Retail, Wholesale and Department Store Union AFL-CIO-CLC v. Hamilton Yellow Cab Company Limited, 1987 CanLII 3130

[1987] OLRB Rep. November 1373

1295-85-R Retail, Wholesale and Department Store Union AFL-CIO-CLC, Applicant v. Hamilton Yellow Cab Company Limited, Fleet Taxi, Yellow Taxi, Transportation Unlimited Inc., D. J. Van Boort, R. Cruden, R. Maurice, J. Lynch, B. Greenland, M. Ferguson, R. Geer, E. Grasley, V. Sudhir, A. Dicasa, P. Dicasa, R. Deacons, R. Botton, F. Mattioli, W. Bray, J. R. McNally, R. Kaur, G. Seliga, W. T. Vanderheyden and Peter Quesnelle, Respondents

BEFORE: R. O. MacDowell, Alternate Chair, and Board Members I. M. Stamp and C. A. Ballentine.

APPEARANCES: J. K. A. Hayes, Harry Ghadban, Brian Lewis and William Pring for the applicant; William G. Charlton, Q.C., David G. Timms and Clayton J. Wallace for the respondents Hamilton Yellow Cab and Transportation Unlimited Inc.; D. J. Van Boort, R. Cruden, and Fred Mattioli on their own behalf.

DECISION OF THE BOARD; November 18, 1987

I

[1]. This is an application for certification in which the union seeks to represent a unit of taxicab drivers and "owner-operators" working "under the banner" of Hamilton Yellow Cab Company Limited ("Yellow"). The union asserts that for collective bargaining purposes under the Labour Relations Act, these drivers and owner-operators are either employees or "dependent contractors" of Yellow - whatever their legal status may be at common law or for other purposes. The union refers to section 1(1)(h) of the Act which reads as follows:

1.-(1) In this Act,

(h) "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 union does not seek to represent owners of more than one car or taxicab owner's licence ("plate"), or anyone who does not actually drive a vehicle. The union submits that multi-car or multi-plate owners are really small businessmen, not employees or dependent contractors within the meaning of section 1(1)(h) of the Act. The union's proposed unit consists solely of what it describes as "working drivers" who supply their labour to service Yellow's customers, and may, incidentally own or lease a taxi cab licence and/or vehicle. Yellow does not dispute the union's legal characterization of the position of multi-car or multi-plate owners even if some of them may also drive, (and we have neither the evidence nor inclination to do so). Yellow does challenge the union's assertion that the owner operators are "dependent contractors" and that both they and the "pure drivers" are "employees" for collective bargaining purposes. Yellow asserts that the owner-operators are independent contractors, and that neither they nor the drivers are "employees" of Yellow.

[2]. The union further argues that Yellow, Transportation Unlimited Inc. ("Transportation Unlimited") and the other named respondents should all be declared to be "related employers" pursuant to section 1(4) of the Act. That section provides:

(4) Where, in the opinion of the Board, associated or related activities or businesses are carried on, whether or not simultaneously, by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, the Board may, upon the application of any person, trade union or council of trade unions concerned, treat the corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and grant such relief, by way of declaration or otherwise, as it may deem appropriate.

In the union's submission, the business activities of these respondents are totally integrated with, and substantially controlled by, Yellow. The union argues that, to the extent that those business activities involve employment relationships, these respondents all share with Yellow the role of "employer" vis-a-vis the "working drivers" who actually deliver taxi services to Yellow's customers.

[3]. The hearings in this matter consumed a number of days, and the Board heard quite a bit of evidence about the special economic characteristics of the taxi industry. Much of that evidence was not substantially in dispute - although the parties urged us to draw different inferences and legal conclusions from it. We should note that all of the named respondents were given notice of this application and on the first day of hearing quite a number of them appeared either in person or by counsel. Thereafter, however, only Yellow and Transportation Unlimited continued to appear or take an active role in these proceedings. In the result, there was no direct evidence from the other named respondents about their particular business situation or their relationship with either Yellow or the individuals whom the union seeks to represent. Nor did Yellow's witnesses really address the precise terms of its relationship with the other named respondents. And, because Yellow took the position that even the single car/plate owners/lessees were "independent contractors", we have little direct evidence about the relationship between these individuals whom the union seeks to represent and those persons said by Yellow to be their "employees" (whom the union also seeks to represent). None of the owner-operators testified about their relationship with their "fill-in" drivers.

[4]. The Board was advised that the entity formerly known as Wentworth Taxi, no longer exists. Wentworth Taxi is therefore deleted from the style of cause.

II

[5]. The taxicab industry in the City of Hamilton is closely regulated by City bylaw. Taxicab owners, taxicab drivers, and taxicab "brokers" must all have licences issued by the City. In order to obtain a taxicab driver's licence, the applicant must have the approval of the taxicab owner, as well as the approval of the taxicab broker at whose place of business the taxicab is located. As a broker, Yellow Cab has co-signed the applications of numerous individuals seeking drivers' licences. Once licenced, however, a driver is eligible to drive any taxicab in the City of Hamilton. He has no obligation to drive for an approving owner or broker, although obviously he is most likely to drive, at least initially, for his sponsors.

