[1981] OLRB Rep. February 192
0574-80-R Canadian Union of United Brewery, Flour, Cereal, Soft Drink and Distillery Workers, Applicant, v. Miore Distributing Co. Limited, Respondent.
BEFORE: Ian C.A. Springate, Vice-Chairman, and Board Members H.J.F. Ade and M.A. Ross.
APPEARANCES: E. G. Posen and R. Hill for the applicant; and B. Pollock and J. Manafo for the respondent.
DECISION OF THE BOARD; February 12, 1981
This is an application for certification in which the Board issued a decision on July 7, 1980.
The Board finds that the applicant is a trade union within the meaning of section 1(1) (n) of The Labour Relations Act.
The parties are in agreement that the respondent employs two individuals who would appropriately be included in the bargaining unit under consideration. However, they are in disagreement as to the status of twelve other individuals. The respondent takes the position that these twelve are independent contractors not covered by The Labour Relations Act. The applicant, however, submits that the twelve are "dependent contractors" as that term is defined in section 1(1) (ga) of the Act and accordingly, by force of section l(l)(gb), they are to be considered employees for the purpose of the Act.
The respondent is primarily engaged in the distribution of soft drinks to private residences. The individuals in dispute all use trucks to deliver soft drinks, and certain other products, to customer's homes. For convenience purposes, these individuals will henceforth be referred to simply as "drivers". A labour relations officer has conducted an inquiry into the status of four of the drivers. The parties are in agreement that the Board should treat these four as being representative of all of the drivers.
Three of the four drivers examined work five days per week, apparently servicing a different route each day. The other driver, Mr. G. Caserta, at one time also worked five days per week but he returned one of his routes to the respondent when he concluded that the small number of customers on the route did not warrant the work involved. Accordingly, Mr. Caserta now works only four days per week.
The trucks used by the drivers to make their deliveries are parked overnight at the respondent's premises. In the morning, the drivers come in and unload the cases of empty bottles picked up the day before, and then load up with full bottles. A driver’s work day is completed when he has finished that day's route. This may require that he work into the evening.
While doing their routes, the drivers usually wear a uniform bearing the respondent's name, although they are not required to do so. The cost of the uniforms is shared equally between the respondent and the drivers.
Generally, when a driver starts delivering for the respondent, he is put through a training program lasting a number of weeks. During this period, the driver receives a set salary and uses a company-owned vehicle. At the end of his training period, a driver is taken off salary and advised that he is expected to purchase his own truck. Two of the four drivers examined had purchased their trucks from the respondent. Another of the drivers Mr. L. Catinella, has been delivering the respondent's products for some months now but is still using a company owned truck. The respondent has made it clear to Mr. Catinella, however, that he must shortly buy a vehicle of his own either from the respondent or from some other source.
With one exception, the driver's trucks are all painted in the respondent's colors and all of them bear the respondent's name. The respondent pays the cost of painting the trucks. Drivers are responsible for the upkeep and maintenance of their own trucks as well as for keeping them insured. The drivers treat the costs associated with insuring and operating their trucks as deductible expenses for income tax purposes. The drivers can, and usually do, purchase both gas and mechanical services from the respondent, although they are not required to do so. If a truck is not operating because of mechanical problems, a driver can generally borrow a spare truck from the respondent. Mr. Caserta, one of the drivers examined, indicated that, on one occasion, there was no spare truck available for him to use, and accordingly he rented a truck with the respondent paying the costs involved.
The respondent charges the drivers $3.25 (exclusive of a deposit on bottles) per case of soft drink and sets what Mr. Manafo, the President of the respondent, referred to as a "suggested retail price" of $4.50. The drivers collect the $4.50 retail price from the customers and in turn later pay the respondent $3.25, keeping $1.25 for themselves. Although soft drinks are the main product delivered by the drivers, they also deliver other products for the respondent, including vegetable oil and bleach, for which they also receive the difference between the amount paid by the customer and the amount later paid over to the respondent. According to Mr. Manafo, the drivers are free to charge more or less than the price suggested by the respondent and he indicated that this in fact had occurred in the past. There is nothing before us, however, to indicate that any driver currently charges a price other than that set by the respondent. Indeed, the notice to the drivers setting out the current prices nowhere states that they are merely suggested prices. All four drivers examined stated that they charge the price set by the respondent. Three of the four drivers indicated that they felt that they could not charge any other price. The fourth driver, Mr. Del Gobbo, indicated that he felt he could charge customers a lower price, but not a higher one.
Mr. Manafo stated that the respondent set a suggested retail price both so as to be able to tell potential customers what the price of the product is, and also for retail sales tax purposes. The price charged by the company to the drivers includes a seven per cent retail sales tax calculated on the basis of the respondent's suggested price to the customer. The respondent forwards this amount to the government. It should be noted that the amount forwarded to the government would only be correct if the drivers charged customers the company's suggested price.
