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 February 22, 2011
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Independent Contractor

Independent Contractors Considered Workers for Health and Safety Purposes

 

By Rosalind Cooper

 

For years employers across Canada have struggled with the difference between independent contractors and employees. Individuals believed to be independent contractors are often classified as employees after their relationship ends, leading to liability for employment-related severance and other amounts.

 

The courts, human rights tribunals, and other administrative tribunals are constantly grappling with this issue. Most recently, the Ontario Court of Appeal had to consider the decision in the context of whether independent contractor truck drivers were workers within the meaning of the Ontario Occupational Health and Safety Act (OHSA).

 

How the case arose
This case arose because a company, with 11 full-time employees, didn't have a joint health and safety committee. The OHSA requires a joint health and safety committee only where there are 20 or more workers that are "regularly employed" at a workplace. In counting its workers regularly employed at the workplace, the company didn't include its independent contractor truck drivers.

 

The Ministry of Labour took a different view. It decided that the independent contractors should be included. As such, the company was violating the OHSA by failing to establish and maintain a joint health and safety committee.

 

Lower court decisions
The case ended up in trial court where the court agreed with the company's analysis. The court based its decision on a previous decision of the Ontario Labour Relations Board, where the words "regularly employed" in the OHSA were determined to apply only to workers who had a traditional employment relationship with employers. In deciding that the truck drivers didn't have a traditional employment relationship, the court considered that:

  • the truck drivers were independent owners/operators;
  • the company didn't own any of the trucks;
  • the company was a dispatch business;
  • the truck drivers paid the company a fee for its dispatch services and paid all taxes, fees, and tolls;
  • the truck drivers arranged and paid for their own Ontario Workplace Safety and Insurance Board coverage; and
  • the drivers didn't operate from offices of the company; they went there only to submit paperwork.

The Ministry of Labour appealed the decision to the Ontario Court of Justice, which agreed with the trial court. It went further and acknowledged that the truck drivers:

  • were entitled to refuse employment opportunities offered by the company;
  • could work for themselves or someone else;
  • owned and maintained their own vehicles; and
  • commonly structured their trucking services as independent businesses.

Court of Appeal comes to different conclusion

The Ministry of Labour appealed further, this time to the Ontario Court of Appeal. Here, the company wasn't so lucky. The Court of Appeal unanimously decided that the truck drivers were "regularly employed" by the company. As such, they should be counted in determining whether the company had an obligation to establish and maintain a joint health and safety committee.

 

In making its decision, the Court of Appeal said that the phrase "regularly employed" should be interpreted generously rather than narrowly -- in order to guarantee a minimum level of protection for the health and safety of workers. In coming to its conclusion, the Court of Appeal:

  • determined that the truck drivers were "employed" by the company. In doing so, it relied on the definition of "employer" in the OHSA as "a person who employs one or more workers or contracts for the services of one or more workers and includes a contractor or subcontractor who performs work or supplies services;" and
  • determined that they were "regularly" employed based on the dictionary definition of "regularly." The Court of Appeal said that this term is analogous with "normal," "customary," and "usual" and that the evidence showed it was normal or customary for the company to have between 30 and 140 drivers working for it.

Significance of decision

This is the first time a Canadian court has considered whether independent contractor workers are to be included when determining whether an employer must establish and maintain a joint health and safety committee under the OHSA. This ruling will have ramifications for the interpretation of other provisions of the OHSA and health and safety statutes across the country with similar wording.


Read more from Northern Exposure

 

Want to learn more about Canadian employment law for U.S. employers? Call or email Dominique Monet, national group leader, Labor, Employment & Human Rights Group, at Fasken Martineau to receive a free copy of the firm's Doing Business in Canada special report. Call Dominique at (514) 397 7425 or send him an email.

 

 

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