Canada (Attorney General) v. Public Service Alliance of Canada, 1991 CanLII 88 (SCC), [1991] 1 SCR 614

Canada (Attorney General) v. Public Service Alliance of Canada, [1991] 1 S.C.R. 614

Public Service Alliance of Canada Appellant

v.

Her Majesty The Queen represented by

the Attorney General of Canada Respondent

and

Econosult Inc. Mis en cause

Indexed as: Canada (Attorney General) v. Public Service Alliance of Canada

File No.: 21393.

1990: May 22; 1991: March 21.

Present: Lamer C.J.* and La Forest, L'Heureux‑Dubé, Sopinka, Gonthier, Cory and McLachlin JJ.

on appeal from the federal court of appeal

Labour relations ‑‑ Public Service ‑‑ Employment -- Teachers working in penitentiary pursuant to government contract with private corporation ‑‑ Teachers provided by private corporation doing same work as those in service of Solicitor General ‑‑ Public Service Staff Relations Board concluding that teachers were Government employees for purposes of collective bargaining ‑‑ Whether Board had jurisdiction to determine who is employee of Public Service ‑‑ Public Service Staff Relations Act, R.S.C. 1970, c. P‑35, ss. 2, 33, 98.

Administrative law ‑‑ Judicial review ‑‑ Jurisdictional error ‑‑ Standard of review.

When educational programs for inmates of federal penitentiaries were instituted by the Solicitor General, the teachers hired became part of the Solicitor General's staff, were classified as civil servants and formed part of a bargaining unit known as the Educational Group. The Solicitor General later decided to privatize the educational programs. Accordingly, the Government entered into a contract with Seradep Inc. for the supply of teachers to provide instruction at one of its penitentiaries. The duties of these teachers were precisely defined by the Government. They were under the control of a supervisor employed by Seradep Inc. but it was a member of the correctional service who monitored the quality of instruction. When the contract with Seradep Inc. expired, a similar contract was concluded with Econosult Inc. Both contracts contained a clause stating expressly that the teachers were not hired as employees of the Crown. While the contract with Seradep Inc. was still in force, the appellant filed an application with the Public Service Relations Board seeking first, a declaration that all teaching employees at the penitentiary, including those provided by Seradep Inc., were employees of the Government, and second, that these teachers were members of the Educational Group for which the appellant was the certified bargaining agent. The application was based upon ss. 33 and 98 of the Public Service Staff Relations Act. The Board adopted the view that in the context of labour relations, the "substance" rather than the "form" of the relationship must be examined. It concluded that a true employer/employee relationship existed between the Solicitor General and the teachers supplied by Econosult Inc. in spite of the existence of the contract and granted appellant's application. The Federal Court of Appeal set aside the Board's decision. The majority held that the Board did not have the jurisdiction to decide who was an employee of the Public Service. Rather, the Board's authority applied only to public servants recognized as such by legislation other than its enabling statute and by the authority of a body other than itself.

Held (Cory J. dissenting): The appeal should be dismissed.

Per Lamer C.J. and La Forest, L'Heureux-Dubé, Sopinka, Gonthier and McLachlin JJ.: The standard of review will depend on whether the interpretation of s. 33 of the Public Service Staff Relations Act and, in particular, the word "employees" contained therein, was intended by Parliament to be left to the Board or whether it is a provision limiting jurisdiction. If it is the latter then the Board's interpretation is reviewable if it is wrong. If, however, the interpretation of s. 33 and more specifically the meaning of the term "employees", was intended to be left to the Board then its decision is not reviewable unless the interpretation placed upon those provisions is patently unreasonable and the Board thereby exceeded its jurisdiction. In determining whether there has been a simple error in interpreting a provision conferring or limiting jurisdiction as in determining whether jurisdiction has been exceeded by a patently unreasonable error a pragmatic and functional approach must be adopted.

The application of the pragmatic and functional approach to the construction of these provisions leads to the conclusion that Parliament did not intend to confer jurisdiction on the Board with respect to the labour relations of employees who are not members of the Public Service.

First, the Board's function under s. 33 is to determine whether employees, as defined in the Act, are included in a bargaining unit. By expressly defining the word "employee" in s. 2, Parliament clearly indicated its intention to limit the Board's jurisdiction to persons employed in the Public Service and who are not covered by the Canada Labour Code.

Second, the creation of a category of de facto public servant is not in keeping with the purpose of the legislation. The Public Service Staff Relations Act, the Public Service Employment Act and the Financial Administration Act, when read with the Canada Labour Code, reveal a scheme to create two separate and distinct labour regimes for two categories of federal employees. There is no place in this legal structure for a public servant without a position created by the Treasury Board and without an appointment made by the Public Service Commission. Moreover, the reason for the Board's existence in this scheme of labour relations is the resolution of labour management disputes between the Federal Government and its employees. Those who are authorized to bring disputes before the Board are employees, employee organizations and employers as defined in the legislation which clearly confines the ambit of these disputes to the Public Service. No purpose is served by extending its jurisdiction to employees outside the Public Service who have recourse to other labour relations legislation, either federal or provincial.

Third, in providing a clear definition of the employees and the employer who are subject to the Board's jurisdiction, Parliament clearly showed its intention that the Board should not rely on its general labour expertise to extend the reach of this definition.

The conclusion that Parliament did not confer jurisdiction on the Board with respect to the labour relations of employees who are not members of the Public Service is not at variance with previous decisions of this Court. No case gives the Board the authority to decide that persons hired by a private contract fall within the definition of "employee" in the Public Service Staff Relations Act notwithstanding that they have not been appointed as public servants in accordance with the established statutory requirements.

Per Cory J. (dissenting): The application of the functional and pragmatic approach set forth in Bibeault clearly establishes that the Board had jurisdiction under s. 33 of the Public Service Staff Relations Act to decide whether the Econosult Inc. teachers were members of the bargaining unit.

The purpose of the Act, as reflected by s. 98, is to provide the means for achieving the speedy resolution of disputes arising out of a collective agreement between the Federal Government and its employees. While the Board is required under s. 33 to determine who are the members of a bargaining unit, it was not necessary in this case for the Board, in carrying out its assigned role under that section, to determine whether an employee was a member of the Public Service ‑‑ i.e., an employee as defined in s. 2. A person can well be a member of a bargaining unit for collective bargaining purposes, and yet not be a public servant entitled to all the special benefits and perquisites that flow from membership in the Public Service. Here, in making its decision as to whether teachers doing the same work in the same institution should belong to the same bargaining unit, the Board carried out a function which lay logically at the heart of the specialized jurisdiction confided to the Board by the Act. The wording of s. 98 itself made it incumbent on the Board to make a finding on this issue.

Further, it is apparent that the Board's raison d'être is the resolution of labour management disputes that may erupt between the Federal Government and its employees, and the Board acted within its area of expertise in that field and carried out its mandate in deciding that the Econosult Inc. teachers were members of the bargaining unit. The Board has been given wide powers and its decisions, which are protected by a privative clause, require the utilization of expert skill or knowledge in the field of labour relations involving the Federal Government and its employees. The question of whether a person can be an employee, for the purposes of collective bargaining, without going through the formalities set out in the Public Service Employment Act, is a substantive question that the Board was required to consider in order to attain the aim of the Public Service Staff Relations Act and to fulfill its role.

The Board's decision was not patently unreasonable. A person need not be appointed by the Public Service Commission pursuant to s. 8 of the Public Service Employment Act in order to be classified as an employee of the Federal Government and a member of a bargaining unit under s. 33 of the Public Service Staff Relations Act. It is not the form of the arrangement or the expressed intent of the Government which is determinative of the issue; rather, it is the substance of the relationship that must govern the decision. Here, it was apparent that, quite apart from appointments made under s. 8 of the Public Service Employment Act, government officials could de facto create a position. The Board, after carefully examining the situation of the contract workers, determined that they were employees of the Federal Government for collective bargaining purposes. The Board's decision was consistent with the facts presented, the decided cases and with the provisions of the Public Service Staff Relations Act, and appeared to be a reasonable one.

Cases Cited

By Sopinka J.

Applied: U.E.S., local 298 v. Bibeault, [1988] 2 S.C.R. 1048; referred to: Syndicat Général du Cinéma et de la Télévision (S.G.C.T.) v. The Queen, [1978] 1 F.C. 346; Doré v. Canada, [1987] 2 S.C.R. 503; CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983; Service Employees International Union, Local 204 v. Kennedy Lodge Inc., [1984] O.L.R.B. Rep. July 931; Brantwood Manor Nursing Homes Ltd. (1986), 12 C.L.R.B.R. (N.S.) 332; Canada (Attorney General) v. Brault, [1987] 2 S.C.R. 489; Canada Post Corp. v. C.U.P.W., [1989] 1 F.C. 176.

By Cory J. (dissenting)

Syndicat Général du Cinéma et de la Télévision (S.G.C.T.) v. The Queen, [1978] 1 F.C. 346; Doré v. Canada, [1987] 2 S.C.R. 503; Anisminic Ltd. v. Foreign Compensation Commission, [1969] 2 A.C. 147; Re Racal Communications Ltd., [1981] A.C. 374; O'Reilly v. Mackman, [1983] 2 A.C. 237; Gray v. Powell, 314 U.S. 402 (1941); National Labor Relations Board v. Hearst Publications, Inc., 322 U.S. 111 (1944); Udall v. Tallman, 380 U.S. 1 (1965); Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324; Metropolitan Life Insurance Co. v. International Union of Operating Engineers, Local 796, [1970] S.C.R. 425; Bell v. Ontario Human Rights Commission, [1971] S.C.R. 756; Blanco v. Rental Commission, [1980] 2 S.C.R. 827; Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178; Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245; Alberta Union of Provincial Employees, Branch 63 v. Board of Governors of Olds College, [1982] 1 S.C.R. 923; CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983; Teamsters Union, Local 938 v. Massicotte, [1982] 1 S.C.R. 710; Syndicat des employés de production du Québec et de l'Acadie v. Canada Labour Relations Board, [1984] 2 S.C.R. 412; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Canada (Attorney General) v. Brault, [1987] 2 S.C.R. 489.

Statutes and Regulations Cited

Canada Labour Code, R.S.C., 1985, c. L‑2, ss. 5, 6, 16.

Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.

Financial Administration Act, R.S.C., 1985, c. F‑11, s. 11(2) [am. c. 9 (1st Supp.), s. 22(2)], (3).

Industrial Relations Act, R.S.B.C. 1979, c. 212, s. 34(1) [am. 1987, c. 24, s. 24].

Labour Code, R.S.Q. 1977, c. C‑27, s. 39 [am. 1983, c. 22, s. 21].

