PIEDMONT AIRLINES, INC. Applicant v. UNITED STEEL WORKERS OF AMERICA,, 2003 FCA 154

Date: 20030325 Docket: A-438-01 Citation: 2003 FCA 154 CORAM: ROTHSTEIN J.A. EVANS J.A. MALONE J.A. BETWEEN: PIEDMONT AIRLINES, INC. Applicant and UNITED STEEL WORKERS OF AMERICA, TRANSPORTATION COMMUNICATIONS AMALGAMATED LOCAL 1976 Respondent and U.S. AIRWAYS INC. Respondent Heard at Ottawa, Ontario, on January 21, 2003. Judgment delivered at Ottawa, Ontario, on March 25, 2003. REASONS FOR JUDGMENT BY: EVANS J.A. CONCURRED IN BY: ROTHSTEIN J.A. MALONE J.A. Date: 20030325 Docket: A-438-01 Citation: 2003 FCA 154 CORAM: ROTHSTEIN J.A. EVANS J.A. MALONE J.A. BETWEEN: PIEDMONT AIRLINES, INC.

Applicant and UNITED STEEL WORKERS OF AMERICA, TRANSPORTATION COMMUNICATIONS AMALGAMATED LOCAL 1976 Respondent

and U.S. AIRWAYS INC. Respondent REASONS FOR JUDGMENT EVANS J.A. A. INTRODUCTION [ 1 ] This is an application for judicial review by Piedmont Airlines Inc. under subsection 28(1) of the Federal Court Act , R.S.C. 1985, c. F-7 , requesting the Court to set aside a decision of the Canada Industrial Relations Board. In that decision, the Board declared that U.S. Airways Inc. had sold part of its business to Piedmont, that Piedmont was a successor-employer for the purposes of subsection 44(2) of the Canada Labour Code , R.S.C. 1985, c.

L-2 , and that the United Steelworkers of America, Transportation Communications Amalgamated Local 1976 ("the union") continued to be the bargaining agent for the unit of employees, now employed by Piedmont, working at Ottawa International Airport. [ 2 ] Counsel for Piedmont argued that the Board was in error in declaring Piedmont to be a successor-employer for the purposes of

section 44. The Board defined the "business" that had been sold without taking into account the fact that the collective agreement excluded work performed by members of the bargaining unit at U.S. Airways' request for Piedmont and certain other carriers operating in and out of Ottawa. Hence, the Board erred in finding a sale of a business because no bargaining rights attached to the part of the business that had been sold to Piedmont.

As a result, the Board's order interfered with an agreement freely negotiated by the parties by creating bargaining rights where none existed under the agreement, and thus violated a fundamental principle of labour relations, namely, the parties' right to freedom of contract. [ 3 ] In response, counsel for the union maintained that the Board's statutory power to grant a declaration under subsection 44(2) is very broad.

Accordingly, counsel argued, the Board was not in error when it held that the scope clause in the collective agreement was not determinative of whether there had been a sale of a business for the purposes of

section 44. The relevant document was the original certification order which did not exclude work performed for Piedmont and the other specified carriers: bargaining rights therefore attached to the part of U.S. Airways' business that was sold to Piedmont. [ 4 ] Counsel submitted that parties to a collective agreement may not limit the Board's exercise of its powers under

section 44 of the Code. This is because, counsel argued, they were conferred by Parliament to advance the public interest in harmonious and equitable labour relations by protecting employees against the loss of their rights as a result of changes in the ownership of the business. [ 5 ] This application for judicial review raises the following question: when the Board is determining whether a business has been sold for the purposes of

section 44, is the collective agreement relevant to deciding whether a criterion developed by the Board in its

section 44 jurisprudence has been met? The criterion at issue is whether "union bargaining rights [were] in some way tied to the seller's business or part thereof that was presumably sold": Halifax Grain Elevator Ltd. and I.L.A., Local 1843 , 15 C.L.R.B.R. (2d) 191 at 195 (C.L.R.B.) . [ 6 ] Orders of the Board are protected by a strong privative clause: Canada Labour Code , subsections 22(1) and (2) . It permits review only on the grounds referred to in paragraphs 18.1(4) ( a ), (

b) or (

e) of the Federal Court Act . In this application, only paragraph (

a) is relevant. It provides that the Court may grant relief if the tribunal "acted ... beyond its jurisdiction". Accordingly, the applicant can only succeed if it establishes that the Board's

interpretation of the successor-employer provisions of the Code caused the Board to act "beyond its jurisdiction". [ 7 ] The only statutory ground of review available in this application thus requires the Court to frame its answer in terms of whether the Board exceeded its jurisdiction. However, the prior question is the standard of review applicable to the Board's decision. This is determined by applying a pragmatic and functional analysis. [ 8 ] In my opinion, the relevant standard of review in this case is patent unreasonableness.

