In Canada, jurisdiction over employment law is ordinarily within the authority of each province, unless the employer or activity is “federal” in nature.  Much of the time this is a straightforward distinction but in certain areas, such as the regulation of employment related to First Nations, it is much trickier.  Although pronounced upon not long ago by the Supreme Court of Canada in NIL/TU, O Child and Family Services Society v. B.C. Government and Service Employees’ Union, 2210 SCC 45 (“NIL/TU, O”) the test in that ruling has not delivered consistent or predictable results in cases since.  

The latest Federal Court pronouncement on this issue came December 20, 2013 in Fox Lake Cree Nation v. Denis Anderson, 2013 F.C. 1276.  Mr. Justice Zinn had to decide whether the adjudicator appointed pursuant to the Canada Labour Code had jurisdiction to hear certain claims for unjust dismissal, unpaid overtime and vacation pay.  The claimant was Denis Anderson, an employee of the Keyask Project Negotiations Office established by the Fox Lake Cree Nation (“FLCN”) with whom he had been employed until the termination of his employment October 10, 2010.

Justice Zinn agreed with the adjudicator that Mr. Anderson’s employer was in fact the Fox Lake Cree Nation; however, that finding was not determinative of the jurisdictional issue as the case law provides examples of very different results when applying the functional test set out in NIL/TU,O.  Mr. Anderson argued that the activities of the Negotiation Office were integrally related to the federal responsibility for Indians and land reserved for Indians which meant that the employer was a federal work, undertaking or business and accordingly the Canada Labour Code applied.

Justice Zinn held that the proper procedure was not to examine the nature, operations and habitual activities of the FLCN as a whole but rather those which are the subject of the jurisdictional challenge.  Focussing upon the operations and habitual activities of the Negotiations Office, Justice Zinn pointed out that a single employer may have both federally and provincially regulated operations and employees. 

Finding that the central purpose of the Negotiation Office was the negotiation of sophisticated commercial agreements (the development of Hydro Electric Projects) Justice Zinn held that the focus should not have been upon the beneficiaries of the activities of the Negotiation Office nor upon who was receiving, providing or funding services or the location of such services.  The sole consideration should have been the nature of the habitual activities undertaken by the operation.  He cited with authority from the NIL/TU, O decision at paragraph 45:

“The community for whom the entity operates… does not change what it does.”

Justice Zinn declined to find that this matter fell into any of the three “Tessier” categories (Tessier Ltée. v. Quebec, 2012 SCC 23) and so derivative federal jurisdiction was not justified. Nor did resorting to provisional labour legislation impair those functions of the enterprise which are intimately bound up with the status and rights of Indians.  Ultimately there was nothing to oust the presumption that labour relations are within provisional jurisdiction and accordingly the employer’s application was allowed setting aside the adjudicator’s decision.

The ruling in Fox Lake Cree Nation is consistent with the trend reinforced bythe Supreme Court of Canada in NIL/TU, O narrowing the scope of federal jurisdiction, even in circumstances where the business activity undertaken is essential to First Nations.  This trend has the potential to significantly complicate the management of workplaces and the legality of existing employment agreements and policies, in many enterprises hitherto thought to be subject to federal jurisdiction.

For full text please see: