International Association of Machinists and Aerospace Workers, Local Lodge No. 99 v. Finning International Inc. et al., 2007 ABCA 319

• Judge: Conrad,Ritter,Ross
• Neutral Citation: 2007 ABCA 319
• Citation: 2007 ABCA 319,(2007), 422 A.R. 301 (CA),422 AR 301,(2007), 422 AR 301 (CA),422 A.R. 301
• Date: 01 May 2007
• Court: Court of Appeal (Alberta)

IAM v. Finning Intl. Inc. (2007), 422 A.R. 301 (CA);

      415 W.A.C. 301

MLB headnote and full text

Temp. Cite: [2008] A.R. TBEd. FE.005

International Association of Machinists and Aerospace Workers, Local Lodge No. 99 (appellant/applicant) v. Finning International Inc., Finning (Canada) Division of Finning International Inc., and O.E.M. Remanufacturing Company Inc. (respondents/respondents)

(0603-0123-AC; 2007 ABCA 319)

Indexed As: International Association of Machinists and Aerospace Workers, Local Lodge No. 99 v. Finning International Inc. et al.

Alberta Court of Appeal

Conrad and Ritter, JJ.A., and Ross, J.(ad hoc)

October 17, 2007.

Summary:

The Alberta Labour Relations Board, in a reconsideration of its earlier decision, denied the application of the International Association of Machinists and Aerospace Workers, Local Lodge No. 99 (the Union) for successorship and common employer declarations following the reorganization of certain operations of Finning International Inc. The Union applied for judicial review.

The Alberta Court of Queen's Bench, dismissed the application. The Union appealed.

The Alberta Court of Appeal allowed the appeal based on errors of the Board in the application of its reconsideration power, and in its analysis on the successorship issues.

Labour Law - Topic 526

Labour relations boards and judicial review - Powers of board - Power to reconsider, rescind, etc. - The Alberta Labour Relations Board, in a reconsideration of its earlier decision, denied the application of the International Association of Machinists and Aerospace Workers, Local Lodge No. 99 (the Union) for successorship and common employer declarations following the reorganization of certain operations of Finning International Inc. - The Union applied for judicial review - The chambers judge dismissed the application - The Union appealed - The Alberta Court of Appeal allowed the appeal - The Reconsideration Panel mischaracterized the issues as ones of law - The chambers judge correctly characterized the issues as questions of fact or mixed fact and law, but erred in overlooking the Reconsideration Panel's mischaracterization, particularly where, as here, the characterization of the issue potentially affected the extent to which a Reconsideration Panel should defer to the Original Panel's findings - It was patently unreasonable for the Reconsideration Panel to treat a purported error as one of law, without setting out any basis for this characterization, where there were obvious factual components to the issue - See paragraphs 44 to 52.

Labour Law - Topic 576

Labour relations boards and judicial review - Judicial review - General - Standard of review - [See Labour Law - Topic 526 ].

Labour Law - Topic 576

Labour relations boards and judicial review - Judicial review - General - Standard of review - The Alberta Labour Relations Board, in a reconsideration of its earlier decision, denied the application of the International Association of Machinists and Aerospace Workers, Local Lodge No. 99 (the Union) for successorship and common employer declarations following the reorganization of certain operations of Finning International Inc. - The Union applied for judicial review - The chambers judge dismissed the application - The Union appealed - The Alberta Court of Appeal applied the functional and pragmatic approach to determining the appropriate standard of review of the Reconsideration Panel's decision and concluded that the standard of review of the issues appealed was patent unreasonableness - See paragraphs 23 to 43.

Labour Law - Topic 4908

Unions - Successor rights and obligations - Sale, lease, transfer or disposition of business - [See both Labour Law - Topic 4912 ].