[6]. The City of Hamilton controls the number of licences or "plates" issued to taxicab owners, and thus the number of cabs on City streets. There are currently 256 outstanding plates. There is an established priority list, and when new licences are to be issued, the City awards them to the applicant(s) at the top of the priority list.

[7]. A taxicab owner's licence (plate) may also be purchased from an existing owner at the "going market rate". We were told that that rate is approximately $35,000.00. Because the issuance of new plates is relatively infrequent, a person wishing to operate a cab or assemble a "fleet" is more likely to acquire his plate(s) from existing plate owners than from the City; moreover, over the years, some individuals have acquired quite a number of plates, and that gives them a special foothold in the taxi business. For example, the evidence indicates that Albert Di Casa, (the owner of Yellow) his family, his company "Transportation Unlimited" or his business associate Fred Mattioli, own or control a large number of plates, all of which are associated with cabs operating under the Yellow banner.

[8]. The City bylaw is quite comprehensive in its governance of, inter alia, driver appearance, driver conduct, vehicle appearance, mechanical condition, and vehicle use. Before drivers are issued a licence, they are required to establish their knowledge of the City and its bylaw, and demonstrate their medical fitness. Drivers must keep the City apprised of any change of address.

Plates may not be transferred without City approval. Plate owners must maintain insurance. Cars are subject to periodic inspection. Trip records must be kept. Cabs may only be operated if they are in clean condition, good repair, and free from mechanical defects. Licences and photo identification must be prominently displayed. Drivers are required to be neat and clean in appearance and behave in a civil and polite manner. Drivers must not refuse fares, nor make any misleading representation, and when at a public taxi stand, they must not obstruct the use of a sidewalk or make any disturbance. Drivers may only collect one fare when transporting two or more passengers to the same destination. Drivers must immediately report to the owner any accidents, defects in the vehicle or tickets received, and are obliged to turn over to the owner all monies received, less any amount due to the driver as commission. No owner or driver may actively solicit business when parked in any designated pubic taxistand or other parking area (see generally: Bylaw No. 85-57).

[9]. The regulations are enforced by licence inspectors and police constables. Yellow has no responsibility for enforcement of these regulations; however, to the extent that they address the quality of customer service, Yellow has an independent interest in maintaining adequate performance standards. Customers contract with Yellow for the provision of particular services (see: Fraser v. U-Need-A-Car Ltd. (1985) 1985 CanLII 2118 (ON CA), 50 O.R. (2d) 281 (C.A.)) either by telephoning Yellow or appearing at a Yellow cabstand. In all likelihood, those customers are indifferent as to which "Yellow" owner/operator or driver provides those services, so long as the customers' needs are met in an efficient and courteous manner. In this regard, Yellow applies its own sanctions to ensure that appropriate standards of behaviour and performance are met. We will consider those sanctions and controls in more detail below.

III

[10]. The delivery of taxi service to the public involves a number of interrelated elements: a car, a plate which permits its use as a taxi, a licenced driver, and a broker/dispatch service which recruits or attracts customers and allocates them to the available cabs. However, the actual matrix of economic relationships can be quite complex. There may be individuals who own a car, own a plate, and drive. There may be individuals who own a car, lease a plate and drive. There may be individuals who lease a car, own a plate and drive. There may be individuals who lease both a car and a plate. There may be individuals who own one or more cars or plates but do not drive at all. There may be individuals who own several cars or plates, drive one car, and enter into arrangements permitting other persons to use the other plates or cars. And there are simply drivers, who either drive on a full-time basis or may "lease shifts" from other individuals in order to cover weekends, or off-hours, and extend the time that a particular vehicle may be kept in service. The "lease" of a shift involves the right, for a price, to drive someone else's vehicle in the Yellow system, to service Yellow customers. Yellow does not control the details of those economic arrangements except, to some extent, in the case of those plates owned or controlled by Mr. Di Casa, the members of his family, Fred Mattioli his long-time business associate, or Transportation Unlimited, a company in which Mr. Di Casa is the major shareholder and chief executive officer (approximately 58 plates in all).

[11]. Except as set out below~ we have no direct evidence that the multi-car or multi-plate owners (sometimes referred to in the testimony as "fleet owners") have any special relationship with Yellow, Transportation Unlimited or Mr. Di Casa, the principal of these two companies. Nor do we have any direct evidence of their relationship to the owner-operators and drivers whom the union seeks to represent. In particular, we have no direct evidence whether they exercise the kind of control over those owner- operators and drivers with whom they are associated, characteristic of an employer-employee relationship (leaving aside, for now, whether Yellow would, in any event, be a related employer under section 1(4)). Indeed, the proper characterization of the relationships described above is quite debatable, and not obviously "employment" relationships at all. For example, if A merely leased a car or plate to B, who then drove under the Yellow banner, serving Yellow's customers, in the manner prescribed by Yellow, there would not ordinarily be an "employment" relationship at all as between A and B. Similarly if X "leases a shift" to Y who then works in the service of Yellow's customers under Yellow's direction and control, that would not necessarily make X the "employer" of Y even though X may have a degree of control over Y's opportunity to work in the Yellow system.

