International Longshoremen's and Warehousemen's Union, Ship and Dock Foremen, Local 514 v. Prince Rupert Grain Ltd., 1996 CanLII 210 (SCC), [1996] 2 SCR 432

International Longshoremen's and Warehousemen's Union, Ship and Dock Foremen, Local 514 v. Prince Rupert Grain Ltd., 1996 CanLII 210 (SCC), [1996] 2 SCR 432

Prince Rupert Grain Ltd. Appellant

v.

International Longshoremen’s

and Warehousemen’s Union,

Ship and Dock Foremen, Local 514 Respondent

and

Grain Workers Union, Local 333 Respondent

and

Canada Labour Relations Board Respondent

Indexed as: International Longshoremen’s and Warehousemen’s Union, Ship and Dock Foremen, Local 514 v. Prince Rupert Grain Ltd.

File No.: 24428.

1996: February 1; 1996: June 20.

Present: Lamer C.J. and L’Heureux‑Dubé, Gonthier, Cory, McLachlin, Iacobucci and Major JJ.

on appeal from the federal court of appeal

Labour relations ‑‑ Canada Labour Relations Board ‑‑ Jurisdiction ‑‑ Certification ‑‑ Whether Board had jurisdiction to conclude that bargaining unit proposed by union was not appropriate ‑‑ If so, whether decision was patently unreasonable.

The appellant joined the BC Terminal Elevator Operators’ Association in 1980 and has carried on its labour relations as a member since that time. In 1993, the ILWU applied to the Board for certification as bargaining agent for a unit of foremen employed by the appellant. The Board rejected the application and indicated that the appropriate unit consisted of all the foremen employed by all the members of the Association, including the appellant. In assessing the appropriateness of the proposed bargaining unit, the Board reviewed the labour relations history of the grain industry on the west coast, emphasizing the need for stability in labour relations in that industry. The Board noted that the appellant’s foremen shared a sufficient community of interest with the foremen of other members of the Association to warrant their inclusion in the same bargaining unit. It also noted that, in several decisions, it had consistently favoured a multi‑employer unit for operational employees in the grain handling industry on the west coast and that there was no evidence justifying a modification to its previous description of the appropriate unit as encompassing all foremen employed by all the members of the Association. The Federal Court of Appeal set aside the Board’s decision, concluding that it had acted outside its jurisdiction. In view of the Board’s decision, the union could never obtain certification as the bargaining agent unless it agreed to include the affected employees in the multi‑employer unit found by the Board to be the only appropriate one. The Board cannot, pursuant to s. 33 of the Canada Labour Code, impose a multi‑employer unit without the union’s consent.

Held: The appeal should be allowed.

Labour relations boards are a highly specialized type of administrative tribunal and, in protecting their decisions by broad privative clauses, Parliament and provincial legislatures have indicated that decisions of these boards on matters within their jurisdiction should be final and binding. Courts should thus exercise deferential caution in their assessment of the jurisdiction of labour boards and be slow to find an absence or excess of jurisdiction. Courts reviewing the jurisdiction of a board should adopt the pragmatic and functional approach articulated in Bibeault. A reading of ss. 24, 27 and 28 of the Canada Labour Code clearly reveals that Parliament intended to confer on the Board a broad jurisdiction to determine whether or not a unit is appropriate for collective bargaining. Indeed, the legislation imposes upon the Board a mandatory obligation to do so. Consequently, upon the submission of an application for certification, there cannot be an automatic acceptance of the proposed unit. Rather the Board must determine whether, in its opinion, the proposed unit is appropriate and, if it is not, it cannot be certified. That decision requires the Board to exercise its skills and expert knowledge in the field of labour relations and must be reached in the context of the factual situation presented to the Board. It is a decision that is uniquely appropriate for a labour board to make. Here, the Board concluded that the bargaining unit suggested by the union was not appropriate and it did not exceed its jurisdiction by suggesting an appropriate composition for the unit. The Board was very careful not to impose on the union its suggested larger multi‑employer unit which it believed to be appropriate and to reflect the reality of the situation. It simply put forward its position as a suggestion and confirmed its open and flexible position on the issue. Finally, s. 33 of the Code has no application in this case since the union’s application before the Board was not for certification of a multi‑employer bargaining unit and it is clear that the Board did not certify a multi‑employer unit in the absence of the union’s consent required by that section.

Since the Board had jurisdiction to determine the appropriate bargaining unit and to make a suggestion as to the composition of that unit, its decision must be upheld unless it is found to be patently unreasonable. This conclusion is confirmed by the broad and strongly worded privative clause set out in s. 22 of the Canada Labour Code. The Board considered all the relevant statutory provisions and all the pertinent factors which would affect its conclusion as to an appropriate bargaining unit and reached a reasonable decision.

