Courts confirm construction labour relations fall within provincial jurisdiction
Courts affirm the strong presumption that the labour relations of construction companies fall within provincial jurisdiction
On November 1, 2019, the Court of Appeal issued a landmark decision which affirmed that the labour relations of a telecommunications construction company, Ramkey Communications fall within provincial jurisdiction, and not under federal jurisdiction. The decision refined the legal test for derivative federal jurisdiction; affirmed the strong presumption of provincial jurisdiction over the labour relations of construction companies; and, will provide clarity to Unions organizing construction companies that perform work for federal entities. In May of 2020 leave to appeal to the Supreme Court was denied and the Court of Appeal’s decision stands.
Ramkey Communications Inc. is a telecommunications contractor that performs construction, maintenance and installation work for telecommunications companies. In the summer of 2015, Ramkey was contracted by Rogers to perform construction work on the Rogers network. LIUNA Local 1059 filed an application for certification to represent the construction employees at the Ontario Labour Relations Board. Ramkey argued that the Ontario Board did not have jurisdiction over the application because Ramkey was vital, essential and integral to Rogers under the principle of derivative federal jurisdiction. Ramkey argued that its labour relations were governed by Federal Law.
Initially, the OLRB found that it had jurisdiction over the application. In a comprehensive decision written by the Chair, the OLRB found that Rogers was not dependent on Ramkey because of a number of factors including the lack of any integration of Rogers and Ramkey’s workforce; the lack of any relevant control by Rogers over the operations of Ramkey; the lack of any guarantee of work under the contract; and that Rogers pulled back some of the work during the course of the hearing.
The Divisional Court, however, overturned the OLRB and found that Ramkey was vital, essential and integral to Rogers predominantly on the basis that Ramkey’s work was vital to Rogers having a “functioning network”.
The Court of Appeal’s Decision
The Court of Appeal reversed the Divisional Court decision and reinstated the OLRB decision and certificate. The Court of Appeal framed the question within the constitutional principle of “dependency”. The question the Court of Appeal posed was this – was the effective performance of the Rogers telecommunications network dependent on the services performed by Ramkey and the specific group of employees that were subject to the application for certification?
The Court of Appeal stated that in all cases where derivative federal jurisdiction was found, there was a corresponding finding that the effective performance of the federal undertaking was dependent on the services provided by the company and group of employees in question in the case.
For example, where the performance of federal undertakings was dependent on local entities who employed: stevedores unloading ships; postal workers delivering mail for Canada Post; and contracted signal installers working exclusively for Bell and were integrated into the Bell operation, the entity was subject to derivative federal jurisdiction.
By contrast, the Court of Appeal noted, in United Transportation Union v. Central Western Railway Corp., workers employed by a local railway that connected into CN and CP rail lines were not subject to federal jurisdiction because “the effective performance of CN’s obligations as a national railway is not contingent upon the services of [Central Western]”.
The Court of Appeal then turned to Tessier the most recent Supreme Court of Canada decision to tie these principles together, emphasizing as follows:
So this Court has consistently considered the relationship from the perspective both of the federal undertaking and of the work said to be integrally related, assessing the extent to which the effective performance of the federal undertaking was dependent on the services provided by the related operation, and how important those services were to the related work itself. [Emphasis added]
Within a dependency framework, the Court of Appeal concluded that Ramkey was not subject to derivative federal jurisdiction because the effective performance of the Rogers network was not dependent on Ramkey or the specific construction workers of Ramkey that were subject to the application. The Court of Appeal held:
More importantly, the effective performance of Rogers was not in any way dependent on Ramkey’s construction services. Unlike in Tessier or in the Federal Court of Appeal’s recent decision in Telecon Inc. v. International Brotherhood of Electrical Workers, Local Union No. 213, 2019 FCA 244, in this case, the Board made clear findings that Rogers was not dependent on Ramkey’s construction technicians. The effective performance of Rogers’ telecommunications network was not contingent upon the services of Ramkey’s construction technicians.
In support of this conclusion, the Court of Appeal relied on the very same indicia, hallmarks of the construction industry, that the OLRB referred to in its decision to emphasize the lack of dependency between Ramkey and Rogers, stating:
The controls Rogers had over Ramkey were no greater than any owner/client or general contractor in the construction industry might exercise over any subcontractor. Rogers only began using Ramkey’s construction technicians in 2014. It had no long-term commitment to use Ramkey’s construction technicians. It never relied exclusively on Ramkey’s construction technicians. In 2016, in the course of the hearing before the Board, Rogers “pulled back” all the construction work it had given to Ramkey’s construction technicians. Ramkey’s competitors performed the construction work Ramkey used to do for Rogers.
The Court of Appeal then dismissed the Divisional Court’s “functioning network” approach, stating:
Respectfully, the Divisional Court erred by considering the extent to which the delivery of telecommunications services by Rogers and other telecommunications companies like Rogers was dependent on having a functioning network line and on work of the type performed by Ramkey’s construction technicians. The proper focus is the extent to which Rogers and the other telecommunications companies, to which Ramkey’s construction technicians provided construction services, were dependent on the services of Ramkey’s construction technicians — the particular employees under scrutiny: Tessier, at para. 38.
Ultimately, the Court of Appeal found that putting into place a functioning infrastructure is distinct from the operation, or the effective performance of, a federal undertaking. The former is insufficient to displace the presumption of provincial jurisdiction – the latter may be.
The Supreme Court of Canada denied Ramkey’s leave to appeal on May 7, 2020.
This decision established a clearly articulated “dependency” test for assessing the labour relations of companies that perform work for federally regulated entities. This is a much needed and valuable development in the law.
Importantly for unions, this decision will provide clarity as to how to approach organizing non-union companies that are engage in similar work to Ramkey in the future. Given how the construction industry operates, with its bid based limited time contracts, it will be very difficult for construction companies to argue that their labour relations do not fall within provincial jurisdiction.
Finally, after 5 years and many hearings and court decisions, the employees will have a union and an automatically binding collective agreement.