. v. Consolidated Exporters Corporation Ltd., 1930 CanLII 50 (SCC), [1930] S.C.R. 531; The Queen v. Ontario Labour Relations Board, Ex parte Northern Electric Co. Ltd., 1970 CanLII 520 (ON SC), [1970] 2 O.R. 654; Northern Electric Co. Ltd. v. The Quebec Labour Court, unreported Quebec Court of Appeal decision, number 13,085, January 25, 1972; The Queen v. Ontario Labour Relations Board, Ex parte Dunn, 1963 CanLII 616 (ON SC), [1963] 2 O.R. 301; Toronto Electric Commissioners v. Snider, 1925 CanLII 331 (UK JCPC), [1925] A.C. 396; Attorney-General for Canada v. Attorney-General for Ontario (the Labour Convention case), 1937 CanLII 362 (UK JCPC), [1937] A.C. 326;

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Letter Carriers' Union of Canada v. Canadian Union of Postal Workers, 1973 CanLII 183 (SCC), [1975] 1 S.C.R. 178; Construction Montcalm Inc. v. Minimum Wage Commission, 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754; Canadian Pacific Railway Co. v. Attorney-General for British Columbia (the Empress Hotel case), 1949 CanLII 278 (UK JCPC), [1950] A.C. 122; Labour Relations Board of New Brunswick v. Eastern Bakeries Ltd., 1960 CanLII 79 (SCC), [1961] S.C.R. 72, referred to.]

APPEAL from a judgment of the Federal Court of Appeal, 1981 CanLII 4561 (FCA), [1982] 1 F.C. 191, determining a question of law, relating to constitutional jurisdiction, referred by the Canada Labour Relations Board. Appeal dismissed, Beetz and Chouinard JJ. dissenting.

William S. Tyndale, Q.C., for the appellant Northern Telecom Ltd.

Philip Cutler, Q.C., and Pierre Langlois, for the appellant Canadian Union of Communication Workers.

Hélène LeBel and Janet Cleveland, for respondent Communication Workers of Canada.

Walter Nisbet, Q.C., for respondent Attorney General of Canada.

William H. Deverell, for the third party the Canada Labour Relations Board.

John Cavarzan, Q.C., for the third party the Attorney General of Ontario.

Jean-K. Samson and Jean-François Jobin, for the third party the Attorney General of Quebec.

The judgment of Ritchie, Estey, McIntyre and Lamer JJ. was delivered by

ESTEY J.—These proceedings originated with the difficulty of the proper assignment of the labour relations of certain employees of the appellant, Northern Telecom Canada Limited (herein-after referred to as "Telecom"), to either the federal or provincial jurisdiction. By applications made in May and September 1978 the appellant and respondent trade unions respectively sought certification under Part V of the Canada Labour Code, R.S.C. 1970, c. L-1, as the bargaining agent

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for a unit composed of all installers employed by Telecom, Eastern Region.

The Eastern Region with respect to which certification is sought is all the operations relating to installers of Telecom carried on east of a vertical line drawn through Brighton in eastern Ontario. The Eastern Region extends easterly from this line through Quebec and across the Atlantic provinces. The Western Region, with which we are not concerned, includes installers employed by Telecom who perform like services west of the Brighton line.

An installer is a highly qualified employee who is engaged in the physical installation of the products of Telecom and its affiliated companies (and occasionally the equipment made by others) in the telephone network operated by Bell Canada (hereinafter referred to as "Bell") and in the facilities operated by other customers of Telecom. It is conceded that Bell and its telephone system is a federal work or undertaking, having been declared to be so in 1882 by the Parliament of Canada in 1882 (Can.), c. 95, s. 4, pursuant to s. 92(10)(c) of the Constitution Act, 1867. The Privy Council in Toronto v. Bell Telephone Co., [1905] A.C. 52, found the undertaking of the company to fall within the federal orbit under s. 92(10)(a) and s. 91(29) of the Constitution Act.

The appellant, Canadian Union of Communication Workers (hereinafter referred to as the "CUCW"), is the bargaining agent for the installers of the appellant Telecom in the Eastern Region pursuant to original certification in 1945 under the Quebec labour relations laws and subsequent voluntary recognition in the eastern part of the province of Ontario and in the provinces east of Quebec. The Communication Workers of Canada (hereinafter referred to as the "CWC") represents the installers of Telecom in the Western Region following certification in 1950 by the Ontario Labour Relations Board. The federal Board, after hearing the presentation of the two applications for certification with respect to installers employed

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in the Eastern Region, determined that the employees in question did not come within the federal labour jurisdiction, but rather than dismissing the applications, made a reference on a constitutional question to the Federal Court of Appeal pursuant to s. 28(4) of the Federal Court Act of Canada. The Board, after a lengthy unanimous award [reported at (1980), 41 di 44], concluded [at pp. 90-941:

Our appreciation of the totality of the written and verbal evidence adduced leads us to conclude the installers in the eastern region are not employed upon or in connection with a federal work, undertaking or business .... The problem of characterization for constitutional purposes is whether you focus on the installation and testing as the first step in the creation, maintenance and operation of the federal work, undertaking or business or the last step in the manufacture and delivery of specialized (and warranted) products, delivery of which is accepted when it is established they are functioning properly. The colour of the valley depends on whether you view it from the sunny or shaded slope.

We have considered the test as expressed by the Supreme Court of Canada and as formulated by us for Part V of the Canada Labour Code in Marathon Realty Company Limited, supra, and have concluded the labour relations of these employees is provincially regulated. For labour relations purposes as well as constitutional law purposes we view the installers' activity as manufacturing related more so than an integral part of the area within federal competence. There is no doubt the system cannot operate without the equipment installed by these employees. It can also be said it could not operate without the phone book. Since 1970 that separate function has been treated as within the provincial jurisdiction.

Any nagging doubts we have in this case, we have resolved in favour of the implicit constitutional presumption in favour of provincial jurisdiction.

We postpone making any final decision with respect to these two certification applications until we learn of the Federal Court of Appeal's determination on our jurisdiction.

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The Board then issued an order in which the following question was referred to the Federal Court of Appeal:

Does the Board have constitutional jurisdiction to grant an application for certification with respect to the employees sought to be represented in these two applications for certification?

This question is propounded by the Board purportedly pursuant to s. 28(4) of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10:

28....

(4) A federal board, commission or other tribunal to which subsection (1) applies may at any stage of its proceedings refer any question or issue of law, of jurisdiction or of practice and procedure to the Court of Appeal for hearing and determination.

The Federal Court of Appeal [at 1981 CanLII 4561 (FCA), [1982] 1 F.C. 191] answered the question in the affirmative. Chief Justice Thurlow found the Court had jurisdiction to receive this reference from the Board and to answer the question put, whether it came up through s. 28(4) of the Federal Court Act or whether by judicial review under subs. (1) of that section. All parties agreed in the Federal Court (and indeed here) that Bell's telecommunication system is a federal undertaking. The installers of Telecom are not engaged in the manufacture of the Telecom equipment in question but only in its installation, and 80 per cent of this work is carried out on Bell premises. Thurlow C.J. concluded, therefore, [at p. 202] that they are "... participating in the carrying on of the federal undertaking itself ...." Ryan J. concurred with the Chief Justice and also with Le Dain J. who likewise answered [at p. 203] the question affirmatively because:

....the close functional relationship of the work of the installers to the operation of the Bell undertaking tips the balance in favour of federal jurisdiction . . . . But the installation is related in a very close and complex manner to the operation of the telecommunications equipment which is the heart of the Bell undertaking ....

….For this reason I think they must be regarded as employed upon or in connection with the operation of the Bell undertaking.

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Jurisdiction of the Federal Court of Appeal to Entertain the Referred Question

The Federal Court Act establishing the Federal Court of Appeal finds its base in s. 101 of the Constitution Act, 1867 which empowers Parliament to establish ". . . Courts for the better Administration of the Laws of Canada". As has been stated by this Court on many occasions, the expression "Laws of Canada" refers to existing federal legislation, regulations and federal common law, and not to potential legislation within federal constitutional competence: McNamara Construction (Western) Ltd. v. The Queen, 1977 CanLII 13 (SCC), [1977] 2 S.C.R. 654 and Quebec North Shore Paper Co. v. Canadian Pacific Ltd., 1976 CanLII 10 (SCC), [1977] 2 S.C.R. 1054. With issues arising under s. 18 of the Federal Court Act, relating as it does to the jurisdiction of the Trial Division and its relationship to the provincial superior courts, we are not here concerned. Section 28 of that Act accords to the Federal Court of Appeal jurisdiction in judicial review of orders of federal boards, as defined in the Act and which includes the Canada Labour Relations Board with which we are here concerned, under subs. (1). By subsection (4), supra, a federal board may refer ". . . any question or issue of law, of jurisdiction or of practice and procedure to the Court of Appeal for hearing and determination".