Labour Relations Act, R.S.M. 1987, c. L10, s. 142(5).

Labour Relations Act, R.S.O. 1980, c. 228, s. 106(2).

Labour Relations Code, S.A. 1988, c. L‑1.2, s. 11(3).

Public Service Employment Act, R.S.C. 1970, c. P‑32, ss. 2 "employee", "Public Service", 8, 22 to 27.

Public Service Staff Relations Act, R.S.C. 1970, c. P‑35, ss. 2 "employee", "employer", "Public Service", 3, 7, 33, 57, 98 [am. 1974‑75‑76, c. 67, s. 27].

Trade Union Act, R.S.N.S. 1989, c. 475, s. 19(1).

Authors Cited

Craig, Paul P. Administrative Law, 2nd ed. London: Sweet & Maxwell, 1989.

Schwartz, Bernard and H. W. R. Wade. Legal Control of Government: Administrative Law in Britain and the United States. Oxford: Clarendon Press, 1972.

Wade, Sir William. Administrative Law, 6th ed. Oxford: Clarendon Press, 1988.

APPEAL from a judgment of the Federal Court of Appeal, 1989, [1989] 2 F.C. 633, allowing respondent's application under s. 28 of the Federal Court Act to review and set aside a decision of the Public Service Staff Relations Board (1988), 13 P.S.S.R.B. Decisions 6. Appeal dismissed, Cory J. dissenting.

Dianne Nicholas, for the appellant.

Raymond Piché and Gaspard Côté, for the respondent.

Sopinka J.

The judgment of Lamer C.J. and La Forest, L'Heureux-Dubé, Sopinka, Gonthier and McLachlin JJ. was delivered by

Sopinka J. -- The question raised by this appeal is whether the Public Service Staff Relations Board (the "Board") had jurisdiction to decide that teachers working in the Cowansville Penitentiary pursuant to a government contract with the mis en cause Econosult Inc. ("Econosult") were employees in the Public Service within the meaning of the Public Service Staff Relations Act, R.S.C. 1970, c. P-35 ("Staff Relations Act"). I have had the benefit of reading the reasons of my colleague Cory J. and with respect, I cannot agree with the conclusion that he has reached.

1. Facts and Proceedings

In 1971, the Solicitor General for Canada instituted educational programs for the inmates of federal penitentiaries. The educational services were to be provided by Government employees. In 1984, the Solicitor General decided to privatize the educational programs by having recourse to agencies in the private sector to provide the required teaching services. There were several reasons motivating this decision. In addition to ensuring the high quality of the programs by requiring that the education of the inmates be provided by teachers from accredited Boards of Education, colleges and universities, it was hoped that the privatization would bring about certain advantages such as lower cost, efficiency and flexibility as to the variety of courses available to inmates.

Accordingly, in May of 1985, Supply and Services Canada entered into a contract with Seradep Inc. ("Seradep") for the supply of teachers to provide instruction at the Cowansville Penitentiary in Quebec. The duties of the employees of Seradep were precisely defined by the Government, but they were nonetheless to be under the control of a supervisor employed by Seradep. A member of the correctional service was to monitor the quality of instruction.

When the contract with Seradep expired in July 1987, a similar contract was concluded with Econosult. Both contracts contained a clause stating expressly that the teachers were not hired as employees of the Crown:

This is a Contract for the performance of a service and the Contractor is engaged as an independent Contractor for the sole purpose of providing a service. Neither the Contractor nor any of his personnel is engaged as an employee, servant or agent of Her Majesty. The Contractor further agrees to be solely responsible for any and all payments and/or deductions required to be made respecting Unemployment Insurance, Workmen's Compensation, Income Tax or such payment deductions falling within this particular category. [Emphasis added.]

While the first contract with Seradep was still in force, the appellant, the Public Service Alliance of Canada ("P.S.A.C."), filed an application with the Board seeking first, a declaration that all teaching employees at the Cowansville Penitentiary, including those provided by Seradep, were employees of the Federal Government and second, that these teachers were members of the Educational Group for which the P.S.A.C. was the certified bargaining agent. The specific findings which the Board was asked to make were as follows:

[translation]

(a)find that all teaching employees at the Cowansville Penitentiary are employees of the respondent employer (Her Majesty the Queen in right of Canada, represented by the Treasury Board), including those providing their services through Seradep Inc.;

(b)find that all employees teaching at the Cowansville Penitentiary are members of the Education Group (ED) of the bargaining unit;

(c)find that the Public Service Alliance of Canada is the certified bargaining agent for all employees teaching at Cowansville Penitentiary;

(d)find that the respondent employer must comply with clause 10 of the collective agreement concerning the withholding of union dues . . . .

Decision of the Board

The Board acknowledged at the outset that if it were to be limited by what it considered to be mere "form", there would be no controversy that the teachers in question were employees of Econosult. Moreover, it was not disputed that there were differences in the hiring process and working conditions of the Econosult employees as opposed to Government employees. First, a supervisor employed by Econosult was responsible for overseeing the services provided by the latter as opposed to the Government employees who were under the supervision of a member of the correctional service. Second, only the Government employees were sworn in as public servants under oath of office. Third, the working conditions of the Government employees were to be negotiated collectively pursuant to the Staff Relations Act in contrast to the teachers from the private sector whose working conditions were negotiated on an individual basis with Econosult. Finally, the contract between the Government and Econosult provided explicitly that the latter was responsible for the hiring of the teachers as opposed to Government employees who are hired following the procedure provided for in the Public Service Employment Act, R.S.C. 1970, c. P-32 ("Employment Act").

Notwithstanding these significant differences, the Board concluded that the true employer of the said teachers was the Government of Canada. As employees of the Government of Canada it was not contested that they were members of the bargaining unit (Educational Group). The Board adopted the view that in the context of labour relations, the "substance" rather than the "form" of the relationship must be examined. The Board was of the opinion that the evidence revealed that Econosult played a rather "marginal" role in the work-life of the teachers.

The Board made the findings which were requested in the following terms:

Having regard to all the above conclusions, my decision is as follows:

(a) I declare that the teachers working at the Correctional Service Canada Cowansville Institution as "contract workers" for Econosult Inc., including Mrs. Lise Côté, the supervisor of education, are included in the teaching group bargaining unit, for which the Applicant is the bargaining agent under the Public Service Staff Relations Act;

(b) I declare that the same persons were included in that bargaining unit in the month of February 1987;

(c) I declare that the Treasury Board is obligated to comply with section 10 of the basic agreement, relating to union check off, with respect to these employees, commencing with the month of February 1987;

(d) I order the Treasury Board to pay to the Applicant an amount equal to the amount that the latter would have collected if the Treasury Board had complied with section 10 of the agreement in question between February 1 and September 30, 1987; and

(e) I shall retain jurisdiction over the reference under section 98 for the purpose of settling possible problems with respect to the calculation of the amount due to the Applicant.

Federal Court of Appeal, 1989, [1989] 2 F.C. 633

Marceau J.A., writing for the majority, made three observations leading to the conclusion that the Board had exceeded its jurisdiction in this case. First, public servants constitute a separate regime of labour relations and must be distinguished from employees of the private and semi-private sector. For example, s. 6 of the Canada Labour Code, R.S.C., 1985, c. L-2, states expressly that Part I, dealing with "Industrial Relations", does not apply in respect of the employment of public servants. Marceau J.A. observed that the Public Service regime is defined in three statutes which must be read together and interpreted accordingly: the Employment Act, the Staff Relations Act and the Financial Administration Act, R.S.C., 1985, c. F-11 (previously R.S.C. 1970, c. F-10). Second, Marceau J.A. distinguished this case from those involving a dispute as to whether a person is an independent contractor or employee. There was no dispute in the case at bar that the teachers provided by Econosult were employees rather than independent contractors. The only controversy was whether they were Government employees or employees of Econosult. Finally, Marceau J.A. emphasized that in the case of employees of the private or semi-private sector, the legal relationship may be inferred from a situation of fact and no particular form is necessary to give rise to the relationship of employer/employee. On the other hand, the status of a public servant cannot be inferred from a mere situation of fact, as employment in the Public Service is subject to a comprehensive set of rules which are strictly enforced. For example, the Staff Relations Act defines precisely when a position will be considered to be part of the "Public Service". The Financial Administration Act confers on the Treasury Board the exclusive power to approve the creation of new positions and to determine their classification as well as their distribution amongst the various organs of the public administration. By virtue of the Employment Act, the Public Service Commission is entrusted with the exclusive power to appoint persons to the Public Service by way of nominations based on merit.

These observations led Marceau J.A. to the finding that the Board did not have jurisdiction to determine who is a member of the Public Service. He concluded that the Board's authority extends only to public servants recognized as such by a statute other than its governing statute and appointed by the authority of a body other than itself. The majority therefore referred the matter back to the Board for a determination of the application on the basis that the teachers employed by Econosult are not employees within the meaning of the Staff Relations Act.

Hugessen J.A. differed from the majority. He found support for the jurisdiction of the Board to decide the matter for the reasons given in Syndicat Général du Cinéma et de la Télévision (S.G.C.T.) v. The Queen, 1977, [1978] 1 F.C. 346. Hugessen J.A. also considered the decision of this Court in Doré v. Canada, 1987, [1987] 2 S.C.R. 503, as determinative that the decision as to what constitutes the creation of a position and the appointment to a position must be reached by means of an assessment of the facts in each case and not simply by looking to the intention of the employer.

2.Relevant Statutory Provisions

The application by the P.S.A.C. was based on ss. 33 and 98 of the Staff Relations Act:

33. Where, at any time following the determination by the Board of a group of employees to constitute a unit appropriate for collective bargaining, any question arises as to whether any employee or class of employees is or is not included therein or is included in any other unit, the Board shall, on application by the employer or any employee organization affected, determine the question.

34. (1) Where the employer and a bargaining agent have executed a collective agreement or are bound by an arbitral award and

(a) the employer or the bargaining agent seeks to enforce an obligation that is alleged to arise out of the collective agreement or arbitral award, and

(b) the obligation, if any, is not an obligation the enforcement of which may be the subject of a grievance of an employee in the bargaining unit to which the collective agreement or arbitral award applies,

either the employer or the bargaining agent may, in the prescribed manner, refer the matter to the Board, which shall hear and determine whether there is an obligation as alleged and whether, if there is, there has been a failure to observe or to carry out the obligation.

(2) The Board shall hear and determine any matter referred to it pursuant to subsection (1) as though the matter were a grievance, and subsection 95(2) and sections 96 and 97 apply to the hearing and determination of that matter.

"Employee" and "employer" are defined in the Staff Relations Act as follows:

2. In this Act

"employee" means a person employed in the Public Service, other than [exceptions not applicable] . . .