Cases Cited

Distinguished: Grain Workers Union, Local 333 v. British Columbia Terminal Elevator Operators’ Association (1989), 101 N.R. 105; referred to: Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157; Teamsters Union v. Massicotte, [1982] 1 S.C.R. 710; Reference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313; Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941; National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324; Island Medical Laboratories Ltd. and H.S.A. of British Columbia (1993), 19 C.L.R.B.R. (2d) 161.

Statutes and Regulations Cited

Canada Labour Code, R.S.C., 1985, c. L‑2, ss. 3(1) "bargaining unit", "employee", "unit", 16(p)(v), 21, 22 [am. 1990, c. 8, s. 56], 24, 27, 28, 33.

Authors Cited

Adams, George W. Canadian Labour Law, 2nd ed. Aurora, Ont.: Canada Law Book, 1993 (loose‑leaf updated November 1995, release No. 4).

Labour Law Casebook Group. Labour Law, 5th ed. Kingston, Ont.: Industrial Relations Centre, Queen’s University, 1991.

APPEAL from a judgment of the Federal Court of Appeal (1994), 174 N.R. 255, 30 Admin. L.R. (2d) 227, 94 CLLC ¶ 14,042, allowing an application to review and set aside a decision of the Canada Labour Relations Board (1994), 93 di 164, dismissing an application for certification. Appeal allowed.

R. Alan Francis, for the appellant.

Peter A. Gall, Maryse Tremblay and Andrea Zwack, for the respondent the Canada Labour Relations Board.

Bruce Laughton, for the respondent the International Longshoremen’s

and Warehousemen’s Union, Ship and Dock Foremen, Local 514.

The judgment of the Court was delivered by

1Cory J. -- There are two issues raised on this appeal. First it must be determined whether the Canada Labour Relations Board (“Board”) had jurisdiction to conclude that the bargaining unit proposed by the International Longshoremen’s and Warehousemen’s Union, Ship and Dock Foremen, Local 514 (“ILWU”) was not appropriate. Secondly, if the Board had jurisdiction to make that determination, it must be determined whether the decision was patently unreasonable.

Factual Background

2As is so often the case, a review of the facts is essential to an understanding of the issues and their resolution.

3The movement of grain from the western terminals in Vancouver and Prince Rupert has always been of great economic importance to the country. Yet the labour relations in the industry have been troubled and turbulent. From as early as 1951, the various West Coast grain terminal employers at the port of Vancouver have had coordinated collective bargaining. This led, in 1957, to the formation of the British Columbia Terminal Elevator Operators’ Association (“Association”). In 1977, the Association was designated by the Board as the employer for the purposes of the Canada Labour Code in respect to all its members, namely the Alberta Wheat Pool, Pioneer Grain Terminal Ltd., Saskatchewan Wheat Pool, United Grain Growers Ltd. and Pacific Elevators Ltd.

4In 1980, Prince Rupert Grain Ltd. (the appellant) became a member of the Association. It was represented by the Association in the bargaining process and was a party to the industry‑wide collective agreements that were negotiated between 1980 and 1983. Although Prince Rupert Grain has never been formally designated by the Board as a member of the Association, the Board specifically found that it has carried on its labour relations as a de facto member of the Association and indeed this was not challenged by the ILWU. For the purposes of these reasons Prince Rupert Grain will be considered to be a member of the Association. Nor is there any challenge to the finding of the Board that Prince Rupert Grain has become “intricately integrated in the collective bargaining process with the other members of the Association” ((1994), 93 di 164, at p. 172).

5In 1983, the ILWU applied to the Board for certification as the bargaining agent for the foremen employed by three of the Association’s members, namely the Saskatchewan Wheat Pool, Alberta Wheat Pool and Pioneer Grain Terminal Ltd., at their respective elevators in the port of Vancouver. At that time, the Board rejected the union’s application and indicated that the appropriate unit consisted of all the foremen employed by all the members of the Association, including the de facto member Prince Rupert Grain. Although a vote was ordered for the employees covered by the multi‑employer unit, there was insufficient support for the ILWU to achieve certification. This decision by the Board as to the appropriate bargaining unit was not appealed by the ILWU.

6Some labour disputes arose with Prince Rupert Grain as a result of the construction of a highly computerized new terminal and the closure of the old one that need not concern us.

7In May 1993, the ILWU applied to the Board for certification as bargaining agent for a unit of foremen employed by Prince Rupert Grain. The application was refused by the Board. That refusal eventually led to this appeal.

