A-1145-88
Attorney General of Canada (Applicant)
v.
Richard Gaboriault, Alain Brousseau, Antonio
Simetich, Marcel St-Laurent, Dough Dixon,
Robert Lauzon, Maurice Boivin, Jacques
Langlois, Pierre Daniels, François Ciré, Pierre
Simard, Jacques Thivierge, Jacques Desjardins,
Louis St-Pierre, Gaston Paquette, Raymond
Brière, Alain Demers, Michel Delisle and Tecksol
Inc. and Gilles Minville (Respondents)
and
Transport Canada (Mis en cause)
INDEXED AS: CANADA (ATTORNEY GENERAL) V. GABORIAULT
(CA.)
Court of Appeal, Marceau, Desjardins and Décary
JJ.A.—Montréal, May 11; Ottawa, June 11, 1992.
Labour relations — S. 28 application to set aside CLRB
decision on complaint of unfair competition under Canada
Labour Code — Passenger Transfer Vehicles at Mirabel Air
port owned by Transport Canada, maintained and operated by
private company on term contract through public bids —
Lower bidder, Cafas Inc., supplanted in 1985 by respondent
Tecksol Inc. — Latter hiring all former employees of Cafas
except eighteen respondents — Complaint by respondents to
CLRB based on Code, s. 184(3)(a)(î) — Board finding true
employer of maintenance workers and drivers not Tecksol Inc.
but Transport Canada — Federal Court decision in Canada
(Attorney General) v. P.S.A.C. (Econosult case) having direct
bearing herein — Status of employee in private and public sec
tors distinguished — Employment in Public Service subject to
body of strict and rigid rules, not resulting from situation of
fact — Board acting on basis of legal impossibility in recogniz
ing new category of government employees: de facto employ
ees and thereby creating legal void — Patently unreasonable
error of law — Application granted.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canada Labour Code, R.S.C. 1970, c. L-1, ss. 184
(3)(a)(i) (as am. by S.C. 1977-78, c. 27, s. 65; 1980-81-
82-83, c. 47, s. 53, item 14), 187(1)(a) (as am. by S.C.
1977-78, c. 27, s. 66; 1984, c. 39, s. 35).
Canada Labour Code, R.S.C., 1985, c. L-2, ss. 16(p)(i),
22(1) (as am. by S.C. 1990, c. 8, s. 56).
Federal Court Act, R.S.C., 1985, c. F-7, s. 28.
CASES JUDICIALLY CONSIDERED
APPLIED:
Canada (Attorney General) v. P.S.A.C., [1989] 2 F.C.
633; (1989), 97 N.R. 116 (C.A.); Canada (Attorney Gen
eral) v. Public Service Alliance of Canada, [1991] 1
S.C.R. 614; (1991), 80 D.L.R. (4th) 520; 48 Admin. L.R.
161; 91 CLLC 14,017; 123 N.R. 161.
REFERRED TO:
National Corn Growers Assn. v. Canada (Import Tribu
nal), [1990] 2 S.C.R. 1324; (1990), 74 D.L.R. (4th) 449;
45 Admin. L.R. 161; 114 N.R. 81; Caimaw v. Paccar of
Canada Ltd., [1989] 2 S.C.R. 983; (1989), 62 D.L.R.
(4th) 437; [1989] 6 W.W.R. 673; 102 N.R. 1; U.E.S.,
Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; (1988), 35
Admin. L.R. 153; 95 N.R. 161.
APPLICATION under section 28 of the Federal
Court Act to review and set aside a decision of the
Canada Labour Relations Board ((1988), 75 di 130)
rendered in response to a complaint of unfair compe
tition made pursuant to sections 184 et seg. of the
Canada Labour Code. Application granted.
COUNSEL:
Raymond Piché for applicant.
Robert P. Gagnon for respondent Tecksol Inc.
Gilles Grenier for Canada Labour Relations
Board.
SOLICITORS:
Deputy Attorney General of Canada for appli
cant.
Grondin, Poudrier, Bernier, Québec, for respon
dent Tecksol Inc.
Trudel, Nadeau, Lesage, Cleary, Larivière &
Associés, Québec, for Canada Labour Relations
Board.
Toupin & Barrette, Montréal, for respondents
Richard Gaboriault et al.