Chief Justice Thurlow, in the Court below, concluded that the jurisdiction of the Court of Appeal, for the purposes of these proceedings, was the same whether the issue arose by way of review under subs. (1) or by a question raised under subs. (4). Whether this be so or not it is abundantly clear that the question posed by the Board raises a question of law or jurisdiction and clearly invokes the procedure authorized by subs. (4). The question is whether subs. (4) may properly be included in the Federal Court Act by Parliament.

In Jabour (Attorney General of Canada v. Law Society of British Columbia, 1982 CanLII 29 (SCC), [1982] 2 S.C.R. 307), this Court was concerned with the competency of the provincial courts, faced with the purported

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exclusivity of the Federal Court under s. 18 of the Federal Court Act, to entertain proceedings challenging the constitutionality or constitutional application of a federal statute. This Court there found the historic jurisdiction of the provincial superior court undisturbed by federal legislation which removed the judicial review by such court of administrative action taken by a federal board pursuant to a federal statute.

We are here faced with the converse challenge, that is, the competence of the Federal Court to determine the constitutionality of federal legislation, either inherent or in its application in given circumstances. A part of the reasoning in the Jabour case, at p. 328, deals analogically with this converse:

At the same time it would leave the provincially-organized superior courts with the invidious task of execution of federal and provincial laws, to paraphrase the Valin case [Valin v. Langlois (1879), 1879 CanLII 29 (SCC), 3 S.C.R. 1] while being unable to discriminate between valid and invalid federal statutes so as to refuse to "execute" the invalid statutes .... Moreover, it would amount to an attempt by Parliament to grant exclusive jurisdiction to the Federal Court to administer the "laws of Canada" while the validity of those laws remained unknown.

It is inherent in a federal system such as that established under the Constitution Act, that the courts will be the authority in the community to control the limits of the respective sovereignties of the two plenary governments, as well as to police agencies within each of these spheres to ensure their operations remain within their statutory boundaries. Both duties of course fall upon the courts when acting within their own proper jurisdiction. The Jabour case, supra, was concerned with the superior courts of general jurisdiction in the provinces, but the same principles apply to courts of subordinate jurisdiction when they are acting within their limited jurisdiction as described by their constituting statute. Such courts must, in the application of the laws of the land whether they be federal or provincial statutes, determine, where the issue arises, the constitutional integrity of the measure in question. Such a court of limited

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jurisdiction must, of course, be responding to a cause properly before it under its statute.

This is the position of the Federal Court in these proceedings. It is a statutory court. Its parent statute clearly authorizes the proceeding with which it is here engaged. Its parent statute in turn is valid under the Constitution, at least so far as the existence of the court is concerned. The jurisdictional challenge narrows down to whether Parliament may properly include subs. (4) in s. 28 under which subsection the constitutional or jurisdictional question is here framed and advanced. This question was sensed or anticipated in Valin v. Langlois (1879), 1879 CanLII 29 (SCC), 3 S.C.R. 1, per Taschereau J. at pp. 74 and 76:

ln my opinion, for the administration of its laws, Parliament can either have recourse to the Provincial Courts already in existence, or create new courts, as it chooses.

... I see in the B.N.A. Act many instances where Parliament can alter the jurisdiction of the Provincial Civil Courts. For instance, I am of opinion, that Parliament can take away from the Provincial Courts all jurisdiction over bankruptcy and insolvency, and give that jurisdiction to Bankruptcy Courts established by such Parliament; I also think it clear, that Parliament can say, for instance, that all judicial proceedings on promissory notes and bills of exchange shall be taken before the Exchequer Court or before any other Federal Court. This would be certainly interfering with the jurisdiction of the Provincial Courts. But, I hold that it has the power to do so quoad all matters within its authority.

Pigeon J., in The Queen v. Thomas Fuller Construction Co. (1958) Ltd., 1979 CanLII 187 (SCC), [1980] 1 S.C.R. 695, in discussing another aspect of the nature of the jurisdiction of the Federal Court, stated at p. 713:

It must be considered that the basic principle governing the Canadian system of judicature is the jurisdiction of the superior courts of the provinces in all matters federal and provincial. The federal Parliament is empowered to derogate from this principle by establishing additional courts only for the better administration of the laws of Canada.

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Closer to the bone of this problem is the observation by Beetz J. in Attorney General of Canada v. Canard, 1975 CanLII 137 (SCC), [1976] 1 S.C.R. 170, at p. 216:

Once it is conceded that the Minister has jurisdiction to appoint an administrator, the exercise of this jurisdiction can only be reviewed in accordance with the Indian Act and the Federal Court Act and not by the Courts of Manitoba. It is true that the latter's jurisdiction had not been questioned by the appellants, presumably because the action taken by the respondent challenged the constitutional validity and the operation of the Indian Act and the Manitoba Courts had jurisdiction to adjudicate upon this issue as well as upon appellants' counterclaim. The Courts of Manitoba could not on the other hand hear an appeal from the Minister's decision or otherwise review it.

Although speaking in another context, Chief Justice Laskin has written: "The question of the constitutionality of legislation has in this country always been a justiciable question." See Thorson v. Attorney General of Canada, 1974 CanLII 6 (SCC), [1975] 1 S.C.R. 138, at p. 151. Here the questioned activity of the Federal Court is simply its right to determine, under its statute, the constitutionality of a federal statute where that issue arises in the course of a proceeding which has arisen under an admittedly valid proceeding conducted before a federal board as defined in the Federal Court Act and under an admittedly valid federal statute, the Canada Labour Code, supra. That the Federal Parliament can direct the review of the actions of a federal board to the Federal Court is no longer in doubt in our law. Whether the action of the Board can be questioned by a proceeding under s. 28(1) or (4) would not appear to be of much importance; the constitutional propriety of the Board action, actual or proposed, may arise in each case. The efficiency of the administration of justice is promoted by the contemplation of the issue under subs. (4) rather than reviewing the issue as a fait accompli under subs. (1). If, in the operations of subs. (1), Parliament can require the Federal Court to review the actions of the Canada Labour Relations Board, and if in the course of that review the Court must determine as a condition precedent the validity of the Board's action from a constitutional viewpoint,

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it would seem to matter little that the same question with the same ancillary steps attached is raised in futuro rather than in retrospect. It is not, therefore, in my view, a violation of the parliamentary limits under s. 101 of the Constitution Act to include subs. (4) in s. 28.

It follows from Canard, supra, and more recently from the decision of this Court in Canada Labour Relations Board v. Paul L'Anglais Inc., 1983 CanLII 121 (SCC), [1983] 1 S.C.R. 147 that the same constitutional question might be brought before a provincial court by its appropriate process. A question of administrative review by the Federal Court under the Federal Board's parent statute, which raises no constitutional question, could not be so referred to the provincial superior court. The nexus between the Federal Court and the constitutional issue here arising is the proceeding under the Federal Court Act which in turn arises from the patently valid proceedings of the Board conducted under the admittedly valid provisions of the Canada Labour Code. In these surrounding circumstances the Federal Court is in the same position as any statutory court, provincial or federal, and therefore can determine the constitutional issue arising as a threshold question in the review of the administrative action in issue.

To conclude otherwise would, in paraphrase of the Jabour decision, supra, leave a federal court established "for the better administration of the laws of Canada" in the position of having to participate in the execution and administration of such laws without the authority, let alone the duty, of first assuring itself that the statute before the Court is a valid part of the "laws of Canada". Anglin C.J.C., in Consolidated Distilleries Ltd. v. Consolidated Exporters Corporation Ltd., 1930 CanLII 50 (SCC), [1930] S.C.R. 531, at p. 534, said that the expression "laws of Canada" must mean " ... laws enacted by the Dominion Parliament and within its competence". I read the reasons of the Chief Justice of

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this Court in McNamara, supra, and Quebec North Shore, supra, as being to the same effect.