[12]. Unfortunately, because most of the named respondents did not appear or give evidence (despite their obligation to do so under section 1(5) of the Act) we do not know the precise nature of their relationship with the "working drivers" and whether they exercise the right to hire, fire, discipline, control the work, or otherwise act like "an employer" vis-a-vis those drivers. Indeed, while we were told that even owner-operators had the power to hire and fire their "fill-in" helpers, we had no direct evidence about that either. We do know that Yellow exercises considerable control over the way in which the taxi services are provided to Yellow's customers, and the economic rewards flowing to the drivers and owner-operators who supply those services. Where necessary, Yellow intervenes to prescribe the service standards which must be met, and to chastise or penalize drivers who do not perform in accordance with Yellow's expectations. Whoever ultimately owns the "tools of the trade" - a car and plate - individuals driving under the Yellow banner are responsible to, controlled by, and under the immediate supervision of Yellow's supervisors. There is no direct evidence that any of the other named respondents or even the owner-operators purport to exercise equivalent or even similar authority over the persons driving their cars for Yellow.

IV

[13]. Yellow is a taxicab broker with approximately 102 cabs operating under its auspices. Yellow provides the taxicab operators and drivers with access to a computer dispatch service and the use of substations or taxi waiting areas which Yellow has acquired through lease agreements with various Hamilton businesses. Yellow also has established arrangements (for example, with Stelco and Bell Canada) to carry passengers or parcels at pre-established rates. Yellow advertises in the telephone book and elsewhere describing itself as having Hamilton's "largest and finest fleet". Customers are encouraged to call Yellow for prompt and efficient service. They do. Both calls and service complaints are directed to, and dealt with by Yellow. From the customer's perspective, if there is a problem, Yellow is the entity to be notified.

[14]. Cars operating under the Yellow banner are allocated customers in accordance with a computerized system which logs and directs a customer service request to cars that have booked in to a particular geographic area of the City. Alternatively, cars may book in to various Yellow Cab stands where customers are likely to appear (for example, at the Royal Connaught Hotel) and are picked up on a "first-in, first-out" basis. In both cases customers are acquired because of Yellow, its goodwill in the community, or its business arrangements, rather than the business acumen of a particular driver or owner-operator. At least 80 per cent of all their business (and perhaps more) is generated and allocated through Yellow's computer, because, until very recently, drivers were not permitted to pick up customers "flagging" them on the street.

[15]. Yellow's charge account customers account for about 30-35 per cent of a driver/owner-operator's daily business. Such customers are provided with a charge slip bearing Yellow's name, and Yellow guarantees payment either in cash or as a deduction from monies payable to Yellow. For other calls, the driver or owner-operator bears the risk of non-payment. While there is no direct evidence on the point, it seems reasonable to infer that non-payment is relatively infrequent.

[16]. The drivers and owner-operators do not advertise although, we were told, a few of them may have business cards. No such business cards were produced. Nor was it established that they meant very much. It is clear that drivers/owner-operators working under the Yellow banner depend substantially if not exclusively upon Yellow. Even settled runs such as taking a student to and from school on a regular basis were initially obtained through Yellow. While a driver may develop a personal relationship with the customer, Mr. Di Casa, the owner of Yellow, made it clear that he would reallocate the run to another driver if its customer expressed dissatisfaction or if Yellow considered it appropriate to do so. Mr. Di Casa suggested that some of the owner-operators may have private arrangements or customers of which he would be unaware; however, there was no concrete evidence in this regard, and even assuming it to be true, it would make up only a minimal proportion of those individuals' total business - most of which is still derived from Yellow. In the final analysis Yellow substantially determines whom its drivers/owner-operators will serve, and the way in which such service will be delivered; and if a driver/owner-operator does not perform to Yellow's satisfaction he is penalized or dismissed. In the case of a customer complaint, Yellow will deal directly with either the owner-operator or driver directly involved.

[17]. Yellow Cab's revenues derive from the flat fee of $235.00 per month per car for the services it provides. Neither taxi drivers nor owner-operators receive "wages" payable by Yellow Cab. Except in the case of Yellow's charge account customers where Yellow pays them directly, their remuneration derives from the fares paid to them by passengers allocated to them by Yellow and carried in the taxicabs that they drive. The various participants (car owner, plate owner, driver, etc.) divide the available funds in accordance with their own privately-struck economic arrangements. The owner-operators and till-in drivers determine between them which (and how many) shifts the latter will work ("lease"), as well as the revenue split. The owner-operators determine whether to cover their off- hours with one or more drivers. However, while those drivers are on the road, they are subject to Yellow's immediate direction and control in precisely the same way as an owner-operator who drives. (See: infra paragraphs 22 and following.)

