A-2-81
Seafarers' International Union of Canada—CLC-
AFL-CIO (Applicant)
v.
Crosbie Offshore Services Limited, Canadian
Merchant Service Guild, Canadian Brotherhood
of Railway, Transport and General Workers and
Canada Labour Relations Board (Respondents)
Court of Appeal, Thurlow C.J., Pratte and Le
Dain JJ.—Ottawa, February 8, 9, 10 and March
5, 1982.
Judicial review — Applications to review — Labour rela
tions — Canada Labour Relations Board dismissed appli
cant's application for certification as bargaining agent for unit
of employees of respondent Crosbie Offshore Services Limited
on ground that it lacked jurisdiction — Employees worked as
seamen on vessels that plied between Newfoundland and off
shore drilling rigs and ships mainly transporting supplies —
Other functions included retrieving and positioning anchors,
towing, iceberg protection and stand-by — Vessels not engaged
in drilling or exploration — 60% of Crosbie's business was
providing crews to man vessels and rigs — Supply of crews for
vessels accounted for 80% of activity of company in supplying
crews — Crosbie employer of employees in question
Application allowed — Board had jurisdiction — Due to
specific provisions dealing with application of Code in ss. 2,
108, 121, 125 and 126, Board had no discretion to exercise —
Jurisdiction depends on facts relating to work, undertaking or
business — When case for relief under s. 28 made out, Court
has no discretion to refuse to intervene — Operation accurate
ly characterized as "shipping" undertaking and not confined to
Newfoundland but carried on mainly in international waters
— Employees employed only in international shipping under
taking, a readily separable segment of Crosbie undertaking —
Parliament has authority to legislate with respect to shipping
undertaking not confined to Province including authority to
legislate with respect to employment of Canadian personnel by
Canadian employer pursuant to power under s. 91(10) of
B.N.A. Act, 1867 to legislate with respect to navigation and
shipping— Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10,
s. 28 — Canada Labour Code, R.S.C. 1970, c. L-1, ss. 2, 108,
121, 125(2),(3)(b),(c), 126 — The British North America Act,
1867, 30 & 31 Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix 11, No.
51, s. 91(10).
Application to review and set aside decision of Canada
Labour Relations Board which dismissed applicant's applica
tion for certification as bargaining agent for a unit of
employees of the respondent Crosbie Offshore Services Lim
ited. Board held that it did not have jurisdiction to entertain the
application because the Newfoundland Labour Relations Board
had concluded that it had jurisdiction; that the applicant's
application to the Canada Labour Relations Board was a
manoeuvre made for the purpose of avoiding the effect of the
decision of the Newfoundland Board and to gain some tactical
advantage by raising a constitutional issue; that the primary
function of the Canada Labour Relations Board was to resolve
labour relations problems rather than to engage in "debate on
the cutting edge of disputes between provinces and the federal
government"; and, that "to assume jurisdiction in these cases or
act in any way to make events more complex is not in the
interests of serving the ends of collective bargaining legislation
and the resources available to administer it." The employees in
question worked as seamen on vessels that plied between New-
foundland and drilling rigs and ships engaged in exploring for
oil or gas at locations on the continental shelf more than 12
miles and less than 200 miles off the coast of Newfoundland.
The primary function of the vessels was to transport supplies.
The ancilliary functions were anchoring handling, towing, ice
berg protection and stand-by. Each of the vessels was under the
time charter to and at the disposal of the oil company for which
the drilling or exploration work was being done. The vessels
were not engaged in the drilling or exploration itself. The
business of the respondent Crosbie consisted, to the extent of
60%, in the supplying of Canadian crews to man the vessels and
the rigs. The other 40% consisted of catering to one of the rigs,
marketing, agency and local purchasing services to the opera
tors of the drill ships and rigs. The supply of crews for the
vessels accounted for 80% of the activity of the company in
supplying crews. The respondent Crosbie is the employer of the
employees in question. On joining a ship, the men are required
to sign articles with the master governing their service, but they
continue to be employees of the respondent Crosbie. The
respondents Crosbie and the Canada Labour Relations Board
submitted that the Board had a discretion to refuse to exercise
its jurisdiction to entertain the applications for certification.
They also submitted that the grant of relief on review under
section 28 is discretionary. The applicant and the Canadian
Merchant Service Guild argued that the ships in which the
employees served were engaged in a transportation operation
that extended beyond the limits of the Province and was thus
within federal legislative jurisdiction. The Attorney General of
Canada submitted that the enterprise or undertaking in which
the ships and their crews were engaged was the exploration
operation being conducted by oil companies on the continental
shelf. The argument asserted the exclusive right of the Federal
Crown to explore for and exploit mineral resources in the sea
bed of the continental shelf and the exclusive authority of
Parliament to legislate in respect of such resources and opera
tions to explore for and exploit them. The Attorney General of
Newfoundland contended that the enterprise or undertaking
was local in nature, the regulation of the labour relations of
which is within the legislative authority of Newfoundland and
that such authority is not affected even if parts of the opera
tions or of the duties of the employees are performed within
and parts without the territorial limits of the Province. The
issue is whether the Board had jurisdiction to hear the
application.