One final note should be added to this jurisdictional discussion. The Constitution Act, 1867, as amended, is not of course a "law of Canada" in the sense of the foregoing cases because it was not enacted by the Parliament of Canada. The inherent limitation placed by s. 101, supra, on the jurisdiction which may be granted to the Federal Court by Parliament therefore might exclude a proceeding founded on the Constitution Act. That may be so, as was discussed in the Jabour judgment, supra, but we are here concerned with a proceeding that originates in the Canada Labour Code and in which is raised a question as to the reach and applicability of that federal statute under the Constitution, in the circumstances disclosed in the record of the C.L.R.B. This aspect of the appeal is dealt with by the Attorney General of Quebec as an intervener in his factum as follows:

[TRANSLATION] ... the Federal Court of Appeal is competent to decide a question of law, even of a constitutional nature, when that question is raised, as it is in the case at bar, in connection with a proceeding or principal action based on the application of federal law.

and with which I respectfully agree.

In my view, therefore, subs. (4) is validly incorporated in s. 28 by Parliament in the enactment, the Federal Court Act, and the Federal Court accordingly was acting within its proper constitutional jurisdiction when it answered the question below.

Because it will shorten the review required of the evidence taken by the Board to outline some aspects of the origins of this litigation, I now turn to the earlier proceedings undertaken by some or all of these parties in connection with the appropriate labour relations jurisdiction.

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A. Eastern Region (with which these proceedings are concerned)

1. 1945: The Quebec Labour Relations Board certified the predecessor to the CUCW as the bargaining agent on behalf of all non-supervisory hourly rated employees of Telecom in the Province of Quebec including the installers.

2. 1945: Telecom and the CUCW entered into a collective agreement in which Telecom recognized the CUCW as the bargaining agent for all installers "whose base point is in the Province of Quebec", which included all installers in the Eastern Region. This is the present status of Eastern Region installers labour relations.

3. 1968: The CWC and the United Steelworkers of America, Local 8001, respectively applied to the Labour Boards of Ontario and Quebec for certification as the bargaining agent for Eastern Region installers in each of these provinces, and each Union intervened in the other Union's proceedings. Telecom and the CUCW objected on constitutional grounds claiming the employees were not subject in their labour relations to provincial jurisdiction. The Ontario Labour Relations Board found the work of the installers in Ontario to be within provincial labour relations jurisdiction. The Quebec authorities reached the same result. Telecom and the CUCW thereupon challenged both the results in court and in both instances succeeded. In Ontario Lacourcière J., then sitting in the High Court of Ontario, found the appropriate jurisdiction over these labour relations to be federal: The Queen v. Ontario Labour Relations Board, Ex parte Northern Electric Co. Ltd., 1970 CanLII 520 (ON SC), [1970] 2 O.R. 654. The Quebec Court of Appeal in proceedings in evocation came to the same conclusion in Northern Electric Co. Ltd. v. The Quebec Labour Court, unreported decision number 13,085, January 25, 1972.

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B. Western Region (with which these proceedings are not directly concerned)

1. 1946: An employees' association failed to achieve certification before the O.L.R.B. but were certified for all employees, including installers, working under the Toronto head office under the Wartime Labour Relations Regulations. This presumably included all the employees in the Western Region.

2. 1950: The CWC replaced the first bargaining agent and the O.L.R.B. certified the CWC as the agent for the installers. Telecom apparently raised no constitutional issue.

3. 1958: The CWC applied to the Canada Labour Relations Board for certification as the bargaining agent for all installers employed in the Western Region. The C.L.R.B. found that it did not have jurisdiction.

4. 1963: An employees' association had been certified by the O.L.R.B. in 1961 to represent all employees in Telecom's manufacturing facilities in Bramalea, Ontario. No mention is made of installers in this bargaining unit. The High Court of Ontario refused to quash the O.L.R.B. decision on the grounds that the manufacturing operations, there the subject of the proceedings, were properly within the field of provincial labour relations; R. v. Ontario Labour Relations Board, Ex parte Dunn, 1963 CanLII 616 (ON SC), [1963] 2 O.R. 301.

5. 1970: The High Court of Ontario (Lacourcière J.) found the O.L.R.B. to be without jurisdiction over the installers' labour relations (supra, item 3, Eastern Region).

C. Eastern and Western Regions after 1971

1. In the Eastern Region, Telecom and the CUCW continued to conduct their labour relations pursuant to the Quebec labour relation laws.

2. In the Western Region, in 1972, Telecom and the CWC recognized the federal jurisdiction by written agreement.

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3. 1974: CWC applied to the Canada Labour Relations Board to be certified to represent the supervisory installers in the Western Region. The Board found it had jurisdiction. Telecom appealed and failed in the Federal Court of Appeal. Northern Telecom Ltd. v. Communications Workers of Canada, 1977 CanLII 3012 (FCA), [1977] 2 F.C. 406; and in this Court, 1979 CanLII 3 (SCC), [1980] 1 S.C.R. 115. Both courts considered that the record before them did not make a decision possible on this important question of jurisdiction.

There is, therefore, no evidence upon which this Court can find that the Board acted beyond its jurisdiction.

It might be added that, in my view, the facts raise a very difficult question from a jurisdictional and constitutional point of view, upon which this Court should not make a pronouncement in the absence of a full exploration of the facts relating to the jurisdictional and constitutional question as such. [Per Jackett C.J., at pp. 409-10.]

The judgment in this Court was given by Dickson J. who wrote at pp. 139 and 141:

On the evidence in the record, this Court is simply not in a position to resolve the important question of constitutional jurisdiction over the labour relations of the employees involved in the installation department of Telecom.

I think we must leave that question to another day and dismiss the appeal simply on the basis that the posture of the case is such that the appellant has failed to show reversible error on the part of the Canada Labour Relations Board.

4. Telecom objected to the Canada Labour Relations Board's dealing with the two applications for certification filed in 1978 by the CUCW and the CWC, which give rise to these proceedings, on the grounds of a lack of constitutional jurisdiction in the Board.

5. The CUCW applied to the Quebec Labour Relations Board for certification as the bargaining agent for the installers, some time in 1978-79. Nothing appears in the record as to where this proceeding stands.

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6. The parties to the current certification proceedings leading to this appeal, before the C.L.R.B., requested that the Board make a reference to the courts on the question of constitutional jurisdiction. I quote from the unanimous reasons of the Board, [supra, at pp. 71-72]:

The final step is these proceedings in which the Board's jurisdiction is questioned. This is, however, not to be the last step. The parties have informed the Board they wish a determination by a judicial authority. They urged the Board to make a reference of the constitutional issue to the Federal Court of Appeal. The hearing on these cases proceeded on the footing that our decision was only the first step in a new march to the Supreme Court of Canada.

Before turning to the evidence and the findings or conclusions drawn therefrom below, it is necessary to gather together the principles developed in this Court and elsewhere which are applicable in judicial proceedings such as these. As was said by this Court in the Telecom 1980 case, supra, (per Dickson J. at p. 130):

But what is in question here is not the Board's administrative jurisdiction in the classic sense of that term, but whether the jurisdiction given by Parliament to the Canada Labour Relations Board, through s. 108 of the Code, extends to the labour relations of the employees engaged in the work, undertaking or business here at issue, i.e., the installation department of Telecom. The answer to the question posed in the order granting leave must be found, not in the principles of judicial review of administrative action, but in the principles governing the constitutional division of authority over labour relations.

It is by now trite to say that such an appraisal of the place of any given labour relations in Canadian constitutional law starts with the general rule that authority over labour relations is provincial. See Toronto Electric Commissioners v. Snider, 1925 CanLII 331 (UK JCPC), [1925] A.C. 396. Indeed it was many years after the Canadian adherence to the Treaty of Versailles and the related treaties and conventions which dealt with these matters, as well as Attorney-General for Canada v. Attorney-General for Ontario (the Labour Convention case), 1937 CanLII 362 (UK JCPC), [1937] A.C. 326, that the outlines of the federal presence in the field began to emerge. The first comprehensive

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federal regulation of such matters came about during World War II when detailed regulations were promulgated establishing and supporting the operation of the Wartime Labour Relations Board. There followed more detailed federal legislation in the form of The Industrial Relations and Disputes Investigation Act, 1948 (Can.), c. 54, and culminating in the current Canada Labour Code, supra, of which s. 108 and s. 2 are of principal interest on this appeal.

108. This Part applies in respect of employees who are employed upon or in connection with the operation of any federal work, undertaking or business and in respect of the employers of all such employees in their relations with such employees and in respect of trade unions and employers' organizations composed of such employees or employers.

109. In this Act

"federal work, undertaking or business" means any work, undertaking or business that is within the legislative authority of the Parliament of Canada, including without restricting the generality of the foregoing:

(b) a railway, canal, telegraph or other work or undertaking connecting any province with any other or others of the provinces, or extending beyond the limits of a province;

(h) a work or undertaking that, although wholly situated within a province, is before or after its execution declared by the Parliament of Canada to be for the general advantage of Canada or for the advantage of two or more of the provinces; .. .