"employer" means Her Majesty in right of Canada as represented by,

(a) in the case of any portion of the public service of Canada specified in Part I of Schedule I, the Treasury Board, and

(b) in the case of any portion of the public service of Canada specified in Part II of Schedule I, the separate employer concerned;

"Public Service" means the several positions in or under any department or other portion of the public service of Canada specified from time to time in Schedule I;

7. Nothing in this Act shall be construed to affect the right or authority of the employer to determine the organization of the Public Service and to assign duties to and classify positions therein.

The Employment Act provides:

2. (1) In this Act

"employee" means a person employed in that part of the Public Service to which the [Public Service] Commission has the exclusive right and authority to appoint persons;

"Public Service" has the same meaning as in the Public Service Staff Relations Act.

8. Except as provided in this Act, the Commission has the exclusive right and authority to make appointments to or from within the Public Service of persons for whose appointment there is no authority in or under any other Act of Parliament.

Financial Administration Act

11. . . .

(2) Subject to the provisions of any enactment respecting the powers and functions of a separate employer but notwithstanding any other provision contained in any enactment, the Treasury Board may, in the exercise of its responsibilities in relation to personnel management including its responsibilities in relation to employer and employee relations in the public service, and without limiting the generality of sections 7 to 10,

(a) determine the requirements of the public service with respect to human resources and provide for the allocation and effective utilization of human resources within the public service;

(b) determine requirements for the training and development of personnel in the public service and fix the terms on which such training and development may be carried out;

(c) provide for the classification of positions and employees in the public service;

(d) determine and regulate the pay to which persons employed in the public service are entitled for services rendered, the hours of work and leave of those persons and any matters related thereto;

(e) provide for the awards that may be made to persons employed in the public service for outstanding performance of their duties, for other meritorious achievement in relation to those duties and for inventions or practical suggestions for improvements;

(f) establish standards of discipline in the public service and prescribe the financial and other penalties, including suspension and discharge, that may be applied for breaches of discipline or misconduct, and the circumstances and manner in which and the authority by which or whom those penalties may be applied or may be varied or rescinded in whole or in part;

(g) [repealed c. 9 (1st Supp.), s. 22(2)];

(h) determine and regulate the payments that may be made to persons employed in the public service by way of reimbursement for travel or other expenses and by way of allowances in respect of expenses and conditions arising out of their employment; and

(i) provide for such other matters, including terms and conditions of employment not otherwise specifically provided for in this subsection, as the Treasury Board considers necessary for effective personnel management in the public service.

3.Jurisdiction of the Board

(a) Standard of Review

In respect of the standard of review I am in substantial agreement with the principles stated by Cory J. In this appeal it is necessary to consider whether the Board, in concluding that it could entertain the application made to it by the appellant, was interpreting a statutory provision which confers or limits jurisdiction. Essentially, this requires a determination as to whether the interpretation of s. 33 of the Staff Relations Act and, in particular the word "employees" contained therein, was intended by Parliament to be left to the Board or whether it is a provision limiting jurisdiction. If it is the latter then the Board's interpretation is reviewable if it is wrong. If, however, the interpretation of s. 33, and more specifically the meaning of the term "employees", was intended to be left to the Board then its decision is not reviewable unless the interpretation placed upon those provisions is patently unreasonable and the Board thereby exceeded its jurisdiction.

In essence, this is a distillation of this complex area of the law which was made by Beetz J. in U.E.S., local 298 v. Bibeault, 1988, [1988] 2 S.C.R. 1048, when he stated (at p. 1086):

It is, I think, possible to summarize in two propositions the circumstances in which an administrative tribunal will exceed its jurisdiction because of error:

1.if the question of law at issue is within the tribunal's jurisdiction, it will only exceed its jurisdiction if it errs in a patently unreasonable manner; a tribunal which is competent to answer a question may make errors in so doing without being subject to judicial review;

2.if however the question at issue concerns a legislative provision limiting the tribunal's powers, a mere error will cause it to lose jurisdiction and subject the tribunal to judicial review.

In the recent decision of this Court in CAIMAW v. Paccar of Canada Ltd., 1989, [1989] 2 S.C.R. 983, La Forest J. stated (at p. 1003):

Where, as here, an administrative tribunal is protected by a privative clause, this Court has indicated that it will only review the decision of the Board if that Board has either made an error in interpreting the provisions conferring jurisdiction on it, or has exceeded its jurisdiction by making a patently unreasonable error of law in the performance of its function; see Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., 1979, [1979] 2 S.C.R. 227.

Although Wilson J. and L'Heureux-Dubé J. dissented, both agreed with the basis for judicial review adopted by La Forest J. For example, L'Heureux-Dubé J. remarked (at p. 1033):

I agree with my colleague La Forest J. that courts must defer to the judgment of administrative tribunals in matters falling squarely within the area of their expertise. It is now well-established that an administrative tribunal exceeds its jurisdiction because of error only if: (1) it errs in a patently unreasonable manner in respect of a question which is within its jurisdiction; or, (2) it commits a simple error in respect of a legislative provision limiting the tribunal's powers (see U.E.S., Local 298 v. Bibeault, 1988, [1988] 2 S.C.R. 1048, at p. 1086).

To the same effect see Wilson J. at p. 1020.

In determining whether there has been a simple error in interpreting a provision conferring or limiting jurisdiction, as in determining whether jurisdiction has been exceeded by a patently unreasonable error, a pragmatic, functional approach must be adopted. This emerges from the following statement of Beetz J. in Bibeault (at pp. 1088-89):

At this stage, the Court examines not only the wording of the enactment conferring jurisdiction on the administrative tribunal, but the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal. At this initial stage a pragmatic or functional analysis is just as suited to a case in which an error is alleged in the interpretation of a provision limiting the administrative tribunal's jurisdiction: in a case where a patently unreasonable error is alleged on a question within the jurisdiction of the tribunal, as in a case where simple error is alleged regarding a provision limiting that jurisdiction, the first step involves determining the tribunal's jurisdiction. [Emphasis added.]

Cory J. concludes that the interpretation of s. 33 of the Staff Relations Act is a matter within the jurisdiction of the Board. Since, in his opinion the decision of the Board is not patently unreasonable, he concludes that there is no basis for judicial review.

Adopting a pragmatic and functional approach to the construction of these provisions, I have come to the conclusion that Parliament did not intend to confer jurisdiction on the Board with respect to the labour relations of employees who are not members of the Public Service. The Board by an error of law has assumed jurisdiction that it was not intended to have. Its decision is, therefore, reviewable.

(b) Application of the Standard

(i) Wording of the Enactment

In my opinion the wording of s. 33 itself, aided by the definition of the word "employee" provided by s. 2, is practically decisive in this case. Section 33 is intended to enable the Board to resolve any question as to whether an employee or class of employees is or is not included in a bargaining unit. In the absence of a definition of "employee", it could be argued that the Board could determine who is an employee on the basis of tests that are generally employed in labour matters. These tests are customarily employed to resolve a dispute as to whether a person is an employee or an independent contractor. The express definition of "employee", however, shows a clear intention by Parliament that it has decided the category of employee over which the Board is to have jurisdiction. It is restricted to persons employed in the Public Service and who are not covered by the Canada Labour Code. The Board's function by the very words of s. 33 is not to determine who is an employee but rather whether employees who come within the definition provided, are included in a particular bargaining unit.

There is no provision in s. 33 or indeed in this statute that gives the Board exclusive jurisdiction to determine who is an employee on the basis of the Board's expertise. Such provisions are not uncommon in labour statutes when it is intended that the Board have the final word as to whether persons employed by the same employer are employees or independent contractors. One example of such a provision is s. 106(2) of the Ontario Labour Relations Act, R.S.O. 1980, c. 228. This exclusive power to determine who is an employee has been exercised to prevent an employer from contracting out work in breach of the collective agreement. This jurisdiction is usually exercised in the context of an unfair labour practice based on anti-union animus. Two cases decided by the Ontario Labour Relations Board illustrate the exercise of this power and, significantly, are cited by the Board in this case in support of its decision. They are Service Employees International Union, Local 204 v. Kennedy Lodge Inc., [1984] O.L.R.B. Rep. July 931, and Brantwood Manor Nursing Homes Ltd. (1986), 12 C.L.R.B.R. (N.S.) 332. Other examples of this express grant of jurisdiction to determine who is an employee are:

(1)Labour Relations Code, S.A. 1988, c. L-1.2, s. 11(3);

(2)Industrial Relations Act, R.S.B.C. 1979, c. 212, s. 34(1);

(3)The Labour Relations Act, R.S.M. 1987, c. L10, s. 142(5);

(4)Trade Union Act, R.S.N.S. 1989, c. 475, s. 19(1);

(5)Labour Code, R.S.Q. 1977, c. C-27, s. 39.

Typical of the wording is s. 16 of the Canada Labour Code which provides:

16. The Board has, in relation to any proceeding before it, power

(p) to decide for all purposes of this Part any question that may arise in the proceeding, including, without restricting the generality of the foregoing, any question as to whether

(i) a person is an employer or an employee . . . .

(ii) Purpose of the Statute and the Reasons for the Board's Existence

The three statutes referred to above when read with the Canada Labour Code reveal a scheme to create two separate and distinct labour regimes for two categories of federal employees. The legislation treats each category as mutually exclusive. Thus s. 3 of the Staff Relations Act limits the application of the Act to the Public Service. The Code applies to employees who work on federal works or undertakings. By virtue of s. 6 of the Code, public servants are excluded from its application. It is significant that s. 5 of the Code makes specific provision for employees who are employed by corporations established to perform work for the Government of Canada. Exclusion from the application of the Code and inclusion in the Public Service require an order of the Governor in Council. Public servants are a special category of employee whose particular status is incompatible with inclusion in a bargaining unit with non-public servants. The positions in the Public Service are determined by Treasury Board and appointments to the public service are within the exclusive right and authority of the Public Service Commission. Exceptions are carefully spelled out in the Employment Act.

Although Cory J. states that the teachers are found to be employees for collective bargaining purposes and not public servants for other purposes, I have some difficulty reading the Board's reasons that way. In paragraph 73 of the Board's reasons it states that the contract teachers are employees of the Government of Canada and that no one has contended that if they are such employees that they are not members of the bargaining unit. The conclusion that the teachers are employees of the Government of Canada is the basis for finding that they are included in the bargaining unit. A finding that they are employees of the Government of Canada simpliciter would clearly exceed the authority conferred by s. 33 and would fly in the face of s. 8 of the Employment Act which expressly reserves this power to the Public Service Commission. While I am of the view that this is the basis of the Board's decision, I will deal with the matter on the narrower interpretation of the Board's decision as suggested by Cory J. His approach is summed up in the statement that: "A person can well be a member of a bargaining unit for collective bargaining purposes, and yet not be a public servant entitled to all the special benefits and perquisites that flow from membership in the Public Service" (p. 000).