[18]. Yellow does not make payments in respect of Unemployment Insurance, Canada Pension, or Workers' Compensation for either owner-operators or drivers, nor does Yellow make any deductions or remissions to Revenue Canada for personal income tax. Each driver/owner-operator, as the case may be, is responsible for the calculation and payment of his own income tax. Drivers/owner-operators do carry receipts with the Yellow Cab logo for the purpose of providing a record of a fare to passengers. Drivers are supposed to keep "trip sheets" recording their fares, and where the trip involves one of Yellow's established business customers, a slip is presented to and signed by the passenger and later presented to Yellow for payment in cash or as a credit against the monthly rental payments. Trip records themselves are not submitted to Yellow.

[19]. Each plate owner or someone with whom he is associated is responsible for providing a car and all necessary equipment, including a roof sign, taxicab meter, two-way radio and mobile taxi computer. Virtually all of the owners/drivers have either purchased this equipment from Yellow or lease it for a monthly fee. Mr. Di Casa estimated that about 75 cars rent Yellow's equipment and about 25 have purchased it outright. Yellow regulates the size, styling and age of the vehicles it permits to operate under its banner. A notice (part of exhibit 26) specifies that small vehicles such as hatchbacks, vehicles more than five years' old, or vehicles of unusual styling will not ordinarily be permitted and that, if any exception is to be made, the owner must obtain the approval of "management". Similarly, Yellow asserts the right to prohibit advertising signs, bumper stickers, window signs, or interior signs on any car operating in the Yellow system.

[20]. Yellow's current policy is to "strongly encourage" all drivers to have their cars painted with the Yellow colours. Cars in the Yellow system have the Yellow logo and telephone number on both doors, and, of course, the distinctive Yellow rooflight. The purpose of such rules, of course, is to ensure that a uniform image is projected to Yellow's customers.

[21]. Mr. Di Casa testified that Yellow does not know and cannot control the arrangements made between a driver and his helper regarding the working of shifts, the scheduling of vacation time and the replacing of drivers due to illness. Nor, he said, are drivers or operators under any specific obligation imposed by Yellow to work particular shifts or to be available to work on certain days of the week. However, the imperatives of the market and the need to make a living dictate that most owner-operators will be working most of the time, and it is not likely that a car could remain for very long under the Yellow banner if it was regularly unavailable or continually refused to accept service calls from Yellow's customers. Indeed, the refusal to take certain calls results in a penalty (see the discussion of "VIP" calls below). The monthly rental obligations, the distinctive vehicle colours, and the established radio links and computer "tie in" make it totally impractical (if not impossible) for an owner/driver working in the Yellow system to work for anyone else; and, for those drivers or operators working pursuant to a plate actually owned or "managed" by Yellow, there is an additional element of control. The limited amount of business from "flags" also makes difficult for an owner/driver to operate independently. We were told that, of the 256 outstanding plates on the City of Hamilton, only 13 operate totally independently. All of the rest are associated with brokers such as Yellow. Indeed, there is no direct evidence that any of the drivers or owner operators whom the union seeks to represent either work for some other broker or "freelance", although Mr. Di Casa speculated that some drivers who work part-time in the Yellow system might also work part-time for somebody else. He was not sure.

[22]. It was conceded by Mr. Di Casa that Yellow supervisors would be familiar with most of the working drivers and, from time to time, would even be called upon to resolve disputes between them. For those plates which Mr. Di Casa controls, either directly or in association with Mr. Mattioh, the lease provides a right to know the identity of the driver so that one can identify poor insurance risks; moreover, the City bylaw requires a broker to maintain a list of taxicab owners operating under its banner - although we were told that this requirement is not strictly enforced. We are satisfied that Yellow and its supervisors have a fairly accurate picture of the personnel to whom it assigns the task of serving its customers, and if it is dissatisfied, Yellow can ensure the effective removal of the driver from the Yellow organization. Yellow maintains a list of licensed drivers who are not permitted to work for owner-operators in the Yellow system.

[23]. The nature of the taxi business precludes the kind of direct managerial control which would obtain in an industrial setting. However, the dispatchers and a web of formal rules achieve precisely the same result: conformity with norms prescribed by Yellow and enforced by the imposition of "sanctions" which deprive the owner/driver of his livelihood. Because of Yellow's ability to grant or withhold specific work assignments, and because, while the owner/driver works under the Yellow banner, the opportunity to work flows substantially, if not exclusively, from Yellow, Yellow has a considerable degree of control over the time, place and manner in which the work is performed.

[24]. A few examples may illustrate the extent of such control.