It was not, however, until the In re the Validity of the Industrial Relations and Disputes Investigation Act (the Stevedores' case), 1955 CanLII 1 (SCC), [1955] S.C.R. 529, that this Court established the basic criteria of federal jurisdiction in this field. It was in the Stevedores' case that the constitutional underpinnings of the federal presence in labour relations came in for its first detailed scrutiny. The statutory provision with which the Court dealt was s. 53 of the 1948 Act which was the precursor of s. 108 of the present Canada Labour Code. The case concerned the labour relations of a stevedoring company which was engaged under seasonal contracts

[page 751]

with a group of shipping companies engaged in the operation of regular shipping schedules between ports in Canada and ports outside Canada. The employer in question supplied the stevedoring and terminal services in the port of Toronto to these shipping companies and this was the exclusive undertaking of the employer. The Court held that the labour relations between the employer and the stevedores so engaged fell within federal jurisdiction, as the services supplied to what was undoubtedly a shipping and navigation undertaking within s. 91 of the Constitutional Act formed an integral part of that shipping undertaking. The judgments in the Stevedores' case became the basis for the constitutional determination, as between federal and provincial jurisdiction, of the appropriate applicable laws in labour relations. It was not until the appeal in Letter Carriers' Union of Canada v. Canadian Union of Postal Workers, 1973 CanLII 183 (SCC), [1975] 1 S.C.R. 178, came before this Court that the subject was authoritatively revisited. There the Court was dealing with the constitutional assignment of the labour relations of an employer engaged largely under contract with the Canada Post Office. The Saskatchewan Labour Relations Board had certified the Union as the collective bargaining agent for these employees. Ritchie J., writing for a unanimous Court, in construing s. 108(1) of the Canada Labour Code, drew upon the Stevedores' case by referring at p. 185 to the discussion in that case (per Chief Justice Kerwin at p. 535) of s. 53 of the 1948 Act:

... the Act ... should not be construed to apply to employees who are employed at remote stages, but only to those whose work is intimately connected with the work, undertaking or business. In pith and substance the Act relates only to matters within the classes of subjects within the specific heads of s. 91 of the British North America Act.

Ritchie J. then proceeded (at p. 186) to adopt the test prescribed in the Stevedores' case (per Estey J. at p. 568):

[page 752]

If, therefore, the work of stevedoring as performed under the foregoing contracts, is an integral part or necessarily incidental to the effective operation of these lines of steam ships, legislation in relation thereto can only be competently enacted by the Parliament of Canada.

That the work of the stevedores is an integral part would seem to follow from the fact that these lines of steam ships are engaged in the transportation of freight and the loading and unloading thereof, which would appear to be as necessary to the successful operation thereof as the enbussing and debussing of passengers in the Winner case, (1954 CanLII 289 (UK JCPC), [1954] A.C. 541). The loading would, therefore, be an integral part of the operation of these lines of steam ships and, therefore, subject to the legislative jurisdiction of Parliament.

As will be seen below, the parallel in principle between the factual issue raised in the Stevedores' case and the facts of this case is strikingly similar. In the Stevedores' case the federal work was the shipping or the flow of cargo carried by ship into and out of the port of Toronto. The loading and unloading services were supplied to the shipowners and the cargo shippers by a stevedoring company in no way connected through corporate ownership to the shipping concerns. The stevedores of course did not maintain or operate any part of the actual navigation facility, but simply attended to the loading and unloading of ships on the docks. The goods, when so unloaded by the stevedores, were then placed upon domestic land-operating transport facilities for onward transportation to the consignee. In the loading cycle the stevedores provided the link between the land transportation of the cargo and the marine transportation of the cargo.

It is true that the stevedoring company was exclusively engaged in supplying these stevedoring services whereas here, as will be seen, the installation services supplied by Telecom to the Bell Telephone network occupied a very high percentage of the time of the installers of Telecom but not one hundred per cent. Ritchie J. disposed of this issue in the Letter Carriers case as follows (at p. 188):

As 90 per cent of the activities of M & B Enterprises Ltd. was confined to work for the Post Office, it is

[page 753]

obvious that this work composed the main and principal part of its business and the Labour Relations Board of Saskatchewan cannot, in my opinion, acquire jurisdiction to entertain an application for certification of a bargaining representative on behalf of a unit composed of all truck driver employees of such a company other than supervisors, simply because two or three drivers in the unit were occasionally engaged in casual employment driving trucks for the transportation of furniture for others than the Post Office.

This Court was once again concerned with the proper constitutional assignment of labour relations between employers engaged on a federal works and its employees in Construction Montcalm Inc. v. Minimum Wage Commission, 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754. The issue there arose when an agency of the Government of Quebec attempted to recover certain funds from a contractor engaged in the construction of runways at an international airport near Montreal for the Government of Canada. The funds were claimed on behalf of the contractor's employees pursuant to the Minimum Wage Act, the Construction Industry Labour Relations Act, and An Act Respecting the Construction Industry, all legislation of the Province of Quebec. In finding that the labour relations of the construction company employing workers on the construction of these runways was properly to be assigned to the provincial jurisdiction, Beetz J., delivering the judgment of the majority of this Court, summarized, at pp. 768-69, the applicable law as follows:

By way of exception however [to the general rule of exclusive provincial competence over labour relations], 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 re the validity of the Industrial Relations and Disputes Investigation Act (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,

[page 754]

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 re the application of the Minimum Wage Act of Saskatchewan to an employee of a Revenue Post Office, (the Revenue Post Office case); Quebec Minimum Wage Commission v. Bell Telephone Company of Canada (the Bell Telephone Minimum Wage case); Letter Carriers' Union of Canada v. Canadian Union of Postal Workers (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 v. City of Yellowknife, at p. 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. Canada Labour Relations Board (the Agence Maritime case); the Letter Carriers' case.

These general principles so developed by Beetz J. in Montcalm were transposed by Dickson J. in Telecom 1980 and then applied to the apparent circumstances arising in the Telecom 1980 appeal (at p. 135):

On the basis of the foregoing broad principles of constitutional adjudication, it is clear that certain kinds of "constitutional facts", facts that focus upon the constitutional issues in question, are required. Put broadly, among these are:

(1) the general nature of Telecom's operation as a going concern and, in particular, the role of the installation department within that operation;

(2) the nature of the corporate relationship between Telecom and the companies that it serves, notably Bell Canada;

(3) the importance of the work done by the installation department of Telecom for Bell Canada as compared with other customers;

(4) the physical and operational connection between the installation department of Telecom and the core federal undertaking within the telephone system and, in particular, the extent of the involvement of the installation department in the operation and institution of the federal undertaking as an operating system.

[page 755]

The federal core undertaking there and here is of course the Bell interprovincial telecommunications network. The subsidiary operation is that of Telecom carried on by the Telecom installers in the installation in this network of switching and transmission equipment manufactured in the main by Telecom though some of the equipment so installed derives from other sources. The corporate relationship between Bell and Telecom was the subject of argument here and below. Telecom is a wholly-owned subsidiary of Northern Telecom Limited which in turn is 60.5 per cent owned by Bell. For some years prior to 1973, 100 per cent of the shares of Northern Telecom Limited were owned by Bell, but since that date, 39.5 per cent of the shares have been held by the public. Thus assisted by the extensive record in this appeal which was denied to the courts in Telecom 1980, these four directing guidelines may be reduced to fit the facts and issues here in this way:

1. The principal and dominant consideration in determining the application of the principle enunciated in the Stevedores' case is an examination of "the physical and operational connection" between the installers of Telecom and the federal core undertaking, the telephone network, and in particular the extent of the involvement of the installers in the establishment and operation of the federal undertaking as an operating system. I have here taken the liberty of paraphrasing in the terminology of the present record consideration numbered 4 above as enunciated by Dickson J. in the 1980 judgment of this Court.

2. The constitutional assessment by the judicial tribunal of the appropriate assignment of labour relations jurisdictionally then must consider, as a subsidiary but not unimportant consideration:

(a) the importance of the work done by the installers of Telecom for Bell as compared with other customers of Telecom (and here again I respectfully adopt the

[page 756]

language of Dickson J. from consideration no. 3, supra); and,

(b) the corporate interrelationship between Bell and Telecom (consideration no. 2 in the 1980 judgment of Dickson J. The consideration raised in Point 1 of the Telecom 1980 judgment, supra, is discussed later in these reasons).