In the scheme of labour relations which I have outlined above there is just no place for a species of de facto public servant who is neither fish nor fowl. The introduction of this special breed of public servant would cause a number of problems which leads to the conclusion that creation of this third category is not in keeping with the purpose of the legislation when viewed from the perspective of a pragmatic and functional approach. There are, for example, certain statutory terms and conditions of employment that are not subject to the collective bargaining process but are nevertheless applicable to a public servant. This results from the combined effect of s. 57 of the Staff Relations Act and ss. 22 to 27 of the Employment Act. Accordingly a bargaining unit which is designed to include all those with a unity of interest would have two classes of employees. On the one hand, the "legal" public servant must take an oath of allegiance and of office, has his or her tenure of office fixed by statute, and is subject to other statutory restrictions but receives other benefits, while, on the other hand, the de facto public servant is free to work these terms out with his or her contractual employer and indeed bargain collectively with the latter in respect of these matters. There is no provision in the Code that excludes its application to de facto public servants, even those so found by the Board. There is, therefore, the prospect that the teachers could be represented by two unions certified by two different boards. Furthermore, the Board's order does not purport to nullify the contract with Econosult and it is unclear who is to pay the contract teachers. As parties to their contracts with Econosult they are entitled to be paid by it and yet they are also entitled to the benefits of the collective agreement. The Treasury Board is to make deductions by way of check-off but it is by no means clear that it can deduct these amounts from the payments it must make to Econosult under its contract with it, which apparently remains on foot.

In short, the situation is aptly summed up by Marceau J.A. speaking for the majority of the Court of Appeal when he states (à la p. 643):

There is quite simply no place in this legal structure for a public servant (that is, an employee of Her Majesty, a member of the Public Service) without a position created by the Treasury Board and without an appointment made by the Public Service Commission.

Finally, what is the reason for the Board's existence in this scheme of labour relations? I agree with my colleague that it is the resolution of labour management disputes between the federal government and its employees. Those who are authorized to bring disputes before the Board are employees, employee organizations and employers as defined in the legislation which clearly confines the ambit of these disputes to the Public Service. No purpose is served by extending its jurisdiction to employees outside the Public Service who have recourse to other labour relations legislation, either federal or provincial.

(iii) The Area of Expertise of the Administrative Agency

In providing a clear definition of the employees and the employer who are subject to the Board's jurisdiction, it was not the intention of Parliament to rely on the expertise of the Board to extend the reach of this definition. Indeed, the source of the Board's error is its reliance on its general labour expertise which led it to rely on criteria developed under other different labour legislation when it ought to have applied the clear definition of "employee" provided by Parliament.

It remains to consider whether this conclusion, which a pragmatic and functional analysis of the legislation supports, is at variance with previous decisions of this Court.

4. Previous Decisions

Both the Board and Hugessen J.A. found in Syndicat Général du Cinéma et de la Télévision (S.G.C.T.) v. The Queen, supra, authority for the conclusion that the Board in this case correctly referred to the nature of the relationship with the Government in order to determine whether the teachers supplied by Econosult were employees within the meaning of the Staff Relations Act.

With respect, I cannot agree with Hugessen J.A. that S.G.C.T. is determinative of the issue in the case at bar. In S.G.C.T., the applicant Syndicat Général du Cinéma et de la Télévision sought certification to represent "freelancers" working under personal contracts with the National Film Board. The Public Service Staff Relations Board refused the application on the basis that the "freelancers" were not employees within the meaning of the Staff Relations Act because they were engaged under contracts for personal services under s. 10(d) of the National Film Act and did not occupy "positions" in the Public Service as defined in the Staff Relations Act and in ss. 13 and 14 of the National Film Act.

The National Film Board, a separate employer under the legislation, could employ persons by contract either to "continuing positions" pursuant to s. 13 of the Act or to positions other than continuing positions pursuant to s. 14. In the former case, the statute required that employment be in accordance with a plan approved by the Governor in Council if the salary of the employee exceeded $5,000. In the latter case, however, s. 14 permitted the National Film Board to employ persons without any formalities. In this respect the National Film Board was the same as any other employer. The issue was simply whether the conduct of the National Film Board was consistent with the freelancers having been employed as independent contractors, a matter to be determined on the basis of the de facto relationship. Le Dain J.A. (as he then was), speaking for the Federal Court of Appeal, was careful to point out that the Public Service Staff Relations Board could not find that a person who had not followed the prerequisites of s. 13 was nonetheless a continuing employee. He stated (at p. 353):

Subsection 13(5) provides that a person appointed to a continuing position in the National Film Board must take an oath of office and secrecy in a specified form. A person who might otherwise be in the relationship of an employee to the Board could not, in my opinion, be considered to occupy a continuing position within the meaning of section 13 unless the requirements of section 13 had been met.

. . . A person who must be considered to be an employee of the Board on the general tests for distinguishing between an employee and an independent contractor must be deemed, in my opinion, to occupy a position within the meaning of section 14. There is no special formality required for employing a person in a position other than a continuing position. [Emphasis added.]

This case does not stand for the proposition that the Board can treat persons as members of the Public Service in disregard of statutory formalities on the basis of conduct which falls short of meeting the statutory prerequisites.

In Canada (Attorney General) v. Brault, 1987, [1987] 2 S.C.R. 489, the issue was whether the creation of the position of "dog handler" amounted to the creation of a new position, requiring an appointment based on selection according to merit in accordance with the Employment Act, or whether it was merely the assignment of an additional function to the existing position of customs inspector. On appeal, this Court held that it was an appointment to a new position that had not been based on selection according to merit and revoked the appointments. Le Dain J. of this Court summarized the steps involved in the creation of a position and the appointment of a person to it. He wrote (at pp. 500-501):

. . . I conclude that the steps may be summarized as follows: 1. The Minister or deputy head of a Department, in the exercise of his management authority, determines what positions are required in the Department and determines the qualifications for appointment to them; 2. Financial approval for a position must be obtained from the Treasury Board, which has authority under s. 7 of the Financial Administration Act, R.S.C. 1970, c. F-10, to classify positions in the Public Service for renumeration and other purposes; 3. The deputy head makes a request to the Public Service Commission to make the necessary appointment or makes the appointment himself under a delegation of authority; and 4. The appointment is made pursuant to the particular selection process required by the Public Service Employment Act and Regulations, the relevant provisions of which have been quoted above. The important point, for purposes of the issue in this appeal, is that it is the Minister or deputy head who creates a position and determines the qualifications for appointment to it, and that, subject to the necessary approval from the Treasury Board, this act does not call for any particular formality or expression. It is an administrative decision which identifies particular functions to be performed and defines the qualifications required for performing them. [Emphasis added.]

Le Dain J.'s statement that "this act does not call for any particular formality or expression" does not, in my reading of the passage, intend to displace the requisite steps of the appointment process which he has outlined, but refers to the creation of the position by the Minister or deputy head. The persons in question were already Government employees within the meaning of the Staff Relations Act and had been properly appointed as public servants according to the careful procedure laid down by the legislator and as described above by Le Dain J. In this respect, the appointment to the status of a public servant was not in issue, nor did the Court address the scope of s. 33 of the Staff Relations Act which is the issue in this case.

Similarly, in Doré v. Canada, supra, the question raised was whether the assignment of a public servant to different functions, pending classification of a new position for such functions, is an appointment to a new position within the meaning of the Employment Act. The decision of the Court, delivered by Le Dain J., was released concurrently with that in Brault. Le Dain J. expressed the following view (at pp. 509-10):

For the reasons given in that appeal [Brault], the issue in the present appeal cannot, in my respectful opinion, turn on whether the Department intended to create a position and to make an appointment within the meaning of the Public Service Employment Act. There must, of course, be an intended identification and definition of functions to be performed and an intended assignment of a person to perform them, but, as I said in the Brault appeal, the application of the merit principle and the right of appeal under s. 21 of the Public Service Employment Act cannot depend on whether the Department chooses to regard what is done as the creation of a position and an appointment to it within the meaning of the Act.

I fail to see how the application of this case may be extended so as to give the Board in the case at bar the authority to decide that persons hired by a private contract fall within the definition of "employee" in the Staff Relations Act notwithstanding that they have not been appointed as public servants in accordance with the established statutory requirements. In my view, there is nothing in the words of Le Dain J. to indicate that the Board can disregard statutory process for entering the Public Service.

The case which is of the greatest assistance in this appeal is the decision of Hugessen J.A. in Canada Post Corp. v. C.U.P.W., 1987, [1989] 1 F.C. 176. In Canada Post, the Federal Court of Appeal found the Canada Labour Relations Board to have erred in law in deciding that rural mail couriers under an employment contract with Canada Post Corporation are "employees" within s. 107(1) of the Canada Labour Code. In the view of the Court, this decision was contrary to s. 13(6) of the Canada Post Corporation Act, which expressly deemed the carriers to be independent contractors. Hugessen J.A. reasoned (at pp. 187-88 and 189):

Aware, as I must be, of the injunction not to be too alert to brand as jurisdictional that which is doubtfully so (see Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corporation ...), I am nonetheless of the view that Parliament's intention in enacting subsection 13(6) was to define and limit the jurisdiction of the Board. It is, in other words, a provision which the Board must interpret correctly if it is to escape judicial review.

While the Board has the undoubted power and jurisdiction to declare who is or is not an employee, that power is circumscribed here.

5. Disposition

For the foregoing reasons I agree with the majority of the Federal Court of Appeal and would therefore dismiss the appeal with costs.

Cory J.

The following are the reasons delivered by

Cory J. (dissenting) -- At issue in this appeal is whether the Public Service Staff Relations Board (the "Board") had jurisdiction to determine whether the teachers working in a penitentiary pursuant to a government contract with Econosult Inc. ("Econosult") formed part of a bargaining unit known as the Educational Group and were therefore Government employees for the purposes of collective bargaining.

Factual Background

In 1971, the Solicitor General for Canada set up educational programs for the inmates of federal penitentiaries. Through the co-operation of various school boards, colleges and universities, these educational programs would be recognized as accredited courses. At the outset, the teachers engaged by the Solicitor General to instruct in the penitentiaries became part of his own staff. They were classified as civil servants employed by the Treasury Board pursuant to the provisions of the Public Service Employment Act, R.S.C. 1970, c. P-32 ("Employment Act"). These teachers formed part of a bargaining unit known as the Educational Group.