This standard is very difficult for an applicant for judicial review to satisfy and Piedmont has not done so. For the reasons that follow, I would therefore dismiss the application. B. FACTUAL BACKGROUND [ 9 ] The relevant facts are not in dispute. The union represented the employees of U.S. Airways at airports at Toronto, Montreal, and Ottawa who provided customer services in connection with the mainline flights operated to and from these airports by U.S. Airways, the principal operating arm and a subsidiary of U.S. Airways Group Inc..

The employees' work included checking in passengers and their baggage, and providing service at the departure gates. [ 10 ] When and as required by U.S. Airways, the employees also performed these services in connection with flights operated by, among others, the regional airlines that comprise U.S. Airways Express, a network of separate regional carriers using small aircraft to provide local air service. These regional carriers coordinate their schedules with U.S. Airways in order to provide passenger feed for its mainline services. Piedmont has operated as a U.S.

Airways Express regional carrier since its purchase by U.S. Airways Group in 1987.

[ 11 ] On April 16, 1999, the union was certified by the Board as the bargaining agent for U.S. Airways' employees in Canada. The certificate defined the bargaining unit as follows: all employees of U.S. Airways Inc. excluding marketing and sales persons, flight attendants, pilots, station masters, supervisors and those above the rank of supervisors, and employees already covered by a certification order. [ 12 ] A first collective agreement was signed on February 16, 2000. The only clause in the agreement relevant to this application for judicial review is

article 3, which is headed "Recognition and Scope", clause C of which provides: Customer Service work related to U.S. Airways Express, Regional Jets, Charters and Ground Handling Agreements is excluded from the scope of this agreement. However, such customer service work may be performed by employees covered by this agreement when and where directed by the Company. As explained later in these reasons, the parties do not agree on the meaning of

article 3, clause C, which has never been the subject of adjudication. [ 13 ] In August 2000, U.S. Airways advised its employees that it intended to terminate its mainline services to and from Ottawa International Airport and that Piedmont had agreed to provide ground and passenger handling operations for U.S. Airways Express regional flights that continued to use the Ottawa airport. In November 2000, U.S. Airways ended its mainline operations in and out of Ottawa. Since then, Piedmont has provided ground and passenger handling services for U.S.

Airways Express carriers operating flights in and out of Ottawa. [ 14 ] In order to enable Piedmont to take over U.S. Airways' Ottawa business, U.S. Airways transferred to Piedmont the equipment that it had used at Ottawa. Piedmont assumed U.S. Airways' contract for the purchase of de-icing and ramp services, and hired 13 of the 17 employees who had been in the U.S. Airways' bargaining unit.

The kind of work performed by the Piedmont employees at Ottawa International was identical to that previously performed by bargaining unit members for U.S Airways. [ 15 ] Nonetheless, Piedmont refused to apply the union's collective agreement, on the ground that all the work performed by Piedmont's employees was excluded by

article 3, clause C. As a result, in January 2001, the union filed proceedings with the Board for a declaration under

section 35 of the Code. The union's application alleged that, by virtue of their common ownership by U.S. Airways Group Inc., U.S. Airways and Piedmont were common employers in respect of the business carried on at Ottawa International Airport. In the alternative, the union applied for relief under

section 44, on the ground that U.S. Airways had sold the Ottawa part of its business to Piedmont. If successful on either ground, the union would become the bargaining agent for the Piedmont employees and Piedmont would be bound by the collective agreement to the extent, if any, that it applied to the work performed at Ottawa. C. DECISION OF THE BOARD [ 16 ] In a unanimous decision rendered on June 29, 2001, the Board dismissed the union's application under

section 35, but granted the

section 44 declaration. It amended the original certification order by substituting Piedmont Airlines as the employer in place of U.S. Airways. On February 1, 2002, the Board issued a further amendment to the order by restricting it to employees at the Ottawa location.

