Truck drivers who are owner-operators may be classified as independent contractors, but an independent contractor agreement does not necessarily determine a worker’s true employment status. Depending on the circumstances, a truck driver classified as an independent contractor may actually be an employee or dependent contractor with additional employment rights.
Monkhouse Law successfully represented an owner-operator truck driver in K. v. Cascades Recovery Plus, 2021 ONSC 3225, defeating the employer’s attempt to have his wrongful dismissal and misclassification action dismissed for lack of jurisdiction.
The Ontario Superior Court of Justice dismissed the employer’s motion and awarded the plaintiff $13,045 in costs. The employer subsequently sought leave to appeal. In K. v. Cascades Recovery Plus, 2021 ONSC 6176, the Divisional Court dismissed the motion for leave to appeal and awarded the plaintiff a further $5,000 in costs.
The decisions allowed the plaintiff to continue pursuing his claims in court. They did not determine whether he was ultimately an employee, dependent contractor or independent contractor.
Background of the Truck Driver Misclassification Case
In 2019, the drivers and drivers’ helpers of Cascades Recovery Plus, a division of Cascades Canada ULC and Metro Waste Paper Recovery Inc. (“Cascades”), successfully unionized in Toronto. The bargaining unit excluded supervisors and those above the rank of supervisor, dispatchers, and office and clerical employees.
The plaintiff had been engaged by Cascades approximately 20 years earlier under an independent contractor agreement as an “Owner Operator Truck Driver.” His compensation was approximately $96,096 per year.
The plaintiff claimed that despite being classified as an independent contractor, the actual working relationship resembled employment. His evidence on the motion was that he worked exclusively for Cascades for 20 years and was economically dependent on the company. He alleged that he could not set his own schedule, was told when and where to make deliveries, was monitored by GPS, required approval to take vacation, could not refuse work or negotiate his pay, wore a Cascades uniform and had Cascades decals on his truck. He also claimed that he had no opportunity to subcontract his duties.
Cascades disputed the plaintiff’s characterization of the relationship. The company maintained that he was an independent contractor who provided truck-driving services using his own truck, paid his own expenses and submitted invoices for his services.
After the workplace unionized, the plaintiff brought a wrongful dismissal action seeking damages that included unpaid overtime, vacation and holiday pay, and CPP and EI deductions.
Cascades brought a motion seeking to have the action stayed or dismissed. It argued that if the plaintiff was actually an employee or dependent contractor, he would fall within the union’s bargaining unit and his dispute would have to proceed through the grievance and arbitration process rather than through the courts.
Monkhouse Law lawyers Andrew Monkhouse and Miguel Mangalindan represented the plaintiff and successfully opposed the motion.
Monkhouse Law Successfully Defeats Employer’s Motion
In K. v. Cascades Recovery Plus, 2021 ONSC 3225, the Ontario Superior Court of Justice rejected the employer’s attempt to have the action dismissed at this stage of the proceeding.
The court considered the plaintiff’s position that his claim arose from an agreement that pre-dated the unionization of the workplace. The existence and nature of that agreement were central disputed issues that could not be finally determined on the employer’s preliminary jurisdiction motion.
The court concluded that it was open to a trial judge to find that a pre-employment agreement existed. The employer’s motion was therefore premature, and the plaintiff could not be prevented at that stage from arguing that the court had jurisdiction over his claim.
The motion was dismissed.
As the successful party on the motion, the plaintiff was awarded $13,045 in costs on a partial indemnity basis.
Employer’s Attempt to Appeal Is Also Dismissed
The employer subsequently sought leave to appeal the decision to the Ontario Divisional Court.
In K. v. Cascades Recovery Plus, 2021 ONSC 6176, the Divisional Court dismissed the employer’s motion for leave to appeal.
The court also awarded the plaintiff a further $5,000 in costs, payable by the employer.
Monkhouse Law’s Andrew Monkhouse and Miguel Mangalindan represented the plaintiff in the Divisional Court proceeding.
As a result, the original order remained in place and the plaintiff was able to continue pursuing his action in court.
Are Truck Drivers Independent Contractors?
Whether a truck driver or owner-operator is an independent contractor depends on the actual working relationship, not simply the title used by the company or the existence of an independent contractor agreement.
The main question courts and labour arbitrators may consider when determining whether someone is an employee or an independent contractor is: whose business is it?