In 1984, the Solicitor General put forward a new policy. It was decided that, in the future, agencies in the private sector rather than teachers on his own staff would be used to provide teaching services for the program. A memorandum from the Commissioner of Correctional Services Canada sets forth the way in which this new policy was to be implemented. It reads:

Education by Contracts or Privatization of Education

Introduction

Since 1971, in the "academic" sector primarily, the CSC offers accredited academic programs to the inmates in its care through contracted agreements with a School Board, a College, a University or a private agency. In the "vocational" (trade) sector the CSC has occasionally or exceptionally had resource [sic] to a similar contracted arrangement. It is my intention to pursue and to accelerate the process of privatization of education, in both the academic and vocational (trade) sectors.

While ensuring at all times the high quality of our educational programs and the security of staff and inmates, there must no longer be any doubt as to the intentions of the policy requiring that the education of our inmates be through teachers from Boards of Education, Colleges and Universities.

Replacement of CSC teachers as vacancies occur shall be carried out on a contractual agreement basis. The hiring of services for the teaching of new and existing educational programs must also be implemented in both academic and vocational (trade) sectors.

On May 16, 1985, Supply and Services Canada entered into a contract with Seradep Inc. ("Seradep") to supply teachers and a librarian to carry out precisely defined duties in the provision of vocational instruction at the Cowansville Penitentiary in the province of Quebec. Although these persons were to be placed under the control of a supervisor employed by Seradep, it was a member of the correctional service who was to monitor the quality of instruction. Seradep was to bill the Government on an hourly basis. When the original contract expired in July 1987, a similar contract was entered into with Econosult (the mis en cause).

The appellant, Public Service Alliance of Canada ("P.S.A.C."), is the certified bargaining agent representing all employees of the Treasury Board who are members of the Educational Group. On February 12, 1987, while the first contract was still in effect, the appellant filed an application with the Board seeking a declaration that all teaching employees at the Cowansville Penitentiary, including those ostensibly employed by Seradep were, in reality, employees of the Federal Government for collective bargaining purposes. Further, it sought a ruling that these teachers were members of the Educational Group and therefore P.S.A.C. was their certified bargaining agent. The application was based upon ss. 33 and 98 of the Public Service Staff Relations Act, R.S.C. 1970, c. P-35 ("Staff Relations Act").

The Decision of the Board

The Board determined that the essential question that it had to answer was whether the teachers working in the penitentiary in accordance with the contract with Econosult were members of the Educational Group bargaining unit and, as a result, Government employees. In considering that question, the Board very carefully analyzed the evidence which had been presented to it during the course of a lengthy hearing. It reviewed in detail the nature of the relationship which existed between the teachers employed by Econosult and the representative of Correctional Services who was monitoring the quality of their instruction and, as well, reviewed the relationship between the teachers employed by Econosult and the other teachers who were members of the Department's staff.

With the review completed, the Board applied what it considered to be the appropriate criteria for determining whether an employer/employee relationship existed between the Solicitor General and the teachers employed pursuant to the contract with Econosult. The criteria were the same as those utilized by other labour tribunals in deciding whether such a relationship existed. The Board in its reasons stressed that it was necessary to reject form and consider the substance of the relationship. It was concluded that a true employer/employee relationship existed between the Solicitor General and the teachers supplied by Econosult in spite of the existence of the contract. The Board granted the declaration sought by P.S.A.C. and in its reasons it stated:

Regardless of what the contract between Econosult Inc. and the Government of Canada says, Econosult Inc., in my opinion, plays a rather marginal role in the working life of the contract workers. It is a contract under which Econosult Inc. must supply manpower, in the form of six (or eight) teachers and a supervisor of education. Once in place, that team is, for the most part, directed and co-ordinated in the execution of its duties by authorities at Correctional Service Canada. There are no other contractual obligations on the part of Econosult Inc. towards the Government of Canada. Even with respect to its two main responsibilities, recruitment of contract workers and their compensation, I would characterize the role of Econosult Inc. as marginal.

The respondent appealed the decision of the Board to the Federal Court of Appeal, pursuant to s. 28 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10.

The Federal Court of Appeal

The majority rejected the careful findings of the Board, allowed the appeal and quashed the decision of the Board: 1989, [1989] 2 F.C. 633.

It was of fundamental importance for the majority that the Seradep and Econosult teachers were not nominated by the Public Service Commission. It was their view that the employer's role of recruiting and controlling employees had been transferred to a private company.

The majority decided that the Board did not have the jurisdiction to decide who was an employee of the Public Service. Rather, the Board's authority applied only to public servants recognized as such by legislation other than its enabling statute and by the authority of a body other than itself. The majority held that the jurisdiction of the Board was restricted to the determination of occupational groups and categories for certification purposes and to deciding whether a public servant belonged to a certified bargaining unit.

Hugessen J.A. differed from the majority and would have dismissed the appeal. He found that the Board had jurisdiction to determine who were employees pursuant to the provisions of the Staff Relations Act. He based this conclusion upon a reading of the Staff Relations Act as a whole. As well, he found support for his position in the reasons given in Syndicat Général du Cinéma et de la Télévision (S.G.C.T.) v. The Queen, 1977, [1978] 1 F.C. 346.

He concluded that there was no error of law made by the Board which would justify intervention by the Court, since the Board had understood the nature of the task it was required to perform and had applied the proper principles and considerations in reaching its decision. In his opinion, the fact that the Econosult teachers had not been hired in accordance with the process outlined in the Employment Act, could not affect the result. He found that the provisions of the Employment Act did not preclude a person from being an employee of the Federal Government and having that relationship regulated by the Staff Relations Act. He relied upon the decision in Doré v. Canada, 1987, [1987] 2 S.C.R. 503, for the proposition that, in the public sector as in the private, the decision as to what constitutes the creation of a position and the appointment to a position must be reached by means of an objective appraisal of the facts of each case and not simply by accepting the intention of the employer, whether private or Government, as determinative. Applying that principle, he found that the Econosult teachers were employees of the Federal Government for the purposes of collective bargaining.

Approach Taken by Courts of Other Jurisdictions to Decisions of Administrative Tribunals

In order to place the issue in its proper historical context, it may be helpful to consider; first, the approach taken in the United Kingdom; second, the views expressed in the United States, and finally to review the position that has been taken by this Court.

The United Kingdom

In Anisminic Ltd. v. Foreign Compensation Commission, [1969] 2 A.C. 147, the House of Lords set forth a definition of jurisdictional error that was so broad as to include any question involving the interpretation of a statute. It was held that an error made by a tribunal in the interpretation of its empowering statute would be the basis for a court to overturn its decision on the ground that it had committed a jurisdictional error.

Lord Reid took the position that jurisdiction meant only that a tribunal be entitled to enter upon the inquiry. Nevertheless, he indicated that even if a tribunal correctly began the inquiry there were several ways in which it could make an error that would render its decision a nullity. He gave, as examples, the misconstruction by a tribunal of its enabling statute so that the tribunal failed to deal with the question remitted to it, the tribunal's failure to take into account relevant considerations, or the tribunal posing the wrong questions for determination. Any of these errors would be, in his opinion, sufficient to render a tribunal's decision a nullity.

Lord Pearce and Lord Wilberforce came to a similar conclusion. In their view, since an administrative tribunal necessarily has a limited authority, the court's role on a review of its decision is to make certain that the tribunal has kept within the field allotted to it. It is for the courts to determine the true construction of a statute delineating a tribunal's jurisdiction.

There can be no doubt that this decision significantly broadened the scope of judicial review of the decisions of administrative tribunals. Indeed, in the opinion of some legal writers, the result of the decision is that a court can always characterize an alleged error as jurisdictional by finding that it resulted from the tribunal asking the wrong question or having taken into account irrelevant considerations. See, for example, Craig in Administrative Law (2nd ed. 1989), at p. 259. Clearly, the reasoning in Anisminic would lead to the conclusion that the more complex an administrative tribunal's enabling legislation, the more readily a court can overturn its decision on the grounds that it committed a jurisdictional error.

In Re Racal Communications Ltd., [1981] A.C. 374 (H.L.), Lord Diplock seemed to go so far as to equate the concept of jurisdictional error with that of error of law. He wrote at pp. 382-83:

[W]here Parliament confers on an administrative tribunal or authority, as distinct from a court of law, power to decide particular questions defined by the Act conferring the power, Parliament intends to confine that power to answering the question as it has been so defined: and if there has been any doubt as to what that question is, this is a matter for courts of law to resolve in fulfilment of their constitutional role as interpreters of the written law and expounders of the common law and rules of equity. So if the administrative tribunal or authority have asked themselves the wrong question and answered that, they have done something that the Act does not empower them to do and their decision is a nullity. . . . The break-through made by Anisminic [1969] 2 A.C. 147 was that, as respects administrative tribunals and authorities, the old distinction between errors of law that went to jurisdiction and errors of law that did not, was for practical purposes abolished. Any error of law that could be shown to have been made by them in the course of reaching their decision on matters of fact or of administrative policy would result in their having asked themselves the wrong question with the result that the decision they reached would be a nullity.

Similar reasoning was set forth by Lord Diplock in O'Reilly v. Mackman, [1983] 2 A.C. 237 (H.L.), at p. 278.

The traditional British approach, which might be described as interventionist, is said to flow from British constitutional principles. This position was put forward by Schwartz and Wade in Legal Control of Government: Administrative Law in Britain and the United States (1972) in this way at p. 205:

British judges are acutely conscious of the fact that they are at the mercy of a sovereign Parliament, which can quickly clip their wings if they fly too high. By instinct they keep close to solid legal ground.

The concept was described in these words, by Craig, op. cit., at pp. 5-6:

It is readily apparent that the execution of legislation may in fact require the grant of discretionary power to a minister or agency. Parliament may not be able to foresee all eventualities and flexibility may be required to implement the legislation. The legislature will of necessity grant power subject to conditions . . . . Herein lies the modern conceptual justification for judicial intervention. It was designed to ensure that the sovereign will of parliament was not transgressed by those to whom such grants of power were made. If authority had been delegated to a minister to perform certain tasks on certain conditions, the courts' function was in the event of challenge, to check that only those tasks were performed and only where the conditions were present. For the courts not to have intervened would have been to accord a legislative power to the minister or agency by allowing them to "legislate" in areas not specified by the real legislature, parliament. The less well known face of sovereignty, that of parliamentary monopoly, thus demanded an institution to police the boundaries which parliament had stipulated.

. . . The flexibility inherent in the idea of legislative intent preserved the veneer that the courts were simply applying the legislative mandate when controlling "inferior" jurisdictions. Dicey's rule of law added respectability to this exercise of power by entrenching the idea that it was natural, right and a matter of constitutional principle that the ordinary courts should be supreme and that the ordinary law should be all pervasive.