Held, the decision is set aside and the matter referred back
to the Board to be dealt with on the basis that the Board had
jurisdiction to deal with the matter.
Per Thurlow C.J.: Having regard to the comprehensive provi
sions for the application of the Code contained in sections 2 and
108, to the use of the verb "shall" in sections 121, 125 and 126,
to the use of the verb "may" in subsection 125(2) and in
paragraphs 125(3)(b) and (c) and to the use of each of them in
other provisions of the Code, the Board had no discretion to
exercise. Whether or not the Board had jurisdiction depended
entirely upon the facts relating to the work, undertaking or
business in which the employees in question were employed at
the material time. The material time was when the application
was before the Board. As to the submission that the grant of
relief under section 28 is discretionary, the Court has consist
ently taken the view that when a case for relief under section 28
has been made out it has no discretion to refuse to intervene.
However, even if this view of the law is incorrect and if relief
under section 28 should be regarded as discretionary, nothing in
the circumstances either as to the conduct of the applicant or
otherwise would warrant the Court in exercising a discretion to
deny relief if the facts disclose that the application was one that
the Canada Labour Relations Board had jurisdiction to enter
tain. What the respondent Crosbie does is supply shipping for
the servicing of underwater exploration undertakings. Even
reduced to the two elements of performance of a contract for
the use of a vessel and employing a crew for it, this operation is
accurately characterized as a "shipping" undertaking or busi
ness within the ordinary meaning of the word "shipping". The
operation is not confined to shipping activities within New-
foundland. It is an operation in which the activities of the
vessels involved are carried on for the most part in international
waters, though ,in part also in Newfoundland. The transporta
tion and other services are for the most part carried out in
international waters. This is the normal and habitual course of
the operation and it is in these activities that the seamen
employed by the respondent Crosbie carry out their duties. As
this undertaking is one of shipping, the operation of which is
not confined to the Province of Newfoundland, the authority to
legislate in respect to it, including the authority to legislate
with respect to the employment of Canadian personnel in it in
terms of their employment by a Canadian employer and their
labour relations with their Canadian employer falls within the
authority of Parliament, under section 91, head 10 of The
British North America Act, 1867 to legislate in respect of
navigation and shipping and not within any of the powers of a
provincial legislature to legislate in respect of local undertak
ings, civil rights or matters of a local nature within the prov
inces. Further these employees are employed only in the inter
national shipping undertaking carried on by the respondent
Crosbie and this undertaking is a readily separable segment of
the Crosbie undertaking as a whole.
Per Le Dain J.: The Board characterized the activity as an
integral part of the offshore oil exploration undertaking, relying
upon Underwater Gas Developers Ltd. v. Ontario Labour Rela
tions Board (1960) 24 D.L.R. (2d) 673 (C.A.), affirming
(1960) 21 D.L.R. (2d) 345 (Ont. H.C.) to support this charac
terization. The shipping activity in the present case is quite
different. It is of a different magnitude and scope and of a
distinct and self-contained character.
Northern Telecom Limited v. Communications Workers
of Canada [1980] 1 S.C.R. 115, applied. City of Montreal
v. Harbour Commissioners of Montreal [1926] A.C. 299,
applied. Canada Labour Relations Board v. City of Yel-
lowknife [1977] 2 S.C.R. 729, referred to. Reference re
the Validity of the Industrial Relations and Disputes
Investigation Act [1955] S.C.R. 529, referred to. Seafar
ers' International Union of Canada v. Zapata Marine
Services Inc. [1980] 2 Can LRBR 7, referred to. Three
Rivers Boatman Limited v. Conseil canadien des relations
ouvrières [1969] S.C.R. 607, distinguished. Underwater
Gas Developers Ltd. v. Ontario Labour Relations Board
(1960) 24 D.L.R. (2d) 673 (C.A.), affirming (1960) 21
D.L.R. (2d) 345 (Ont. H.C.), distinguished. Agence Mari
time Inc. v. Conseil canadien des relations ouvrières
[1969] S.C.R. 851, distinguished.
APPLICATION for judicial review.
COUNSEL:
Joseph Nuss, Q.C. and J. Brian Riordan for
applicant.
Ernest Rovet for respondent Crosbie Offshore
Services Limited.
Raynold Langlois, Q.C. and Claude Joli-
Cœur for respondent Canadian Merchant
Service Guild.
No one appearing for respondent Canadian
Brotherhood of Railway, Transport and Gen
eral Workers.
Gordon Henderson, Q.C. and Emilio Bina-
vince for respondent Canada Labour Rela
tions Board.