The following is the English version of the reasons
for judgment rendered by
MARCEAU J.A.: This application to review and set
aside, pursuant to section 28 of the Federal Court Act
[R.S.C., 1985, c. F-7], is from a decision of the
Canada Labour Relations Board [(1988), 75 di 130]
rendered in response to a complaint of unfair compe
tition made pursuant to sections 184 et seq. [as
enacted by S.C. 1972, c. 18] of the Canada Labour
Code, R.S.C. 1970, c. L-1. It is of particular interest
in that the Court is called on once again to consider
and affirm the duality and relative independence of
the two systems of employment which govern, one
the public sector and the other the private sector, in
our system of law. The difficulty with it arises, in
effect, from the underlying factual context which is
situated at a point of contact between the two types of
employment. The facts giving rise to the case are as
follows.
The facts are not in dispute, but counsel of course
were not in agreement as to the conclusions to be
drawn from them. I must say that I could disregard
these differences of opinion and state the problem
quite simply based on the bare essentials, as in my
view its solution depends strictly on principles of
law; however, to correspond more closely with the
respective positions of the parties, I will undertake a
complete review of the facts accepted by counsel
themselves in the submissions they made to the
Court.
At the Montréal International Airport (Mirabel),
the federal Department of Transport (hereinafter
"Transport Canada"), maintains a shuttle service for
passengers between the terminal and the aircraft. This
service is provided by specially built vehicles, known
simply as "Passenger Transfer Vehicles" (P.T.V.).
Since they were put into service when the airport
opened, these P.T.V.s, owned by Transport Canada,
have been maintained and operated by the employees
of a private company, based on a term contract
awarded in response to public bids. The first private
company to obtain and carry out the contract was
replaced after some years by a lower bidder, a com
pany named Cafas Inc., which was itself supplanted
in 1985 following a new call for tenders by a third
company, the respondent Tecksol Inc.
Once it obtained the contract, Tecksol Inc. pro
ceeded to hire the staff it needed to carry out its obli
gations in accordance with the specifications attached
to the contract. Among the applications it received
were those of several former employees of Cafas
Inc.; it accepted all of them except those of the eigh
teen respondents. The complaint which these eigh
teen respondents submitted jointly to the Canada
Labour Relations Board, shortly after their applica
tions were dismissed, led to the decision at issue here.
This complaint by Gaboriault and his fellow work
ers, made pursuant to paragraph 187(1)(a) of the
Canada Labour Code,' [as am. by S.C. 1977-78, c.
27, s. 66; 1984, c. 39, s. 35] charged Tecksol Inc.
with having, with the complicity of Gilles Minville, a
Transport Canada employee more directly linked
with the Mirabel operations, contravened the provi
sions of subparagraph 184(3)(a)(i) [as am. by S.C.
1977-78, c. 27, s. 65; 1980-81-82-83, c. 47, s. 53,
item 14] of the Code, which read as follows at that
time:
184....
(3) No employer and no person acting on behalf of an
employer shall
(a) refuse to employ or to continue to employ or suspend,
transfer, lay off or otherwise discriminate against any person
in regard to employment, pay or any other term or condition
of employment or intimidate, threaten or otherwise disci
pline any person, because the person
(i) is or proposes to become, or seeks to induce any other
person to become, a member, officer or representative of a
At the time of the complaint this subsection read as fol
lows:
187. (1) Subject to subsections (2) to (5), any person or
organization may make a complaint in writing to the Board
that
(a) an employer, a person acting on behalf of an
employer, a trade union, a person acting on behalf of a
trade union or an employee has failed to comply with sub
section 124(4) or section 136.1, 148, 161.1, 184 or 185;
or
trade union or participates in the promotion, formation or
administration of a trade union ..
It should be mentioned that on December 13, 1984
the Board had certified the International Association
of Machinists and Aerospace Workers as a bargain
ing agent to represent the Cafas Inc. employers work
ing at Mirabel on the operation and service of the
Passenger Transfer Vehicles. It was alleged that the
employment rejections were connected with the part
the respondents may have played in organizing the
union.
Tecksol Inc. and Minville naturally challenged the
validity of the allegations and a hearing was ordered.
At the hearing, in addition to protesting its good
faith, Tecksol added as an alternative argument that,
in any case, the complaint should not have been
brought against it because it was not the real
employer of the P.T.V. maintenance workers and
drivers. At the close of the hearing, the Board dis
missed the complaint against Minville forthwith on
the ground that no evidence had been presented to
support it. On the complaint against Tecksol Inc.,
however, it ordered a second hearing to be held to
which it intended to summon and officially implead
Transport Canada, and which it would devote to con
sidering the argument as to the identity of the true
employer put forward alternatively by the company.