The certification order was thus amended to read: all employees of Piedmont Airlines Inc. working in or out of the Ottawa airport, excluding marketing and sales persons, flight attendants, pilots, station masters, supervisors and those above the rank of supervisors, and employees already covered by a certification order. [ 17 ] The Board issued reasons for its decision on December 31, 2001. In response to Piedmont's objection that the work performed by its employees was excluded by

article 3, clause C of the collective agreement, the Board noted that the original certificate issued to the union referred, with certain exceptions, to all U.S. Airways employees, and did not exempt work performed by the employees for Piedmont or any other U.S. Airways Express carrier. [ 18 ] After reviewing the facts described above respecting the termination of U.S Airways' Ottawa operations and their assumption by Piedmont, the Board concluded that U.S. Airways had transferred to Piedmont its business of servicing flights in and out of Ottawa and that, consequently, a sale of part of a business had occurred within the meaning of

section 44. [ 19 ] The Board held that, in exercising its powers under

section 44, it was not bound by any agreement that the parties may have made. The terms of the original certification order could not be modified by a provision in the collective agreement, including

article 3, clause C. Hence, the Board rejected Piedmont's argument that the collective agreement excluded the remaining work at Ottawa and that, therefore, declaring Piedmont to be a successor-employer would confer rights on the union for which it had never bargained. D. STATUTORY FRAMEWORK [ 20 ] The following provisions of the Canada Labour Code are relevant in the determination of this application.

3(1) "bargaining unit" means a unit (

a) determined by the Board to be appropriate for collective bargaining, or (

b) to which a collective agreement applies; 18.1

(1) On application by the employer or a bargaining agent, the Board may review the structure of the bargaining units if it is satisfied that the bargaining units are no longer appropriate for collective bargaining.

(2) If the Board reviews, pursuant to subsection (1) or

section 35 or 45, the structure of the bargaining units, the Board (

a) must allow the parties to come to an agreement, within a period that the Board considers reasonable, with respect to the determination of bargaining units and any questions arising from the review; and (

b) may make any orders it considers appropriate to implement any agreement.

(3) If the Board is of the opinion that the agreement reached by the parties would not lead to the creation of units appropriate for collective bargaining or if the parties do not agree on certain issues within the period that the Board considers reasonable, the Board determines any question that arises and makes any orders it considers appropriate in the circumstances. ... (4)(

b) amend any certification order or description of a bargaining unit contained in any collective agreement; 22

(1) Subject to this Part, every order or decision of the Board is final and shall not be questioned or reviewed in any court, except in accordance with the Federal Court Act on the grounds referred to in paragraph 18.1(4)( a ), (

b) or (

e) of that Act. ...

(2) Except as permitted by subsection (1), no order, decision or proceeding of the Board made or carried on under or purporting to be made or carried on under this Part shall (

a) be questioned, reviewed, prohibited or restrained, or (

b) be made the subject of any proceedings in or any process of any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, on any ground, including the ground that the order, decision or proceeding is beyond the jurisdiction of the Board to make or carry on or that, in the course of any proceeding, the Board for any reason exceeded or lost its jurisdiction. 44.

(1) In this

section and sections 45 to 47.1, "business" means any federal work, undertaking or business and any part thereof; ... "sell", in relation to a business, includes the transfer or other disposition of the business and, for the purposes of this definition, leasing a business is deemed to be selling it.

(2) Where an employer sells a business, (

a) a trade union that is the bargaining agent for the employees employed in the business continues to be their bargaining agent; (

b) a trade union that made application for certification in respect of any employees employed in the business before the date on which the 3(1) « unité de négociation » Unité_:

a) soit déclarée par le Conseil habile à négocier collectivement;

b) soit régie par une convention collective. 18.1

(1) Sur demande de l'employeur ou d'un agent négociateur, le Conseil peut réviser la structure des unités de négociation s'il est convaincu que les unités ne sont plus habiles à négocier collectivement.

(2) Dans le cas où, en vertu du paragraphe (1) ou des articles 35 ou 45, le Conseil révise la structure des unités de négociation_:

a) il donne aux parties la possibilité de s'entendre, dans le délai qu'il juge raisonnable, sur la détermination des unités de négociation et le règlement des questions liées à la révision;

b) il peut rendre les ordonnances qu'il juge indiquées pour mettre en oeuvre l'entente.