Labour Law - Topic 4912

Unions - Successor rights and obligations - New or successor employer - What constitutes - A Union was the certified bargaining agent for a unit of employees of Finning International Inc. (Finning) - Finning Canada was an unincorporated division of Finning - It repaired and overhauled heavy equipment components that originated from Finning operations - Its Edmonton operations included a Component Rebuild Centre (CRC) - Approximately 160 bargaining unit members were employed at the CRC as of June 2004, which constituted approximately 7% of Finning Canada's employees - The CRC was the source of roughly 4% of Finning Canada's annual revenue (approximately $55M) - By 2001, the CRC was nearing obsolescence and Finning considered constructing a new CRC - Instead, it decided to reorganize its CRC operations, invest in a new company and contract out its work - The reorganization was carried out through a complex series of transactions, mostly in the winter of 2003-2004 - The fundamental elements involved a restructuring of various related corporate entities; the execution by those corporate entities of a joint venture agreement (JVA); Finning's investment of approximately $87M to capitalize the joint venture; and the execution of a customer service agreement to contract out the work previously done at the CRC - The Alberta Labour Relations Board, in a reconsideration of its earlier decision, denied the Union's application for successorship and common employer declarations - The Union applied for judicial review - The chambers judge dismissed the application - The Union appealed - The Alberta Court of Appeal allowed the appeal based on errors of the Board in the application of its reconsideration power, and in its analysis on the successorship issues, thereby leaving in place the Original Panel's finding that the new company was a successor employer.

Labour Law - Topic 4912

Unions - Successor rights and obligations - New or successor employer - What constitutes - The Alberta Court of Appeal stated that "The creation of myriads of holding companies, corporate divisions, and other ownership structures should not be a factor against a successorship finding in the face of the underlying commercial realities at play. Situations involving a contracting-out scenario, as is the case here, are particularly challenging, since there will invariably be a close relationship between the contracting parties. A contracting-out scenario will not necessarily result in a finding of a transfer of a part of the business, since the contracting-out of work alone is an insufficient basis upon which to determine that successorship has occurred ... Nonetheless, where other factors are present, a successorship finding may result ... The analysis should take into consideration any assistance provided by the party that is contracting out its work (including any capital contributions) to determine if more than just the work is being transferred." - See paragraphs 59 and 60.

Cases Noticed:

Dr. Q., Re, [2003] 1 S.C.R. 226; 302 N.R. 34; 179 B.C.A.C. 170; 295 W.A.C. 170; 2003 SCC 19, refd to. [para. 24].

Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, addendum [1998] 1 S.C.R. 1222; 226 N.R. 201, refd to. [para. 24].

Voice Construction Ltd. v. Construction & General Workers' Union, Local 92, [2004] 1 S.C.R. 609; 318 N.R. 332; 346 A.R. 201; 320 W.A.C. 201; 2004 SCC 23, refd to. [para. 25].

Alberta Union of Provincial Employees v. Provincial Health Authorities (Alta.) et al. (2006), 412 A.R. 148; 404 W.A.C. 148; 67 Alta. L.R.(4th) 203; 2006 ABCA 356, refd to. [para. 26].

Alberta v. Labour Relations Board (Alta.) et al. (2002), 293 A.R. 251; 257 W.A.C. 251; 2001 ABCA 299, refd to. [para. 26].

Workers' Compensation Board (Alta.) v. Workers' Compensation Board Appeals Commission (Alta.) (2005), 371 A.R. 318; 354 W.A.C. 318; 2005 ABCA 276, refd to. [para. 28].

Alberta Union of Provincial Employees et al. v. Lethbridge Community College, [2004] 1 S.C.R. 727; 319 N.R. 201; 348 A.R. 1; 321 W.A.C. 1; 2004 SCC 28, refd to. [para. 30].

Public Service Alliance of Canada et al. v. Canadian Corp. of Commissionaires (Southern Alberta) et al. (2004), 374 A.R. 252; 2004 ABQB 529, refd to. [para. 32].

International Longshoremen's and Warehousemen's Union, Ship and Dock Foremen, Local 514 v. Prince Rupert Grain Ltd., [1996] 2 S.C.R. 432; 198 N.R. 99, refd to. [para. 34].

Enmax Corp. v. Canadian Union of Public Employees, Local 38 - see Canadian Union of Public Employees, Local 38 v. Calgary (City).

Canadian Union of Public Employees, Local 38 v. Calgary (City) et al. (2002), 328 A.R. 201; 2002 ABQB 587, revd. (2003), 327 A.R. 250; 296 W.A.C. 250; 2003 ABCA 100, refd to. [para. 35].

Alberta Union of Provincial Employees v. Tri-Municipal Family Leisure Centre Corp. et al. (2003), 344 A.R. 267; 2003 ABQB 511, dist. [para. 35].

