The Niagara Falls Co-operative Taxi Owners Association v. William Peters, 1980 CanLII 814

[1980] OLRB Rep. March 337

0859-79-U The Niagara Falls Co-operative Taxi Owners Association and Wiliam Manson, Complainant, v. William Peters, Carrying on business as Niagara Veteran Taxi, Respondent.

BEFORE: Pamela C. Picher, Vice-Chairman and Board Members J.A. Ronson and D. B. Archer.

APPEARANCES: H. P. Rolph, Keith Jennings and William Manson for the complainant; J. A. Roffey for the respondent.

DECISION OF THE BOARD; March 17, 1980

1. This is a complaint filed under section 79 of The Labour Relations Act. The com­plainants, The Niagara Falls Co-operative Taxi Owners Association and William Manson, al­lege that the respondent company acted contrary to the provisions of sections 3, 56, 61, 63, 70 and 71 of the Act by terminating Mr. Manson's relationship with the respondent, Niagara Veteran Taxi.

2. As a preliminary matter, the employer contends that Manson, a taxi cab owner operator who until the date of his termination worked in association with Niagara Veteran Taxi, is not an employee for the purposes of the Act and is not, therefore, entitled to its pro­tection. The complainants, on the other hand, argue that Manson is a dependent contractor within the meaning of section 1(1)(ga) and is, therefore, an employee under the Act. The parties asked the Board to determine whether or not Manson is a dependent contractor prior to hearing the merits of the complaint. Through its Labour Relations Officer, the Board conducted an examination resulting in a transcript of evidence concerning Manson's relationship with the respondent. This is an interim decision directed solely to a determina­tion of whether or not Manson is an employee.

3. "Dependent contractor" and "employee" are defined by the Act as follows:

In this Act,

(ga) 'dependent contractor' means a person, whether or not employed under a contract of employment, and whether or not furnishing his own tools, vehicles, equipment, machinery, material, or any other thing, who performs work or services for another person for com­pensation or reward on such terms and conditions that he is in a position of economic dependence upon, and under an obligation to perform duties for, that person more closely resembling the re­lationship of an employee than that of an independent contractor;

(gb)'employee' includes a dependent contractor."

Issues to be addressed in the determination of whether Manson is a dependent contractor, therefore, include whether he performs work or services for Niagara Veteran Taxi for com­pensation or reward, whether Manson is in a position of economic dependence and whether he is under an obligation to perform duties for Niagara Veteran Taxi so that he is in a posi­tion more closely resembling the relationship of an employee than an independent contrac­tor.

4. Clearly Manson performs services for Niagara Veteran Taxi. He services charge account runs and any other requests for taxi transportation which come to Niagara Veteran Taxi and are radio dispatched to him. The more difficult question is whether he performs the work or services for compensation or reward within the meaning of section 1(1)(ga) of the Act. The respondent argues that Manson is not a dependent contractor because, among other things, he does not perform services for Niagara Veteran Taxi for compensation or re­ward. Manson's taxi services are compensated; but they are compensated by his passengers, not by Niagara Veteran Taxi. It is common ground that, in general, Niagara Veteran Taxi does not pay any money to Manson or any other owner-operator of a taxi related to Niagara Veteran Taxi. In fact payments flow in the other direction, from Manson and other owner-operators to Niagara Veteran Taxi. When Manson first entered into his arrangement with Niagara Veteran Taxi thirty-two years ago, for example, he was required to pay an initial fee of $500.00. Thereafter he paid weekly "dues" which at the time of his discharge were $51.50. The weekly dues entitled Manson to use of the company's radio-dispatch service and other support facilities.

5. When Manson checks on the air, the company, through its dispatch service, as­signs him runs. In general, Manson collects the full fare for these runs direclty from the pas­senger. There are certain situations, however, in which money passes from Niagara Veteran Taxi to Manson and other owner-operators. The respondent operates charge accounts and provides certain customers with regular taxi service. The practice is for the owner-operator to make out a charge slip for the fare and collect payment directly from Niagara Veteran Taxi which in turn receives payment from the customer by way of the charge account. Niag­ara Veteran Taxi can be viewed in that transaction as a conduit for compensation that flows essentially from the customer to the owner-operator.

6. The Board has previously had occasion to consider whether compensation flowing from a third party falls within the dictates of section 1(1)(ga). In Blue Line Taxi Co. Limited, [1979] OLRB Rep. Nov. 1056, the Board stated at 1065:

"In our view this single factor [that all compensation or reward flows to the owner-driver from the passengers] cannot be allowed to obscure the fact that the control of work opportunities by the respondent is of, and in itself, the sine qua non of the economic dependence which here ex­ists, and the form of compensating for the service performed is deter­mined by the type of market being served. This form of compensation, combined with the stand rental flowing back to the respondent, must be viewed in the total context of the taxi industry, and is not sufficient to make the driver more closely resemble an independent contractor than an employee."