[25]. A memo dated November 1, 1985 (exhibit 10) sets out various rules governing the use of the taxistand at the Royal Connaught Hotel, including parking privileges, booking procedure, speed limits, and an injunction to use the containers provided to dispose of trash. Drivers not complying with these rules are first given a warning. A subsequent infraction results in immediate suspension until the driver contacts "management" or his "supervisor" to seek reinstatement. In the case of "fill-in" drivers this "supervisor" is not the owner-operator. It is an employee of Yellow. If the driver under suspension books in to the hotel location he will be immediately "suspended from the Yellow Cab system until notified otherwise by management". The memo further notes that "the onus is on the driver to contact management. The driver is to remain suspended from all future cab work under the Yellow Cab banner until otherwise [sic] the supervisor is notified". Yellow keeps a record of these warnings and suspensions and the supervisors are required to periodically check the computer to ensure that a suspended driver is not booked into the hotel. The memo also notes that "drivers giving supervisors a hassle or otherwise disrupting company business are to be suspended from the Yellow Cab system until further notice".

[26]. Such detailed prescriptions are not unusual. For example, the arrangement with 7-Eleven Food Stores, a Division of Southland Canada Inc., requires Yellow to indemnify Southland against any liability whatsoever resulting "due to your parking presence on the property" and obligates Yellow to police the parking area. Southland obviously considers the drivers/owner-operators to be part of Yellow's organization for which Yellow is responsible. So, apparently does Yellow. In a letter to Southland dated May 11, 1984, Mr. Di Casa writes:

I was sorry to learn from you that there have been problems with Yellow Cab drivers at your store at Upper Sherman and Concession Streets in Hamilton. I will begin an immediate patrol of the location in order to rectify the situation and comply with the terms of our agreement.... I can assure you I will do whatever [sic] required to be certain our drivers do not interfere with store business.

The evidence is that Mr. Di Casa as well as other Yellow managerial personnel or supervisors do indeed monitor the behaviour of drivers/operators at Yellow's various cabstands, and take appropriate action when they are not following Yellow's rules.

[27]. Exhibits 26 and 27 (further memoranda and instructions to supervisors) reveal a similar pattern. Complaints from Bell Canada concerning a particular driver may result in a suspension for 30 days. There are specific instructions about the tasks to be performed by drivers for particular callers. Drivers who do not "go to voice" (i.e. call in by radio) at the request of a supervisor may be suspended. Drivers whose radio messages are too long may also be suspended. A memo of July 6, 1985, indicates that drivers not rejecting trips upon the instruction of a supervisor are "immediately on a one-week holiday". Drivers falsely reporting "no loads" may be subject to discipline for one week to three months or more, depending upon the frequency of the infractions.

[28]. A driver who is 15 minutes late responding to a call will be suspended for two hours. A driver who accepts but later rejects a call may also be subject to suspension for one hour. A driver who rejects a Yellow "VIP call" is automatically suspended for one hour unless he is able to persuade a Yellow supervisor that he had a good excuse.

[29]. A memo in February 1984, indicates that management is prepared to review the past performance of a driver to see whether some additional suspension may be necessary, and as we have already mentioned, Yellow does appear to keep records of such past suspensions. A refusal to leave a substand when required by a supervisor results in a two-day suspension. If problems arise owner-operators/drivers are advised to follow the supervisors' instructions and take the matter up later with management.

[30]. Until relatively recently, taxi owners could not sell their cabs to someone else who would continue to operate under the Yellow banner without the prior approval of Yellow. For those plates directly owned or controlled by Yellow (those of the Di Casa family, Fred Mattioli and Transportation Unlimited,) the lease arrangement provides that drivers must be approved by Yellow before being permitted to drive. Despite Albert Di Casa's evidence that Yellow would not necessarily know the drivers working in its system, a memo of June 12, 1985 indicates that owner operators are required to provide Yellow with a list of drivers. Another memo prescribes that drivers can only be trained during daylight hours and then only if a sign is posted in the cab bearing the Yellow name and apologizing for the inconvenience, or if a Yellow manager or supervisor gives his prior approval. On May 23, 1985 (i.e. about two months after the release of the Court of Appeal's decision in Fraser v. U-Need-A-Cab Ltd., supra), Yellow notified its owner-operators and drivers 1 hat, henceforth, their cars must be insured at a minimum level of one million dollars lest Yellow be considered responsible for a driver's negligence.

[31]. As we have already mentioned, Yellow maintains a list of individuals who cannot drive under the Yellow banner, and can effectively terminate its relationship with any owner-operator or driver who does not comply with Yellow's rules. On occasion, Yellow has even required drivers to pass proficiency tests administered by Yellow. A failure to pass such test could result in the driver's termination from the Yellow system. Another memo indicates that Yellow supervisors will assess the drivers' ability, performance and attitudes. A memo of May 1984 suggests that Yellow bears be responsibility for the drivers' appearance (described variously as an "embarrassment" or this 'sad state of affairs"), and warns that drivers inappropriately dressed will be sent home.

[32]. It is unnecessary to multiply the examples. It is evident that Yellow monitors, evaluates and closely regulates the manner in which the drivers/operators work, and when Yellow is dissatisfied with the way in which its customers are being served, Yellow initiates disciplinary or corrective measures which resemble those that would be applied to employees. Such authority is exercised on a regular and quite specific basis. The alleged "independence" of the owner-operators is largely illusory. Like the drivers, they are fully integrated into the Yellow system and subject to its direct control. They are tied to and substantially dependent upon Yellow which permits them, on is own terms (and those prescribed by City By-Law) to service Yellow's customers.