Decisions of the Board and the Federal Court of Appeal

Canada Labour Relations Board (1994), 93 di 164

8The Board considered the matter at length and gave carefully measured reasons. The Board specifically recognized the significance of the grain handling industry to Canada. It commented upon the frequent work stoppages which had occurred and their unfortunate effect upon the movement of grain in the past. It emphasized the need for stability in labour relations in this industry which had to be balanced against the need to provide employees with access to collective bargaining through appropriate bargaining units.

9The Board reviewed the history of collective bargaining between the operators of grain terminals in the port of Vancouver and their employees. It referred to the 1983 application by ILWU to be certified to represent the foremen of three terminals in the port of Vancouver and observed that the Board had rejected that proposed bargaining unit in favour of one including foremen from all the member companies in the Association. It noted that in proceedings begun in 1986 and 1987, the multi‑employer unit had been opposed alternatively by the Grain Workers Union, Local 333 and by Prince Rupert Grain. It went on to note that, in contrast to the diametrically opposite positions taken in the earlier proceedings, the Association, Prince Rupert Grain and Local 333 all now supported the multi‑employer unit. The Board observed (at p. 169):

In the present application, both the Association and Local 333 were adamantly in favour of the larger multi‑employer unit. They argued that the existing de facto multi‑employer unit for operational employees, which includes Prince Rupert Grain, demonstrates the stability that the larger unit configuration provides.

The positions taken by Local 333 and the employer before the Board in this application contrast dramatically with their previous positions in the applications of 198[6] and 198[7].

10The Board very clearly recognized that in determining whether a proposed bargaining unit was appropriate, it was required to balance two objectives of the Canada Labour Code, R.S.C., 1985, c. L‑2. First, the fundamental right of employees to access to collective bargaining which includes the right to form a bargaining unit. Secondly, the necessity of establishing an appropriate bargaining unit which will foster industrial peace and stability. When it considered these two important and basic objectives the Board gave considerable weight to the de facto collective bargaining system which already was in existence. In that system, the interests of the appellant’s employees had been well represented in negotiations with the Association. The Board noted that the appellant’s foremen shared a sufficient community of interest with the foremen of other members of the Association to warrant their inclusion in the same bargaining unit. On this issue it stated (at p. 171):

. . . in circumstances where there is an existing collective bargaining regime in place, industrial stability must be given greater weight. To do otherwise would be to ignore the potential pitfalls and industrial instability that multiple units could create.

11In determining the appropriate bargaining unit, the Board very properly observed that the factual setting of the case was of great importance. The Board agreed with the following comments made by the British Columbia Labour Relations Board in the case of Island Medical Laboratories Ltd. and H.S.A. of British Columbia (1993), 19 C.L.R.B.R. (2d) 161, at p. 187:

Industrial stability, however, has different facets, depending upon whether one is at the initial stage of certification or at the second or additional stage of certification. At the initial stage of certification, the concern with industrial stability is with the design of the bargaining unit. . . . However, at the second or additional stage of certification the concern is threefold: first, the design of the bargaining unit; second, the proliferation of bargaining units; and third, the relationship not just between the second or additional units and the employer but between the units themselves. As the number of units increases, so does the potential for industrial instability.

At the second or additional stage of certification, among the four criteria cited in ICBC ‑‑ administrative efficiency and convenience, lateral mobility, common framework of employment conditions and industrial stability ‑‑ we see industrial stability as the most crucial factor. The factors of administrative efficiency and convenience, lateral mobility and a common framework of employment conditions really go to only one factor: the simplification of the administration and negotiation of collective agreements (and thus contribute to industrial stability). It is axiomatic in labour relations that a proliferation of bargaining units increases the potential for industrial instability. [Emphasis added by B.C. Board.]

12The Board further noted that in several decisions, it had consistently favoured a multi‑employer unit for operational employees in the grain handling industry on the West Coast. The Board concluded (at pp. 172‑73):

In the current circumstances, the Board is concerned with the apparent potential for industrial instability that might occur if the unit configuration determined by the Board in its 1983 decision were restructured and single employer units were to become the object of certification applications involving foremen.

The experience in the industry, as it relates to the operational employees, indicates that the “1983” unit provides both the access to employees rights and the industrial stability which the Board must balance in making its determination. The considerations addressed in previous Board decisions and the factors examined herein persuade us that the unit for foremen, as determined appropriate by the Board in 1983, remains an appropriate unit that will ensure both the assertion of employee bargaining rights and industrial stability.

13The Board then made what appears to be an eminently sensible comment. It stated that in those cases where it had already determined the appropriate unit for collective bargaining (i.e. in this case, its 1983 determination that the appropriate unit would be one including employees from all members of the Association), and an applicant union applies for the certification of a different unit then evidence should be presented to assist the Board by demonstrating, for example, that the unit earlier thought to be appropriate was too difficult to organize. It wrote (at pp. 173‑74):

. . . it stands to reason that the Board should be assisted in its task by evidence that supports the union’s claim that the unit described by the Board is either traditionally, or by experience, too difficult to organize.