The Approach Taken in the United States

In Gray v. Powell, 314 U.S. 402 (1941), the U.S. Supreme Court held that a tribunal's interpretation or application of a statutory term should be upheld if it is reasonable even though the reviewing court might, in its own judgment, have construed the term differently. The Court put its position in this way at p. 411:

In a matter left specifically by Congress to the determination of an administrative body . . . the function of review placed upon the courts . . . is fully performed when they determine that there has been a fair hearing . . . and an application of the statute in a just and reasoned manner.

The same principle was enunciated in National Labor Relations Board v. Hearst Publications, Inc., 322 U.S. 111 (1944), where the tribunal had to decide whether news boys were "employees". The tribunal determined that they were. The Court held that if the tribunal's findings of fact were supported in the record and its statutory interpretation had a reasonable basis in law, then its decision must be accepted. At page 130 it was stated:

It is not necessary in this case to make a completely definitive limitation around the term "employee". That task has been assigned primarily to the agency created by Congress to administer the Act. Determination . . . involves inquiries for the Board charged with this duty. Everyday experience in the administration of the statute gives it familiarity with the circumstances and backgrounds of employment relationships in various industries, with the abilities and needs of the workers for self-organization and collective action, and with the adaptability of collective bargaining for the peaceful settlement of their disputes with their employers.

This position of the Court was more recently confirmed in Udall v. Tallman, 380 U.S. 1 (1965). There, Warren C.J., delivering the opinion of the Court, held at p. 16:

When faced with a problem of statutory construction, this Court shows great deference to the interpretation given the statute by the officers or agency charged with its administration. "To sustain the Commission's application of this statutory term, we need not find that its construction is the only reasonable one, or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings." Unemployment Comm'n v. Aragon, 329 U. S. 143, 153. See also, e.g., Gray v. Powell, 314 U. S. 402; Universal Battery Co. v. United States, 281 U. S. 580, 583.

To summarize the American approach, if there is substantial evidence in the record upon which the tribunal could base its decision, and the resolution of questions of law and the statutory interpretation made by the tribunal are reasonable, its decision will be upheld. The American approach recognizes that legislators have determined that administrative tribunals play an important role in today's complex society. It acknowledges their expertise and pays judicial deference to their opinions. The position has been expressed with a clarity that makes it easy to apply in the most complex situations.

Perhaps the ready acceptance of the decisions of administrative tribunals by American courts arises from their secure place in the United States' Constitution. The difference between the American and the British positions has been explained by Wade in his text, Administrative Law (6th ed. 1988), at pp. 298-99:

[The British Courts] addiction to the technicalities of jurisdictional review is not a mere aberration. It is the consequence of their constitutional position vis-à-vis a sovereign legislature: only by showing that they are obeying its commands can they justify their interventions. By one means or another, therefore, the doctrine of ultra vires must be stretched to cover the case. The courts of the United States, with their entrenched constitutional status, can afford to dispense with these subtleties. The position of British judges is fundamentally different.

The Canadian Approach

The Canadian approach must be reviewed in three stages. The first stage is composed of cases decided before Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., 1979, [1979] 2 S.C.R. 227 ("C.U.P.E."). The second involves a consideration of the C.U.P.E. decision. The third will be comprised of a review of the cases of this Court decided subsequent to C.U.P.E.

This task has been greatly simplified by the review of the pertinent cases and the academic writing pertaining to them undertaken with great clarity and skill by Wilson J. in her reasons in National Corn Growers Assn. v. Canada (Import Tribunal), 1990, [1990] 2 S.C.R. 1324.

I am in complete agreement with the views she has expressed. In my view, courts should generally approach decisions of administrative tribunals with reasonable deference except in those situations where the tribunals' decisions involve an interpretation of Charter or constitutional rights.

Pre-C.U.P.E. Cases

Three cases of this Court set out the pre-C.U.P.E. position. They are Metropolitan Life Insurance Co. v. International Union of Operating Engineers, Local 796, 1970, [1970] S.C.R. 425, Bell v. Ontario Human Rights Commission, 1971, [1971] S.C.R. 756, and Blanco v. Rental Commission, 1980, [1980] 2 S.C.R. 827. All of these decisions relied upon the principle set out in Anisminic, supra. They all took the position that a definition of jurisdictional error should include any question pertaining to the interpretation of a statute made by an administrative tribunal. In each case, this Court substituted what was, in its opinion, the correct interpretation of the enabling provision of the tribunal's statute for that of the tribunal. These cases appear to expand, in a significant manner, a court's role upon an application for judicial review.

The C.U.P.E. Decision

In C.U.P.E., the union laid a complaint with the Public Service Labour Relations Board ("P.S.L.R.B.") alleging that the employer was replacing striking employees with management personnel contrary to the provisions of the Public Service Labour Relations Act. That Act provided that during a strike "the employer shall not replace the striking employees or fill their position with any other employee". At issue was the P.S.L.R.B.'s jurisdiction to interpret the meaning of the term "other employee" in order to determine if it included management personnel. There was general agreement that this provision of the Act could be interpreted in two different ways.

Dickson J. (as he then was), writing for the Court, noted that the section in question was replete with ambiguity. He then set out with compelling force the rationale for protecting decisions of administrative tribunals which were made within their jurisdiction. He wrote at pp. 235-36:

The labour board is a specialized tribunal which administers a comprehensive statute regulating labour relations. In the administration of that regime, a board is called upon not only to find facts and decide questions of law, but also to exercise its understanding of the body of jurisprudence that has developed around the collective bargaining system, as understood in Canada, and its labour relations sense acquired from accumulated experience in the area.

The usual reasons for judicial restraint upon review of labour board decisions are only reinforced in a case such as the one at bar. Not only has the Legislature confided certain decisions to an administrative board, but to a separate and distinct Public Service Labour Relations Board. That Board is given broad powers -- broader than those typically vested in a labour board -- to supervise and administer the novel system of collective bargaining created by the Public Service Labour Relations Act. The Act calls for a delicate balance between the need to maintain public services, and the need to maintain collective bargaining. Considerable sensitivity and unique expertise on the part of Board members is all the more required if the twin purposes of the legislation are to be met.

He went on to stress that judicial restraint should be exercised in reviewing the P.S.L.R.B.'s interpretation of the words in issue, since an interpretation of the provision in question was a function that "would seem to lie logically at the heart of the specialized jurisdiction confided to the Board" (p. 236). From this, it followed that "not only would the Board not be required to be `correct' in its interpretation but one would think that the Board was entitled to err and any such error would be protected from review by the privative clause" (p. 236). He then defined the appropriate standard for judicial review in these words at p. 237:

Did the Board here so misinterpret the provisions of the Act as to embark on an inquiry or answer a question not remitted to it? Put another way, was the Board's interpretation so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review? [Emphasis added.]

The immediate effect of the C.U.P.E. decision has been charted by Wilson J. in her reasons in National Corn Growers Assn., supra. Legal writers hailed the decision as setting out a "restricted and unified theory of judicial review". The C.U.P.E. test of reasonableness was applied in situations where labour boards were protected by a privative clause in cases of consensual arbitrators, statutory arbitrators and, as well, to labour relations board decisions not protected by a privative clause. Generally, these cases preclude judicial interference with interpretations made by a board as long as they are not patently unreasonable. See Volvo Canada Ltd. v. U.A.W., Local 720, 1979, [1980] 1 S.C.R. 178; Douglas Aircraft Co. of Canada v. McConnell, 1979, [1980] 1 S.C.R. 245; Alberta Union of Provincial Employees, Branch 63 v. Board of Governors of Olds College, 1982, [1982] 1 S.C.R. 923; and CAIMAW v. Paccar of Canada Ltd., 1989, [1989] 2 S.C.R. 983, at pp. 1003-4.

The principle adopted in C.U.P.E. reached its zenith when it was applied in Teamsters Union, Local 938 v. Massicotte, 1982, [1982] 1 S.C.R. 710. In that case Laskin C.J., at p. 724, stated that: "mere doubt as to correctness of a labour board interpretation of its statutory power is no ground for finding jurisdictional error, especially when the labour board is exercising powers confided to it in wide terms to resolve competing contentions".

C.U.P.E., and the decisions referred to above, make it clear that an administrative tribunal will, in ordinary circumstances, lose jurisdiction only if it acts in a patently unreasonable manner.

However, two subsequent decisions of this Court indicate that an administrative tribunal may lose jurisdiction if it has erred, no matter how reasonably, in its interpretation of a legislative provision limiting its powers.

Post-C.U.P.E. Decisions: The Effect of Syndicat des Employés de Production du Québec et de l'Acadie v. The Canada Labour Relations Board and U.E.S., local 298 v. Bibeault

In Syndicat des employés de production du Québec et de l'Acadie v. Canada Labour Relations Board, 1984, [1984] 2 S.C.R. 412, the employer made an application to the Canada Labour Relations Board ("C.L.R.B."), alleging that the union was authorizing an unlawful strike by employees who were engaging in a concerted refusal to work overtime. The employer asked the C.L.R.B. to declare the strike unlawful and to issue a cease and desist order against the union. The C.L.R.B. held that the employees' actions did indeed amount to a strike regardless of whether the collective agreement gave the employer the power to require employees to work overtime or not. The C.L.R.B.'s order required the strikers to call off the overtime ban and referred to an arbitrator the issue as to whether on a correct interpretation of the collective agreement overtime was compulsory.

The union sought a review of the C.L.R.B.'s finding that the strike was unlawful. It was the union's position that in making that ruling the C.L.R.B. had committed a jurisdictional error by answering incorrectly the preliminary question as to whether a refusal to work overtime constituted a strike when the C.L.R.B. had not held that overtime was compulsory under the collective agreement.

Beetz J. delivered the reasons for the Court. He made a distinction between errors made by a tribunal while acting within its jurisdiction and errors made by a tribunal ruling upon its jurisdiction. He determined that in the former situation the standard of deference applicable by a court will be that of patent unreasonableness as set out in C.U.P.E. However, he found that in the latter situation the standard of deference will be much lower. He expressed his position in this way at pp. 420-21:

[A jurisdictional error] relates generally to a provision which confers jurisdiction, that is, one which describes, lists and limits the powers of an administrative tribunal, or which is [translation] "intended to circumscribe the authority" of that tribunal, as Pigeon J. said in Komo Construction Inc. v. Commission des relations de travail du Québec, [1968] S.C.R. 172 at p. 175. A jurisdictional error results generally in an excess of jurisdiction or a refusal to exercise jurisdiction, whether at the start of the hearing, during it, in the findings or in the order disposing of the matter. Such an error, even if committed in the best possible good faith, will result nonetheless in the decision containing it being set aside, because it also falls within s. 28(1)(a) of the Federal Court Act.

