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Labour Relations of a Stevedoring Undertaking Not Directly Subject to Federal Jurisdiction Says Supreme Court

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Labour, Employment & Human Rights Bulletin

On May 17, 2012, the Supreme Court of Canada handed down a significant decision regarding division of powers in labour relations matters. In Tessier Ltée v. Quebec (Commission de la santé et de la sécurité du travail),[1] the Supreme Court of Canada was asked to determine whether the employer was governed by federal or provincial occupational health and safety legislation. The employer regularly engaged in the loading and unloading of ships, an activity known as long-shoring or stevedoring. The employer also engaged in crane leasing, maintenance and repair of equipment, and intra-provincial road transportation. What makes this case unique is that the employees worked indistinctly across the different sectors of the organization, which made it an indivisible undertaking.

The Supreme Court pointed out that the federal government has jurisdiction to regulate labour relations in two circumstances. First, Parliament has direct jurisdiction when the employment relates to a work, undertaking, or business within federal legislative authority, and second, when it is an integral part of a federally-regulated undertaking. The Supreme Court pointed out that the second circumstance is a case of derivative jurisdiction.

Contrary to what the case law and doctrine might suggest, the Supreme Court ruled that stevedoring is not an activity that brings an undertaking directly within a federal head of power for purposes of labour relations regulation. Parliament is therefore only justified in regulating stevedoring labour relations if the stevedoring activities at issue are an integral part of the extra-provincial transportation by ship, which falls under federal jurisdiction.

The Supreme Court then established an analytical framework for assessing whether a related undertaking is integral to a federal undertaking. Essentially, the Court found that the relationship must generally be considered from the perspective both of the federal undertaking and of the work said to be integrally related to it, assessing the extent to which the effective performance of the federal undertaking is dependent on the services provided by the related operation, and how important those services are to the related work itself.

Applying this criterion to the facts of this case, the Court found that the employer was not subject to federal jurisdiction with respect to its labour relations, as its stevedoring activities do not form a significant part of its operation and because the evidence did not show that its stevedoring services were integral to the federal shipping companies it serviced.

This Supreme Court of Canada ruling is relevant to all Canadian companies that engage in stevedoring activities, as well as to all companies wishing to qualify as federal undertakings for labour relations purposes under the derivative jurisdiction rule.

The employer was represented before the Supreme Court of Canada by a Fasken Martineau team that included Sébastien Gobeil and Maxime-Arnaud Keable. For further information, please contact Sébastien Gobeil at 418-640-2032.

[1] Tessier Ltée v. Quebec (Commission de la santé et de la sécurité du travail), 2012 SCC 23

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