Before the date set for the new hearing, Tecksol
Inc. indicated that it no longer intended to proceed
with its alternative argument, but the Board refused
to consider the discontinuance and proceeded as
scheduled. After hearing submissions by the parties it
took the matter under advisement and shortly after
issued its decision. It found that the true employer of
the P.T.V. maintenance workers and drivers was not
Tecksol Inc. but in fact Transport Canada; however,
as it did not have any jurisdiction over Transport
Canada it could not admit and act on the complaint.
Both the Attorney General of Canada and Gaboriault
and his fellow workers at once appealed from the
decision, bringing proceedings under section 28 of
the Federal Court Act.
Some time later, this Court rendered judgment in
Canada (Attorney General) v. P.S.A.C., [1989] 2 F.C.
633 [hereinafter Econosult], in which it adopted posi
tions that appeared to be at variance with the Board's
findings and the decision it had just made. To avoid
needless litigation, the parties then agreed to stay the
section 28 proceedings until the Supreme Court had
ruled on the validity of these positions.
When the Supreme Court judgment affirming the
judgment of the Federal Court was rendered, 2
Gaboriault and his fellow workers, before proceeding
with the section 28 application, chose to ask the
Board to revise its decision. The Board refused. This
refusal is really only incidental since the application
before this Court is against the initial decision, but
the real nature of the problem can perhaps be gath
ered from reading the summary of reasons (unofficial
but prepared by the Board) which the latter gave to
justify its reaction:
The Board dismisses an application for review of a decision
rendered in Tecksol Inc. (1988), 75 di 130 (CLRB no. 713)
where it had been determined that the real employer in a com
plaint of unfair labour practice was not Tecksol but rather the
Transport Department, whose activities do not fall under the
Board's jurisdiction.
The Board dismisses the application for review for the follow
ing reasons:
The Econosult judgment, issued by the Supreme Court on
March 21, 1991, on which the applicants based their applica
tion, has no bearing on decision no. 713 in that it only deter
mines that Econosult employees are not civil servants falling
under the Public Service Staff Relations Board jurisdiction.
The judgment did not determine however that the employees
could not be employees of a federal government department.
Contrary to the situation prevailing in Econosult, the Board has
full jurisdiction to determine who is an employee and who is
an employer and this is what it has done, by properly applying
its policies.
The problem raised by the fact that employees are not covered
either by the Public Service Staff Relations Act or by the
Canada Labour Code requires a legislative solution rather than
an administrative one.
As soon as the Board's decision to affirm its deci
sion was known, the Attorney General reactivated his
section 28 proceedings for its review. 3
2 [1991] 1 S.C.R. 614.
3 Gaboriault and his fellow workers at first did likewise, but
shortly before the hearing they discontinued their application.
Those are the facts underlying the application
before the Court. I have taken more time that I would
have liked to go over them, but now that the position
of the Board, the consequences of which might be so
very significant, has been put in context I think it will
be easier to explain why I feel that the Attorney Gen
eral was right to challenge it.
Essentially, what I think is that the Econosult deci
sion did have a direct bearing on the solution of the
problem as the Board felt it should be stated and that
the conclusion reached in that case is contrary to the
position taken by the Board. In my opinion, with
respect, to conclude merely that the majority judg
ment held that the employees in question were not
subject to the jurisdiction of the Public Service Staff
Relations Board is to misread that judgment. It is, in
fact, to amputate the ratio decidendi, the very sub
stance, of the judgment. What the Supreme Court
affirmed in the judgment was that, in the legal situa
tion at issue here, a person cannot be an employee of
the federal government without an express appoint
ment or formal hiring duly authorized by law. In the
reasons I wrote in support of this Court's judgment in
Econosult, I gave an explanation of this situation
which I will take the liberty of repeating (at pages
642-643):
It is well known that in the private sector the status of
employee of a person acting for another, though involving a
contract resulting from deliberate acts, is often in practice
inferred from the circumstances which actually surround the
doing of the work. The reason is that the employer-employee
relationship is primarily a legal relationship which the law
associates with a situation of fact: the contract of employment
may not take any particular form and may result simply from
the behaviour of the parties concerned, hence the establishment
of criteria by which such a contract can be identified behind
appearances which may conceal it.
In the public sector, on the contrary, as I understand the leg
islation, the status of an employee of Her Majesty cannot be
simply inferred from a situation of fact. The intention was sim
ply, so to speak, to shield the Crown as employer from the
actions of all its representatives vested with executive powers:
otherwise, Parliament undoubtly concluded, the situation
would quickly become both uncontrollable and chaotic.