These principles were most recently examined and applied by this Court through Chouinard J. in Canada Labour Relations Board v. Paul L'Anglais Inc., supra. Thus it will be seen that, though elucidated in an expanding range of circumstances, this problem and its constitutional solution remain as enunciated in the Stevedores' case, supra.

During this development from 1955 onwards of the general principles applicable in determining the appropriate jurisdiction for labour relations between employers engaged on or in connection with federal undertakings and their employees, considerable litigation developed between Telecom and trade unions representing or seeking to represent the installers or their supervisors. The first case, The Queen v. Ontario Labour Relations Board, Ex parte Dunn, supra, concerned the review by way of certiorari by the High Court of Ontario of a decision by the Ontario Labour Relations Board granting certification and representation to a trade union representing all the employees of Telecom (other than management personnel) engaged in a Telecom manufacturing facility in Ontario. The unit included the installers presumably, but no special reference is made to them in the report of the case. McRuer C.J.H.C., in giving judgment, made reference at p. 307 to the limited but important role to be played by the administrative agency in the determination of the constitutional questions:

The Board cannot judicially determine constitutional questions but it has power to entertain an objection to its jurisdiction on constitutional grounds and to have the grounds of the objection stated. 1 think s. 46 [Rules of Procedure R.R.O. 1960, Reg. 401, under Labour Relations Act R.S.O. 1960, c. 202] does nothing more than

[page 757]

provide a procedure by which the Board's jurisdiction can be questioned but it cannot give itself jurisdiction by a wrong decision in law.

The learned Chief Justice then adopted the ratio of the Stevedores' case which I have set out through the judgment of Ritchie J. in the Letter Carriers case, supra, and determined that the employees of Telecom engaged in the Bramalea plant were engaged in the manufacture of telephone equipment to be installed as an integral part of the Bell network, but that such manufacture by Telecom as a supplier to Bell did not make the former an integral part of the federal work and undertaking of the latter.

The learned Chief Justice was also concerned with the issue as to whether diversity of employer would by itself disqualify the employees and their labour relations from federal jurisdiction. Of course one need proceed no further than Canadian Pacific Railway Co. v. Attorney-General for British Columbia (the Empress Hotel case), 1949 CanLII 278 (UK JCPC), [1950] A.C. 122, to determine that the test is not corporate arrangement or ownership of facilities or the corporate identity of the employer, but rather the relationship between the services rendered by the employees in question and the operation of the federal work or undertaking. The courts found that the operation of the Empress Hotel was not a necessary or integrated element in the operation of the railway undertaking of the CPR. Accordingly, the High Court did not extend the federal jurisdiction in labour relations to the manufacturing operations carried on by Telecom, notwithstanding that Telecom was then a company controlled by Bell, the operator of the admitted federal undertaking, and that much of its product went into that federal undertaking.

There followed the case of The Queen v. Ontario Labour Relations Board, Ex parte Northern Electric Co. Ltd., supra, where Lacourcière J., as he then was, concluded that the labour relations between Telecom and the installers in the Western Regions fell within the federal jurisdiction. The issue was, as here, simply put, a determination as

[page 758]

to whether the act of installation of this specialized switching and transmission equipment was the last step in the marketing of this equipment after its manufacture by Telecom or was it the first step in the operation of the Bell interprovincial telecommunications network. Lacourcière J. found the latter element to be dominant notwithstanding that the installers were a section within the Marketing Services Division of Telecom. After citing the Stevedores' case, His Lordship stated at pp. 669-70 and 71:

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, a fortiori 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 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.

A similar result was reached by Casey J. in his judgment in the Quebec Court of Appeal in 1971 in Northern Electric Co. Ltd., supra, at p. 6:

My conclusion is that the fact that the Bell has its installing done by employees of its wholly owned subsidiary does not remove these employees from federal jurisdiction.

Rinfret and Turgeon JJ.A. concurred in separate opinions.

I turn now to the record before the Board as it relates to the nature and type of work and services performed by the installers on behalf of Telecom in connection with Bell and the other customers of

[page 759]

Telecom. There is no dispute in the evidence tendered by all parties that Bell entered into contracts or other arrangements with Telecom for the supply to the telecommunications network operated by Bell of equipment for the switching of communications carried by the network and for the transmission of those communications. The work of the installers was to install this equipment in the telecommunications network. The installation work is carried on by the installers on the premises of Bell, its affiliates, and to a much lesser extent, the other customers of Telecom; and sometimes on the premises of Bell's customers. Hence the installers are engaged for all practical purposes throughout the performance of their services to Telecom on premises away from the premises of their employer. The equipment manufactured by Telecom is manufactured by other employees with whom the installers have no contact. Of course in some instances the equipment installed in the Bell telecommunications network is manufactured by organizations other than Telecom but is installed under the aforementioned arrangements between Telecom and Bell by the installers.

In order to effect the installation of this specialized equipment, Bell isolates the area in their network in which the installation is to be made by the installers prior to the commencement of the installation work. When the equipment has been assembled and installed the actual switching or act of interconnection bringing the equipment into operating condition as a part of the Bell network, is made by employees of Bell. After the equipment has been so installed it is maintained by employees of Bell and not by the installers or indeed by any other employees of Telecom except under specific repair contracts which would not, by the agreement of all parties, amount to the maintenance of the network by these installers. It is unnecessary for the determination of the issue raised in this appeal to go into the detail of the equipment being so installed or indeed into the function of that equipment as a part of the Bell telecommunications network. The extent of the equipment supplied by Telecom and installed by its installers is revealed in the following quotation from the judgment of Chief Justice Thurlow [at p. 199] to

[page 760]

which no exception was taken by any counsel in this Court:

Bell buys 90% of its switching and transmission equipment from Telecom Canada and 95% of all such equipment bought by Bell is installed by Telecom Canada. Installation work for Bell accounts for 80% of the work of the Telecom Canada installers.

We are not here concerned with whether or not the installers in question form a unit appropriate for collective bargaining, but simply the nature of the services performed by these employees of Telecom in the course of their work in connection with the Bell telecommunications network. Neither are we here concerned with the question of relative efficiency as between the assignment of the labour relations here in question to the federal or the provincial jurisdiction. As a practical matter, it may well be of no consequence since, as we have seen from the history of these and related proceedings, the conduct of labour relations with respect to the installers has been variously assigned and conducted according to the laws of Canada or the Province of Quebec or the Province of Ontario. It should also be pointed out that the identification of the appropriate jurisdiction for these employer-employee relations does not depend upon a microscopic examination of the considerable amount of detail involved in the description of the daily work routines of the installers as they perform the installation services provided by Telecom to Bell, as described above. Rather we must be engaged in the determination of the issue in this appeal on an overall assessment of the record, documentary and testimonial, in order to ascertain whether the installers are engaged integrally in the operation of the federal work, namely the Bell telecommunications network; or whether, on the other hand, these services are truly performed as the last act in the manufacture by Telecom of their specialized products in switching and transmission.

It may be of some assistance to depart from the general description of the work done by the installers in connection with the Bell network and to set forth some excerpts from the evidence.

[page 761]

Mr. Stephen, a witness called by Telecom, was asked about the testing of the equipment when installed by Telecom:

A. Well all, all of the work, including the testing is done on the customer's premises.

Q. During that testing is any use made of the network, the customer's telephone network?

A. Oh no. No. We're not testing the customer's network. We're testing only the, in this case, General Switching Division, we're testing the switching equipment that the customer is going to use to operate his network.

Q. If there's any testing of the network to be done, who does that?

A. The customer will do the, any network testing. The network testing, if there's a new office going in or an extension to an office going in, will usually consist of testing the trunks that interconnect one office with another office. And that's done by the, by the telephone company.

Mr. Stephen was also asked about the method by which the installation is performed while the telephone network continues in operation:

Q. During these tests is there traffic on the system, on the network that you're ...

A. Well, I should be quite clear on how I answer that. There will be traffic on the network. We would, ah, part of the network would be taken out of service. The microwave route might consist of 5 or 6 or 7 channels, radio channels. One of the channels would be taken out of service. We would work on it. The other, let's say there was 6, one was taken out of service, the other 5 would be working carrying live traffic. The 6th one, on which we would be working, would not be carrying live traffic. After we'd done our work it would go back into, or be turned back to the customer. It'd be used to carry traffic again. So, the network would still be working, but the channel on which we would be working would not.