The Board must presume that the unit configuration which it ascribed is appropriate. If the union applies for another unit it should, from a purely practical perspective, be in a position to provide evidence that the earlier unit is not appropriate. This does not create a burden of proof but rather, if you will, a practical evidential responsibility.

14The Board concluded that there was no evidence of fresh developments or new needs in the field, or of changes occurring in the grain handling industry, or of organizational difficulty which would justify the Board in replacing its 1983 description of the appropriate unit as encompassing all foremen employed by all the members of the Association.

15It concluded that industrial stability would best be served by maintaining a unit that included the foremen of the Prince Rupert Grain terminal together with the foremen in Vancouver.

Federal Court of Appeal (1994), 174 N.R. 255

Stone J.A. (McDonald J.A. concurring)

16Stone J.A. stated that the two issues to be determined were (1) whether the Board acted without jurisdiction or exceeded its jurisdiction in making the decision in question, and (2) whether the Board’s decision should be set aside on the ground that it is patently unreasonable, assuming that it was made within the Board’s jurisdiction. Addressing the issues in reverse order, Stone J.A. concluded that if the Board had acted within its jurisdiction, then its decision was not patently unreasonable and should be upheld in light of the privative clause set out in s. 22 of the Canada Labour Code.

17On the first issue, Stone J.A. concluded that the Board had acted outside its jurisdiction because, in his view, the Board’s decision to dismiss the certification application was inseparable from the Board’s determination of what it believed to be the appropriate unit for collective bargaining. In the result, the union could never hope to be certified as the bargaining agent unless it agreed to include the affected employees in the multi‑employer unit found by the Board to be the only appropriate one. Stone J.A. found that, in reaching its decision, the Board went beyond the limits laid down in the Code. He indicated that he was bound by the decision in Grain Workers Union, Local 333 v. British Columbia Terminal Elevator Operators’ Association (1989), 101 N.R. 105 (F.C.A.), where it was held that the Board may not impose a multi‑employer unit pursuant to s. 33 of the Code unless the union concerned has agreed that it should do so. Here, in his view the Board went beyond its jurisdiction since the union did not consent to the Board’s determination of the appropriate unit under s. 33.

Marceau J.A. (concurring)

18Marceau J.A.’s reasons were substantially the same as those of Stone J.A. In finding that the Board lacked jurisdiction to determine that the unit appropriate for collective bargaining must consist of employees of all members of the Association, Marceau J.A. noted that “if it had been understood that the Board, in fulfilling its duty, had the same power to resort to multi‑employer units as it has to single‑employer ones, s. 33 would have been completely unnecessary” (p. 265).

Relevant Statutory Provisions

Canada Labour Code, R.S.C., 1985, c. L‑2

3. (1) In this Part,

“bargaining unit” means a unit

(a) determined by the Board to be appropriate for collective bargaining, or

(b) to which a collective agreement applies;

“employee” means any person employed by an employer and includes a dependent contractor and a private constable, but does not include a person who performs management functions or is employed in a confidential capacity in matters relating to industrial relations;

“unit” means a group of two or more employees.

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

(v) a group of employees is a unit appropriate for collective bargaining,

21. The Board shall exercise such powers and perform such duties as are conferred or imposed on it by this Part, or as may be incidental to the attainment of the objects of this Part, including, without restricting the generality of the foregoing, the making of orders requiring compliance with the provisions of this Part, with any regulation made under this Part or with any decision made in respect of a matter before the Board.

22. (1) Subject to this Part, every order or decision of the Board is final and shall not be questioned or reviewed in any court, except in accordance with the Federal Court Act on the grounds referred to in paragraph 18.1(4)(a), (b), or (e) of that Act.

(2) Except as permitted by subsection (1), no order, decision or proceeding of the Board made or carried on under or purporting to be made or carried on under this Part shall

(a) be questioned, reviewed, prohibited or restrained, or

(b) be made the subject of any proceedings in or any process of any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise,

on any ground, including the ground that the order, decision or proceeding is beyond the jurisdiction of the Board to make or carry on or that, in the course of any proceeding, the Board for any reason exceeded or lost its jurisdiction.

24. (1) A trade union seeking to be certified as the bargaining agent for a unit that the trade union considers constitutes a unit appropriate for collective bargaining may, subject to this section and any regulations made by the Board under paragraph 15(e), apply to the Board for certification as the bargaining agent for the unit.

25. (1) Where a trade union applies under section 24 for certification as the bargaining agent for a unit that the trade union considers appropriate for collective bargaining, the Board shall determine the unit that, in the opinion of the Board, is appropriate for collective bargaining.