V

[33]. The respondent Transportation Unlimited is engaged in the taxicab-owner business in the City of Hamilton. Its controlling shareholder and chief executive officer is Albert Di Casa, the controlling shareholder and chief executive officer of Yellow. Transportation Unlimited has the same business address as Yellow.

[34]. At the date of the application Transportation Unlimited was the owner of 22 plates and tie lessee of two others. Eighteen of those 22 plates were in turn leased to taxicab operators on terms which include a weekly rental rate, the control and prior approval of the drivers of the taxicab, the obligation to operate under the Yellow banner, the use of Yellow's standard equipment (radio, computer terminal, etc.) and, we were told, certain responsibilities as to the provision of car insurance which is arranged by Transportation Unlimited. The lease states that the arrangement is not an employer-employee relationship, although, of course, that statement, in itself, does not establish its legal character. Transportation Unlimited, either as owner-lessor or re-lessee of the plates it controls, does not exercise direct responsibility for the engagement, termination or turnover of drivers except to the extent that those drivers are subject to its initial approval and the s. tine on-the-job controls as other drivers in the Yellow system. As we have already noted, all drivers the system are closely monitored by Yellow's supervisors. Transportation Unlimited makes payments in respect of Workers' Compensation, Canada Pension, Unemployment Insurance or income tax.

[35]. Transportation Unlimited operates four cars itself and for this purpose hires nine drivers (for certain shifts for certain cars) whom the parties agree are employees, but whom Mr. Di Casa described as "leasing shifts as our employees." Other individuals also "lease shifts" for a flat rate depending on the day, and are free to use the car for other than commercial use. Transportation Unlimited arranges insurance and owns the roof sign, taxi meter and radio for all of the cars operating in the Yellow fleet under its auspices either directly or indirectly. Transportation Unlimited pays Yellow a flat monthly brokerage fee in the amount of $235.00 per month for each of its plates.

VI

[36]. In conducting its organizing campaign, the union made no distinction between "single car owner-operators" and "drivers". It typically represents both in other municipalities (although not necessarily in the same bargaining unit) and, in the union's view, both groups had a community of interest because they were both essentially dependent upon Yellow for their livelihood and subject in their day-to-day work to Yellow's direction and control. The membership cards signed by new members do not distinguish between drivers and owner-operators.

[37]. The application for certification was made in respect of a single "mixed" bargaining unit of drivers and single-car owner-operators. Notice of this application was posted in prominent places where it would most likely come to the attention of the drivers and owner-operators potentially affected. No owner-operator intervened in these proceedings to oppose the union's proposed bargaining unit. On the other hand, neither is there any positive evidence that the owner-operators actually wish to be included in the same bargaining unit as drivers.

[38]. Section 6(5) of the Act reads as follows:

(5) A bargaining unit consisting solely of dependent contractors shall be deemed by the Board to be a unit of employees appropriate for collective bargaining but the Board may include dependent contractors in a bargaining unit with other employees if the Board is satisfied that a majority of such dependent contractors wish to be included in such bargaining unit.

VII

[39]. In 1965 Professor Arthurs introduced the term "dependent contractor" into Ontario's legal lexicon. He used that term to describe individuals whose economic situation resembles that of an independent entrepreneur in some respects, but, when viewed in its totality, really more closely resembles that of an employee. (See: H. W. Arthurs: The Dependent Contractor: A Study of the Legal Problems of Countervailing Power (1965), 16 University of Toronto Law Journal 89). In Professor Arthurs' opinion, "self-employed truck drivers, peddlers, and taxicab operators, farmers, fishermen and service station lessees personify the dependent contractor". He argued that these individuals should be entitled to engage in collective bargaining. In 1975 the Legislature accepted that proposition and enacted what is now section 1(1)(h) of the Labour Relations Act.

[40]. In Adbo Contracting Company Ltd., [1977] OLRB Rep. April 197, the Board discussed the background and purpose of the then recent amendment in a long passage to which we might usefully refer:

17. This case requires us to explore the outer limits of the Labour Relations Act. The purpose of this statute, as set out in its preamble, is to "further harmonious relations between employers and employees by encouraging the practice and procedure of collective bargaining between employers and trade unions as the freely designated representatives of employees". The Act itself provides a structure for the organization of individual workers into combinations. Collective action by workers, once regarded as amounting to an illegal conspiracy, has been legitimized, the underlying rationale being the need to protect the individual employee from the worst extremes of the labour market. The countervailing power of collective bargaining can now be used by workers to obtain improved wages, hours of work, and other working conditions.