Q. And who would take it out of circuit?

A. Oh, always the telephone company. Whenever we are to work on equipment, radio equipment, the telephone company personnel has to be there. They take it out of service and put it back into service once we say that it's been tested and is working properly. We never take it out of, that's true of General Switching Equipment too. If we have to modify existing units, those are always

[page 762]

removed from service by the telephone company, put back into service by the telephone company after we have done our work. We never interfere, knowingly with a customer's network.

It will be observed from this testimony tendered on behalf of Telecom that there is a very close, tightly scheduled integration of the services performed by the installers and the acceptance of those services by the employees of Bell into the telecommunications network without interruption of the performance of the network at the time.

The difficulty in interpreting the details of this evidence can be well illustrated by a reference to the evidence of Mr. Gauthier, an installer called by CWC. He made reference to the evidence of Mr. Stephen, part of which I have quoted above, and then he added:

A. ... He [Mr. Stephen] is correct by saying that we do not busy-out live equipment, but I would like to add, without the customer's approval. And there is a very strict procedure on that, that the customer, and I would like to elaborate it for all parties. It is done, that method of operation procedure, before the job starts, the Northern Telecom supervisor, with the Bell or the telephone C.O. foreman and the traffic, they have a meeting and describes all of the equipment that's going to be involved, if there's a rearrangement, the equipment that will have to be busied-out, and then they give us the authority to busy-out a certain amount of equipment at one particular time or day. In my case, I will be involved, in a couple of weeks, in busying-out equipment. I will have that authority. It is my total responsibility to choose which equipment I can put out of service for the amount of time that I will be working doing the modification. See, maybe this is why that there's no Bell employee there, because we don't have the same working hours as they do. But once the telephone company, the customer agrees that I have so many senders to modify and I'm allowed one at a time, I, myself, can busy it out, work on it, test it, make sure it is back into service and in a good working condition.

[page 763]

Q. For example ... So, when you start ... Do you, you are made aware of the arrangement called a M.O.P., arrived at with Bell Canada, and it tells you what you're supposed to do and what you can do during what periods of time?

A. Right. With, the traffic is, has a very high authority over that equipment. They do not want us to start busying-out equipment because, according to their traffic, they need all that equipment there, and as fast as we can, that is the purpose of that. And it's very strict.

The parties of course have drawn opposite conclusions from this evidence which, by itself, cannot be accurately described as creating factual conflict. The two presentations by Telecom on the one hand and the CWC on the other will be seen from the following excerpt from the submission made to the Canada Labour Relations Board by Miss LeBel, counsel for the CWC:

What is, what this whole process emphasizes is exactly what I'm talking about, the close physical and operational connection between the installers and the oper . . . , and the operation of the telephone network.

We're still talking about operational equipment or partly operational equipment or operational equipment that is temporarily put out of service or equipment that we're testing to the point where it is operational. The fact that it is the telephone company that puts the final connection or that throws the switch, I submit, is irrelevant in trying to determine the constitutional allocation of jurisdiction.

Again, however, whichever way it's done, it shows that the two groups, the two operations are not separate, they have to work together, very closely together. And they do work very closely together.

On the other hand, counsel for Telecom advanced the straight forward proposition that the installers do not work on the telecommunications network as such but simply deliver and put into operating condition, specialized communications equipment which they then turn over to the employees of Bell who make the final connection or switching to place it in operation as a part of the network. Thus it is well stated by the Board in

[page 764]

its award, in commenting upon this detailed but substantially uncontested testimony, that:

The problem of characterization for constitutional purposes is whether you focus on the installation and testing as the first step in the creation, maintenance and operation of the federal work, undertaking or business or the last step in the manufacture and delivery of specialized (and warranted) products, delivery of which is accepted when it is established they are functioning properly. The colour of the valley depends on whether you view it from the sunny or shaded slope. [Supra, at p. 90, and repeated here for convenience.]

After an extensive review of the record and the arguments presented to the Board, the Board concluded [at p. 90]:

Our appreciation of the totality of the written and verbal evidence adduced leads us to conclude the installers in the eastern region are not employed upon or in connection with a federal work, undertaking or business . ... we find the activity of the eastern region installers is essentially the installation and construction of certain components of the Bell Canada, nationwide and international telephone network.

As already noted, the Board supported this conclusion by reference, [at p. 91], to "the implicit constitutional presumption in favour of provincial jurisdiction".

The Federal Court of Appeal, as I have said, reached the opposite conclusion from the evidence. In the words of the Chief Justice [at pp. 201-02]:

In the view I have of the matter the close corporate relationship between Bell and Telecom Canada is of little or no consequence.

But the feature of the case that appears to me to be of the greatest importance and to point with telling effect to the conclusion that the jurisdiction is federal is the fact, as I see it, that what the installers are doing, day in day out, during 80% of their working time, is participating in the carrying on of the federal undertaking itself which by reason of its nature requires a constant program of rearrangement, renewal, updating and expansion of its switching and transmission system and the installation of telecommunication equipment designed to carry out that need.

[page 765]

The essence of the concurring opinion of Le Dain J., [at p. 203], is:

... the installation is related in a very close and complex manner to the operation of the telecommunications equipment which is the heart of the Bell undertaking….

The constitutional allocation of this relationship has been before the labour boards and the courts for almost forty years and very actively for the last twenty years. The federal Board itself has reached differing conclusions on the question. The provincial Boards have consistently taken jurisdiction. The employer has vacillated on the question. The trade unions have taken tactical positions as the administrative and litigious proceedings have progressed. The courts have consistently found federal jurisdiction. I refer to the judgments of the High Court of Ontario and the Quebec Court of Appeal, supra, as well as to the judgment of the Federal Court of Appeal in these proceedings. McRuer C.J.H.C., in the 1963 decision, supra, was not dealing with the installers in isolation, if indeed the Court was there even made aware of their existence. That decision concerns a manufacturing facility.

Bell operates the core federal undertaking, a telecommunications system, interprovincially. Telecom installs integral equipment in that system. The steps to be taken in determining the appropriate constitutional jurisdiction are those prescribed by Dickson J. in the Telecom 1980 judgment, supra, at p. 133:

In the case at bar, the first step is to determine whether a core federal undertaking is present and the extent of that core undertaking. Once that is settled, it is necessary to look at the particular subsidiary operation, i.e., the installation department of Telecom, to look at the "normal or habitual activities" of that department as "a going concern", and the practical and functional relationship of those activities to the core federal undertaking.

In 1970 Lacourcière J. in Northern Electric, supra, reviewed an extensive record, applied the Stevedores' test, supra, and concluded that the

[page 766]

federal Board had jurisdiction. The Board in the present proceedings stated [at p. 89]:

What is different in the situation today from the way it was in 1970? Very little.

The corporate interrelationship and degree of ownership integration between the customer and the supplier (Bell and Telecom) was reduced in the early 1970's as noted above. Corporate interrelationship is not, without more, a controlling factor, and in any case is reduced in significance somewhat by the post-1973 reduction of Bell's indirect interest in Telecom. In some circumstances it may well be a conclusive element in determining whether the evidence in question described form or reality in the relationship between employer and employees or between employer and customer. In the light of all the evidence and circumstances in these proceedings, I cannot conclude that the corporate relationship of Bell and Telecom is a factor bearing on the outcome here.

We are not here concerned with micro-differences between the function of the installers and that of comparable Bell employees but rather with the macro-relationship between the work of the installers in the subsidiary operation and the functioning of the core undertaking. It is, with all respect to those who have down through the long years of this process otherwise concluded, my view on an examination of the record now before this Court, that an application of the ratio decidendi of the Stevedores' case, supra, and the tests for the determination of the appropriate constitutional classification prescribed in this Court in Telecom 1980, supra, lead inexorably to the assignment of the labour relations of these employees of Telecom to the federal jurisdiction. In the words of Beetz J. in Montcalm, supra, at p. 768:

... but only if it is demonstrated that federal authority over these matters is an integral element of such federal competence ... .

The facts I have already set out either by excerpts from testimony or from the Board award or the reasons for judgments below. The almost complete integration of the installers' daily work routines with the task of establishing and operating

[page 767]

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.

While it undoubtedly simplifies and clarifies the debate to attempt to define the work of the installers as being either the last step in manufacture or the first step in the operation of the telecommunications network, it is in part misleading to do so. Where the product loses its functional identity upon installation in a large system, it perhaps is not completely accurate to describe its integration as related to its manufacture. Manufacturing in its ordinary connotation refers to the fabrication of a product either from raw material to the complete finished state or the assembly of components and sub-assemblies into a finished product. Here the transmission and switching equipment as such are complete either on delivery to Bell or prior to its connection to the network. The connection to the network is simply putting the product, when finished, to work. The network is not complete without the product but the product is complete without the network. Thus it can be said with accuracy and logic that the installation is a step in the expansion or reconstitution of the federal works, the operating telecommunications network.

