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Looks like a Duck: ONCA Returns Telecommunications Construction to Provincial Jurisdiction

A recent Ontario Court of Appeal decision serves to remind employers that the presumption of provincial jurisdiction over labour relations will only be displaced in the clearest of cases.

In Ramkey Communications Inc. v. Labourers’ International Union of North America, the employer opposed certification of a trade union to represent a provincially regulated bargaining unit of construction employees. It argued that its “construction technicians” performed essential work for federally regulated telecommunications companies and so its labour relations should be federally regulated as well.

If Ramkey’s argument had been successful, the union’s application before the Ontario Labour Relations Board (the “Board”) would have been dismissed, and the union would have been obliged to seek certification under the Canada Labour Code (the “Code”) instead.  Unlike Ontario’s Labour Relations Act, the Code has no card-check certification process for construction industry applications and does not limit the voting list to employees at work in the bargaining unit on the day of application.  As such, certification under the Code requires a much broader mandate of support and is generally more difficult in larger workforces.

The Board rejected Ramkey’s argument and ruled that its construction technicians were engaged in construction work that was not core to a federal undertaking.  The Divisional Court overturned the Board’s decision and found that Ramkey was engaged derivatively in work that was vital, essential, or integral to a federal undertaking. Ultimately, the Ontario Court of Appeal reinstated the Board’s decision.

Ramkey’s construction technicians provided services as a third-party contractor, on a non-exclusive basis (mainly to Rogers, which is clearly a federally regulated telecommunications company). Ramkey’s work consisted primarily of installing new network lines and supporting infrastructure. Ramkey was not the exclusive provider of these services to Rogers, nor was Ramkey guaranteed any amount of work from Rogers. In fact, Rogers had many other contractors performing similar work. (Though not determinative, Ramkey was incorporated under the laws of Ontario and, up until this application, it followed Ontario’s employment statutes and regulations.)

The applicable test was set out in the relatively recent Supreme Court of Canada decision, Tessier Ltée v. Quebec (Commission de la santé et de la sécurité du travail). Applying that test to determine whether the presumption of federal jurisdiction was displaced in the circumstances, the Court of Appeal considered the relationship from the perspective of the federal undertaking, assessing: (1) how important Ramkey’s construction services for the federal undertaking were to Ramkey’s construction division, and (2) the extent to which the effective performance of the federal undertaking was dependent on Ramkey’s construction services.

The Court of Appeal ruled that the Divisional Court had erred in failing to give weight to the Board’s finding that Rogers was not dependent on the services of Ramkey’s construction technicians. Instead, the Divisional Court had incorrectly focused on the extent to which Rogers and other telecommunications companies were dependent on having a functioning network line and on the type of work performed by Ramkey’s technicians. The Court of Appeal found that the technicians were not vital or integral to Rogers’ operations as a federal, telecommunications undertaking. Rogers’s effective performance was not reliant on Ramkey’s services.

As outlined, the clearest of facts are required to displace the presumption that employees are subject to provincial labour relations. In order to rebut the presumption, the federal undertaking must be functionally dependent on the service provider to deliver its core undertaking. The more integrated and integral are the provider’s services to that core federal undertaking, the more likely are its services to fall under federal regulation for labour and employment matters.  The inverse is likewise true.

For more information contact:

Jeremy Schwartz at [email protected] or 416-862-7011

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