GMAC Commercial Credit Corp. - Canada v. T.C.T. Logistics Inc. et al., [2006] 2 S.C.R. 123; 351 N.R. 326; 215 O.A.C. 313; 2006 SCC 35, refd to. [para. 39].

Planet Development Corp. and Lester (W.W.) (1978) Ltd. v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry in the United States and Canada, Local 740, [1990] 3 S.C.R. 644; 123 N.R. 241; 88 Nfld. & P.E.I.R. 15; 274 A.P.R. 15; 76 D.L.R.(4th) 389, consd. [para. 39].

Ivanhoe Inc. et al. v. United Food and Commercial Workers, Local 500 et al., [2001] 2 S.C.R. 565; 272 N.R. 201; 2001 SCC 47, refd to. [para. 39].

United Brotherhood of Carpenters and Joiners of America, Local 1460 v. Board of Industrial Relations (Alta.), [1971] 2 W.W.R. 105; 17 D.L.R.(3d) 302 (Alta. C.A.), refd to. [para. 40].

Loutan v. Alberta Union of Public Employees, 2002 ABQB 272, refd to. [para. 40].

Ryan v. Law Society of New Brunswick, [2003] 1 S.C.R. 247; 302 N.R. 1; 257 N.B.R.(2d) 207; 674 A.P.R. 207; 2003 SCC 20, refd to. [para. 43].

Thompson v. Burnco Rock Products Ltd., [2003] Alta. L.R.B.R. LD-069 (L.R.B.), refd to. [para. 45].

Williams v. Teamsters Local Union 938 et al., [2005] N.R. Uned. 149; 2005 FCA 302, refd to. [para. 45].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 46].

Director of Investigation and Research, Competition Act v. Southam Inc. et al., [1997] 1 S.C.R. 748; 209 N.R. 20, refd to. [para. 50].

Canada Union of Public Employees v. Metropolitan Parking Inc., [1980] 1 Can. L.R.B.R. 197 (Ont. L.R.B.), folld. [para. 55].

Construction Workers Union (CLAC), Locals 63 and 65 v. Hartland Pipeline Services Ltd., [2001] Alta. L.R.B.R. 296, refd to. [para. 56].

Alberta v. Alberta Union of Public Employees (1998), 223 A.R. 169; 183 W.A.C. 169; 1998 ABCA 304, refd to. [para. 57].

Health Care Employees Union of Alberta v. Danfield Security Services Ltd., [1996] Alta. L.R.B.R. 27, refd to. [para. 60].

General Teamsters, Local 362 v. Aspen View Regional Division No. 19, [2000] Alta. L.R.B.R. 535, refd to. [para. 60].

Health Sciences Association of Alberta v. Dynacare Kasper Medical Laboratories, [1997] Alta. L.R.B.R. 57, refd to. [para. 60].

United Steelworkers of America, Local 5220 v. GenAlta Recycling, AltaSteel Ltd. and James Metals, [2001] Alta. L.R.B.R. 376, affd. [2001] Alta. L.R.B.R. 466; 2001 CarswellAlta 1954 (Q.B.), refd to. [para. 68].

Carpenters 1325 v. Bay Acrylics and Thiele Drywall, [1991] Alta. L.R.B.R. 97, refd to. [para. 68].

United Food and Commercial Workers International Union, Local 280-P v. Canada Packers Inc. and Prairie Margarine, [1986] Alta. L.R.B.R. 417, dist. [para. 69].

Authors and Works Noticed:

Adams, George W., Canadian Labour Law (2nd Ed.) (2007 Looseleaf), p. 8-4, para. 8.60 [para. 54].

Counsel:

J.R. Carpenter, P.G. Nugent and J.R. Kolmes, for the appellant;

G.M. Somjen, for the respondent, Finning International Inc.;

H.J.D. McPhail, Q.C., for the respondent, Finning (Canada) Division of Finning International Inc.;

C.W. Neuman, for the respondent, O.E.M. Remanufacturing Co. Inc.;

S.W. McLeod, for the respondent, Alberta Labour Relations Board.

This appeal was heard on May 1, 2007, by Conrad and Ritter, JJ.A., and Ross, J.(ad hoc), of the Alberta Court of Appeal, who delivered the following memorandum of judgment on October 17, 2007.