Brad Smith, Q.C. and Marc Jewett for inter-
venor Attorney General of Canada.
W. G. Burke-Robertson, Q.C. for intervenor
Attorney General of Newfoundland.
SOLICITORS:
Ahern, Nuss & Drymer, Montreal, for
applicant.
Rovet & Associates, Toronto, for respondent
Crosbie Offshore Services Limited.
Langlois, Drouin & Associés, Montreal, for
respondent Canadian Merchant Service
Guild.
Herridge, Tolmie, Ottawa, for respondent
Canadian Brotherhood of Railway, Transport
and General Workers.
Gowling & Henderson, Ottawa, for respond
ent Canada Labour Relations Board.
Deputy Attorney General of Canada for inter-
venor Attorney General of Canada.
Burke-Robertson, Chadwick & Ritchie,
Ottawa, for intervenor Attorney General of
Newfoundland.
The following are the reasons for judgment
rendered in English by
THURLOW C.J.: This is an application under
section 28 of the Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, to review and set aside the
decision of the Canada Labour Relations Board
which dismissed, on the ground that the Board did
not have constitutional jurisdiction to entertain it,
the applicant's application for certification under
the Canada Labour Code, R.S.C. 1970, c. L-1, as
the bargaining agent for a unit of some 116
employees of the respondent Crosbie Offshore Ser
vices Limited described as:
All unlicensed employees employed aboard all vessels operated
by the employer in Canada excluding all licensed employees or
any other person who, in the opinion of the Board, exercises
management functions. The vessels operate out of ports in the
Province of Newfoundland and transport supplies to oil rigs or
other equipment, vessels and/or places beyond the limits of the
Province of Newfoundland.
The application to review and set aside was sup
ported by the respondent, Canadian Merchant
Service Guild, and by the Attorney General of
Canada. It was opposed by the respondent, Cros-
bie, by the Attorney General of Newfoundland,
and by the Canada Labour Relations Board. The
respondent, Canadian Brotherhood of Railway,
Transport and General Workers, filed no memo
randum of argument and took no part in the
proceedings.
The positions taken by the several parties varied
widely. Briefly put, that of the applicant and of
Canadian Merchant Service Guild focused on the
fact that the ships in which the employees served
were engaged in a transportation operation that
extended beyond the limits of the Province of
Newfoundland and was thus within federal legisla-
tive jurisdiction. That of the Attorney General of
Canada rested on the submission that the enter
prise or undertaking in which the ships and their
crews were engaged was the exploration operation
being conducted by oil companies operating drill
ing rigs and drilling ships on the continental shelf
to the eastward of Newfoundland and Labrador.
The argument asserted the exclusive right of the
Crown in right of Canada to explore for and
exploit mineral resources in the sea bed of the
continental shelf and the exclusive authority of
Parliament to legislate in respect of such resources
and operations to explore for and exploit them.
The Attorney General of Newfoundland, while
reserving Newfoundland's position on matters
relating to proprietary interest in or legislative
jurisdiction over natural resources in the continen
tal shelf off the Province's coast, took the position
that a decision on such matters was not required
for the determination of this application, that the
enterprise or undertaking in which the employees
are engaged is a local undertaking, the regulation
of the labour relations of which is within the
legislative authority of the legislature of New-
foundland and that such authority is not affected
even if parts of the operations or of the duties of
the employees are performed within and parts
without the territorial limits of the Province. Both
the respondent, Crosbie, and the Canada Labour
Relations Board took the position that whether or
not it had jurisdiction to entertain the applications
for certification the Board had a discretion to
refuse to exercise its jurisdiction and in the situa
tion before it was justified in exercising that dis
cretion so as to reject and dismiss the application.
They also submitted that the grant of relief on
review under section 28 of the Federal Court Act
is discretionary and that in the circumstances the
discretion should be exercised to deny relief.
The Board's decision on the applicant's applica
tion also dealt with and dismissed for the same
reasons three other applications for certification,
one by Canadian Merchant Service Guild in
respect of a unit comprising licenced personnel
employed on the same vessels and two by Canadi-
an Brotherhood of Railway, Transport and Gener
al Workers, one for the licenced and the other for
the unlicenced employees. In summary, the
Board's reasons for its conclusion, as I read them,
were that the Newfoundland Labour Relations
Board on application by the same unions for cer
tification in respect of the same personnel had
concluded that it had jurisdiction and had proceed
ed to take a vote of the employees, that the
applicant's application to the CLRB, which was
filed after the vote was taken but before it was
counted, was a procedural manoeuvre made for the
purpose of avoiding the effect of the decision of the
Newfoundland Board and to gain some tactical
advantage by raising a constitutional issue; that
the primary function of the CLRB was to resolve
labour relations problems rather than to engage in
"debate on the cutting edge of disputes between
provinces and the federal government", and, that
"to assume jurisdiction in these cases or act in any
way to make events more complex is not in the
interests of serving the ends of collective bargain
ing legislation and the resources available to
administer it." The Board thereupon proceeded to
"dismiss these applications on the ground we do
not have constitutional jurisdiction."