Another error which has sometimes been regarded as jurisdictional is one relating to a matter which is preliminary or collateral, but supposedly essential to the exercise of the jurisdiction as a kind of condition thereof. This however is a fleeting and vague concept against which the courts were warned by this Court in New Brunswick Liquor Corporation (supra), at p. 233, once the initial jurisdiction of the administrative body holding the hearing has been established at the outset.

Beetz J. found that the C.L.R.B. had exceeded its jurisdiction in ordering the parties to refer one of the causes of dispute to arbitration. In his view, the error was jurisdictional and the C.L.R.B. had exercised a power which had not been conferred upon it. He stated at pp. 441-42:

Unquestionably, as has already been noted, it is often difficult to determine what constitutes a question of jurisdiction, and administrative tribunals like the Board must generally be given the benefit of any doubt. Once the classification has been established, however, it does not matter whether an error as to such a question is doubtful, excusable or not unreasonable, or on the contrary is excessive, blatant or patently unreasonable. What makes this kind of error fatal, whether serious or slight, is its jurisdictional nature; and what leads to excluding the rule of the patently unreasonable error is the duty imposed on the Federal Court of Appeal to exercise the jurisdiction conferred on it by s. 28(1)(a) of the Federal Court Act.

Once a question is classified as one of jurisdiction, and has been the subject of a decision by an administrative tribunal, the superior court exercising the superintending and reforming power over that tribunal cannot, without itself refusing to exercise its own jurisdiction, refrain from ruling on the correctness of that decision, or rule on it by means of an approximate criterion.

This is why the superior courts which exercise the power of judicial review do not and may not use the rule of the patently unreasonable error once they have classified an error as jurisdictional.

These reasons would seem to indicate that any error made by an administrative tribunal in considering its own jurisdiction will constitute a jurisdictional error with the result that its decision may be quashed on judicial review. The decision encountered a good deal of adverse criticism from legal writers which has been referred to by Wilson J. in National Corn Growers Assn., supra.

The position taken in Syndicat des employés de production du Québec et de l'Acadie, supra, was, I believe, clarified if not modified by the reasons given in U.E.S., local 298 v. Bibeault, 1988, [1988] 2 S.C.R. 1048. Once again, Beetz J. wrote for the Court. He expressed the view that although the current tendency had been to limit the concept of "preliminary questions" as far as possible, it had not been eliminated by the doctrine of patent unreasonableness. He held that a tribunal's decision on a preliminary question could be reviewed even though it was not manifestly or patently unreasonable. He put forward his position on the preliminary questions doctrine in this way at pp. 1086-87:

The idea of the preliminary or collateral question is based on the principle that the jurisdiction conferred on administrative tribunals and other bodies created by statute is limited, and that such a tribunal cannot by a misinterpretation of an enactment assume a power not given to it by the legislator. The theoretical basis of this idea is therefore unimpeachable -- which may explain why it has never been squarely repudiated: any grant of jurisdiction will necessarily include limits to the jurisdiction granted, and any grant of a power remains subject to conditions. The principle itself presents no difficulty, but its application is another matter.

The theory of the preliminary or collateral question does not appear to recognize that the legislator may intend to give an administrative tribunal, expressly or by implication, the power to determine whether certain conditions of law or fact placed on the exercise of its power do exist. It is not always true that each of these conditions limits the tribunal's authority; but except where the legislator is explicit, how can one distinguish a condition which the legislator intended to leave to the exclusive determination of the administrative tribunal from a condition which limits its authority and as to which it may not err? One can make the distinction only by means of a more or less formalistic categorization. Such a categorization often runs the risk of being arbitrary and which may in particular unduly extend the superintending and reforming power of the superior courts by transforming it into a disguised right of appeal.

The concept of the preliminary or collateral question diverts the courts from the real problem of judicial review: it substitutes the question "Is this a preliminary or collateral question to the exercise of the tribunal's power?" for the only question which should be asked, "Did the legislator intend the question to be within the jurisdiction conferred on the tribunal?"

He added that the determination of preliminary issues must be made in a "pragmatic and functional" manner. He set out his position in this way at p. 1088:

The formalistic analysis of the preliminary or collateral question theory is giving way to a pragmatic and functional analysis, hitherto associated with the concept of the patently unreasonable error. At first sight it may appear that the functional analysis applied to cases of patently unreasonable error is not suitable for cases in which an error is alleged in respect of a legislative provision limiting a tribunal's jurisdiction. The difference between these two types of error is clear: only a patently unreasonable error results in an excess of jurisdiction when the question at issue is within the tribunal's jurisdiction, whereas in the case of a legislative provision limiting the tribunal's jurisdiction, a simple error will result in a loss of jurisdiction. It is nevertheless true that the first step in the analysis necessary in the concept of a "patently unreasonable" error involves determining the jurisdiction of the administrative tribunal. At this stage, the Court examines not only the wording of the enactment conferring jurisdiction on the administrative tribunal, but the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal. [Emphasis added.]

In Paccar, supra, this Court directed that courts are to adopt the pragmatic and functional approach described in Bibeault, supra, when reviewing the decisions of administrative tribunals which determine questions relating to their jurisdiction.

The issue of jurisdiction will always pose difficult problems. Obviously some control of administrative tribunals is required. For example, if the Board in this case had interpreted its empowering statute to give itself jurisdiction over all persons who are qualified as teachers on the grounds that they might some day become members of a bargaining unit, it would exceed its jurisdiction. On the other hand, it would be all too easy for a court to go out of its way to conclude that, in its opinion, an administrative tribunal had made an error, no matter how trivial, in the interpretation of its statute so as to warrant the finding of a jurisdictional error. To do so would ignore the important place of administrative tribunals in our complex society. Their role could so easily be frustrated by too quick and ready a finding of jurisdictional error. The pragmatic and functional approach does, I believe, permit a court to be reasonably flexible and deferential in its approach to the jurisdiction of administrative tribunals in those cases where a tribunal has ruled upon its own jurisdiction.

The Application of the Factors Set out in Bibeault to this Case

The legislative provisions which must be considered in determining the jurisdiction of the Board in this case are to be found in three statutes. Firstly, the Staff Relations Act, s. 2, s. 33 (now s. 34) and s. 98 (now s. 99) which read:

2. In this Act . . .

"employee" means a person employed in the Public Service, other than . . .

The listed exceptions are not applicable to this appeal.

33. Where, at any time following the determination by the Board of a group of employees to constitute a unit appropriate for collective bargaining, any question arises as to whether any employee or class of employees is or is not included therein or is included in any other unit, the Board shall, on application by the employer or any employee organization affected, determine the question.

34. (1) Where the employer and a bargaining agent have executed a collective agreement or are bound by an arbitral award and

(a) the employer or the bargaining agent seeks to enforce an obligation that is alleged to arise out of the collective agreement or arbitral award, and

(b) the obligation, if any, is not an obligation the enforcement of which may be the subject of a grievance of an employee in the bargaining unit to which the collective agreement or arbitral award applies,

either the employer or the bargaining agent may, in the prescribed manner, refer the matter to the Board, which shall hear and determine whether there is an obligation as alleged and whether, if there is, there has been a failure to observe or to carry out the obligation.

(2) The Board shall hear and determine any matter referred to it pursuant to subsection (1) as though the matter were a grievance, and subsection 95(2) and sections 96 and 97 apply to the hearing and determination of that matter.

Secondly, the Employment Act, s. 8 must be considered. It reads:

8. Except as provided in this Act, the Commission has the exclusive right and authority to make appointments to or from within the Public Service of persons for whose appointment there is no authority in or under any other Act of Parliament.

Lastly, s. 11(3) of the Financial Administration Act, R.S.C., 1985, c. F-11 (previously R.S.C. 1970, c. F-10, s. 7(6)), must be considered. It reads:

11. . . .

(3) The powers and functions of the Treasury Board in relation to any of the matters specified in subsection (2) do not extend to any such matter that is expressly determined, fixed, provided for, regulated or established by any Act otherwise than by the conferring of powers or functions in relation thereto on any authority or person specified in that Act, and do not include or extend to any power or function specifically conferred on, or any process of personnel selection required or authorized to be employed by, the Public Service Commission by or under the authority of the Public Service Employment Act.

Let us now, pursuant to the direction set out in Paccar, supra, undertake the functional approach outlined in Bibeault, supra. This approach requires us to review not only the wording of the enactment conferring jurisdiction, but also to consider the purpose of the statute creating the Board, its reasons for existence, the area of expertise of its members and the nature of the problems it must consider.

The first aspect to be considered is the wording of the statute. When the statute is considered as a whole, it can be seen that the Board is given broad powers to consider and resolve a wide variety of problems that arise in the field of labour relations. The decisions of the Board are protected by a privative clause. The legislators clearly placed their trust and confidence in the Board and sought to protect its decisions in the sensitive domain of labour matters. To my mind, s. 98 of the Staff Relations Act reflects the fundamental purpose of the statute. It provides a means whereby either the employer or the bargaining agent may seek to enforce an obligation rising out of a collective agreement or arbitral award. It establishes a procedure for settling disputes which are a source of disruptive friction between employer and employees. The purpose of the Staff Relations Act is to provide the means for achieving the speedy resolution of disputes between labour and management. In reaching its decisions, the Board will make use of the special skills of its members who are experienced and knowledgeable in the field of labour relations generally and particularly as labour relations issues existing between the Public Service and the Federal Government. The Board must utilize this expertise in the resolution of just such labour/management disputes as are presented in this case.

Section 33 of the Staff Relations Act requires the Board to determine who are the members of a bargaining unit. That does not mean that the Board must determine whether or not a person is a Public Service employee, that is to say, an employee as defined in s. 2. A person can well be a member of a bargaining unit for collective bargaining purposes, and yet not be a public servant entitled to all the special benefits and perquisites that flow from membership in the Public Service. However, a person who is found to be a member of a bargaining unit should be entitled to all the benefits that flow from the collective bargaining agreement which pertains to the particular bargaining unit. Here the Econosult teachers were doing precisely the same work as those in the service of the Solicitor General. They all worked at the same penal institution and they all were monitored by the same member of the Correctional Services.

The Econosult teachers moved to have the Board declare them members of the same bargaining unit as those in the service of the Solicitor General for collective bargaining purposes. In making its decision as to whether teachers doing the same work in the same institution should belong to the same bargaining unit, the Board was carrying out a function that, in the words of Dickson J. in C.U.P.E., "would seem to lie logically at the heart of the specialized jurisdiction confided to the Board" (p. 236). In my view, the wording of s. 98 made it incumbent on the Board to make a finding on this issue. Thus the wording of the Act, taken as a whole and particularly s. 98, leads me to conclude that the Board had jurisdiction to determine whether the Econosult teachers were members of the bargaining unit.

