The Supreme Court of Canada (the "SCC") in
Consolidated Fastfrate Inc. v. Western Canada Council of
Teamsters1 ("Consolidated Fastfrate"),
recently held that a national freight forwarding company which
utilizes the services of other companies to physically cross
provincial borders is subject to provincial rather than federal
jurisdiction. This decision will have significant impact on
companies whose business, although interprovincial or international
in nature, may now fall within the jurisdiction of provincial
labour and employment laws, particularly if their employees do not
cross provincial boundaries in the course of their work.
The genesis of the eventual SCC decision was an application by
the Consolidated Fastfrate Transport Employees' Association of
Calgary (the "Calgary Association") to the Alberta Labour
Relations Board (the "ALRB") for a declaration of whether
the Calgary branch operations of Consolidated Fastfrate Transport
Inc. ("Fastfrate") were subject to provincial or federal
regulations. Fastfrate is a national forwarding company that picks
up and consolidates freight in one province and deconsolidates the
freight in another. Fastfrate relies on third party carriers to
transport the freight over provincial borders and their employees
do not cross provincial borders.
The ALRB held that the operations of Fastfrate were subject to
federal jurisdiction as it viewed the operation as a single,
indivisible, interprovincial freight transportation undertaking.
The Alberta Court of Queen's Bench disagreed and held that the
operations of Fastfrate were subject to provincial legislation,
concluding that the existence of a national corporate structure was
insufficient to bring the operations within federal jurisdiction.
The Court of Appeal of Alberta agreed with the ALRB. The majority
concluded that Fastfrate operated as an interprovincial freight
collection and delivery service bringing it within federal
On appeal, the SCC found that Fastfrate fell under provincial
jurisdiction. It held that the functional analysis undertaken to
determine how an entity is governed must centre on what operations
it actually performs. On the basis of Fastfrate's business
model, the SCC held that it was not possible for an undertaking to
operate an interprovincial transportation service where it does not
itself perform the interprovincial carriage.
This ruling overturned the 1994 decision of the Canada Labour
Relations Board (the "CLRB") in Teamsters, Local 362
v. DHL International Express Ltd., (1994) 27 C.L.R.B.R. (2d)
95, where the CLRB relied on the "dominant purpose" of
the undertaking to hold that DHL, a freight forwarder, was subject
to federal jurisdiction.
Rothstein J., writing for the majority of the SCC in
Consolidated Fastfrate held the following:
...the 'dominant purpose' test in DHL
– measured in terms of the contractual service offered
rather than the actual operations of the undertaking —
has the potential to sweep under federal jurisdiction many
enterprises that subject to provincial jurisdiction based on their
actual operations... This kind of indeterminate fluidity in the
division of powers surely cuts against the balance that underlies
our federal system.2
The implications of the Consolidated Fastfrate decision
are significant. First, it means that freight forwarding companies
who contract with interprovincial carriers instead of providing
interprovincial transportation services themselves, are subject to
provincial jurisdiction and therefore their labour relations will
be governed by provincial laws. Second, this decision could change
the current regulation of many national companies operating in
multiple jurisdictions whose employees do not physically cross
provincial boundaries in their work by bringing their operations
within provincial jurisdiction.
1 Consolidated Fastfrate Inc v. Western Canada Council
of Teamsters, 2009 SCC 53,  3 S.C.R. 407.
2 Ibid. at para. 62.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On Thursday, September 22, 2016, Dentons hosted a panel discussion about the management of liabilities and risks associated with environmental crises, including potential liabilities for directors and officers and provided insight into risk and liability techniques associated with environmental crisis management.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).