The Board's reasons, or some of them, might
conceivably be considered adequate as reasons for
declining to exercise its jurisdiction to entertain
the applicant's application if the Board had any
discretion in the matter. But having regard to the
comprehensive provisions for the application of the
Canada Labour Code contained in sections 2 and
108, to the use of the verb "shall" in sections 121,
125 and 126, to the use of the verb "may" in
subsection 125(2) and in paragraphs 125(3)(b)
and (c) and to the use of each of them in other
provisions of the Code, the Board, in my opinion,
had no discretion to exercise. Whether or not the
Board had jurisdiction depended entirely on the
facts and the Board, as I view the matter, had no
option but to consider those facts and take a
position as to whether or not they showed that the
Board had jurisdiction and to be guided according
ly, and by that alone, in either entertaining or
declining to entertain the application.
It follows that on the basis of the reasons given
by the Board the dismissal of the application
cannot be sustained. I should add that the submis
sion that the grant of relief under section 28 of the
Federal Court Act is discretionary has been made
on more than one occasion in the past and the
Court has consistently taken the view that when a
case for relief under section 28 has been made out
it has no discretion to refuse to intervene. How
ever, even if this view of the law is incorrect and if
relief under section 28 should be regarded as dis
cretionary to the same extent as certiorari is dis
cretionary I see nothing in the circumstances
either as to the conduct of the applicant or other
wise which would warrant the Court in exercising
a discretion to deny relief if the facts disclose that
the application was one that the CLRB had juris
diction to entertain. Accordingly I would reject the
submissions of the respondent, Crosbie, and of the
Board.
The issue that in my view must be determined
on this application is whether the CLRB had
jurisdiction to entertain the applicant's applica
tion. That, as I have indicated, turns on the facts
relating to the work, undertaking or business in
which the employees in question were employed at
the material time. The material time in my opinion
was when the application was before the Board. If
for any reason the Board did not have jurisdiction
at the moment the application was filed it might
still entertain the application if, by reason of
changes in the situation prior to the Board dispos
ing of the application, jurisdiction in fact existed.
On the other hand if, notwithstanding the fact that
there was jurisdiction when the application was
filed, changes in the meantime in the work, under
taking or business had left the Board without
jurisdiction the purported exercise of it at that
point could not be justified.
The relevant provisions of the Canada Labour
Code are section 108 providing for the application
of Part V and the definition of "federal work,
undertaking or business" in section 2. They read:
108. This Part applies in respect of employees who are
employed upon or in connection with the operation of any
federal work, undertaking or business and in respect of the
employers of all such employees in their relations with such
employees and in respect of trade unions and employers' organ
izations composed of such employees or employers.
2. In this Act
"federal work, undertaking or business" means any work,
undertaking or business that is within the legislative author
ity of the Parliament of Canada, including without restrict
ing the generality of the foregoing:
(a) a work, undertaking or business operated or carried on
for or in connection with navigation and shipping, whether
inland or maritime, including the operation of ships and
transportation by ship anywhere in Canada;
(b) a railway, canal, telegraph or other work or undertaking
connecting any province with any other or others of the
provinces, or extending beyond the limits of a province;
(e) a line of steam or other ships connecting a province with
any other or others of the provinces, or extending beyond the
limits of a province;
(d) a ferry between any province and any other province or
between any province and any other country other than
Canada;
(e) aerodromes, aircraft or a line of air transportation;
(f) a radio broadcasting station;
(g) a bank;
(h) a work or undertaking that, although wholly situated
within a province, is before or after its execution declared by
the Parliament of Canada to be for the general advantage of
Canada or for the advantage of two or more of the provinces;
and
(i) a work, undertaking or business outside the exclusive
legislative authority of provincial legislatures;
As it is apparent from the wording that this
definition embraces "any work, undertaking or
business' that is within the legislative authority of
the Parliament of Canada" and as under section
108 Part V is to apply to employees employed
upon or in connection with the operation of any
such federal work, undertaking or business and
their employers in their relations with such
employees the question that arises as to the juris
diction of the Board in a case of this kind is
essentially one of whether, constitutionally, the
particular work, undertaking or business in which
the employees are employed is one that falls within
the legislative authority of Parliament. If so, the
Board will have jurisdiction. Otherwise it will not.
The constitutional principles on which the issue
must be determined are summarized in the follow
ing passage from the judgment of Dickson J. in
' For a discussion of the scope of the expression see Canada
Labour Relations Board v. City of Yellowknife [1977] 2
S.C.R. 729 per Pigeon J. at pages 736-738.