The characterization of the nature of the service rendered by the installer is not a clear-cut and simple process which can produce but one answer. Other tribunals have reached the opposite result from my conclusion, which I have reached with much hesitation and after much consideration of the views advanced by others in support of their

[page 768]

conclusions. Several factors, however, seem to me to be overpowering. It seems to me that the assignment of these labour relations to the federal sphere reflects the nature of the work of the employees in question, the relationship between their services and the federal works, the geographic realities of the interprovincial scope of the work of these employees transcending as they do several provincial boundaries, and the close and complete integration of the work of these employees and the daily expansion, refurbishment and modernization of this extensive telecommunication facility.

This result is fed by the reality that the employment relationship in question, that is between Telecom and the Eastern installers from which the linkage to the Bell telecommunications network arises, extends into at least five provinces. No single provincial jurisdiction can physically embrace these relationships: Labour Relations Board of New Brunswick v. Eastern Bakeries Ltd., 1960 CanLII 79 (SCC), [1961] S.C.R. 72. While it is not a factor in determining the applicable constitutional jurisdiction, it is reassuring that the result, which in my respectful view is correct in law, places the Eastern Region installers in the same jurisdiction for labour relations purposes as the supervisors of the Telecom Western Region installers as a result of the 1980 proceedings. The result also happily coincides with that realized over a decade ago by Lacourcière J. and by the Quebec Court of Appeal in the two Northern Electric cases, supra.

I cannot conclude the matter without expressing the hope that the conclusion of this proceeding will see an end to the heretofore endless parade of digressive and wasteful administrative and judicial proceedings. It has for fifty years been the expressed wish of all the legislatures here involved that employer-employee relations be regulated by administrative processes where these technical matters can be examined and any differences resolved by experts selected for this specialized process. Labour disputes understandably lead the parties thereto, whatever side they may be on, into tactical manoeuvres, sometimes for constructive purposes, sometimes out of the spirit of combat

[page 769]

itself, and sometimes for destructive purposes. It is idle to attempt to assign blame for delay and unnecessary expense in these complex dealings; it is even more pointless to lecture the parties and their experienced professional advisers. The fact is, the subject here, the appropriate jurisdiction for the administration of the labour relations between Telecom and its Eastern installers, has now been fully examined administratively and judicially, and the time has come to get down to the true purpose of labour relations and the administrative structure designed to regulate that process. I trust this will be the result of this appeal.

For these reasons, I would dismiss the appeal with costs payable by the appellants to the respondent, Communication Workers of Canada, in this Court and in the Court below; and no costs to the Attorney General of Canada or any of the third parties.

The following are the reasons delivered by

DICKSON J.—I have had the advantage of reading the reasons of my brothers Estey and Beetz. Like Beetz J., I concur in the reasons of Estey J. in so far as they relate to the jurisdiction of the Federal Court of Appeal to entertain the referred question. On the merits, I concur in the result reached by Estey J.

The issue on the merits is whether constitutional jurisdiction over labour relations of installers employed by Northern Telecom Canada Limited ("Telecom") belongs to the federal Parliament or the provincial legislatures. The historical background of proceedings before labour boards and courts is summarized in the reasons of Estey J. He has also reviewed the decisions of this Court in In re the Validity of the Industrial Relations and Disputes Investigation Act (the Stevedores' case), 1955 CanLII 1 (SCC), [1955] S.C.R. 529; Letter Carriers' Union of Canada v. Canadian Union of Postal Workers, 1973 CanLII 183 (SCC), [1975] 1 S.C.R. 178; Construction Montcalm Inc. v. Minimum Wage Commission, 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754. I need not repeat that discussion.

[page 770]

In Northern Telecom Ltd. v. Communications Workers of Canada (Telecom 1980), 1979 CanLII 3 (SCC), [1980] 1 S.C.R. 115, this Court was dealing with the constitutional jurisdiction over the supervisors of the installers in the western region. The present case involves the installers in the eastern region, but the constitutional issue is the same. It is common ground that Bell Canada's telecommunications system is a federal undertaking. The question is whether Telecom's installation department forms an integral part of that federal undertaking. In Telecom 1980 this Court found the record lacking essential constitutional facts. I broadly outlined the facts required, dividing them into four general categories. The record in the present case does contain the necessary facts, and I propose to analyse them according to the outline given in Telecom 1980.

(1) the general nature of Telecom's operation as a going concern and, in particular, the role of the installation department within that operation;

Telecom is a large manufacturer and supplier of very sophisticated telecommunications equipment. There are four manufacturing groups: (1) Switching Group; (2) Transmission Group; (3) Cable Group; (4) Subscriber Equipment Group. The installers are personnel of the Switching and Transmission groups. However, the installers are functionally quite separate from the rest of Telecom's operations. 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. Telecom's core manufacturing operations are conceded to fall under provincial jurisdiction, but there would be nothing artificial in concluding that

[page 771]

Telecom's installers come under different constitutional jurisdiction.

(2) the nature of the corporate relationship between Telecom and the companies that it serves, notably Bell Canada;

Northern Telecom Canada Limited is a wholly owned subsidiary of Northern Telecom Limited, which is 60.5 per cent owned by Bell Canada. Bell Canada's ownership interest is less than formerly, but Bell Canada retains, and intends to continue to retain, control of Telecom. Corporate relationships are not determinative in assessing constitutional jurisdiction (Telecom 1980, at p. 134), but the fact that Bell Canada controls Telecom makes it somewhat easier to conclude a segment of Telecom's operations is an integral part of Bell Canada's operations.

(3) the importance of the work done by the installation department of Telecom for Bell Canada as compared with other customers;

Chief Justice Thurlow in the Federal Court of Appeal [1981 CanLII 4561 (FCA), [1982] 1 F.C. 191] summarized the situation on this point as follows, [at p. 199]:

Bell buys 90% of its switching and transmission equipment from Telecom Canada and 95% of all such equipment bought by Bell is installed by Telecom Canada. Installation work for Bell accounts for 80% of the work of the Telecom Canada installers.

Telecom's involvement with Bell Canada is clearly the predominant part of the installers' work, and on that aspect, meets the test for federal jurisdiction set out in the Letter Carriers case, supra, and Montcalm, supra. The installers' work for Bell Canada is neither an exceptional nor a casual factor.

(4) the physical and operational connection between the installation department of Telecom and the core federal undertaking within the telephone system and, in particular, the extent of the involvement of the installation department in the operation and institution of the federal undertaking as an operating system.

[page 772]

This factor is obviously the most critical in determining whether the federal Parliament or the provincial legislature has constitutional jurisdiction. There is clearly some connection between the Telecom installers and Bell Canada, the core federal undertaking, but is it sufficient to displace the prima facie position that labour relations are a matter of provincial competence?

The appellants argue that the installers' work is merely the end of the manufacturing process; installation is simply effective delivery. The fact that installation of sophisticated equipment is no simple task and involves a significant amount of on-site testing makes no difference. It should be noted that the testing is primarily internal to the system just installed and does not normally involve testing along Bell's full network. It is also conceded that once installation is completed, the equipment is turned over to Bell Canada and it is Bell Canada's employees who are responsible for ordinary maintenance. It is argued that installers essentially do construction work as was found to be under provincial jurisdiction in Montcalm, supra.

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

[page 773]

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 operation 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 coordinate 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.

[page 774]

I agree with the conclusion expressed by Chief Justice Thurlow in the Federal Court of Appeal [at p. 202] :

But the feature of the case that appears to me to be of the greatest importance and to point with telling effect to the conclusion that the jurisdiction is federal is the fact, as I see it, that what the installers are doing, day in day out, during 80% of their working time, is participating in the carrying on of the federal undertaking itself which by reason of its nature requires a constant program of rearrangement, renewal, updating and expansion of its switching and transmission system and the installation of telecommunications equipment designed to carry out that need. With 80% of the work these installers are doing on a continuing basis being work done in Bell's undertaking, I am of the opinion that there is a foundation for the assertion of federal jurisdiction over their labour relations and that the Board should assume and exercise it in accordance with the Canada Labour Code. Further, in my view, the fact that 20% of the installers' work is not done for Bell does not change the conclusion.

Although I think this case is very close to the boundary line between federal and provincial jurisdiction, I am persuaded that the installers fall under federal jurisdiction.