(3) Si le Conseil est d'avis que l'entente conclue par les parties ne permet pas d'établir des unités habiles à négocier collectivement ou si certaines questions ne sont pas réglées avant l'expiration du délai qu'il juge raisonnable, il lui appartient de trancher toute question en suspens et de rendre les ordonnances qu'il estime indiquées dans les circonstances. ...

(4) b) modifier l'ordonnance d'accréditation ou la description d'une unité de négociation dans une convention collective; 22

(1) Sous réserve des autres dispositions de la présente partie, les ordonnances ou les décisions du Conseil sont définitives et ne sont susceptibles de contestation ou de révision par voie judiciaire que pour les motifs visés aux alinéas 18.1(4) a ),

b) ou

e) de la

Loi sur la Cour fédérale et dans le cadre de cette loi. ...

(2) Sauf exception prévue au paragraphe (1), l'action - décision, ordonnance ou procédure - du Conseil, dans la mesure où elle est censée s'exercer dans le cadre de la présente partie, ne peut, pour quelque motif, y compris celui de l'excès de pouvoir ou de l'incompétence à une étape quelconque de la procédure_:

a) être contestée, révisée, empêchée ou limitée;

b) faire l'objet d'un recours judiciaire, notamment par voie d'injonction, de certiorari, de prohibition ou de quo warranto. 44.

(1) Les définitions qui suivent s'appliquent au présent

article et aux articles 45 à 47.1. « entreprise » Entreprise fédérale, y compris toute

partie de celle- ci. ... « _vente_ » S'entend notamment, relativement à une entreprise, du transfert et de toute autre forme de disposition de celle-ci, la location étant, pour l'application de la présente définition, assimilée à une vente.

(2) Les dispositions suivantes s'appliquent dans les cas où l'employeur vend son entreprise_:

a) l'agent négociateur des employés travaillant dans l'entreprise reste le même;

b) le syndicat qui, avant la date de la vente, avait présenté une demande d'accréditation pour des employés travaillant dans l'entreprise peut, sous réserve des autres dispositions de la présente

business is sold may, subject to this Part, be certified by the Board as their bargaining agent; (

c) the person to whom the business is sold is bound by any collective agreement that is, on the date on which the business is sold, applicable to the employees employed in the business; and (

d) the person to whom the business is sold becomes a party to any proceeding taken under this Part that is pending on the date on which the business was sold and that affects the employees employed in the business or their bargaining agent. 45. In the case of a sale or change of activity referred to in

section 44, the Board may, on application by the employer or any trade union affected, determine whether the employees affected constitute one or more units appropriate for collective bargaining. 46. The Board shall determine any question that arises under

section 44, including a question as to whether or not a business has been sold or there has been a change of activity of a business, or as to the identity of the purchaser of a business. partie, être accrédité par le Conseil à

titre d'agent négociateur de ceux-ci;

c) toute convention collective applicable, à la date de la vente, aux employés travaillant dans l'entreprise lie l'acquéreur;

d) l'acquéreur devient

partie à toute procédure engagée dans le cadre de la présente

partie et en cours à la date de la vente, et touchant les employés travaillant dans l'entreprise ou leur agent négociateur. 45. Dans les cas de vente ou de changements opérationnels visés à l'article 44, le Conseil peut, sur demande de l'employeur ou de tout syndicat touché décider si les employés en cause constituent une ou plusieurs unités habiles à négocier collectivement. 46. Il appartient au Conseil de trancher, pour l'application de l'article 44, toute question qui se pose, notamment quant à la survenance d'une vente d'entreprise, à l'existence des changements opérationnels et à l'identité de l'acquéreur.