That conclusion is strengthened when the purpose of the statute creating the Board, its reason for existence, the area of expertise of its members and the nature of the problems it must deal with are considered. It is apparent that the Board's raison d'être is the resolution of labour management disputes that may erupt between the Federal Government and its employees. The area of expertise of the Board is in the field of labour relations involving the Federal Government and its employees. In order to carry out its role and exercise its special skills and knowledge, the Board must have jurisdiction to determine just who are members of a bargaining unit.

To hold otherwise would mean that the membership of all bargaining units is fixed for all time at the moment of their creditation. Employees whose status was unclear as to whether they were part of a bargaining unit, and if they were, to which bargaining unit they belonged, would be precluded from ever having the issue determined by the very entity whose expertise makes it eminently suited to resolving just such a dispute. It was, quite simply, not necessary for the Board, in carrying out its assigned role, to determine whether an employee is a member of the Public Service. However, the question of whether a person can be an employee, for the purposes of collective bargaining, without going through the formalities set out in the Employment Act, is a substantive question that the Board was required to consider in order to attain the aim of the Staff Relations Act and to fulfill its role.

The Board has been given wide powers and the protection of a privative clause. Its members are experienced and skilled in the field of labour relations. The legislators made it clear that labour disputes, such as those presented in this case, were to be resolved by the Board. The Court should not be quick to interfere. The Board necessarily had jurisdiction to determine who were employees within the meaning of the Staff Relations Act and to what bargaining unit they belonged.

In summary then, the pragmatic and functional approach mandated by Bibeault, supra, requires a consideration of the enactment conferring jurisdiction, the aim of the statute creating the Board, the reasons for the Board's existence and the area of expertise of its members. A review of all those factors leads me to conclude that the Board did not exceed its jurisdiction. It acted within its area of expertise and carried out its mandate when it found that the Econosult teachers were indeed members of the bargaining unit. There is no basis for a court to interfere with its decision on that ground.

The conclusion I have reached seems to be supported when this case is compared to the situation presented in Bibeault, supra. The Bibeault case was concerned with the Quebec Labour Commissioner's interpretation of s. 45 of the Quebec Labour Code. That section provided, inter alia, that when there is an "alienation or operation by another" of an "undertaking" there is automatically by operation of law a transfer of certain rights and obligations. At pages 1093-94 Beetz J. wrote:

The transfer of rights and obligations thus does not depend on the conclusion arrived at by the commissioner on the facts and the law -- nor indeed on the existence of a certificate recording the transfer -- but on the fact that the requirements of section 45 have actually been met.

In reaching the conclusion that s. 45 was a "jurisdictional section", Beetz J. relied on two factors. First, the limited jurisdiction granted the Labour Commissioner and secondly, the lack of expertise needed to answer the question facing the Labour Commission. He adopted a portion of the respondent's factum in these words at pp. 1094-95:

[translation] It can be seen at the outset that the legislator did not see fit to give the labour commissioner a general, exclusive jurisdiction over implementation of and compliance with all the provisions of the Labour Code. He chose instead the approach of conferring several special powers, and limited himself to giving jurisdiction over specific and defined matters.

By proceeding in this way the Quebec legislator clearly differs from most other Canadian legislators, who have chosen instead to confer on a specialized and unique agency (generally a labour relations commission) true general jurisdiction over the interpretation and implementation of the legislation governing collective labour relations.

He continued at p. 1097:

. . . the concepts of alienation and operation by another are civil law concepts that require no special expertise on the part of an administrative tribunal. They are concepts which do not call on the labour commissioner's expertise . . .

Unlike the situation presented in Bibeault, in the case at bar the Board has been given wide powers and its decision required the utilization of expert skill or knowledge that it was uniquely qualified to exercise. The application of the functional and pragmatic analysis set forth in Bibeault, supra, clearly establishes that the Board had the jurisdiction to decide whether or not the Econosult teachers formed part of the Educational Group bargaining unit.

It remains only to consider whether the Board, acting within its jurisdiction, acted unreasonably in reaching its decision. Unfortunately, a consideration of this issue will, of necessity, be somewhat repetitious.

Was the Decision of the Board Patently Unreasonable?

In C.U.P.E., Dickson J. held that an administrative tribunal's decision is patently unreasonable in circumstances where "its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review" (p. 237). The decision of the Board in this case cannot be considered to be unreasonable. It was essential for it to determine whether a person could be an employee and a member of a bargaining unit, although that person had not become a public servant according to the provisions of the Employment Act. It will be remembered that pursuant to s. 8 of the Employment Act, "the Commission has the exclusive right and authority to make appointment to or from within the Public Service of persons for whose appointment there is no authority in or under any other Act of Parliament". The question then arises whether this is an essential precondition to membership in a bargaining unit. That is to say, must a person be appointed by the Public Service Commission pursuant to s. 8 of the Employment Act in order to be classified as a public employee for the purposes of s. 33 of the Staff Relations Act?

I would begin by observing that the intention of one of the parties is not usually determinative of such an issue. In S.G.C.T., supra, the issue was whether or not "freelancers" working under personal service contracts with the National Film Board could be certified by the union. Le Dain J.A., writing on behalf of the Federal Court of Appeal, held that there was "no special formality required" to distinguish "continuing positions" which form part of the Public Service and other positions. Rather, he said at pp. 353-54 that the substance of the arrangement was to be given precedence over form:

Undoubtedly the Board has the authority under paragraph 10(1)(d) of the National Film Act to enter into contracts for personal services with independent contractors, or "freelancers" as they are apparently called, but notwithstanding the form which such an engagement takes it may be open in a particular case to show on all the circumstances that the relationship is in fact one of employment. In such a case one would have to conclude that the employee occupies a position within the meaning of section 14.

As a result, the freelancers were deemed to be "employees" although they had not been nominated pursuant to s. 8 of the Employment Act and despite their personal contracts with the National Film Board.

The respondent argued that the S.G.C.T. decision is not applicable because in the case at bar there is no statutory provision comparable to what was then s. 14 of the National Film Act, which allowed the National Film Board to determine the working condition of employees. I cannot accept that contention. In the case at bar, the Board was required to determine who were employees and to which bargaining unit they belonged in order to carry out its function.

In Canada (Attorney General) v. Brault, 1987, [1987] 2 S.C.R. 489, this Court was required to determine whether, in the absence of any clear administrative decision or expression of intention on the part of the Government, the creation of additional functions in a position in the Public Service amounted to the creation of a new position requiring an appointment under the Employment Act. The Government argued that before a new position could be found to exist it was required to be made manifest in clear terms. This Court found that the expression of such an intention by Government was unnecessary. Le Dain J., writing for this Court, stated at pp. 501-2:

Having regard to the importance of the principle of selection according to merit and the right of appeal under s. 21 of the Public Service Employment Act, I am unable, with great respect, to agree with the premise underlying the judgment of the majority of the Federal Court of Appeal, which I understand to be that a new position in the Public Service calling for an appointment within the meaning of s. 21 cannot be created by a change in the functions of an existing position unless the administration chooses to regard such a change as creating a new position within the meaning of the Act. Such a view would permit the circumvention of the merit principle and the right of appeal.

Obviously the administration must have reasonable flexibility to make minor changes in the functions of an existing position in the Public Service which the occupant of the position may be called on to perform, without thereby creating a new position for which an appointment based on selection according to merit must be made. Where, however, as in the present case, the change in functions is of such a significant or substantial nature as to call for additional or special qualifications requiring evaluation and therefore what amounts to a new selection for the position, a new position within the meaning of the Act is created. [Emphasis added.]

Once again, the question was determined on the basis of substance rather than mere form.

In Doré, supra, a decision rendered at the same time as Brault, the question to be determined was whether the assignment of a person already in the Public Service to new functions, pending classification of a new position for those functions, was an "appointment" requiring that the procedures under the Employment Act be followed. Le Dain J. held that, as a matter of fact, a new position had been created, notwithstanding the lack of any express intent. He wrote at pp. 509-10:

For the reasons given in [Brault], the issue in the present appeal cannot, in my respectful opinion, turn on whether the Department intended to create a position and to make an appointment within the meaning of the Public Service Employment Act. There must, of course, be an intended identification and definition of functions to be performed and an intended assignment of a person to perform them, but, as I said in the Brault appeal, the application of the merit principle and the right of appeal under s. 21 of the Public Service Employment Act cannot depend on whether the Department chooses to regard what is done as the creation of a position and an appointment to it within the meaning of the Act. It is what the Department has objectively done as a matter of fact and not what it may have intended or understood it was doing as a matter of law that must determine the application of the merit principle and the right of appeal. [Emphasis added.]

These two cases make it clear that it is not the form of the arrangement or the expressed intent of the Government which is determinative of the issue, but rather the substance of the relationship must govern the decision. Thus, if the intention of the Government employer is to be gathered from the Employment Act, that intention is not determinative of the issues. Rather, the substance of the relationship between the Econosult teachers and the Government must be examined.

In the case at bar, it is apparent that positions can be created solely by the actions of Government officials acting outside the provisions of s. 8 of the Employment Act. It would seem then, that quite apart from appointments made under that section, Government officials can de facto create a position. The issue as to whether a person is an employee of the Federal Government and, if so, a member of a bargaining unit, must be determined on the facts of each case. Here, the decision of the Board is consistent with the facts presented, the decided cases and with the provisions of the Staff Relations Act. The Board carefully examined the situation of the contract workers. It determined that, as a matter of fact, on the basis of the general tests set out by the Board itself and by other tribunals specializing in labour relations, the contract workers were indeed employees of the Federal Government for collective bargaining purposes. The Econosult teachers were doing the same job as the P.S.A.C. teachers and were responsible to the same supervisor. They were working side-by-side doing virtually identical jobs. In the circumstances of this case, the decision of the Board was certainly not patently unreasonable, rather it appears to be a reasonable one.

I would note once again, that the effect of the Board's decision is limited in nature. It does not provide the Econosult teachers with any of the Public Service benefits such as superannuation. It simply provides that for the purposes of labour relations, people doing the same work should come within the same bargaining unit and the provisions of the same collective bargaining agreement should apply to them.

Disposition

In the result, I would allow the appeal and confirm the order of the Board in the terms suggested by Hugessen J.A. in the Federal Court of Appeal.

Appeal dismissed with costs, Cory J. dissenting.

Solicitor for the appellant: Dianne Nicholas, Ottawa.

Solicitor for the respondent: John C. Tait, Ottawa.

• Chief Justice at the time of judgment.