By one of several different tests, not one repeated test — a business can be federal because of what it does, or federal because of what it is, and checking only one route can produce the wrong answer.
Short answer
Canada Labour Code s.2 defines a “federal work, undertaking or business” as any work within the legislative authority of Parliament, and lists several genuinely different routes to that status — a functional test for an undertaking “connecting any province with any other province, or extending beyond the limits of a province,” and separate, geography-free status tests for a bank, an authorized foreign bank, a radio broadcaster, or a work declared by Parliament to be for the general advantage of Canada. A target that never crosses a provincial line can still be federal on the second kind of test.
An intraprovincial carrier absorbed into an interprovincial network becomes federal the moment its routes actually cross a border — as a matter of constitutional law, whether or not anyone treats the acquisition as an employment-law event. Two continuity mechanisms then apply on two different things: Canada Labour Code s.44(3) carries the certified bargaining agent and any collective agreement across the change, and s.189(1.3) separately preserves individual employees’ pre-federal service for continuity purposes, so years worked entirely under provincial law still count once the same jobs sit under the Code. The rule runs both directions too: Quebec’s Labour Code art. 45.3 and British Columbia’s Labour Relations Code s.36 carry bargaining rights the other way where a federal business becomes provincial.
Paragraph (g) of the s.2 definition makes “a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act” federal in its own right — nothing in that paragraph asks where its branches are or whether it has ever done business across a border. A single-branch trust company that never leaves one province is caught the same way a national branch network is. Paragraphs (f) and (h) do the same for radio broadcasters and works declared for the general advantage of Canada. Confirming a target’s operations stay inside one province rules out only the functional test; it says nothing about a status-based designation, which has to be checked independently — and getting it wrong sends every termination to the wrong statute, since ESA s.3(2) disapplies the Ontario Act outright to a relationship “within the legislative jurisdiction of the Parliament of Canada.”
The functional-test flip decided the target changed employment jurisdiction on closing. The status-test version is a bank branch that was federal without crossing a single border.
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