E. ISSUES AND ANALYSIS [ 21 ] Counsel for Piedmont conceded in oral argument that, but for

article 3, clause C, she could not successfully have challenged the Board's finding that a sale of a business had occurred for the purposes of

section 44. Accordingly, counsel's submissions focussed exclusively on whether the Board committed a reviewable error when it found a sale of a business without taking into account

article 3, clause C. Issue 1: Standard of review [ 22 ] Counsel for Piedmont agreed that the Board's

interpretation of

section 44 can normally only be set aside if it is patently unreasonable: National Bank of Canada v. Retail Clerks' International Union , 1984 CanLII 2 (SCC) , [1984] 1 S.C.R. 269 at 276. However, she submitted that whether the Board could make a determination under

section 44 that was inconsistent with the collective agreement was a "jurisdictional" question and hence was reviewable for correctness. [ 23 ] In view of the pragmatic and functional approach that, for some time, courts in Canada have taken for determining the standard of review, this argument puts the conclusionary cart before the analytical horse. A question is not reviewable on a standard of correctness because, in some abstract sense, it is jurisdictional.

As used in administrative law, the concept of jurisdiction has little, if any, value as an analytical tool for determining legislative intent with respect to the provisions in an agency's enabling statute that the agency must interpret correctly if its decision is to withstand judicial review. See Pushpanathan v. Canada (Minister of Citizenship and Immigration) , 1998 CanLII 778 (SCC) , [1998] 1 S.C.R. 982 at para. 28 ; SOCAN v.

Canadian Association of Internet Providers, [2002] 4 F.C.R. 3 at paras. 46-47 (C.A.). [ 24 ] Whether or not a statutory provision in dispute is "jurisdictional", in the sense that the agency must interpret it correctly, is generally determined by the pragmatic and functional analysis that must be conducted to decide the appropriate standard of review. If that analysis leads to the conclusion that the reviewing court is at least as well placed as the agency to interpret the statutory provision in dispute, and that the agency's

interpretation is therefore entitled to no deference, the provision may be labelled "jurisdictional". [ 25 ] Nonetheless, the "jurisdictional" nature of a question appears still to have some relevance to determining the standard of review. Thus, in Chieu v.

Canada (Minister of Citizenship and Immigration) , 208 D.L.R. (4 th ) 107 at para. 24 , 2002 SCC 3 , the Court said that the meaning of the words in a discretion-conferring provision in an agency's constating statute was a jurisdictional question, and that this was one of the considerations to be taken into account under the "nature of the question in dispute factor" in the pragmatic and functional analysis. However, since determining whether a sale of a business has occurred for the purposes of

section 44 is not that kind of question, Chieu is not relevant to the present case. [ 26 ] The strong preclusive clause in

section 22 of the Code is a forceful directive from Parliament to reviewing courts to afford deference to decisions of the Board. The Supreme Court of Canada has regularly warned against judicial overreaching that prevents labour relations boards from performing their legislative mandate as a result of the courts' branding "as jurisdictional, and therefore subject to broader curial review, that which may be doubtfully so": Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corporation , 1979 CanLII 23 (SCC) , [1979] 2 S.C.R. 227 at 233. On an application for judicial review the Court cannot substitute its opinion for that of the Board on a question of statutory

interpretation to which the Board's knowledge and experience are relevant. [ 27 ] The question in dispute in the present case is whether the collective agreement is relevant for determining whether

section 44 is engaged by a given transaction. In particular, does the collective agreement, rather than the certification order, define the part of the business to which bargaining rights attached and which was sold? This question involves the

interpretation of

section 44 of the Code, a matter that

section 46 expressly entrusts to the Board. It goes to the matters that the Board may consider in defining the business

allegedly sold and, in particular, in determining whether collective bargaining rights were attached to the part of the business sold. Given the specialist knowledge of the Board, its tripartite membership, and its broad regulatory responsibility in the area of labour relations, this is a question that the Board is much better institutionally equipped than the Court to decide. [ 28 ] Counsel for Piedmont relied on Public Service Alliance of Canada v. Bombardier Inc ., 2000 CanLII 16792 (FCA) , [2001] 2 F.C. 429 (C.A.) to support the argument that whether the Board had to have regard to the terms of a collective agreement when exercising its power under

section 44 was a jurisdictional question and therefore subject to review for correctness. The dispute in Bombardier concerned the

interpretation of sections 47 and 47.1 of the Code, which are part of the successor-employer provisions. [ 29 ] In my view, however, Bombardier does not support Piedmont's argument that the Board's

interpretation of

section 44 is reviewable on a correctness standard because it is a "jurisdictional" question. First, the Court in Bombardier did not find it necessary to resolve the standard of review issue. It held (at para. 34) that the Board's decision had to be set aside whether its

