In Hospital Employees’ Union and Gitwangak Band Council et al., the Canada Industrial Relations Board (the “Board”) was tasked with determining whether the operations of two health centres were incident to the Gitwangak Band Council or the Gitanyow Band Council’s band governance functions. If so, the health centres would be subject to federal jurisdiction in matters of labour relations. Finding that the health centres were in fact operated by unincorporated health authorities that were operationally distinct from the band councils, the Board ultimately concluded that the presumption in favour of the provincial regulation of labour relations had not been rebutted, and that it therefore did not have jurisdiction over the health centres.
Until the early 2000s, the Gitxsan Health Society provided health care services to the Gitwangak and the Gitanyow bands in British Columbia. In 2001, however, both bands entered into separate agreements with Health Canada to deliver health services to their own respective communities. In 2004, the Board issued a certification order in which it declared that the Gitwangak Band Council and the Gitanyow Band Council (collectively, the “Respondents”) were a common employer and were the successor to the Gitxsan Health Society “in part and only as it relates to the provision of community health services to members of the Gitwangak and Gitanyow bands”. The Board also certified the Union as the bargaining agent for the employees of the Respondents engaged in providing community health services.
The Gitwangak Health Centre is operated by the Gitwangak Health Authority (the “GHA”), an unincorporated entity. The GHA works with both the Simgiget’m Gitwangak Society – an organization formed by the Gitwangak Hereditary Chiefs pursuant to the British Columbia Society Act (the “BCSA”) to assist them and their respective houses to, amongst other things, protect and preserve their traditional territory and improve their socio-economic well-being – and the Gitwangak Band Council to design and implement its health services. Although the GHA’s health director reports to the general manager of the Gitwangak Indian Band, it is otherwise an operationally independent entity from both the Simgiget’m Gitwangak Society and the Gitwangak Indian Band, with its own staff and budget.
For its part, the Gitanyow Health Centre is operated by the Gitanyow Health Services Authority (the “GHSA”), another unincorporated entity. The GHSA works with both the Gitanyow Huwilp Society – an organization formed by the Gitanyow Hereditary Chiefs pursuant to the BCSA to assist them and their respective houses to, amongst other things, develop programs and services for land and resources, human services, health, education, justice and economic development – and the Gitanyow Band Council to design and implement its health services. Like the GHA, it is an operationally independent entity from both the Gitanyow Huwilp Society and the Gitanyow Indian Band, with its own building, staff and budget.
Since 2013, both the GHA and the GHSA have received their funding directly from the First Nations Health Authority (the “FNHA”), a provincial society incorporated under the BCSA that plans, designs, manages and funds the delivery of health programs and services to First Nations in British Columbia. Consequently, the GHA and the GHSA are both financially accountable to the FNHA.
Overview of Board Proceedings
The proceedings before the Board arose in the context of a complaint filed by the Hospital Employees’ Union (the “Union”) in which it alleged that the Respondents had violated the Canada Labour Code (the “Code”) by failing to bargain the terms of a collective agreement with respect to the operations of the health centres (the “Section 50 Complaint”).
In response to the Section 50 Complaint, counsel for the Respondents filed submissions with the Board on behalf of both band councils, and on behalf of the GHA and the GHSA. He did so in light of the Respondents’ position that the health centres were independent from the band councils and were, in fact, operated by the health authorities. Through their counsel, the Respondents subsequently raised a preliminary objection challenging the Board’s constitutional jurisdiction to hear the Section 50 complaint. More specifically, they sought a declaration that the Board did not have constitutional jurisdiction over the labour relations at the health centres, as well as an order rescinding the previous certification order.
In support of their preliminary objection, the Respondents argued that the Union had not rebutted the presumption of provincial regulation over labour relations and that the appropriate test was set out in the Supreme Court of Canada’s decision in NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees’ Union (“NIL/TU,O”). The Respondents further argued that the GHA and the GHSA operated separately and apart from either the Hereditary Chiefs societies or the band councils, with their own personnel policies, program deliveries, banking arrangements and funding sources, as well as accountability for the expenditure of funds to the FNHA. To that end, the Respondents pointed to jurisprudence regarding what they deemed similar provincially incorporated health services.
For its part, the Union called into question the timeliness of the Respondents’ objection to the Board’s jurisdiction. It noted that the NIL/TU,O analysis was in place at the time of the certification and was not a marked departure from earlier jurisprudence, and that the jurisprudence had not changed since the time of certification or through the collective bargaining relationship of the parties. The Union also argued that, unlike in the jurisprudence referred to by the Respondents, there was no standalone, separate entity providing the health services in the present case. Rather, it argued that the GHA and the GHSA were the unincorporated means through which the bands provided the health services. The entities in question were therefore the band councils.