Factors that may be considered include:
- Whether the worker provides their own equipment
- Whether the worker can hire helpers or subcontract work
- The degree of financial risk taken by the worker
- The level of control exercised by the possible employer
- The worker’s opportunity for profit and risk of loss
This list is not exhaustive and no one factor is necessarily determinative. An independent contractor agreement is also not necessarily determinative. The actual circumstances of the working relationship must be considered.
Independent Contractor Misclassification in the Trucking Industry
Misclassification can have serious consequences for workers in Ontario. While a true independent contractor may have considerable autonomy, a worker who is incorrectly classified as an independent contractor may lose access to employment rights and entitlements that would otherwise apply.
A misclassified employee may perform work in circumstances that resemble an employment relationship while the employer avoids responsibilities relating to termination pay, severance pay, overtime, vacation pay, holiday pay, Canada Pension Plan contributions and Employment Insurance.
The fact that a truck driver owns or operates a truck, is described as an “owner-operator,” or has signed an independent contractor agreement does not by itself determine the worker’s legal status. The entire working relationship must be considered.
Can a Misclassified Truck Driver Go to Court?
Whether a worker can bring a misclassification claim in court can become more complicated when the workplace is unionized.
A collective agreement sets out the terms of the relationship between a union and an employer. In Ontario, labour arbitrators generally have exclusive jurisdiction over disputes arising from the interpretation, application, administration or violation of a collective agreement.
When determining whether a dispute belongs before the courts or a labour arbitrator, courts consider the “essential character” of the dispute.
In W. v. Ontario Hydro, 1995 CanLII 108 (SCC), the Supreme Court of Canada considered whether the essential character of a dispute arose from the interpretation, application, administration or violation of a collective agreement.
In C. v. BML Multi Trades Group Ltd., 2003 CanLII 34634 (ON CA), the Ontario Court of Appeal addressed the jurisdiction of a labour arbitrator to determine whether an individual was an employee within the meaning of a collective agreement.
However, in G. v. Ottawa (City), 2003 SCC 14, the Supreme Court of Canada considered claims arising from an alleged agreement that pre-dated the workers becoming members of a bargaining unit. The Court held that the existence of the alleged pre-employment agreement raised a disputed factual issue that could not be resolved through a preliminary jurisdictional motion.
The Ontario Superior Court found the reasoning in G. v. Ottawa (City) highly applicable to the issues raised in K. v. Cascades Recovery Plus.
What Did the Court Decide in K. v. Cascades Recovery Plus?
The employer argued that if the plaintiff was actually an employee or dependent contractor, his dispute belonged within the union’s collective agreement and should therefore be determined through labour arbitration.
The plaintiff argued that his claim arose from his alleged misclassification under an agreement that existed long before the workplace became unionized.
The court did not determine at this stage whether the plaintiff was ultimately an employee, dependent contractor or independent contractor. Instead, it concluded that the disputed issues surrounding the pre-existing agreement could not properly be resolved on the employer’s preliminary jurisdiction motion.
The court therefore dismissed the employer’s motion and awarded the plaintiff $13,045 in costs.
When the employer subsequently sought leave to appeal, the Divisional Court dismissed that motion as well and awarded the plaintiff a further $5,000 in costs.
These decisions were significant for the plaintiff because they allowed him to continue pursuing his action through the courts rather than having it dismissed at the preliminary stage.
Monkhouse Law’s Experience With Worker Misclassification Cases
Monkhouse Law has represented employees and workers in a number of reported decisions involving employment status and worker misclassification.
In K. v. Cascades Recovery Plus, Andrew Monkhouse and Miguel Mangalindan successfully opposed the employer’s jurisdiction motion and subsequently opposed its attempt to obtain leave to appeal.
The case is one example of Monkhouse Law’s broader employment litigation experience. Learn more about Monkhouse Law’s notable employment law cases and reported decisions.
Have You Been Misclassified as an Independent Contractor?
Misclassification can have serious financial consequences for workers. It may affect rights relating to paid time off, overtime, termination notice, severance pay, Employment Insurance and Canada Pension Plan contributions.
Truck drivers and owner-operators should not assume that signing an independent contractor agreement automatically determines their employment status. The legal classification of a worker depends on the circumstances of the working relationship.
Monkhouse Law has experience representing workers in employee and independent contractor misclassification matters, including misclassification class actions and reported employment law decisions.
If you are a non-unionized worker and believe you have been misclassified as an independent contractor, contact Monkhouse Law for a free 30 minute phone consultation.
Past results do not guarantee future outcomes. Every employment matter depends on its own facts and applicable law.