Canadian Offshore Marine Limited (Applicant)
v.
Seafarers International Union of Canada and The
Attorney General of Canada (Respondents)
Court of Appeal, Jackett C.J., Thurlow and
Pratte JJ.—Montreal, December 18 and 19,
1973.
Judicial review—Canada Labour Relations Board—Cer-
tification of union as bargaining agent for unit of employees
of plaintiff—Whether employee of plaintiff or parent
company.
The applicant applied to the Federal Court to review and
set aside the certification under the Canada Labour Code
granted by the Canada Labour Relations Board of the
respondent union as bargaining agent for a unit of
employees of the applicant working on ships operating in
and out of Canadian ports and engaged in servicing offshore
oil drilling rigs. The applicant claimed that the Canada
Labour Relations Board erred in certifying the unit as it
claimed the employees were not its employees but were
employees of the parent company.
Held, (Thurlow J. dissenting) the application is dismissed.
The weight of evidence did not establish, beyond doubt that
the employment contracts were entered into with the
employees by the parent company as principal and the
applicant offered no evidence of the arrangements whereby
it acted only as agent of the parent company.
Per Thurlow J.—the employees signed on as employees of
the parent company. Nothing in the evidence indicates that
any of those men understands or believes anyone else to be
his employer.
APPLICATION for judicial review.
COUNSEL:
Michael Ryan for Canadian Offshore
Marine Ltd.
Joseph Nuss for Seafarers International
Union of Canada.
T. B. Smith and Paul Evraire for Attorney
General of Canada.
SOLICITORS:
MacKeigan, Cox, Downie and Mitchell,
Halifax, for Canadian Offshore Marine Ltd.
J. Nuss, Montreal, for Seafarers Interna
tional Union of Canada.
Deputy Attorney General of Canada for
Attorney General of Canada.
JACKETT C.J. (orally)—This is a section 28'
application to set aside an order of the Canada
Labour Relations Board certifying 2 the respond
ent union to be the bargaining agent for a speci
fied unit of employees.
When the application was argued before us,
the sole attack made on the Board's order was
that the Board based it on a finding that the
employees in the unit were employees of the
applicant and that, on the material before the
Board,
(a) the Board erred in law in making that
finding (section 28(1)(b)), or
(b) that finding was an erroneous finding of
fact that was made by the Board without
regard to the material before it (section
28(1)(c)).
As I understand the position taken by all the
parties, they are agreed that the attack must fail
if it was open to the Board, on the material
before it, to find that the employees in the unit
were employees of the applicant.
Ninety per cent. of the shares of the appli
cant, which is a Canadian company, belong to
Offshore Marine Limited (hereinafter referred
to as "Offshore"), which is a United Kingdom
company that, according to the evidence, is a
subsidiary of a Cunard company.
The employees in question were employed as
non-licensed personnel on ships belonging to
Offshore and had signed ships' documents that
purported to make them employees of Offshore.
(If that were the whole of the evidence, the only
conclusion open would be that the employees
were employees of Offshore and were not
employees of the applicant. There is, however,
additional evidence.)
The ships in question were operated to carry
out contracts under which they plied between
Canadian ports and oil rigs in non-territorial
waters for the purpose of carrying supplies to
the rigs and otherwise performing services for
the rigs. The applicant carried on business in
Canada. It recruited such of the employees in
question as were recruited in Nova Scotia ports
and it performed in those ports for the ships in
question the work ordinarily performed by
ships' agents. As I understand the evidence, the
applicant arranged with ships' agents in New-
foundland to perform similar services in respect
of such of the ships in question as operated out
of Newfoundland ports. In addition, the appli
cant paid the wages of the employees in ques
tion by its own cheques delivered through the
ships' masters and it negotiated the contracts
under which the services were performed for
the rigs although such contracts were concluded
by Offshore. The applicant, as a matter of rou
tine, sent to Offshore a statement of its dis
bursements in connection with this business and
was paid by Offshore the amount thereof plus
an amount called a "commission". (If that were
the whole of the additional evidence, the only
conclusion would be that the applicant was
carrying on this business in Canada as an agent
of Offshore and that the employees in question
were employees of Offshore and were not
employees of the applicant. There is, however,
further evidence.)
There is, apparently, in the Province of Nova
Scotia, a legal requirement that a company
carrying on business in Canada be registered as
such. The applicant is registered under that law
and Offshore is not. Moreover, the employees
in question have been reported by the applicant,
under Canadian income tax, Canada Pension
and unemployment insurance legislation, as its
employees, and the applicant has reported the
wages that have been paid to those employees
as wages paid by it from which it has made the
deductions required by those laws. In so far as
these proceedings are concerned, those acts, in
my opinion, constitute admissions by the appli
cant against interest, which are some evidence
that the applicant is the employer of the men in
question.
It remains to consider whether such admis
sions are of such a character that a fact finder,
properly instructed, might hold that they tip the
balance when weighed against the other evi
dence that was before the Board. If that other
evidence definitely establishes the facts to be
something different from what is admitted, the
facts admitted cannot, of course, be substituted
for the truth.
Thus, if, before the Board, it had been estab
lished beyond doubt that the employment con
tracts had been entered into by Offshore as
principal, and that such contracts had been the
governing contracts, the only conclusion that
could have been reached with reference to the
Canadian Government returns made by the
applicant would have been that the statements
contained therein (that the employees in ques
tion were the applicant's employees) had been
made falsely, either innocently or fraudulently.