Section 1(1)(ga) does not stipulate that the compensation or reward must flow directly from the person with whom it is argued one has an employment relationship. Given the generality of the wording of section 1(1)(ga) and recognizing that the Act must be responsive to differ­ences that exist from one industry to another, the Board concludes that the compensation received by Manson from third party passengers falls within the parameters of "compensa­tion" referred to in section 1(1)(ga).

7. To what extent was Manson economically dependent on Niagara Veteran Taxi? The respondent argues that he could not be considered economically dependent because he, as with all Niagara Veteran Taxi owner-drivers, always had the concurrent option of picking up fares independently from its dispatch service. The evidence establishes that occasionally, due to an owner-driver's lateness in checking on the air or his misconduct, he is suspended or "cutoff the air" for a day or more by the respondent. The respondent submits that he is not economically dependent on Niagara Veteran Taxi because when he is cut off the air the owner-driver can still operate his taxi by using the public taxi stands or picking up private fares.

8. The amount of work available through independent pick-ups in Niagara Falls var­ies substantially with the tourist seasons. Manson testified that the period from July through Labour Day is busy. During that time about one-third of his total business would be derived through independent pick-ups, with two-thirds coming from the Niagara Veteran Taxi dis­patch service. In the off-season, however, Manson testified that the bottom drops out of the taxi business and that in that period, which constitutes three-quarters of the year, 90 per cent of his business would flow from the dispatch service. Manson emphasized that in the off-season charge runs would prove particularly important because they provided a sizeable amount of predictable business. Some days he would make only $10.00 to $12.00 above the charges. The economic importance of Manson's relationship with Niagara Veteran Taxi is under-scored by his earnings since his discharge. During that time he has worked exclusively as an independent. His maximum daily earnings have been $24.00. He testified that while working with Niagara Veteran Taxi, he might have made between $110.00 and $120.00 a day. In addition to the charge runs, the difference may further be attributable to the respon­dent's working arrangements with Dominion Stores, Skylon and Loblaws, all of which have direct telephone lines to Niagara Veteran Taxi. Stands at some key locations in Niagara Falls are restricted to the respondent's cabs.

9. The Board concludes from the evidence that the small amount of work which Manson obtained independently of Niagara Veteran Taxi was in the nature of a seasonal supplement which in the circumstances does not detract from the substantial reality that Manson was economically dependent on Niagara Veteran Taxi. (See Flintkote Company of Canada Limited, [1978] OLRB Rep. Sept. 822.) Manson relied on Niagara Veteran Taxi for the vast bulk of his economic gain. He did no advertising on his own behalf and depended for his livelihood on the goodwill developed by Niagara Veteran Taxi rather than by him­self. We note in this regard that Manson was required to have a roof sign on his taxi with Ni­agara Veteran Taxi's name and phone number. Manson's economic dependence is further exemplified by the fact that he purchased his relationship with Niagara Veteran Taxi with a $500.00 payment and maintained it with a weekly payment of $51.50. (See Dufferin Aggregates, [1978] OLRB Rep. Mar. 278.) If Manson were not dependent on Niagara Vet­eran Taxi for his economic well-being, a question would arise as to why he would pay such substantial sums to maintain his association with the respondent. The Board views this as strong evidence of the need for an association with a dispatching service. The importance of an association with a taxi company was demonstrated to some extent by Manson's testimony relating to his inability to sell his father's taxi cab and license which were not associated with Niagara Veteran Taxi even after reducing the price three times. Manson contrasted this ex­perience with the example of his brother's taxi cab and license which were associated with Niagara Vetran Taxi and sold in one day.

10. We turn now to consider the question of whether Manson was under an obligation to perform duties for Niagara Veteran Taxi in a way more closely resembling the relation­ship of an employee than an independent contractor. In this respect the amount of control exerted by Niagara Veteran Taxi over Manson's work becomes particularly relevant.

11. Some aspects of Manson's working relationship with Niagara Vetran Taxi have the ear-marks of the situation typical of an independent contractor. If Manson is sick and can't work on any particular day or succession of days, he need not notify Niagara Veteran Taxi. He can take vacations whenever he wants and for however long he wants. If he were to return from vacation later than expected it would not be incumbent upon him to notify Niag­ara Veteran Taxi of his delay. Manson is fully responsible for the care of his own taxi-cab. He pays, for example, for all repairs. He is financially responsible for his car insurance and license plates. Additionally, Niagara Veteran Taxi makes no deductions for income tax, Unemployment Insurance Benefits, Canada Pension Plan or Workmen's Compensation coverage. Nor does Niagara Veteran Taxi contribute to any health, life or accident insur­ance plans in which Manson participates.

