Who is the Employer?

Several recent decisions of courts and tribunals across Canada have answered the question “who is the employer?” In three recent decisions, a broad view was taken of the concepts of “employee” and “employment,” while a recent decision of the Alberta Court of Appeal moves in a different direction.

Ontario Court of Appeal

In Ontario (Ministry of Labour) v. United Independent Operators Limited, a truck driver was seriously injured at work when he was crushed between two trucks. The Ministry of Labour investigated and determined that United had failed to establish a joint health and safety committee, contrary to the Occupational Health and Safety Act. The Act requires a joint health and safety committee to be established at a workplace where 20 or more workers are “regularly employed”.

United argued that it did not have enough workers to warrant the establishment of a health and safety committee, as the truck drivers were not regularly employed, but were independent owners and operators. United stated that it essentially acted as a dispatch service, to which the drivers paid fees in exchange for dispatch services. The drivers owned their own trucks and were responsible for all of their own taxes, fees, tolls and workers’ compensation coverage. They attended at United’s offices only to submit the necessary paperwork for payment.

However, the Ontario Court of Appeal determined that independent contractors are “regularly employed” for the purposes of the Act. The Court explained that, as a remedial public welfare statute with the purpose of establishing minimum levels of protection for the health and safety of workers, the Act must be interpreted generously. A narrow interpretation of “regular employment” would be contrary to the purpose of the legislation. The Court also found that the truck drivers were “workers” pursuant to the definition under s. 1(1) of the Act: “a person who performs work or supplies services for monetary compensation”.

Accordingly, the Court held that truck drivers who normally perform services for an organization are “regularly employed” by that organization, and must therefore be counted when determining whether the threshold number has been reached for the creation of a joint health and safety committee.

British Columbia Human Rights Tribunal

The British Columbia Human Rights Tribunal (“the Tribunal”) recently found in McCormick v. Fasken Martineau DuMoulin LLP that an equity partner in a law firm was an “employee” of the firm. The decision was the result of a complaint brought by a partner of the firm with regard to mandatory retirement provisions in the firm’s partnership agreement.

The Court held that, although an equity partner at a large firm is not an employee in common law or for other statutory purposes, a partner is nevertheless an “employee” under the Human Rights Code. The Tribunal determined that a broad and liberal interpretation must be accorded to quasi-constitutional statutes, including human rights legislation. The Tribunal explained that, because the Code exists to provide protection against discrimination, the definition of employee must be interpreted generously.

Upon examining the facts of the case in light of the traditional factors to be considered in determining employment status, the Tribunal found that an employment relationship did in fact exist.

Alberta Labour Relations Board

The Alberta Labour Relations Board recently released four concurrent rulings which determined that taxi drivers, regardless of whether they are owner-operators or whether they lease vehicles from taxi companies or other owner-operators, are employees pursuant to Alberta’s Labour Relations Code.

The Board found that the dispatch company had significant control over the taxi drivers and how they carried out their work. All drivers were required to sign an agreement and adhere to certain rules that could be enforced by the dispatch company. Further, the Board determined that the dispatch company had a substantial influence on the work made available to drivers, including deciding which taxi stands to contract for, how to operate the dispatch services, and how calls were distributed between the drivers. The taxi owner-operators also differed from other independent contractors in that they had entered in to an exclusive commercial relationship with the dispatch company, rather than establishing relationships with numerous customers.

As a result of the degree of control and supervision exercised by the dispatch company over the taxi drivers, the Board determined that the drivers must be treated as employees, and that they should therefore be allowed to form bargaining units and bargain collectively.

Alberta Court of Appeal

In a decision of the Alberta Court of Appeal in Lockerbie & Hole Industrial Inc. v. Alberta, the Court of Appeal took a different approach. The Court held that private landowners who employ contractors at arm’s length to perform work are not “employers” under the Alberta Human Rights Act (AHRA). Consequently, the landowners are not the parties responsible for ensuring that site-access policies are non-discriminatory; rather, it is the arm’s length contractor who bears the responsibility of ensuring compliance with the AHRA.

The complainant worked for Lockerbie & Hole, which was a subcontractor of Syncrude. Syncrude had a policy of drug testing workers before they were allowed on a Syncrude-owned site. When the complainant tested positive for marijuana, he was not permitted to work at the site for at least six months. The complainant then filed a complaint with Alberta’s Human Rights and Citizenship Commission, alleging discrimination due to a drug addiction. The Human Rights Panel determined that Syncrude was an “employer” pursuant to the AHRA, despite the fact that Syncrude did not hire or pay the complainant, nor did it direct his work.

The Court of Appeal disagreed, and took a contextual approach to the issue of “Who is the employer?” Given that there was more than one possible co-employer, the Court considered additional factors, including the relationship between the two possible employers.

Ultimately, the Court determined that Lockerbie & Hole was the sole employer, and that no employment relationship existed between Syncrude and the complainant. As a result, only Lockerbie & Hole was held responsible for ensuring that the complainant’s rights under the AHRA were respected.

Conclusion

Given the liberal and purposive interpretation that courts and tribunals have assigned to certain legislation, including laws related to occupational health and safety and human rights, it is possible for judges and arbitrators to find the existence of an employment relationship where one may not have expected it. However, the decision of the Alberta Court of Appeal in Lockerbie is clearly at odds with this approach, and has the effect of limiting the definitions of “employee” and “employer”. It remains to be seen whether other courts and tribunals will be persuaded by the reasoning in Lockerbie. In all cases, however, the determination of who the employer is, and whether an employment relationship exists at all, will turn on the particular facts of the case.