Although the respondent discusses price increases with the drivers, the respondent has the final say in determining both the cost to the drivers and the "suggested" price to the customer. Around the beginning of March 1980, the respondent indicated it would be raising both the retail price as Well as the amount charged to the drivers. The drivers were concerned that the increase would result in a loss of customers, and on March 3, 1980, they petitioned the respondent asking that the increase to the customers not be so great, and also that the cost to the drivers be lowered. Representatives of the respondent met and discussed the matter with the drivers, but refused to alter the rates already set.
The drivers receive no remuneration for delivering the respondent's products other than the difference between what the drivers charge the customers, and what they later pay to the respondent. They receive no holiday pay, vacation pay or fringe benefits of any kind. The drivers at times extend credit on their own initiative to customers and one of them Mr. Calligaris, stated that he has lost some money by doing so.
When a driver is off work ill, or takes a vacation, a supervisor with the respondent will perform his route either using the driver's truck or one owned by the respondent. The driver is not paid for the day, even if his truck was used.
As noted above, the drivers deliver a variety of products supplied to them by the respondent. Two of the four drivers examined indicated that they also sell soap supplied to them by another company. One of the drivers, Mr. Caserta, stated that he made less than $50.00 per year selling the soap. The other driver, Mr. Catinella, indicated that some weeks he sold no soap at all and that on other weeks he might sell one or two bags, on which he made $2.00 per bag. From this information, we can assume that Mr. Catinella makes between $100.00 and $200.00 per year from the sale of soap. None of the drivers examined does any other work than that set out above. Thus the drivers receive either 100% or close to 100% of their incomes from the delivery and sale of the respondent's products.
The drivers each deliver to customers within an area assigned to them by the respondent. Most new customers are obtained by householders approaching the drivers while they are doing their rounds, although some of the drivers will knock on doors to ask people if they would like to become customers. New customers are also obtained by people phoning the respondent's offices and asking that they receive home delivery. These customers are then assigned to the driver who delivers in that geographic area. To facilitate this process, the delivery trucks bear the respondent's phone number.
One of the drivers, Mr. Caserta, has handed out free bottles of soft drink to potential new customers and both he and Mr. Calligars have given free soft drinks to existing customers with complaints about the product. In all of these cases, however, the respondent has reimbursed the two men. Another of the drivers, Mr. Del Gobbo, has also handed out bottles of soft drink to customers with complaints. It appears that in all but one instance Mr. Del Gobbo has borne the cost of the soft drink himself. The one exception was when the amount involved reached either $4.00 or $5.00 and, because it was so high, Mr. Del Gobbo arranged for the respondent to reimburse him.
One of the drivers examined stated that some two or three years ago the respondent had provided him with business cards to hand out. Mr. Del Gobbo indicated he currently hands out similar cards which he had made up at his own expense.
Three of the four drivers examined have made use of a helper. In no case was the respondent asked if the men could use a helper, and in every case the driver paid the helper directly. Mr. Catinella uses a helper on Saturdays and pays him $30.00 for the day. Mr. Calligaris sometime uses a 13 or 14 year old helper on Saturdays who he pays between$15.00 and $25.00 for the day, depending on how busy he is. Mr. Caserta's 11 year old son acts as his helper at times, for which he is paid a couple of dollars. On one occasion, Mr. Caserta was not feeling well and his nephew helped him do his rounds, for which the nephew received $25.00 worth of free ginger ale. Mr. Del Gobbo, the fourth driver examined, has not made use of a helper.
None of the drivers examined has been formally disciplined by the respondent, although one of them, Mr. Del Gobbo, indicated that one of the respondent's supervisors had spoken to him on a number of occasions with respect to his having missed some customers on his route. Mr. G. Tortorice, the respondent's supervisor, stated that when customers have complaints about the drivers, he goes out to talk to the customer and might later advise the driver involved to do better.
For each driver, there is a series of route books, apparently one for each of his delivery days. The drivers are expected to provide the respondent with the names of any new customers so that the books can be kept up to date. The route books are kept with the respondent. A route book is given to a driver on the day he delivers to customers listed in that particular route book, but is returned to the respondent the following morning. The route books are considered to be the property of the respondent.
Section 1(1)(ga) of the Act defines a "dependent contractor" as follows:
"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.