(One possibility that is suggested is that this
family of companies did not wish to alert
Canadian governments to the fact that Offshore
was doing business in Canada through the
agency of the applicant.)
However, as it seems to me, the evidence that
was before the Board, other than-the admissions
made by the applicant in its government returns,
did not establish, beyond doubt, that the
employment contracts were entered into with
the employees by Offshore as principal. It is not
too difficult to imagine some inter-corporate
arrangement worked out by those determining
the policies of this family of companies that
would have created a situation in which the
applicant would have quite truthfully represent
ed these employees to be its employees. It is not
entirely fanciful to think of an arrangement for
a joint venture under which the ships and some
of the employees would have been supplied by
Offshore and the employees in question (and
others) and local management would have been
supplied by the applicant. Indeed, there might
have been a simple arrangement under which
the applicant employed the employees in ques
tion and supplied them, for a consideration, for
use on Offshore's ships. There are many con
ceivable ways whereby corporate arrangements
might have been made so as to result in a
situation in which the returns made by the appli-
cant in Canada were honest reports of the actual
situation.
Such a prior arrangement being conceivable,
the question remains as to whether the evidence
that was led on behalf of the applicant and
Offshore was such as to establish that no such
arrangement was in fact made, and thus to
establish the falsity of the statements made in
the applicant's returns that the employees in
question were its employees. As I appreciate it,
the evidence in question was evidence of senior
operating officers of the two companies as to
how in fact daily operations were carried on.
They did insist that the applicant acted only as
agent of Offshore but they did not give any
evidence of the actual arrangements made so
that a conclusion could be reached as to the
legal effect of those arrangements. They gave
no evidence negativing any special arrangement
between the two companies and, having regard
to the corporate relationships, it is conceivable
that any such arrangement, if it did exist, would
have been unknown to them.
In the absence of clear evidence excluding the
possibility that the reports to the Canadian Gov
ernment were honestly made, I am of opinion
that the applicant is not in a position to com
plain when the matter was dealt with, as it
appears to have been, on the assumption that
there was some arrangement in existence that
resulted in a situation that made the statement
contained therein as to the relationship between
the applicant and the employees an accurate
statement of the actual state of affairs.
For these reasons, I am of opinion that it was
open to the Board, on the evidence, to find that
the employees in the unit were employees of the
applicant and that the section 28 application
should, accordingly, be dismissed.
* * *
PRATTE J. concurred.
* * *
THURLOW J. (orally) (dissenting)—This is an
application under section 28 of the Federal
Court Act to review and set aside the certifica-
tion under the Canada Labour Code granted by
the Canada Labour Relations Board on Septem-
ber 27, 1973 of the respondent union as bar
gaining agent for "a unit of employees of
Canadian Offshore Marine Limited comprising
unlicensed personnel employed by Canadian
Offshore Marine Limited aboard vessels operat
ing in and out of Canadian ports and engaged in
servicing offshore oil drilling rigs".
The application for certification was heard by
the Board jointly with another application by
the same union for certification as bargaining
agent of the same personnel as employees of
Offshore Marine Limited, a British company
which owns 90 per cent of the issued shares of
Canadian Offshore Marine Limited and a ques
tion arose as to which of the two companies was
the employer of these men.
The evidence shows that when these men join
the vessels, which are all of British registry,
they sign on in accordance with statutory proce
dure as employees not of Canadian Offshore
Marine Limited but of Offshore Marine Lim
ited, which owns the vessels and for whose
account they are operated. Nothing in the evi
dence indicates that any of these men under
stands or believes anyone else to be his
employer.
Canadian Offshore Marine Limited, which is
a subsidiary of the British company and carries
out that company's directions in all that it does,
issues cheques to pay the Canadian residents
who become members of the crews of these
vessels and reports them as its employees to the
Department of National Revenue and the
Unemployment Insurance Commission. This is
undoubtedly evidence against Canadian Off
shore Marine Limited and having regard to the
domination of that company by Offshore
Marine Limited I think it is evidence against
that company as well, tending to show that
Canadian Offshore Marine Limited is the
employer of the men in question. But to my
mind such evidence cannot, in the context of
the other material put before the Board serve to
displace the conclusion which the fact of the
personnel signing on as employees of Offshore
Marine Limited produces, that is to say, that
these seamen are employees of that company
rather than of Canadian Offshore Marine Lim
ited. Nor can the making of such reports have
the effect of changing the seamen's employer
from the British to the Canadian company.
In my opinion on the material in the record
the Board's conclusion that Canadian Offshore
Marine Limited was the true employer of these
seamen and that Offshore Marine Limited was
not their employer is not sustainable and should
be regarded as having resulted from the applica
tion of some erroneous principle of law.
I would therefore set aside the certification.
' Section 28(1) of the Federal Court Act reads as follows:
28. (1) Notwithstanding section 18 or the provisions of
any other Act, the Court of Appeal has jurisdiction to
hear and determine an application to review and set aside
a decision or order, other than a decision or order of an
administrative nature not required by law to be made on a
judicial or quasi-judicial basis, made by or in the course of
proceedings before a federal board, commission or other
tribunal, upon the ground that the board, commission or
tribunal
(a) failed to observe a principle of natural justice or
otherwise acted beyond or refused to exercise its
jurisdiction;
(b) erred in law in making its decision or order, whether
or not the error appears on the face of the record; or
(c) based its decision or order on an erroneous finding
of fact that it made in a perverse or capricious manner
or without regard for the material before it.
2 See Part V of the Canada Labour Code as amended by
chapter 18 of the Statutes of Canada of 1972.
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.