Employment in the Public Service has been subject to a body
of strict and rigid rules.
This basic principle applies to everyone in all
fields, as also does the rule that the federal govern-
ment means all Departments, and none of them may
be an independent entity which can become an
employer on its own. Certainly, wide powers have
been conferred on the Board to decide questions
before it, and in particular it has jurisdiction—which
the Public Service Staff Relations Board in Econosult
did not have—to determine whether a person is an
employer or an employee (cf. subparagraph 16(p)(i)
of the Code [R.S.C., 1985, c. L-2]). Equally certainly,
the exercise by the Board of its jurisdiction is pro
tected by a privative clause (subsection 22(1) of the
Code [R.S.C., 1985, c. 1-2 (as am. by S.C. 1990, c. 8,
s. 56)]). However, clearly the Board is not acting in a
vacuum and while it is natural for it to seek to imple
ment its own particular policies, its conclusions must
be able to form part of the system as a whole and not
be at variance in any essential way. The Board cannot
act on the basis of a legal impossibility.
This is precisely why I said at the outset that the
problem could be discussed without even adverting to
the context in which the decision was made. I am not
forgetting that the Board had an unfair labour prac
tice complaint against Tecksol Inc. before it, and that
it came to the conclusion that Tecksol Inc. was not
the complainants' employer as a result of its analysis
of the specific situation of the company and the con
tents of the contract awarded to it. I am also not for
getting that the Board never stated that it had jurisdic
tion over Her Majesty as employer, and that in
arriving at its conclusion it confined itself simply to
the criteria it had developed for identifying an
employer within the meaning of the legislation it is
responsible for applying. However, I still think that
by reasoning as it did the Board, I repeat, acted on
the basis of a legal impossibility, which its jurisdic
tion, however wide, clearly cannot allow it to do.
Of course, it is quite natural for the Board to refer
to its analysis of the circumstances surrounding the
doing of the work in order to determine which of two
possible employers is the worker's real employer,
and it is legitimate for it, in order to facilitate its anal
ysis, to seek to identify certain criteria, though it may
seem surprising—I may say in passing—that it relied
primarily on those formulated by the ordinary courts
of law to distinguish an employee from an indepen
dent worker. However, it must still have before it two
possible employers, that is, two persons who may
have by their actions alone established an employer-
employee relationship with the worker. This is where
one encounters the initial stumbling-block: such an
employer-employee relationship between the federal
government and the worker cannot simply result
from a situation of fact. To reason as if it could be
otherwise would, in my opinion, be a "patently
unreasonable" error of law which could not escape
judicial review. (See, in particular, National Corn
Growers Assn. v. Canada (Import Tribunal), [1990] 2
S.C.R. 1324; Caimaw v. Paccar of Canada Ltd.,
[1989] 2 S.C.R. 983; U.E.S., Local 298 v. Bibeault,
[1988] 2 S.C.R. 1048.)
But would that mean, one may say, that in imple
menting the Canada Labour Code the Board would
have to introduce a category of employers lacking the
attributes necessary for that status and so create an
artifical labour relations situation? It would, I think,
be advisable to look more closely at what is meant by
necessary attributes and also at how the system
would be artifical. However, in any case, it is not for
this Court, at least not at this stage, to decide this
point, when it has a clear duty to correct a patently
unreasonable error of law.
It was argued that the Attorney General had no
interest in securing the quashing of a decision which
was not in any way binding on Transport Canada and
which was also of no concern to Gaboriault and his
fellow workers, so that the Court should in its discre
tion avoid intervention.
First, I do not think that the Court's power under
section 28 of its enabling Act is discretionary; but
even if it were I feel that the Attorney General has
every interest in acting to prevent the continued exis
tence and binding authority of a decision in which
the Board, without jurisdiction, purported to identify
and implement a new category of government
employees, namely de facto employees, thus quite
suddenly creating a legal void which could not be tol
erated.
In my opinion the application should be allowed
and the decision a quo set aside. If the Board does
not consider that Gaboriault and his fellow workers
discontinued their complaint, it will naturally be open
to the Board to re-hear the complaint, but it must then
do so on the assumption that the persons hired by
Tecksol Inc. and assigned to the maintenance and
operation of P.T.V.s at Mirabel are not employees of
Transport Canada or employees or public servants of
Her Majesty the Queen in Right of Canada.
DESJARDINS J.A.: I concur.
DÉcARY J.A.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.