(2) In determining whether a unit constitutes a unit that is appropriate for collective bargaining, the Board may include any employees in or exclude any employees from the unit proposed by the trade union.

28. Where the Board

(a) has received from a trade union an application for certification as the bargaining agent for a unit,

(b) has determined the unit that constitutes a unit appropriate for collective bargaining, and

(c) is satisfied that, as of the date of the filing of the application or of such other date as the Board considers appropriate, a majority of the employees in the unit wish to have the trade union represent them as their bargaining agent,

the Board shall, subject to this Part, certify the trade union making the application as the bargaining agent for the bargaining unit.

33. (1) Where a trade union applies for certification as the bargaining agent for a unit comprised of employees of two or more employers who have formed an employers’ organization, the Board may designate the employers’ organization to be the employer if it is satisfied that each of the employers forming the employers’ organization has granted appropriate authority to the employers’ organization to enable it to discharge the duties and responsibilities of an employer under this Part.

(2) Where the Board designates an employers’ organization as an employer pursuant to subsection (1),

(a) the employers’ organization and each employer forming the employers’ organization is bound by any collective agreement entered into by the employers’ organization and the trade union concerned; and

(b) this Part applies, except as otherwise provided, as if the employers’ organization were an employer.

(3) Where an employer ceases to be a member of an employers’ organization or withdraws the authority referred to in subsection (1) that the employer granted to the employers’ organization, the employer

(a) continues to be bound by any collective agreement applicable to his employees that was entered into by the employers’ organization; and

(b) may be required to commence collective bargaining in accordance with section 48.

Analysis

19The first question which must be answered on this appeal can be put in this way. Does the Board have jurisdiction to determine the composition of the appropriate bargaining unit and did the Board have jurisdiction in this case to refuse to certify the bargaining unit proposed and to suggest a different composition for that unit?

20At the outset it should be stated, once again, that it would be all too easy for courts to find that empowering provisions of statutes creating administrative tribunals are jurisdictional in nature, thereby increasing the likelihood that their jurisdiction will be unnecessarily limited. The result of adopting such an approach would be that a great many decisions of the tribunals would be required to be correct in the eyes of the courts. There have been very salutary warnings sounded against the courts taking such a position. In Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227 (“CUPE”), at p. 233, Dickson J., as he then was, framed the warning in these clear words:

The question of what is and is not jurisdictional is often very difficult to determine. The courts, in my view, should not be alert to brand as jurisdictional, and therefore subject to broader curial review, that which may be doubtfully so.

21Similarly, in Canadian Broadcasting Corp. v. Canada (Labour Relations Board), [1995] 1 S.C.R. 157, at p. 181, Iacobucci J. observed that:

. . . when dealing with a tribunal as specialized as the Canada Labour Relations Board, inherent in whose functioning is the need to resolve disputes quickly and with finality, courts should be reluctant to characterize a provision as jurisdictional unless it is clear that it should be so labelled. . . .

22To the same effect in Teamsters Union v. Massicotte, [1982] 1 S.C.R. 710, 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.

23If these warnings are not heeded, the operation and indeed the whole concept of administrative tribunals may be jeopardized. These tribunals are often set up to operate in areas where specific expertise, experience, and sensitivity to the particular problems involved are essential to their resolution. Administrative tribunals are designed to function expeditiously, inexpensively, and with less formality than courts. There is little doubt either of the need for these tribunals or of the very important role they fulfil in Canadian society.

24It has often been very properly recognized that labour relations boards exemplify a highly specialized type of administrative tribunal. Their members are experts in administrating comprehensive labour statutes which regulate the difficult and often volatile field of labour relations. Through their constant work in this sensitive area, labour boards develop the special experience, skill and understanding needed to resolve the complex problems of labour relations. There were very sound reasons for the establishment of labour boards and the protection of their decisions by broad privative clauses. Parliament and provincial legislatures have clearly indicated that decisions of these boards on matters within their jurisdiction should be final and binding. The courts could all too easily usurp the role of these boards by characterizing the empowering legislation according them authority as jurisdiction limiting provisions which would require their decisions to be correct in the opinion of the court. Quite simply, courts should exercise deferential caution in their assessment of the jurisdiction of labour boards and be slow to find an absence or excess of jurisdiction.