interpretation "is considered jurisdictional or within the Board's core expertise." Second, Bombardier concerned sections 47 and 47.1 of the Code, not

section 44, and the Supreme Court of Canada held in the National Bank case that the

interpretation of the words "sale of a business" in what is now

section 44 is reviewable only for patent unreasonableness. [ 30 ] In my opinion, therefore, the standard of review in this case is patent unreasonableness. Issue 2: Was the Board's Decision Patently Unreasonable? [ 31 ] Counsel for Piedmont advanced four arguments in support of her submission that the Board's decision was patently unreasonable. I shall deal with them one by one, even though the first three are variations on two themes: the meaning of

article 3, clause C espoused by Piedmont, and the priority of the collective agreement over the certification order. (

i) Board's decision deprives the collective agreement of any application [ 32 ] Counsel for Piedmont submitted that the result of the Board's decision was absurd because, with the departure of U.S. Airways from Ottawa,

article 3, clause C of the collective agreement exempts all the customer service work performed at Ottawa by Piedmont employees. Thus, since the effect of the Board's order is to deprive the collective agreement of any application it is patently unreasonable. [ 33 ] This argument assumes that

article 3, clause C has the meaning ascribed to it by Piedmont, namely that it excludes work performed for Piedmont by the employees at Ottawa under any circumstances . The union, however, argues that, properly interpreted,

article 3, clause C only exempts from the agreement new operations established by Piedmont and the other carriers to which it applies, not work performed in connection with their existing operations. Alternatively, counsel submitted,

article 3, clause C does not apply to Piedmont in its capacity as purchaser of U.S. Airways' business. [ 34 ] The Board did not attempt to interpret

article 3, clause C. Nor should we. Hence, since it has not been decided that

article 3, clause C exempts from the collective agreement work performed by the employees of Piedmont as the purchaser of the business, the Board's decision cannot be characterized as patently unreasonable on the ground that it effectively deprives the agreement of any subject- matter. [ 35 ] If the parties cannot agree on the meaning of

article 3, clause C, the proper course is to submit it to arbitration. I should make it clear that nothing in these reasons is to be taken to indicate any view on the meaning of

article 3, clause C. I would only add that whatever

article 3, clause C is ultimately decided, or agreed, to mean, the Board's decision that Piedmont is a successor-employer under

section 44 will have practical effect. Thus, if Piedmont's view of its meaning prevails, the union will remain the bargaining agent for Piedmont's customer service employees at Ottawa and the collective agreement will apply to them to whatever extent, if any, that it covers the work that they perform. (ii) Bargaining rights did not attach to the part of U.S. Airways' business that was sold [ 36 ] Counsel argued that the Board's decision was patently unreasonable because it failed to appreciate that the business sold to Piedmont was not the same as U.S. Airways' business. For

section 44 to apply, the union's bargaining rights had to attach to the part of U.S. Airways' business that was sold to Piedmont. The submission was that, for labour law purposes, U.S. Airways' business comprised two elements: providing customer service work for both its own flights and those of the carriers identified in

article 3, clause C. The business acquired by Piedmont was the latter, since U.S. Airways no longer operated flights in or out of Ottawa and consequently had no need of customer service work for its own flights. As a result of

article 3, clause C, no bargaining rights attached to the part of the business sold to Piedmont and therefore there could have been no sale of a business within the meaning of

section 44. [ 37 ] The Board treated the "business" for the purposes of

section 44 as that described in the certification order, which contains no limitation such as that in

article 3, clause C. The Board refused to permit the definition in the certification order of the business to which bargaining rights attached to be narrowed by the terms of a subsequent collective agreement. [ 38 ] The logic of Piedmont's position is that, if the collective agreement had expressly provided that it applied only to work performed for U.S. Airways and expressly excluded work performed for any other employer, there never could be a sale of the business

for the purposes of

section 44. The parties would thus effectively be free to contract out entirely of

section 44 of the Code. In view of the public policy purpose of this provision, the Board's refusal to define the business transferred by reference to the collective agreement is not patently unreasonable. [ 39 ] This Court has already rejected a challenge to the Board's view that the principle of freedom of contract does not preclude it from exercising the broad power, now contained in