Northern Telecom Limited v. Communications
Workers of Canada 2 :
The best and most succinct statement of the legal principles
in this area of labour relations is found in Laskin's Canadian
Constitutional Law (4th ed., 1975) at p. 363:
In the field of employer-employee and labour-management
relations, the division of authority between Parliament and
provincial legislatures is based on an initial conclusion that in
so far as such relations have an independent constitutional
value they are within provincial competence; and, secondly,
in so far as they are merely a facet of particular industries or
enterprises their regulation is within the legislative authority
of that body which has power to regulate the particular
industry or enterprise ...
In an elaboration of the foregoing, Mr. Justice Beetz in
Construction Montcalm Inc. v. Minimum Wage Commission
([19791 1 S.C.R. 754) set out certain principles which I venture
to summarize:
(1) Parliament has no authority over labour relations as such
nor over the terms of a contract of employment; exclusive
provincial competence is the rule.
(2) By way of exception, however, Parliament may assert
exclusive jurisdiction over these matters if it is shown that
such jurisdiction is an integral part of its primary compe
tence over some other single federal subject.
(3) Primary federal competence over a given subject can
prevent the application of provincial law relating to labour
relations and the conditions of employment but only if it is
demonstrated that federal authority over these matters is an
integral element of such federal competence.
(4) Thus, the regulation of wages to be paid by an undertak
ing, service or business, and the regulation of its labour
relations, being related to an integral part of the operation of
the undertaking, service or business, are removed from pro
vincial jurisdiction and immune from the effect of provincial
law if the undertaking, service or business is a federal one.
(5) The question whether an undertaking, service or business
is a federal one depends on the nature of its operation.
(6) In order to determine the nature of the operation, one
must look at the normal or habitual activities of the business
as those of "a going concern", without regard for exceptional
or casual factors; otherwise, the Constitution could not be
applied with any degree of continuity and regularity.
A recent decision of the British Columbia Labour Relations
Board, Arrow Transfer Co. Ltd. ([1974] 1 Can. L.R.B.R. 29),
provides a useful statement of the method adopted by the
courts in determining constitutional jurisdiction in labour mat
ters. First, one must begin with the operation which is at the
core of the federal undertaking. Then the courts look at the
particular subsidiary operation engaged in by the employees in
question. The court must then arrive at a judgment as to the
2 [1980] 1 S.C.R. 115 at pages 131-133.
relationship of that operation to the core federal undertaking,
the necessary relationship being variously characterized as
"vital", "essential" or "integral". As the Chairman of the
Board phrased it, at pp. 34-5:
In each case the judgment is a functional, practical one about
the factual character of the ongoing undertaking and does
not turn on technical, legal niceties of the corporate structure
or the employment relationship.
Later, after discussing the communications
enterprise of Bell Canada that was involved as a
federal undertaking in the question at issue, Dick-
son J. continued [at page 1351:
On the basis of the foregoing broad principles of constitution
al adjudication, it is clear that certain kinds of "constitutional
facts", facts that focus upon the constitutional issues in ques
tion, are required. Put broadly, among these are:
(1) the general nature of Telecom's operation as a going
concern and, in particular, the role of the installation depart
ment within that operation;
(2) the nature of the corporate relationship between Telecom
and the companies that it serves, notably Bell Canada;
(3) the importance of the work done by the installation
department of Telecom for Bell Canada as compared with
other customers;
(4) the physical and operational connection between the
installation department of Telecom and the core federal
undertaking within the telephone system and, in particular,
the extent of the involvement of the installation department
in the operation and institution of the federal undertaking as
an operating system.
I turn now to the facts. The record before the
Court is comprised of:
(1) the material that was forwarded to the
Court by the CLRB in compliance with Rule
1402(3), consisting of the application and
responses thereto, correspondence relating to it
including submissions and, notably, the report of
an officer appointed by the Board to investigate
and report on the application;
(2) some 18 volumes of historical documents
including maps relating to Newfoundland and
Labrador filed by the Attorney General of
Canada by leave of the Court as bearing on the
question of ownership and legislative authority
in relation to rights to explore for and exploit
mineral resources in the continental shelf off
Newfoundland and Labrador; and
(3) an affidavit of Richard A. Spellacy, the
president of the respondent Crosbie, and a tran
script of his cross-examination thereon which
became part of the case pursuant to an order of
the Court.
Despite its bulk the record gives but a cloudy
picture of the work, undertaking or business in
which the employer is engaged and in which the
employees are employed. The following facts, how
ever, emerge.
The employees in question at the material time
worked as seamen on some ten vessels that plied
between St. John's or Botwood in Newfoundland
and drilling rigs, of which there were three, and
drilling ships, of which there were four, engaged in
exploring for oil or gas in the continental shelf at
locations more than twelve miles and less than 200
miles off the coast of Newfoundland. The func
tions of these vessels were
(1) to carry supplies and material to and from
the rigs and drill ships
(2) to provide a stand-by service
(3) to provide iceberg patrol and protection
(4) to tow the rigs as required, and
(5) to position and retrieve anchors for the rigs
as required.
