Employment Law and First Nation Band

In Canada, jurisdiction over employment law is normally within the authority of each province or territory, unless the employer or activity falls under the federal jurisdiction. This is a straightforward distinction under normal circumstances, but, in certain areas, it remains unclear. This was the case in Fox Lake Cree Nation v. Anderson, 2013, in which the Federal Court of Canada set aside the order of an adjudicator appointed by the Canadian Labour Ministry because that adjudicator did not have the jurisdiction to hear the complaint made by the terminated employee. In a nutshell, the court found that the operations of the workplace, the negotiations office, was not properly characterized as being a federal work, undertaking or business within the meaning of the Canada Labour Code. This meant that the matter did not fall under federal jurisdiction.

Facts Of The Case And Decision

The Fox Lake Cree Nation is an Indian Band as defined by the Indian Act. The negotiations office is considered an internal consulting office that negotiates contracts on behalf of the band with Manitoba Hydro regarding hydroelectric projects. Specifically, the office negotiates business opportunities, training and employment, project development, environment and resources, adverse effects and commercial terms.

Initially, the main goal of the office was to negotiate a settlement agreement with Manitoba Hydro to address the adverse effects of past hydroelectric development on the community. (This agreement was concluded in 2004.) After this point, the goal was to conduct extensive negotiations regarding a particular hydroelectric project including: interests in a limited partnership, anticipated adverse effects of the project on the band, and the impact of the project on the exercise of aboriginal entry rights by the band and its members. (These agreements were entered into in 2009.)

The band also has an ongoing mandate to oversee all matters affecting negotiations with Manitoba Hydro regarding hydroelectric projects.

The employee at the centre of the present case, Denis Anderson, worked in the negotiations office and is a member of the band. When Anderson was terminated in 2010, he filed a wrongful dismissal complaint under the Canada Labour Code. The Minister of Labour of Canada appointed an adjudicator who found that the employer had to pay Anderson overtime pay, general holiday pay and termination pay.

The band challenged the federal adjudicator’s jurisdiction to hear the complaint, arguing that labour relations are a provincial matter. However, the arbitrator found that, since the negotiations office was either part of an Indian Band of subject to its direction, the office was engaged in a federal work, undertaking or business, and therefore fell within federal jurisdiction. He also decided that the matter couldn’t fall under provincial jurisdiction, because provincial regulation would impair the core of the federal power with respect to members of First Nations pursuant to the Constitution Act.

The employer appealed the decision to the Federal Court of Canada. The court agreed with the employer, based on the following findings.

Labour relations presumptively fall within the exclusive jurisdiction of provincial legislatures. Parliament has jurisdiction only with respect to federal works, undertakings and businesses. The court found that the Fox Lake Cree Nation negotiations office was not such an operation within the meaning of the Canada Labour Code.

It was clear to the Federal Court that the adjudicator erred in his characterization of the operations and activities of the negotiations office. The central purpose of the negotiations office is the negotiation of sophisticated commercial arrangements with Manitoba Hydro, a provincial Crown corporation established and regulated by provincial statute, regarding the development of new hydroelectric projects. The band itself might fall under federal jurisdiction, but there is nothing federal about the work of the negotiations office.

Moreover, the office’s operations are not integral to a federal undertaking; that is, the band could exist without the negotiations office. The effective operation of the band is not dependent on the activities performed by the negotiations office—the negotiations are important but not vital.

Additionally, it was not clear how provincial regulation of employees engaged in the negotiations office would impair the core of the federal power over band members; the provincial regulation would not impact Indian status or any rights connected to it.

The court commented that given modern federalism, there is nothing to prevent provinces from passing legislation within their exclusive jurisdiction, even where the legislation affects Aboriginal peoples, provided that the legislation does not directly contradict or materially impact anything in the Indian Act or other federal statutes dealing with Aboriginal peoples.

The Federal Court allowed the employer’s appeal and set aside the decision of the adjudicator.

Takeaways From This Case

Employment and labour relations fall exclusively in the provincially regulated jurisdiction, with some minor exceptions. Parliament only has jurisdiction by way of exception in cases where these relations are of a federal work, undertaking or business that is within the legislative authority of Parliament.

Two things have to be considered when deciding whether something falls within the exception: first, courts have to look to the operations and habitual activities of the workplace; second, courts need to ask whether provincial/territorial regulation would impair the core of the federal power over the matter.

According to law firm Gowlings, the ruling restricts what operations fall under federal jurisdiction, even excluding activities performed by organizations that are generally regulated by the federal government, such as First Nations bands. Mark Josselyn notes:

“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.”

What might the fallout be from this and similar decisions (such as NIL/TU,O Child and Family Services Society v BC Government and Service Employees’ Union)? Will we see more employees of federal works losing claims under the Canada Labour Code? Or will federal employees start making claims under provincial legislation? First Nations operations may present particular challenges since First Nations are governed federally, but not due to the nature of their “industry,” like telecommunications, for example. Most First Nations bands likely do a significant amount of work that doesn’t relate to federal works at all, and if this case is a sign of things to come, it looks like there will be more cases like Fox Lake to come.

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Comments

  1. This judgment should be applied with caution. A Band Council within the meaning of the Indian Act remains an employer governed by the Canada Labour Code by virtue of the definition in s. 2(i) (“a work, undertaking or business outside the exclusive legislative authority of the legislatures of the province’). It is far from clear that in NIL/TU,O the Supreme Court meant to authorize breaking down the activities of an entity governed by federal statute (which NIL/TU,O was not) so as to separate out employees one by one if their duties considered independently could arguably fall under provincial jurisdiction.

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