section 18.1 of the Code, to amend the certificate defining the appropriate bargaining unit in a manner contrary to the parties' agreement: Teleglobe Canada v. Canadian Overseas Telecommunications Union , [1980] F.C.J. No. 903 (C.A.) . However, this is the first occasion on which the Court has been asked to determine if the certification order is similarly determinative in the context of

section 44. In order to succeed in this application Piedmont must establish that it was patently unreasonable for the Board to have adopted this same approach in the context of subsection 44(2) and thus to have prevented the parties from, in effect, contracting out of

section 44. [ 40 ] An applicant has a heavy burden to discharge in order to persuade a reviewing court that a decision of a specialized independent administrative agency, such as the Board, is so evidently lacking in rationality that it is patently unreasonable. In view of the rationale of the Board's policy of treating the certification order and not the agreement as the crucial document, I am not persuaded that, by applying this policy to define the business to which bargaining rights attached for the purposes of

section 44, the Board's decision can be said clearly to lack a rational basis. [ 41 ] I wish to make it clear that, although it was not patently unreasonable for the Board to ignore the terms of the collective agreement when determining whether there had been a sale of the business for the purposes of

section 44, the parties were free to limit the scope of the collective agreement for the purposes of defining their rights inter se . Hence, nothing in these reasons precludes an arbitrator from concluding that, properly interpreted,

article 3, clause C excludes from the agreement all the work performed by members of the bargaining unit for Piedmont and the other carriers covered by this provision. (iii) Board's decision extends the union's bargaining rights [ 42 ] Counsel for Piedmont submitted that the Board's decision was inconsistent with the policy of

section 44, namely the preservation of existing rights for which employees had bargained through their union. Writing for the Court in Bombardier Inc ., Linden J.A. said (at para. 3) of the successor-employer provisions in the Code: This framework is designed to ensure that the existing collective bargaining rights of workers, whether they exist by virtue of certification or of a subsisting collective agreement, are not adversely affected or lost upon the occurrence of certain potentially destabilizing events. [ 43 ] Counsel's argument was that

article 3, clause C of the collective agreement negotiated on behalf of the employees of U.S. Airways expressly exempted work performed for Piedmont. Accordingly, the Board created new bargaining rights for the union when it found that Piedmont was the successor-employer of U.S Airways and was bound by the collective agreement, and when the Board issued the amended certification order. [ 44 ] This argument runs into the difficulties that I have already described. It is premised on an

interpretation of

article 3, clause C that is contested and has never been the subject of an adjudication. If, as the union contends,

article 3, clause C applies only to new operations by Piedmont and not to operations already in existence, bargaining rights are not increased by finding Piedmont to be a successor-employer. However, as I have already noted, the

interpretation of

article 3, clause C is not for this Court to decide and I express no view on its meaning. [ 45 ] In addition, and more fundamentally, Piedmont's argument assumes that, for the purposes of

section 44, the scope of the union's bargaining rights are defined by the collective agreement and not by the certification order. However, since, as I have said, it was not patently unreasonable for the Board to disregard a provision in the collective agreement when determining whether the sale of a business has occurred, it was not a reviewable error for it to determine whether bargaining rights attached to the business presumably sold by reference to the certification order alone. The certification order did not exclude work performed by the employees for Piedmont. Again, I would note that this conclusion has no bearing on the proper

interpretation of the collective agreement as determined by an arbitrator. [ 46 ] Counsel relied on Beverage Dispensers & Culinary Workers Union, Local 835 v. Terra Nova Motor Inn Ltd., 1974 CanLII 192 (SCC) , [1975] 2 S.C.R. 749 at 752-23, to support her argument that the Board erred by not having regard to the terms of the collective agreement.

In a dissenting judgment in that case, Laskin C.J. stated that the certification order was spent on the signing of the first collective agreement. [ 47 ] In my opinion, however, this statement is not sufficient to establish that the Board's decision in the present case was patently unreasonable. The Board operates under a different legislative framework from the provincial scheme considered in Beverage Dispensers, and the factual and legal contexts in which Laskin C.J. made the statement in question were very different from those under consideration here.

