SpaceX labour fight shows how jurisdictional lines matter for Canadian HR in emerging industries
When it comes to space, which employment laws apply? That question has been in the spotlight recently with SpaceX feuding with the U.S. National Labor Relations Board (NLRB).
The very public battle dates back to 2022, when the company fired eight engineers who helped draft and circulate an open letter criticizing Elon Musk’s conduct and calling for stronger workplace standards. The letter prompted unfair labour practice charges at the NLRB, and for the next two years, SpaceX aggressively challenged the board's authority and the constitutionality of its structure in federal court.
SpaceX won a key ruling in August 2025 when the Fifth Circuit court found the board’s setup was likely unlawful and securing an order blocking enforcement actions against the company. A more recent decision by the National Mediation Board cements that finding, concluding that SpaceX’s engineers fall under its jurisdiction rather than the NLRB’s.
While Canadian employers might not have to worry about outer space, questions still arise when it comes to which jurisdiction applies across the country.
"The default function is that employment law is something that's dealt with at the local level, at the provincial level, unless it's specifically carved out and given to the federal jurisdiction," says Ian Campbell, partner at Faskenn.
However, this isn’t set in stone, he says; as industries grow and contract with economic factors such as technology and job markets, jurisdictional lines are changing as well, and employers can benefit from awareness of where those lines lie.
How Canada draws the line – and why it is shifting
Federally regulated employers, mainly engaged in a few main industries including finance, telecommunications and cross-border transportation, have for decades been governed by regulations that “were viewed as being more favourable to employers than at least some provincial jurisdictions," says Campbell.
Many employers – particularly in transportation – were content to accept that classification, he adds, stating that some companies “just never really turned their mind to the issue.”
That is changing. Over the last eight to 10 years, Campbell says, there have been significant changes in how federal regulations are imposed and implemented, leading some employers to question more closely where their regulatory requirements lie.
“The amount of [federal] reporting and policy requirements that have been imposed have increased exponentially,” Campbell says, with the result that “many people” now “carefully analyze the question of jurisdiction in a way they hadn't done before.”
Legal implications for federal/provincial jurisdictional missteps
For most Canadian employers, Campbell says, jurisdiction “is for 95 per cent of the population entirely uncontroversial, and it's black or white.” In sectors like retail, local services or small manufacturing, he explains, there is little doubt that provincial standards govern.
But for those in transportation, logistics, telecom and other emerging or evolving industries, many employers don’t want to operate under different sets of rules for different sections of operations.
George Waggott, Toronto employment and labour lawyer at George Waggott Law, warns that attempting consolidation or offloading of functions to simplify compliance is not an easy thing.
“It's not something that you can just easily say, ‘Well, let's call ourselves provincial, or let's call ourselves federal,’” he says. “You need to actually have a good proper compelling argument, and even in cases where that's been what happens, it can be disputed.”
The consequences of getting it wrong can surface years later when complaints are filed and jurisdictional questions are raised – early missteps on jurisdiction can delay proceedings and result in “double-costed compliance.” The matter is complicated by the fact that there is no simple way to confirm jurisdiction ahead of proceedings.
Unlike tax questions, Waggott points out, which can be answered ahead of filing, employers are left in the dark when it comes to jurisdictional questions.
“The labour tribunals don't do that. If you're not sure which side of the law you're going to be on or not in your organization, there's no easy way to find out,” he says – putting the onus on internal HR and legal teams to do their own due diligence before a dispute lands at a board or court.
“You just have to go and review it and get advice, make some strategic decisions based on what you think it likely will be.”
Gray areas in trucking, telecom and federal-adjacent work
For Waggott, the most difficult questions for employers can arise in industries that sit close to federal operations but are not at the core of them. The basic rule is simple – but applying it to modern operations is not.
For example, he points to employees installing equipment for local employers who are working on federal contracts, or working at call centres that service federal banks – the business at the centre may clearly be federal, but the status of contractors and service providers is less obvious, creating an employment law and compliance gray area.
However, the formula is still simple in theory, says Waggott.
“Unless there's a specific federal heading you can fall under, it's provincially regulated... If somebody is working delivering parts to a rocket ship in Manitoba, that work is governed by Manitoba law.”
Astronauts as special category under Canadian law
For those who are wondering, if a similar scenario to the SpaceX legal battle were to unfold in Canada, the answers would be quickly found, with rules governing astronautical staff written directly into statute.
Under the Canadian Space Agency Act, regular Agency employees are appointed under the Public Service Employment Act, but astronauts are treated differently. The Act provides that “the Agency may appoint and employ astronauts in positions in the Agency and may, with the approval of the Governor in Council, establish the terms and conditions, including remuneration, of their employment.”
They are excluded from the usual federal public sector labour regime, but they are employees under the Government Employees Compensation Act, eligible for pensions under the Aeronautics Act.
