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LEGAL REPORT: LABOUR AND EMPLOYMENT "One of the keys to the decision here is in order to have interprovincial transportation you must be involved in the physical transportation across provincial boundaries." — TOM ROSS, MCLENNAN ROSS LLP clearly shows there is a concern companies that would otherwise be federal will organize their operations through fairly sophis- ticated contracting-out mechanisms to move themselves into the provincial sector. "Imagine Canada Post subcontracts all the work of moving the mail across provincial boundaries and declares it is provincial because it no longer actually does the work that gets the stuff across the boundaries." In writing the dissenting opinion in Fastfrate, Justice Ian Binnie pointed to the nature of modern business as a cau- tion against allowing a company with operations in multiple jurisdictions contracting out interprovincial work to achieve the benefit of being under local labour laws. "In an era where contracting out elements of a service business is commonplace, the modalities of how a truly interprovincial transportation operation 'undertakes' to move its customers' freight from one part of Canada and deliver it to another should not contrive to defeat federal jurisdiction," wrote Binnie. Ball&Alexander Excellence in Employment & Labour Law • Counsel in Leading Cases • • Author of Leading Text • Wrongful Dismissal Employment Class Actions Labour Relations Employment Law Human Rights Post Employment Competition Civil Litigation Appellate Advocacy Employment Standards Disability 82 Scollard Street, Toronto, Canada, M5R 1G2 Phone: (416) 921-7997 Fax: (416) 921-3662 web: www.staceyball.com www.kenalexander.ca 44 FEBRU AR Y 2010 www. C ANADIAN Law ye rmag.com all&Alexander_CL_Feb_10.indd 1 1/19/10 9:21:01 AM He viewed Fastfrate as "a single functionally integrated indivisible national transportation service," with terminals at either end of the shipment. "This is not the case of a company that is simply present in each province with a stand-alone operation — like a chain of clothing stores. "What Fastfrate does — the service it provides, its 'under- taking' — is to move freight from the hands of a customer in one part of the country to the hands of a customer in another part of the country." Regardless of the actual operations of Fastfrate, Binnie LLP Barristers & Solicitors further wrote, labour law must evolve past the notion of busi- ness in the era when the BNA Act was enacted. Specifically pointing to division of legislative powers, he wrote the court must be cognizant of changing political and cultural realities. "Although the passage of time does not alter the division of powers, the arrangement of legislative and executive powers entrenched in the Constitution Act, 1867 must be applied in light of the business realities of 2009 and not frozen in 1867. The current Canadian economy would be unrecognizable to the statesmen of 1867," he wrote. "A grown man is not expected to wear the same coat that fitted him as a child. Today's coat is of the same design, but the sleeves are longer and the chest is broader and the warp and woof of the fabric is more elaborate and complex." In writing for the majority, Justice Marshall Rothstein further clarified the difference between the interprovincial nature of communications and transportation. Pointing to s. 92(10)(a) of the BNA Act, Rothstein said: "Communications undertakings can operate and provide international and inter- provincial communication services from a fixed point where- as transportation, by definition, involves mobility of goods, persons, and transportation equipment across territory. In the transportation context, it is not possible for an undertaking to operate an interprovincial transportation service where it does not itself perform the interprovincial carriage." One test to protect workers of a random company sud- denly arranging its operations to avoid a particular labour jurisdiction would be intent. "It is always a risky strategy if you are engaging in something in a colourable way to avoid jurisdiction," says Ross. He believes the larger impact of this decision is to provide business with certainty, especially the freight-forwarding business, where the test would be location of an employee's work functions and not the purpose of the company. "We want to encourage businesses to make rational decisions that best suit themselves and their shareholders and their customers, and it is a lot easier to do that when you know with certainty what the rules are."