On the issue of timeliness, the Board noted that following the release of the NIL/TU,O decision in 2010, it received a number of applications to reconsider previous certification orders that it had issued in respect of entities providing services to First Nations. The Respondents, however, did not file such an application and only raised the issue of constitutional jurisdiction for the first time in the context of the Section 50 complaint. Nevertheless, the Board held that, in light of existing jurisprudence on the issue, the Respondents’ preliminary objection with respect to constitutional jurisdiction was not subject to a procedural or statutory time limitation. The Board accordingly concluded that it was not improper to raise the issue in the context of a response to a complaint to the Board, even several years after the release of the NIL/TU,O decision.
Moving on to the issue of constitutional jurisdiction, the Board began by applying the presumption that labour relations generally fall under provincial jurisdiction. It was then tasked with determining whether the presumption had been rebutted. The Board noted that the Supreme Court of Canada had indeed set out the test to be applied in order to ascertain the jurisdiction of Indigenous employer-employee labour relations in the NIL/TU,O decision. Specifically, in order to determine whether an entity is a federal undertaking subject to federal jurisdiction, the test required the Board to apply a “functional test” which considers the normal and habitual activities of the entity without regard for exceptional or casual factors. If the functional test is inconclusive, the Board must then determine whether the core of the federal head of power at issue would be impaired by the provincial regulation of the entity’s labour relations.
Recalling a case in which it had recently applied the functional test in the context of an unjust dismissal complaint, the Board noted that it had previously examined whether the labour relations of a health centre operated by a band council fell under provincial or federal jurisdiction. In that case, the Board had found that the health services in question fell under federal jurisdiction and highlighted some distinguishing features in the jurisprudence that emerged after the NIL/TU,O decision. In brief, the federal courts had found that labour relations in the context of services provided directly by band councils and associated with the governance or the general administration of a First Nation, such as policing, education and health care, fell under federal jurisdiction. Accordingly, then, the Board held that the question of constitutional jurisdiction for entities involved in delivering health care services to Indigenous clients would depend on the facts of each case and, in particular, the degree of separation between the entity and the band council.
In this case, the Board proceeded with a proper application of the NIL/TU,O analysis by considering “who” the entity providing the services actually was. The Board noted that a band council is a federal undertaking for the purposes of labour relations when it is engaged in its governance functions and in the general administration of band affairs. The next question for the Board to examine was thus whether the services provided by the health centres were related to council governance. In the health domain, the Indian Act provides that a band council can decide to provide health care services directly to its members as an incident of band governance. That being said, this does not mean that the band must provide the services using band employees. Band councils can, for example, create or use corporate or administrative structures to advance their interests, and the creation of such a separate structure will generally sever the government from its role as the employer of the employees.
The Board acknowledged the fact that the Supreme Court of Canada was dealing with provincially incorporated entities providing services to Indigenous peoples in the NIL/TU,O decision, as well as in the Native Child companion case, but nonetheless queried whether the use of other types of administrative structures might similarly demonstrate an intent to separate the habitual and normal activities of the entity from band governance. Finding that the corporate status of an entity is not a determinative factor in applying the functional test, the Board concluded that it ultimately had to determine whether the health authorities were sufficiently distinct and separate from the band councils that they could not be said to be incorporated into band governance.
On the evidence, the Board held that each of the bands had, together with their respective Hereditary Chiefs society, created an agency or administrative structure – a health authority – intended to operate outside of the day-to-day direction and control of the band. Not satisfied that the regular and habitual activities of the health centres had been assimilated to band governance, the Board was of the view that the health services provided by the health authorities could not be considered part of the undertaking of the Gitwangak or Gitanyow band councils. In the absence of evidence of a band council incorporating the program delivery into its governance, the Board found that the Union had not rebutted the presumption in favour of provincial regulation. As stated by the Board, “[t]he regular and habitual activities of each of these health authorities are health care, which is a matter of provincial jurisdiction”.
In Our View
In a unanimous decision, the Board declared that it did not have constitutional jurisdiction over the activities of the GHA and the GHSA and, as a result, that it did not have jurisdiction to deal with the Union’s Section 50 Complaint. Interestingly, however, the Board nevertheless declined to use its discretionary authority to rescind its earlier certification order, finding it inappropriate to do so in the absence of an independent application for review or amendment of the order.
 In NIL/TU,O, as well as in the companion case of Communications, Energy and Paperworkers Union of Canada v. Native Child and Family Services of Toronto (“Native Child”), the Court considered whether entities providing child welfare services to First Nations communities fell under provincial or federal jurisdiction for labour relations purposes. In the end, the Court determined that they fell under provincial jurisdiction.