Each of the vessels was at the material times
under time charter to and, as to the service to be
rendered from time to time, at the disposal of the
oil company for whom the drilling or exploration
work of a rig or drill ship was being carried on.
The towing of rigs was infrequent and amounted
to five to seven per cent of the work of the vessels.
Two of the vessels were of a larger size and did no
towing or anchoring. They were simply supply
vessels. The duration of voyages from port to the
rig or drill ship and return to port varied from as
little as a day to three weeks, the average duration
being about five days. Service in retrieving and
positioning anchors for the three rigs would be
required when the rigs moved from one drilling
location to another. Regulations called for a ser
vice vessel to be stationed near the rigs continuous
ly to lend assistance if required. A tour on stand
by duty would run from two to seven days. Occa
sionally, the vessels also transported personnel of
the rigs and drill ships from and to port when the
weather was such as to prevent their being trans-
ported by helicopter. Iceberg protection included
putting a rope around an iceberg and towing it
when possible to prevent its endangering a rig. The
vessels were all specially designed for these pur
poses and were capable of being used for them in
servicing underwater exploration and drilling oper
ations almost anywhere in the world.
Except in so far as it rendered assistance in the
manner indicated, the vessel was not engaged in
the drilling or exploration itself which was being
carried on by or for the oil company to which the
vessel was time chartered. When the charter
expired the vessel might be rechartered to the
same or another oil company or be sent elsewhere.
On one occasion one of the vessels on going off
charter had towed a ship destined for scrap to
Spain. Upon arrival in Spain the seamen supplied
by the respondent returned to Canada.
Nine of the ten ships were registered in West
Germany and the other in Liberia. All ten had
been chartered by their German owners to OSA
Ltd., a United Kingdom corporation which had
transferred the charters to Crosbie Enterprises
Limited, a Newfoundland corporation which owns
51% of the shares of the respondent Crosbie. Prior
to September 10, 1980, when the applicant's
application was filed, the charters had been trans
ferred to the respondent Crosbie. They were held
by that company throughout the material period
and at the time of the dismissal of the application
by the Board on December 30, 1980. Whether
these were time or bare boat charters is not clear.
It is not unlikely that they had some features of a
bare boat charter and some of a time charter.
Each of the vessels had a German master and a
German first engineer. Whether they were
employees of the owner or of OSA Limited or of
the respondent Crosbie is not clear. The probabili
ty is that they were employees of the owners.
Since the decision of the Board was given, the
number of vessels involved has decreased to eight,
at least one vessel has been substituted for another,
three or four of the vessels have begun operating
under Canadian flag and the charters have been
transferred to Crosbie OSA Limited, a Newfound-
land corporation 51% owned by the respondent
Crosbie. None of these changes has any effect, as
it seems to me, on my conclusion. They all
occurred after the material period and in my view
they would make no difference either way to the
question of jurisdiction even if they had occurred
in the material period.
The respondent Crosbie is but one of a number
of subsidiaries of Crosbie Enterprises Limited. Its
business, at the material time, consisted, to the
extent of 60%, in the recruiting and employing of
Canadian crews to man the vessels and the rigs.
The other 40% of its undertaking consisted of
catering to one of the rigs, marketing, agency and
local purchasing services to the operators of the
drill ships and rigs and the operation of a business
known as KAPPA, the nature of which was not
described. The supply of crews for the vessels
accounted for 80% of the activity of the company
in supplying crews. Since the applicant's applica
tion was filed, revenue from the supplying of crews
has declined in proportion to other revenues.
Whether it declined in volume does not appear.
The respondent Crosbie is only one of several
companies engaged in supplying and servicing the
exploration activities of the seven drill ships and
rigs. It is the employer of the employees in ques
tion. Its business is centred at St. John's. It pays
the employees and provides for other employment
benefits and for transportation to St. John's. On
joining a ship the men are required to sign articles
with the master governing their service in it. Pre
sumably in the case of a ship of German registry
these would be the articles required by the law of
that country. Though they thus become subject to
the master and the law of the vessel they continue
to be employees of the respondent Crosbie.
The record does not disclose the country in
which the rigs and drill ships are registered. Oper
ating, as they do, in international waters there is
no reason to presume that they are of Canadian
registry. The ships are specially designed and con-
structed for drilling at sea, and are equipped with
devices that enable them to maintain themselves in
position on the drill site without anchors. The rigs
are also ships. They have means of self-propulsion
but for one reason or another may be towed to a
drill site. When located, the rig can be partly
submerged and operate while resting on the
bottom in water not more than 120 feet deep. In
deeper waters and in particular in those here
involved the rig is partially submerged but floats.