18. The Labour Relations Act, however, was never intended to insulate entrepreneurs from economic competition by allowing that class of person to act in combination. Such combinations not only fall outside the purview of collective bargaining legislation, but they are also expressly restricted by the federal Combines Investigation Act. Collective bargaining policy, thus, expressly encourages combinations, while competition policy operates in the opposite direction. Given these two quite different policies, it then becomes important to identify the outer limits of our own statute, the Labour Relations Act.

19. The task of distinguishing between the individual worker and the true entrepreneur has never been easy. There exists an economic spectrum - coloured at one end by the true entrepreneur and at the other end by the individual worker. These two points of the spectrum can be identified clearly. The businessman who sells goods, and employs others to produce these goods, is clearly not entitled to use the Labour Relations Act for the purpose of forming a combination with other businessmen. On the other hand, it is clear that the worker who supplies only his own labour to an employer is entitled to organize with other workers under the Act. At the shaded area toward the middle of the economic spectrum, however, it becomes difficult to draw a distinction.

20. The problem of drawing a distinction in this area is not a new one for this Board. The case of Livingston Transportation Ltd., [1972] OLRB Rep. May 488 provides a good example of the difficulties faced by the Board when determining the outer limits of the Act. The question before the Board was whether certain truck owners were employees or independent contractors. In answering that question, the Board alluded to no less than four approaches that might be taken:

1. resort to the control test used for determining the vicarious liability of an employer;

2. use of the four-fold test adopted by Lord Wright in Montreal v. Montreal Locomotive Works Ltd., et al 1946 CanLII 353 (UK JCPC), [1947] 1 D.L.R. 161, a case concerning liability for municipal taxation;

3. simply asking the question of whose business is it;

4. application of what was referred to as "the statutory purpose test".

The multiplicity of approaches that emerged in the Livingston case is some evidence of the problems that then faced the Board when identifying the outer limits of the Act. Fortunately, there is now a new point of departure for distinguishing between the individual worker and the true entrepreneur.

21. The Labour Relations Act, having been amended in 1975, now provides a single, and less confusing, approach to the problem. Section 1 of the Act has been amended to provide that the term "employee" includes a "dependent contractor". That same section defines dependent contractor as "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 independent contractor". Section 6 of the Act, moreover, has been amended to provide that "[a] bargaining unit consisting solely of dependent contractors shall be deemed by the Board to be a unit of employees appropriate for collective bargaining but the Board may include dependent contractors in a bargaining unit with other employees if the Board is satisfied that a majority of such dependent contractors wish to be included in such bargaining unit".

22. We do not construe the inclusion of these provisions in the Act as merely amounting to a legislative attempt to codify the Board's existing jurisprudence, such as Livingston Transportation. In those cases, the question had to be framed in terms of whether a person was an employee or an independent contractor. The Board, as a result, placed emphasis on the fourfold test as set out in Montreal Locomotive Works. The appropriateness of this test for determining the outer limits of a collective bargaining statute was always questionable. This concern has been best put by Dean Arthurs in his perceptive article, "The Dependent Contractor: A Study of the Legal Problems of Countervailing Power" (1965), U.T.L.J. 89. At page 94, he comments:

Whether the "control" or the "fourfold" testis the more appropriate for identifying the "master-servant" relationship is not here material. The pertinent question is whether the factors in an employment relationship which invoke vicarious liability bear any relation to those which invite a regime of collective bargaining. The very terminology - "master" and "servant" - evokes a nostalgic Victorian image of authoritarianism which is collective bargaining's antithesis. More important, any rationale of vicarious liability focuses ultimately on the allocation of loss as between employer and injured third party, and not on the rights and duties of employers and employees, inter se. The control test and its modem successor, the fourfold test, are thus intended to identify those features of the employment relationship which will permit the employer to escape liability if he falls outside the rationale of vicarious liability. Control may be important if vicarious liability is based on a desire to discourage negligent work practices; use of the employer's tools or financial independence upon him may be important if vicarious liability is based on a desire to reach the employer's "deeppocket," or on a "loss-spreading" rationale. But the relevance of any of these considerations to situations where no third party is present is purely fortuitous. The rationale of labour relations legislation is that the public interest is best served by the promotion of collective bargaining between employers and their employees. Surely any meaningful definition must be formulated in the light of this statutory purpose. Indeed, the Ontario Board in the Telegram case recognized this fact: "[T]he elements to be considered are not alone those that were established for the purpose of determining whether an employer is vicariously responsible for the tortious acts of his servants, but those as well that have a bearing on the labour relations aspects of the relationship Yet the Montreal Locomotive test was adopted by the Ontario board in the Telegram case, and has been followed ever since.

23. The question that must now be answered by the Board is, not whether a person falling within the shaded area on the economic spectrum is an employee or an independent contractor, but whether that person is a dependent contractor. This new point of departure does not mean that considerations formerly taken into account are now totally irrelevant. The statutory definition of dependent contractor clearly requires some reference to the employee-independent contractor distinction. A shift of emphasis has occurred, however, as this new definition recognizes that persons in an economic position closely analogous to that of the employee should also enjoy the benefits of collective bargaining. The determination of who is a dependent contractor is now a comparative exercise that requires reference to a much broader range of labour relations considerations.