I would dismiss the appeal with an order as to costs as indicated in the reasons of Estey J.

The reasons of Beetz and Chouinard JJ. were delivered by

BEETZ J. (dissenting)—I have had the advantage of reading my brother Estey's reasons for judgment.

I agree with these reasons in so far as they relate to the jurisdiction of the Federal Court of Appeal to entertain the referred question.

However, and with the greatest respect for those who hold a different view, I reach the opposite result on the merits.

In the Eastern Region, the employer and Canadian Union of Communication Workers (CUCW) have operated under provincial legislation from 1945 to 1971, although it is true that there was no distinction between manufacturing employees and installers until 1968. In that year,

[page 775]

the Ontario Labour Relations Board held it had jurisdiction over the installers and, in 1969, the Quebec Enquiry Commissioner took the same view. The Ontario High Court and the Quebec Court of Appeal decided otherwise in The Queen v. Ontario Labour Relations Board, Ex parte Northern Electric Co. Ltd., 1970 CanLII 520 (ON SC), [1970] 2 O.R. 654, and Northern Electric Co. Ltd. v. The Quebec Labour Court unreported decision 13,085, January 25, 1972. But, as was noted by the Canada Labour Relations Board in its reasons, the employer and CUCW continued to operate under provincial legislation notwithstanding these judgments.

Provincial legislation was also applied in the Western Region from 1950 to 1970 whether or not a distinction was made between manufacturing employees and installers.

Like provincial boards, the Canada Labour Relations Board has considerable expertise in the matter. It is the trier of facts. It is not called upon to review the evidence: it has the advantage of actually hearing it. It had already decided that it did not have jurisdiction in 1958 with respect to the installers of the Western Region. When it did assume jurisdiction in 1974 with respect to the supervisory installers of the Western Region, its jurisdiction had not been clearly challenged. This Court held that by its obfuscation, the employer had effectively deprived a reviewing court of the necessary constitutional facts upon which to reach any valid conclusion on the constitutional issue and dismissed the appeal simply on the basis that the appellant had failed to show reversible error on the part of the Board: Northern Telecom Ltd. v. Communications Workers of Canada, 1979 CanLII 3 (SCC), [1980] 1 S.C.R. 115, hereinafter referred to as Northern Telecom (No. 1).

In the case at bar, the jurisdiction of the Board was formally challenged and there was an abundance of material before the Board enabling it as well as a reviewing Court to decide the issue. The Board correctly directed itself on the law. It relied essentially on the reasons delivered by my brother Dickson on behalf of a unanimous Court in Northern Telecom (No. 1).

[page 776]

The unanimous reasons of the Board have been reported in (1980), 41 di 44. I quote certain excerpts to be found at pp. 88-91:

Where does all of this leave us? In our view we are confronted with the same problem which faced the Boards and courts in the 50's, 60's and 70's. The major difference is we now have some guidance from the Supreme Court of Canada. It summarized principles of constitutional law applicable in this case.

The Board then quoted the principles summarized at pp. 132 and 135 of the Northern Telecom (No. 1) case and continued:

With these in mind the parties presented evidence and argument to the Board. The union's case focused on installation activity and its procedure as an "integral" step in establishing, repairing, maintaining, expanding and operating an interprovincial telecommunications network. The employer's case emphasized installation as the final step in delivery of manufactured goods installed as a service "integral" to the manufacture of complex processes in a rapidly changing industry where virtual market monopoly dictates close connections between the manufacturer and major customer like Bell Canada. The thin line between preparing to operate a system and actually operating a system in a telephone network was the battle line of debate.

... we will not base our decision on a fine distinction between whether testing or cutting into a telephone network or throwing the switch to start a piece of equipment constitutes operating or maintaining or constructing a part of a telephone network.

What is different in the situation today from the way it was in 1970? Very little. There have been some changes in the shareholding interest of Bell Canada in the employer and some changes in the shared responsibility and control of research. There have also been some small changes in market distribution of the employer's product and, of course, more major changes in technology, and some administrative reorganization with the employer. The employer characterized this as evidence of the continually uninterrupted evolution of the employer away from Bell Canada.

[page 777]

Counsel presented cogent and detailed evidence and argument on the nexus between the employer and that portion of the telecommunications industry considered in the federal jurisdiction. We cannot conceive that the integral test of jurisdiction that tells employees and employers the forum in which they may exercise the right of freedom of association sanctioned by Canada's signature on the Treaty of Versailles and ratification of International Labour Organization Convention No. 87 and expressed in legislation in each province and the federal jurisdiction turns on such a microscopic examination of facts. If it does, we venture to say the test needs to be seriously rethought by the courts, as well as politicians.

Our appreciation of the totality of the written and verbal evidence adduced leads us to conclude the installers in the eastern region are not employed upon or in connection with a federal work, undertaking or business. Like the Ontario Board in 1969 and this Board in 1958 (and 1968 in RCA Victor Company Ltd., 68 CLLC ¶116,040) we find the activity of the eastern region installers is essentially the installation and construction of certain components of the Bell Canada, nationwide and international telephone network. The work is important to Bell Canada. The components are often large or important and the quantity requires constant attention by the employer and the connection between Bell Canada and the employer cannot be characterized as exceptional or casual. The problem of characterization for constitutional purposes is whether you focus on the installation and testing as the first step in the creation, maintenance and operation of the federal work, undertaking or business or the last step in the manufacture and delivery of specialized (and warranted) products, delivery of which is accepted when it is established they are functioning properly. The colour of the valley depends on whether you view it from the sunny or shaded slope.

The test enunciated in judicial decisions gives no clear answer to the proper characterization. The facts merely show the detailed aspects of the landscape and their hue changes with the vantage point. Like the differing conclusions in the opinions in Construction Montcalm Inc. and the Minimum Wage Commission et al 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754 and Four B Manufacturing Limited v. United Garment Workers of America et al, 80 CLLC 14,006 (S.C.C.) the functional test when applied to the same facts can produce differing results. We have considered

[page 778]

the test as expressed by the Supreme Court of Canada and as formulated by us for Part V of the Canada Labour Code in Marathon Realty Company Limited, supra, and have concluded the labour relations of these employees is provincially regulated. For labour relations purposes as well as constitutional law purposes we view the installers' activity as manufacturing related more so than an integral part of the area within federal competence. There is no doubt the system cannot operate without the equipment installed by these employees. It can also be said it could not operate without the phone book. Since 1970 that separate function has been treated as within the provincial jurisdiction.

.. . the essentiality of the product to the operation of the federal work, undertaking or activity is not the test for the integral nature of the activity with respect to the product to the activity of the federal work, undertaking or business.

Any nagging doubts we have in this case, we have resolved in favour of the implicit constitutional presumption in favour of provincial jurisdiction.

I do not find any error in these reasons and I agree that the construction and installation of certain components of the federal undertaking remain distinct from the operation of the undertaking or, to use the language of my brother Dickson in Northern Telecom (No. 1) at p. 135, is not involved "in the operation and institution of the federal undertaking as an operating system". (Emphasis added.)

I also agree with the application made by the Board to the circumstances of this case of the principles affirmed in Construction Montcalm Inc. v. Minimum Wage Commission, 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754 and re-affirmed by my brother Dickson in Northern Telecom (No. 1) at p. 132:

(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

[page 779]

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.

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 Dain J. put it in the Federal Court of Appeal [1981 CanLII 4561 (FCA), [1982] 1 F.C. 191, at p. 203]. 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.

I would allow the appeal, set aside the decision of the Federal Court of Appeal and answer in the negative the question referred to it.

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The appellants are entitled to costs in this Court and the Court below against the respondents. However there should be no order as to costs for or against the interveners.

Appeal dismissed with costs, BEETZ and CHOUINARD JJ. dissenting.

Solicitors for the appellant Northern Telecom Canada Limited: Ogilvy, Renault, Montreal.

Solicitors for the appellant Canadian Union of Communication Workers: Robinson, Cutler, Sheppard, Borenstein & Associates, Montreal.

Solicitors for the respondent Communication Workers of Canada: Jasmin, Rivest, Castiglio & Associates, Montreal.

Solicitor for the respondent the Attorney General of Canada: Roger Tassé, Ottawa.

Solicitors for the third party the Canada Labour Relations Board: Deverell, Harrop, Vancouver.

Solicitors for the third party the Attorney General of Quebec: Boissonneault, Roy & Poulin, Montreal.

Solicitor for the third party the Attorney General of Ontario: A. Rendall Dick, Toronto.