25In Reference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313, McIntyre J. recognized that labour boards possess a high degree of experience and expertise. He wrote, at pp. 416‑17:

Our experience with labour relations has shown that the courts, as a general rule, are not the best arbiters of disputes which arise from time to time. Labour legislation has recognized this fact and has created other procedures and other tribunals for the more expeditious and efficient settlement of labour problems. Problems arising in labour matters frequently involve more than legal questions. Political, social, and economic questions frequently dominate in labour disputes. The legislative creation of conciliation officers, conciliation boards, labour relations boards, and labour dispute‑resolving tribunals, has gone far in meeting needs not attainable in the court system. The nature of labour disputes and grievances and the other problems arising in labour matters dictates that special procedures outside the ordinary court system must be employed in their resolution. Judges do not have the expert knowledge always helpful and sometimes necessary in the resolution of labour problems. The courts will generally not be furnished in labour cases, if past experience is to guide us, with an evidentiary base upon which full resolution of the dispute may be made. In my view, it is scarcely contested that specialized labour tribunals are better suited than courts for resolving labour problems, except for the resolution of purely legal questions.

26This position has recently been reiterated in the case of Canadian Broadcasting Corp., supra, at pp. 179-80, by Iacobucci J.:

The labour relations tribunal, in its federal and provincial manifestations, is a classic example of an administrative body which is both highly specialized and highly insulated from review. . . . The Canada Labour Relations Board must develop a coherent and workable structure for the application of the numerous statutory provisions which govern the labour relations of the employers and employees whose operations fall within federal jurisdiction. In order for these workers and their employers to receive rapid resolution of their disputes in a manner which can be rationalized with their other rights and duties under the Canada Labour Code, the decisions of the Board cannot routinely be overturned by the courts whenever they disagree with the Board’s treatment of an isolated issue.

To the same effect are the reasons of the majority in Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369.

27Courts reviewing the jurisdiction of a board to entertain the complaint before it should adopt and be guided by what has been designated the pragmatic and functional approach. See U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048. In order to resolve the question, Beetz J. stated that the reviewing court should consider the following factors: (a) the wording of the enactment conferring jurisdiction on the administrative tribunal; (b) the purpose of the statute creating the tribunal; (c) the reason for the tribunal’s existence; (d) the area of expertise of the tribunal’s members; and (e) the nature of the problem before the tribunal.

28An examination of the relevant statutory provisions of the Canada Labour Code clearly reveals Parliament’s intention to grant the Board broad, discretionary powers for determining the appropriate bargaining unit. A review of ss. 24, 27 and 28 of the Code, confirms that this is an exercise which falls squarely within the exclusive jurisdiction of the Board. Support for such an interpretation of the relevant provisions is also found in the literature. George W. Adams (now Justice Adams), in his excellent work Canadian Labour Law (2nd ed. 1993 (loose-leaf)), correctly states at p. 7‑2: “[i]n all jurisdictions, labour boards are given a broad mandate to determine the appropriate bargaining unit”. Similarly, it has been asserted that when a union seeking certification applies to the labour relations board in respect of a unit that it considers appropriate for collective bargaining, it is the labour board which must decide whether the unit applied for, or some variation of it, is appropriate for collective bargaining (Labour Law Casebook Group, Labour Law (5th ed. 1991), at p. 348).

29Pursuant to subs. (1) of s. 24 of the Code, a trade union may apply to the Board for certification as the bargaining agent for the unit that it considers to be appropriate for collective bargaining. This subsection both requires that unions wishing to be certified as bargaining agents apply for certification to the Board and confers on the Board the authority to consider and dispose of these applications.

30Once the union has submitted its application for certification, the next stage of the process is set out in s. 27 of the Code. It provides that when the Board has received an application from a union seeking certification as the bargaining agent for a unit, it must determine if the unit is appropriate for collective bargaining. It is significant that by the use of the word “shall” in the section, Parliament has not only authorized the Board to determine whether a unit is appropriate for collective bargaining but imposed a mandatory obligation on it to do so. Moreover, in making the mandatory evaluation the Board must determine whether, in its opinion, the proposed unit is an appropriate one. The Board would not be fulfilling its mandate if it were to simply approve the application submitted for certification. Furthermore, pursuant to s. 27(2) of the Code, the Board may in determining the appropriateness of a unit, “include any employees in or exclude any employees from the unit proposed by the trade union”.

31Section 28 imposes a duty on the Board to certify the union as the bargaining agent of the proposed bargaining unit if the conditions specified in the section are fulfilled. First, the Board must have received an application from a union wanting to be certified as the bargaining agent for a unit. Second, the Board is required to determine whether that unit is appropriate for collective bargaining. Finally, the Board must be satisfied that, at the relevant time, a majority of the employees in the unit wish to have the trade union represent them as their bargaining agent. Only when these statutory conditions are fulfilled, is the Board required to certify an applicant union.