It is maintained in its position by anchors, which,
as already indicated, are placed in position by the
service vessels.
On the record there is no reason to conclude
that any of the various persons or corporations
involved in providing the service vessels or their
service to the exploration operations are, in inter
est or otherwise, the same as or under the control,
as subsidiaries or otherwise, of the oil companies
or others by or for whom the exploration undertak
ings are being carried out.
As it appears to me, what the respondent Cros-
bie does is done in league with foreign parties
operating on an international scene in the supply
of shipping for the servicing of underwater
exploration undertakings. In this the undertaking
of the respondent Crosbie is but a segment of the
business of providing the service vessels and per
forming the required transportation and other ser
vices. The segment, in the case of any vessel,
consists of either taking a charter or assuming an
existing charter of the vessel, rechartering the
vessel, if need be, to an oil company engaged in
exploration activities, assuming to the oil company
charterer responsibility for the owners' obligations
under the charter to render the transportation and
other services contracted for and employing cer
tificated and other seamen and supplying them as
required to serve on the vessel under the command
of its master.
I should say at this point that even reduced to
the two elements of performance of a contract for
the use of a vessel and employing a crew for it, this
operation, in my opinion, is accurately character
ized as a "shipping" undertaking or business
within the ordinary meaning of the word "ship-
ping". That view is, I think, enhanced by the fact
that a multiplicity of ships and of charters is
involved.
Is the undertaking then one that is within the
legislative authority of Parliament? The answer is,
I think, reasonably clear. The operation is not
confined to shipping activities within Newfound-
land. It is not shipping in inland waters from one
port in Newfoundland to another port in
Newfoundland 3 . Nor is it an operation between
Newfoundland ports involving, to a minor extent
having regard to the undertaking as a whole, pas
sage through international waters en route be
tween Newfoundland ports 4 . It is an operation in
which the activities of the vessels involved in it are
carried on for the most part in international
waters, though in part also in Newfoundland. The
transportation and other services are for the most
part carried out in international waters. The deliv
eries of supplies transported are made and the
services are rendered to other ships operated by
others in international waters. This is the normal
and habitual course of the operation and it is in
these activities that the seamen employed by the
respondent Crosbie carry out their duties.
It seems to me that as this undertaking is one of
shipping, the operation of which is not confined to
the Province of Newfoundland, the authority to
legislate in respect to it, including the authority to
legislate with respect to the employment of
Canadian personnel in it, the terms of their
employment by a Canadian employer and their
labour relations with their Canadian employer,
falls within the authority of Parliament, under
section 91, head 10 of The British North America
Act, 1867, 30 & 31 Vict., c. 3 (U.K.) [R.S.C.
1970, Appendix II, No. 5], to legislate in respect
of navigation and shipping and not within any of
3 Three Rivers Boatman Limited v. Conseil canadien des
relations ouvrières [1969] S.C.R. 607. Compare Underwater
Gas Developers Ltd. v. Ontario Labour Relations Board (1960)
24 D.L.R. (2d) 673 (C.A.), affirming (1960) 21 D.L.R. (2d)
345 (Ont. H.C.).
4 Agence Maritime Inc. v. Conseil canadien des relations
ouvrières [1969] S.C.R. 851.
the powers of a provincial legislature to legislate in
respect of local undertakings, civil rights or mat
ters of a local nature within the provinces'. In
reaching this conclusion I do not regard it as
necessary to seek to fit the undertaking into any of
the exceptions to section 92, head 10 or to the
power of Parliament under section 91, head 29.
Power to legislate in respect of such an under
taking, as it seems to me, is included in the power
conferred on the Parliament of Canada by section
91, head 10 to legislate in respect of shipping. It
was held by the Privy Council in City of Montreal
v. Harbour Commissioners of Montreal 6 that the
power so conferred is to be widely construed. In
my opinion a shipping undertaking of this kind
which, because it is not confined to operations
within a province but is essentially of an interna
tional character, cannot fall within provincial
legislative authority, must, in respect of what in it
is amenable to Canadian legislation, fall within the
power of Parliament in relation to shipping under
section 91, head 10.
Further, on the facts as I see and have described
them, it is only in this particular undertaking of
the respondent Crosbie that the employees in ques
tion are engaged. It is their normal and habitual
employment in the Crosbie operation. They carry
out no other function for Crosbie. They do not
work on Crosbie premises on land or (excepting
the licensed personnel on the same vessels) with
other Crosbie employees. They are thus clearly
identifiable and severable as a group from other
persons employed in the Crosbie undertaking as a
whole and in the other business activities of the
respondent Crosbie as well. A change or reduction
in percentage of revenue from the supply of these
employees to the vessels is not important. What
matters is that these employees are employed only
in the international shipping undertaking carried
on by the respondent Crosbie and that it is a
readily separable segment of the Crosbie undertak-
5 Reference re the Validity of the Industrial Relations and
Disputes Investigation Act [1955] S.C.R. 529.