12. A careful review of the evidence, however, establishes that Mr. William Peters, the owner of Niagara Veteran Taxi, exerts a high degree of control over the work of Manson and the other owner-drivers. If owner-operators want to work the day shift they have to check in by 8:15 in the morning or they will be cut off from dispatching services for the entire day. If they work the day shift they're not allowed to work on the air past 9:00 p.m. While an owner-operator is ordinarily allowed to decide for himself what shift to work, the evidence establishes that Niagara Veteran Taxi exerts the ultimate authority in this regard to ensure that it has a sufficient number of cars on each shift. It may dictate, for example, that an owner-operator must put a driver on his car if he does not want to drive the shift. Manson testified that once he refused to put a driver on because he had had too many accidents using drivers. Peters insisted, however, and Manson testified that he was left with no choice but to accommodate Peters. Moreover, when an owner-operator on his own initiative wants to put a driver on his cab, as Manson has done on occasion, the driver has to be approved by Peters.

13. Peters has established rules. Many of them are reflective of the controlling By­Laws of the Niagara Regional Board of Commissioners of Police. Some are personal to Ni­agara Veteran Taxi. All of these rules are enforced by the respondent through the use of penalties ranging from fines to suspension (being cut off from dispatch services) to dis­charge. The public By-Laws establish dress regulations, but Peters has imposed an addi­tional rule that prohibits owner-operators from wearing shorts in the summer. If an owner-operator is dispatched to a charge account run and subsequently decides that he would prefer to take an independent pick-up, he is liable to be cut off the air if he doesn't service the charge account. If an owner-operator takes a fare dispatched to someone else, he is sub­ject to discipline. If a complaint is received from a customer about a driver's language or manners then he may be cut off the air.

14. The nature of the control Peters exerts over the owner-operator is reflected in a notice issued on May 1, 1979:

"NIAGARA VETERAN TAXI CO.

CORNER BRIDGE & SECOND

NIAGARA FALLS, ONTARIO

May 1, 1979

NOTICE: ALL OWNERS AND DRIVERS

THE PRACTICE OF CHECKING OUT ON JOBS THAT MAY

NOT BE TO YOUR LIKING MUST STOP AT ONCE.

ALSO, CERTAIN DRIVERS HAVE AN ARRANGEMENT

WITH BELLHOPS AND A PAYOLLA EXISTS FOR OUT OF

TOWN TRIPS; OUR SWITCHBOARD WILL NOT CATER TO

THESE DRIVERS FOR PERSONAL CALLS.

THIS NOTICE IS A FAIR WARNING TO ALL; YOU WILL BE

DISMISSED IF THIS PRACTICE CONTINUES - DRIVERS AND

OWNERS.

'William Peters'

A warning of this nature reflects a permanent and continuing relationship controlled by a party closely resembling the typical employer.

15. The totality of the evidence satisfies the Board that Manson, associated solely with Niagara Veteran Taxi for thirty-two years, was economically dependent on it and under an obligation to perform duties for it in a manner that more closely resembles the relationship of an employee than an independent contractor.

16. Counsel for the respondent referred the Board to its decision in Seven-Eleven Taxi, [1976] OLRB Rep. April 134 arguing that its similarity to the instant case should cause the Board in this case to conclude in a like manner that the owner-drivers are independent rather than dependent contractors. Important differences, however, exist between the evidence discussed in Seven Eleven Taxi and the evidence before this Board. The evidence in the Seven-Eleven Taxi reflects far fewer instances of control exerted over the owner-drivers by the company than in the instant case. There is no indication in Seven Eleven Taxi, for exam­ple, that the owner-drivers had to report on the air at a particular time in the morning if they wanted to work the day shift or that there was a limit to the number of shifts they could work. As well, there is no suggestion that, at other times, to insure a sufficient number of cars on each shift, Seven-Eleven Taxi Ltd. might have required owner-drivers to operate their cars either by driving an extra shift themselves or by putting drivers on their cars. Further­more, the Board in Seven-Eleven Taxi did not have before it evidence of a substantial scheme of rules and discipline as was established in the instant case. Evidentiary differences such as these readily distinguish Seven-Eleven Taxi from the instant case. In the Board's view Manson's relationship with Niagara Veteran Taxi may be compared more closely to the circumstances of the owner-drivers in Blue Line Taxi, supra, a case in which the Board distinguished Seven-Eleven Taxi and concluded that the persons in question were dependent rather than independent contractors.

17. For the reasons set out above, therefore, the Board is satisfied that William Man-son is a dependent contractor within the meaning of section 1(ga) of The Labour Relations Act and, therefore, having regard to the provisions of section 1(gb) of the Act, an employee for the purposes of the Act.

18. Manson testified that he only occasionally hires drivers to operate his taxi during his non-working hours. Such an irregular use of an extra driver is not sufficient for the Board to conclude that Manson is engaged in an entrepreneurial activity and does not therefore de­tract from his status as an employee. This conclusion is also consistent with the Board's deci­sion in Blue Line Taxi.

19. The employer's preliminary objection to the section 79 complaint based on the contention that Manson is not an employee under the Act is therefore dismissed. The Board will hear the complaint on its merits.