32In my view, a reading of ss. 24, 27 and 28 of the Code renders it readily apparent that Parliament intended to confer on the Board a broad jurisdiction to determine whether or not a unit is appropriate for collective bargaining. Indeed, the Board’s determination as to whether the proposed unit is appropriate constitutes a mandatory condition that must be fulfilled before the Board may grant certification to a union. Conversely, if the Board is not satisfied that the proposed unit is an appropriate one, then the conditions of s. 28 of the Code have not been fulfilled and the Board shall not grant certification. Consequently, upon the submission of an application for certification, there cannot be an automatic acceptance of the proposed unit. Rather the Board must determine whether the proposed unit is appropriate and, if it is not, it cannot be certified.

33In summary, the legislation imposes a mandatory duty upon the Board to determine whether the proposed bargaining unit is appropriate. That decision requires the Board to exercise its skills and expert knowledge in the field of labour relations. The decision must be reached in the context of the factual situation presented to the Board and not in the abstract. It is a decision that is uniquely appropriate for a labour board to make. It must now be determined whether the Board exceeded its jurisdiction by suggesting an appropriate composition for the unit.

Did the Board Exceed its Jurisdiction by Suggesting the Composition of an Appropriate Unit?

34The respondent, ILWU, takes the position that contrary to the provisions of s. 33 of the Code, the Board sought to create a multi‑employer bargaining unit without its consent. The Federal Court of Appeal adopted this position in its finding that the Board’s decision effectively prevented the union from representing the foremen of Prince Rupert Grain unless the union agreed to apply for certification of a unit that was comprised of the foremen of Prince Rupert Grain together with the foremen of the five other members of the Association. The Federal Court of Appeal found that, in effect, the Board exceeded its jurisdiction by imposing this decision on the union in the absence of the union’s consent. I cannot accept the position of the ILWU and must with respect differ from the position taken by the Federal Court of Appeal.

35The decision as to the appropriateness of the bargaining unit can never be made in a vacuum. Rather it has to be assessed in light of the existing circumstances. The mandatory requirement that the Board determine if the proposed bargaining unit is appropriate clearly indicates that the Board must consider alternative bargaining units. The Board must make comparisons between the proposed units and others which in the Board’s opinion might be more appropriate as bargaining units. It is in making the decision as to whether the proposed unit is “appropriate” that the Board exercises its special skill and experience in applying the factors which are relevant to that determination. This is precisely what the Board did in this case.

36The Board considered all the relevant and pertinent factors. It considered the need for workers to participate in reaching a collective agreement through a bargaining unit. It considered the turbulent history of labour relations in this troubled industry extending over a number of years. It was aware of the need for stability in these labour relations and the dangers that arise from the undue fragmentation of bargaining units. It took into account the community of interest that existed between the foremen employed at Prince Rupert and the foremen employed by other members of the Association. It was aware of the past and present problems in this industry. It considered and assessed all the pertinent factors and the relevant provisions of the Canada Labour Code and after careful consideration, concluded that the bargaining unit suggested by the Union was not appropriate. Quite simply, this is what the Canada Labour Code required it to do. The Board then suggested a bargaining unit which it thought would be appropriate.

37It will be remembered that the application before the Board was not for certification of a multi‑employer bargaining unit and therefore s. 33 simply did not apply. Certainly it is clear that the Board could not certify a multi‑employer unit in the absence of the union’s consent required by the section. In this case, the Board was very careful not to impose on the union its suggested larger multi‑employer unit which it believed to be appropriate and to reflect the reality of the situation. Indeed, the Board explicitly stated that it was prepared to modify its finding in response to new developments or changes which might occur in the grain handling industry. There was nothing inflexible in this ruling. The Board applied its expert knowledge to the realities of the situation at the time of the hearing. It assessed the appropriateness of the suggested bargaining unit. In doing so it properly made comparisons with other units that it considered might be more appropriate. When it had completed this assessment the Board then made a pertinent suggestion as to the composition of an appropriate unit.

38In my view, the Board did not exceed its jurisdiction by making what appears to be a sensible and helpful suggestion. After all it is the Board which possesses a high degree of skill and experience in this very field. It is the Board which can make a good assessment of the composition of a unit which would be “appropriate” for collective bargaining in a given industry at a given time. Indeed to reasonable and concerned members of the community, it might appear to be unnecessarily restrictive for courts, on jurisdictional grounds, to prohibit a skilled and experienced labour board from exercising its skill and experience in making what might well be a helpful suggestion as to the composition of an appropriate bargaining unit. To so restrict the Board would place it in the position of in effect saying “we know what the composition of an appropriate unit would be but we cannot tell you of our opinion for fear of losing jurisdiction in this matter”. So long as the Board does not unilaterally impose its opinion on the parties but simply puts forward its position as a suggestion and confirms, as it did in this case, its open and flexible position on the issue, it cannot be said to have exceeded its jurisdiction.