- The nature of the Board's task in determining whether a person is a dependent contractor or not has been set out as follows in the Superior Sand, Gravel & Supplies Ltd. case [1978] OLRB Rep. Feb. 119:
"19. In cases such as this one the Board must distinguish the workman from the true entrepreneur. The task is not an easy one since there exists no clear line of demarcation. Determining who falls within the Act as a dependent contractor is essentially a factual exercise. The legal test, found in section 1(1) (ga) of the Act provides the Board with only a point of reference but, as the Board has already noted in Adbo Contracting Ltd., supra, it is a more useful and less confusing reference point than those adopted by the Board prior to the enactment of the dependent contractor provisions. This new point of reference leads the Board directly to the substance of the economic relationship, and away from those matters of form which merely obscure its reality. While it may be quite true that the Board might reach the very same result by recourse to the old points of reference, this new test provides a more direct and understandable route to the ultimate result.
Our task is to make the determination by reference to the criteria set out in the statutory definition of dependent contractor. This definition directs the Board to examine the types of economic dependence and the kind of business relationship, or obligation, that it has before it, and further directs the Board not to give undue emphasis to whether there exists a formal contract of employment and whether or not a person furnishes his own tools, vehicles, equipment or machinery. In the final balance, the Board must be satisfied that the relationship before it, even though it may not bear all the hallmarks of the typical employment relationship, more closely resembles the relationship of an employee than that of an independent contractor."
The relationship between the drivers and the respondent does not bear all the hallmarks of a typical employment relationship. However, after considering all of the evidence, and in particular the fact that the drivers perform a service for the respondent by delivering its product to customers listed in the respondent's route books, and that the income they receive from delivering the respondent's product constitutes either all, or almost all, of their income, we are satisfied that on balance the drivers more closely resemble employees than independent contractors. For a similar conclusion involving milk delivery drivers, see Dominion Dairies Limited [1978] OLRB Dec. 1083.
In reaching this conclusion, we have considered but put little weight on the fact that some of the drivers make use of a helper. The occasional use of a helper in the circumstances present here falls far short of making the drivers entrepreneurs who derive substantial profits or benefits from the labour of others such as might lead to a conclusion that they more clearly resemble independent contractors than employees. See Dominion Dairies Limited, op cit, and Comfort Guard Services [1978] OLRB Rep. Oct. 905.
At the hearing, counsel for the respondent laid great stress on the recent decision of the Supreme Court of Canada in Yellow Cab Ltd. v. Board of Industrial Relations 80 CLLC ¶ 14,066 (S.C.C.). That case arose out of a determination by the Alberta Board of Industrial Relations that an employee-employer relationship existed between certain taxi drivers and a taxi company. The Board reached this determination notwithstanding the fact that the drivers did not receive wages from the taxi company but instead received money from passengers, a portion of which they paid to the taxi company for use of the company's cars and access to certain of the company's facilities.
Mr. Justice Richie, in giving the decision of the Court, looked to the definition of "employee" in The Alberta Labour Act which states as follows:
"1(d) 'employee' means a person employed by an employer to do work or provide services of any nature who is in receipt of or entitled to wages; ...
His Lordship then examined the facts involved and held as follows:
"As I take the view that no wages flow from the employer-owner to the lessee driver, I cannot find that the relationship of employer and employee existed here within the meaning of the statute.
In our view, the decision of the Supreme Court in the Yellow Cab case is not applicable to the instant proceedings. The decision of the Supreme Court clearly flowed from the definition of "employee" contained in the Alberta statute. Further, in the Yellow Cab case, the issue was whether or not there existed an employer-employee relationship. In the instant case, the issue is a different one, namely whether the drivers are in a position more closely resembling the relationship of an employee than that of an independent contractor. Notwithstanding the fact that the drivers do not receive payments directly from the respondent, but instead turn over to the respondent most of what they collect from their customers, we are satisfied that the relationship involved more closely resembles the relationship of an employee than that of an independent contractor and that accordingly, the drivers are "dependent contractors" for the purposes of The Labour Relations Act.
At the hearing, counsel for both the applicant and the respondent were in agreement that if the Board were to determine that the drivers were dependent contractors, then they should be included in the same bargaining unit as the two "regular employees". The applicant has as members a majority of the dependent contractors, and none of the dependent contractors have come forward to indicate that the applicant does not represent their views with respect to the composition of the bargaining unit. In these circumstances, we are satisfied for the purposes of section 6(4) of the Act, that a majority of dependent contractors desire to be included in a bargaining unit with the other two employees.
The Board accordingly finds that all employees of the respondent, including dependent contractors, employed in the Municipality of Metropolitan Toronto, save and except foreman and supervisors, persons above the rank of foreman and supervisor, and office staff, constitute a unit of employees appropriate for collective bargaining.
The Board is satisfied on the basis of all of the evidence before it that more than fifty-five per cent of the employees of the respondent in the bargaining unit at the time the application was made, were members of the applicant on June 23, 1980, the terminal date fixed for this application and the date which the Board determines, under section 92(2)(j) of The Labour Relations Act, to be the time for the purpose of ascertaining membership under section 7(1) of the said Act.
A certificate will issue to the applicant.