6 [1926] A.C. 299.
ing as a whole and of the respondent Crosbie as
well.
I am accordingly of the view that the employees
here in question at the material times were
engaged in a shipping undertaking that was within
the legislative authority of the Parliament of
Canada, that the undertaking was a federal work,
undertaking or business within the meaning of the
definition in section 2 of the Canada Labour Code
and that the Canada Labour Relations Board,
both at the time the applicant's application for
certification was filed and when it was dismissed,
as well as in the meantime, had jurisdiction to
entertain and deal with the application and should
have dealt with it on its merits.
Having reached this conclusion on the basis of
the nature of the Crosbie undertaking in which the
employees in question were employed as a shipping
undertaking within the legislative authority of the
Parliament of Canada, it is unnecessary to consid
er or deal with the question whether a basis for
federal jurisdiction over the labour relations of the
employees in question could be established by
regarding the oil and gas exploration undertaking
of the oil companies as a federal undertaking and
the Crosbie service and supply operation as an
integral and essential part of it. To resolve the
matter on that basis would, if one were persuaded
that the Crosbie operation could be so regarded,
involve deciding in favour of the Crown in right of
Canada questions as to the respective rights and
authority of Newfoundland and Canada over the
continental shelf and the exploration and exploita
tion of mineral resources therein. In my view such
questions should not be addressed or answered
except when and to the extent that it becomes
necessary to do so. Accordingly and notwithstand
ing the very careful presentation made by Mr.
Smith on behalf of the Attorney General of
Canada in support of the federal position, these
matters should in my opinion be left for a time
when determination of the points is essential to the
decision of the case then before the Court.
I would set aside the decision and refer the
matter back to the Canada Labour Relations
Board to be dealt with on the basis that the Board
had jurisdiction, at the time when the applicant's
application was dismissed, to deal with the
application on its merits.
PRATTE J.: I agree.
* * *
The following are the reasons for judgment
rendered in English by
LE DAIN J.: I agree that the application should
be disposed of in the manner proposed by the
Chief Justice and for the reasons given by him.
I only wish to add a few words on the question
of characterization which was raised by the deci
sion of the Newfoundland Labour Relations Board
in The Seafarers' International Union of Canada
v. Zapata Marine Services Inc. [1980] 2 Can
LRBR 7 and the submission of the Attorney Gen
eral of Canada. The Board took the position that
the activity on which the crews of the supply
vessels were engaged was not shipping but was
rather an integral part of the offshore oil explora
tion undertaking. Counsel for the Attorney Gener
al of Canada said that he agreed with this charac
terization of the activity, although not, of course,
with the conclusion of the Newfoundland Board as
to legislative jurisdiction. Both the Newfoundland
Board and the Attorney General of Canada relied,
in support of this characterization, on the decisions
of the Ontario High Court and Court of Appeal in
Underwater Gas Developers Ltd. v. Ontario
Labour Relations Board (1960) 24 D.L.R. (2d)
673 (C.A.), affirming (1960) 21 D.L.R. (2d) 345
(Ont. H.C.). There, an application for certification
was made for some thirty-nine employees of vari
ous kinds engaged in various aspects of a wholly
intra-provincial undertaking for establishing and
servicing sites for the drilling of gas underwater in
Lake Erie. The work of the undertaking required
the use of vessels of various kinds, and some of the
employees were engaged as crew of the vessels and
some in carrying out work of various kinds on the
vessels. Others worked on the shore and on the
tower. Both Smily J. in the High Court and Ayles-
worth J.A. in the Court of Appeal held that the
activity of the vessels was not shipping within the
meaning of subsection 91(10) of the B.N.A. Act,
but was part of the overall undertaking for the
establishment and servicing of underwater gas well
sites. Assuming, with respect, that that was a
correct characterization in that case, the present
case is in my opinion quite different. The shipping
activity in the present case is of a different magni
tude and scope and of a distinct and self-contained
character. Its principal function is the transporta
tion of supplies, and the ancillary functions of
anchoring handling, towing, iceberg protection and
stand-by, all of which are performed for the semi-
submersible rigs and only some of which are per
formed for the drilling ships, do not in my opinion
make the activity any the less activity which can
only be properly characterized as shipping. Even if
the Province were found to have legislative juris
diction to regulate the exploration and exploitation
of natural resources on the continental shelf that
could not in my opinion have the effect of remov
ing the supply vessels from the general federal
legislative jurisdiction with respect to an extra-pro
vincial shipping undertaking. It is conceivable that
the vessels might then be subject to provincial
regulation in certain aspects of their activity, but
the labour relations between the crew and their
employer would remain an integral part of federal
legislative jurisdiction with respect to shipping.
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.