Unlike provincial labour boards, the Board does not regard the certification order as spent once the first collective agreement is made and the parties redefine the bargaining unit: Oceanex

(1997) Inc. and I.U.O.E., Local 904 (2000), 70 C.L.R.B.R. (2d) 62 at 67 (C.I.R.B.) . For the reasons that I have already indicated, it was not patently unreasonable for the Board to extend this approach to applications under

section 44. (iv) Board's decision amends bargaining unit without a request from either party

[ 48 ] In the absence of specific statutory authorization, counsel argued, it was patently unreasonable for the Board to amend the certification order by changing the bargaining unit on the basis of its determination that a sale of part of a business had occurred. The certification order issued to give effect to the Board's

section 44 declaration differed from the original in two respects: Piedmont was substituted for U.S. Airways as the employer and the amended order applied only to customer service work performed at Ottawa. [ 49 ] Counsel for Piedmont argued that, while

section 45 empowers the Board to determine whether the employees affected by the sale of a business constitute one or more units appropriate for collective bargaining, it does not apply to the facts of this case, because neither the union nor the employer applied to the Board for a determination of the appropriateness of the bargaining unit. The existence of this express power in

section 45 indicates that

section 44 should not be interpreted as impliedly conferring a power to change the bargaining unit when neither party has requested a change. [ 50 ] Counsel acknowledged that

section 18.1 of the Code confers a broad power on the Board to amend a certification order or the description of a bargaining unit contained in the collective agreement if, in the Board's opinion, the appropriateness of the bargaining unit so requires. However, like the power in

section 45, this power is exercisable only "on application by the employer or a bargaining agent", and not on the Board's own motion. [ 51 ] The amended certification order in our case modified the bargaining unit because it applies only to the work previously performed for U.S. Airways at Ottawa. What had been one bargaining unit, comprising employees at Ottawa, Montreal, and Toronto, became two units after the Board amended the certificate: one for Piedmont employees at Ottawa and one for the employees of U.S. Airways at Montreal and Toronto. [ 52 ] The Board has stated that a party may apply under

section 18.1 for a modification to the bargaining unit in conjunction with a

section 44 declaration: Re Sécur Inc. , [2001] C.I.R.B.D. No. 6 at para. 59. In the present case, however, the union did not file with its application for a declaration under

section 44 a separate application invoking the Board's express power under either

section 18.1 or

section 45 to review the appropriateness of the bargaining units if the union's

section 44 application were successful. Nonetheless, the union's application under

section 44 for a declaration that the sale of a business has occurred may be regarded as an implicit request to the Board to alter the bargaining unit in the manner necessarily required if the Board makes the

section 44 declaration requested by the union. [ 53 ] In my opinion, it would be unduly formalistic in a case such as this to require a union applying under

section 44 to make a separate and express application for a modification of the bargaining unit when the change was simply consequential upon the Board's granting the declaration that had been requested. Since the modification in the present case was entirely integral to and consequential on the remedy claimed by the union, it was not made unilaterally by the Board. As the Board observed in Radiomédia Inc. and Les Entreprises de radiodiffusion de la Capitale Inc., CHRC-CHOI-FM Division , [1997] C.L.R.B.D.

No. 3 at para. 29: If the Board concludes that a sale of a business did in fact occur in the instant case, the Board has no other choice but to amend the certification order in question so that it reflects these changes. This is simply a formalizing situation. [ 54 ] Consequently, I cannot agree that the Board's decision was patently unreasonable because it altered the bargaining unit without an express request to that effect by either of the parties. F. CONCLUSIONS [ 55 ] For the above reasons, I would dismiss the application for judicial review with costs. "John M. Evans" J.A.

"I agree Marshall Rothstein J.A." "I agree B. Malone J.A." FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-438-01 STYLE OF CAUSE: Piedmont Airlines Inc. v. United Steelworkers of America et al. PLACE OF HEARING: Ottawa, Ontario

DATE OF HEARING: January 21, 2003 REASONS FOR JUDGMENT BY: Evans J.A. CONCURRED IN BY: Rothstein J.A. Malone J.A. DATED: March 25, 2003 APPEARANCES : Ms. Patricia Wilson FOR THE APPLICANT Mr. Mark Rowlinson and Mr. Robert Champagne FOR THE RESPONDENT (USWA/TCA Local 1976) SOLICITORS OF RECORD : Osler, Hoskin & Harcourt LLP Ottawa, Ontario FOR THE APPLICANT United Steelworkers of America, Transportation Communications Amalgamated Local 1976 FOR THE RESPONDENT Toronto, Ontario (USWA/TCA Local 1976)