39In concluding that the Board had exceeded its jurisdiction by imposing on the union a s. 33 application which would require its consent, the Federal Court of Appeal relied on its earlier decision in Grain Workers, supra. In that case, it had been held that the Board cannot impose a multi‑employer bargaining unit upon a union unless the union concerned has agreed to that bargaining unit pursuant to s. 33 of the Code. Pratte J.A., on behalf of the court, wrote (at p. 107):

If, therefore, the applicant had applied to the Board in 1977 to be certified as the bargaining agent of only five of the six members of an employer’s organization, its application might perhaps have been dismissed on the ground that it did not include all the members of the organization but the Board would not have the power, without the consent of the applicant, to include in the bargaining unit the employees of the sixth member. [Emphasis added.]

40In that case, the Board had amended its earlier certification order by unilaterally enlarging the unit to include the employees of another member of the Association. It thereby imposed a new and different bargaining unit upon the union without its consent. I do not think the Grain Workers case is applicable since the situation presented in that case is clearly distinguishable. In the case at bar, the Board did not impose a modified unit on the union. It simply gave its opinion that a single employer unit was not appropriate and suggested an alternative unit. The Grain Workers case could only be applicable if in the case under consideration the Board had refused to certify the unit proposed by the union and of its own initiative had certified a multi‑employer unit without the consent of the union as required by s. 33.

41In my view, the Board had jurisdiction to determine the appropriate bargaining unit and to make the suggestion as to the membership of that unit which it put forward in this case. This conclusion is based upon an examination of the wording of the statute empowering the Board, the purpose of the statute, the expert knowledge of its members, and the decisions of this Court pertaining to the manner in which courts should approach issues concerning the jurisdiction of administrative boards. It follows that unless the decision of the Board was patently unreasonable it should be maintained.

Standard of Review

42Since the Board had jurisdiction to determine the appropriate bargaining unit and to make a suggestion as to the composition of that unit, its decision must be upheld unless it is found to be patently unreasonable or, in other words, clearly irrational. This conclusion is clearly confirmed by the broad and strongly worded privative clause set out in s. 22 of the Canada Labour Code. It has been held on numerous occasions that such a clause gives a very clear signal to the courts that decisions of a board or tribunal operating under the protection of such a privative clause must be protected from strict judicial scrutiny. See CUPE, supra; Royal Oak Mines, supra, at p. 394; Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941, at p. 959. The position with regard to privative clauses was clearly and concisely set out by Gonthier J., writing for the majority in National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324, in these words (at pp. 1369‑70):

. . . courts, in the presence of a privative clause, will only interfere with the findings of a specialized tribunal where it is found that the decision of that tribunal cannot be sustained on any reasonable interpretation of the facts or of the law.

43This result is also dictated by the expert knowledge, skill and experience of the members of the labour board which render it the appropriate body for determining the appropriateness of a unit for collective bargaining. As it was stated in CUPE, supra, 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.

44There simply can be no doubt that courts should exercise restraint and deference in reviewing those decisions which come within the jurisdiction of specialized administrative tribunals, particularly labour boards. The decision of the Board came within its jurisdiction and should not be set aside unless it is patently unreasonable.

Was the Decision of the Board Patently Unreasonable?

45In Public Service Alliance of Canada, supra, at pp. 963‑64, an attempt was made to indicate the strength of the term “patently unreasonable” and to give some definition to the phrase. There it was stated:

It is said that it is difficult to know what “patently unreasonable” means. . . . Yet any test can only be defined by words. . . . Obviously, the patently unreasonable test sets a high standard of review. In the Shorter Oxford English Dictionary “patently”, an adverb, is defined as “openly, evidently, clearly”. “Unreasonable” is defined as “[n]ot having the faculty of reason; irrational. . . . Not acting in accordance with reason or good sense”. Thus, based on the dictionary definition of the words “patently unreasonable”, it is apparent that if the decision the Board reached, acting within its jurisdiction, is not clearly irrational, that is to say evidently not in accordance with reason, then it cannot be said that there was a loss of jurisdiction. This is clearly a very strict test.

It is not enough that the decision of the Board is wrong in the eyes of the court; it must, in order to be patently unreasonable, be found by the court to be clearly irrational.

46There can be no question that the Board’s decision was very clearly not patently unreasonable. It considered all the relevant statutory provisions and all the pertinent factors which would affect its conclusion as to an appropriate bargaining unit and reached a reasonable decision. Indeed the Federal Court of Appeal recognized that, if the Board was found to be acting within its jurisdiction, its decision was not patently unreasonable.

Disposition

47In the circumstances, the appeal should be allowed, the order of the Federal Court of Appeal set aside and the decision of the Canada Labour Relations Board No. 1050 restored. The appellant should have its costs throughout.