24. This redefinition of the limits of the Labour Relations Act serves two purposes. First, it recognizes that, as a matter of fairness, persons in economic positions that are closely analogous should be given the same legislative treatment. A second purpose, and one no less important, is to protect existing collective bargaining rights from being eroded by arrangements that differ only in form, but not in substance, from the employment relationship. These two considerations provide the justification for the shift of emphasis.

25. The shift of emphasis is readily apparent from a reading of the definition of dependent contractor. Clearly a person need not be employed under a contract of employment to be considered as a dependent contractor, and provision of tools, vehicles, equipment, machinery is no longer a major consideration. Contractual form and the ownership of tools are no longer essential considerations. The emphasis, instead, is placed upon economic and business factors. Both the type of economic dependence that exists, and the kind of business relationship entered into, determine whether a person more closely resembles an employee than an independent contractor.

26. Economic dependence must be such that it puts the person in roughly the same economic position as an employee who must face the perils of the labour market. Mere economic vulnerability, however, is not a sufficient basis for a finding that a person is a dependent contractor, since this is a condition that may be experienced by the true entrepreneur, just as much as the individual worker. There must exist, therefore, a type of economic dependence closely analogous to that of the individual worker.

27. This first requirement of a particular type of economic dependence is closely related to the second requirement of a particular kind of business relationship. In order for a person to be considered a dependent contractor, that person must not only be economically dependent upon another person, but also must be "under an obligation to perform duties for that person" roughly analogous to that of an employee. This reference in the statutory definition requires us to look beyond the factor of economic dependence to the form of the business relationship to determine if it is roughly analogous to that of employer and employee. Such an examination, however, need not result in the identification of a particular contractual obligation, since a business relationship may exist, and continue, in the absence of any particular contractual obligation. The Board, therefore, need not confine itself to this very narrow issue but may deal with the wider issue of the nature of the business relationship.

[41]. For collective bargaining purposes the Legislature has abandoned the traditional comnon law distinctions between "employees" and "independent contractors". Rather, the Act now identifies a hybrid creature - the dependent contractor - whose rights depend upon the statutory definition, labour relations considerations, and the extent to which s/he is in an economic position roughly equivalent to those for whom this collective bargaining statute was designed. The form of the relationship or the possession of particular assets (for example the ownership of vehicles) are no longer determinative of an individual's status. The test is whether the individual or group are more like employees than self-employed independent entrepreneurs. If they are, they are entitled to bargain collectively. It remains a question of just where to draw the line.

[42]. If the truly "independent contractor" or small entrepreneur is at one end of the economic spectrum, and the employees at the other end, where do the owner-operators and drivers in t. ~is case fit - bearing in mind that neither ownership of the vehicle or licence, nor the legal form of tie relationship, are controlling factors? In our opinion, the owner-operators are really more like employees of Yellow.

[43]. What the owner-operators supply to Yellow is primarily their labour, in the service of Yellow's customers. The fact that they may own or lease a car which, we note, must still meet Yellow's specifications, does not alter that basic equation. Yellow exercises detailed control over the performance of their work as it must if it is to preserve its customers' goodwill, and ensure that they are served in accordance with its own standards. Yellow also maintains an elaborate system of riles and disciplinary responses which effectively penalizes any owner or driver who does not meet those standards. In this regard the owner-operators look very much like employees of Yellow whose position on the job is not that much different from the drivers for Transportation Unlimited, who also work in the Yellow system and whom everyone agrees are employees.

[44]. . Yellow selects the owner-operator whom it will permit to work for its organization, re serves the right to ensure that they are properly trained, monitors their behaviour on the job, and can effectively terminate that relationship at will. Because the City controls the fares (except perhaps in the case of private arrangements between Yellow and its corporate customers) Yellow's stand rent, fees, and work referrals effectively govern the remuneration of owner-operators to whom work is distributed and paid for on a kind of "piecework" basis. These factors also make the owner-operators look more like employees of Yellow than the independent entrepreneurs that Yellow claims them to be. In a very real sense, the owner-operators "work" for Yellow, not for themselves.

[45]. The constant references to Yellow's "management" to whom "on the road" problems are to be referred, is no accident of language. That term quite accurately describes a situation in which Yellow's supervisors do indeed "manage" the daily activities of the owner-operators and drivers in the Yellow system. And of course, Yellow is able to do so because there is only a limited degree of skill, expertise, specialization or creativity involved in the work performed by those working drivers. The situation is not analogous to that of an itinerant electrician or plumber whose specialized training and provincial certificate of qualification puts the performance of his work beyond the detailed control of the persons by whom he is engaged from time to time, and who can plausibly claim to be a self-employed small businessman.

[46]. There is very little evidence of entrepreneurial activity such as self-promotion, advertising, the aggressive solicitation of business from other competitors, price competition or the organization of one's business to take advantage of limited liability or the tax laws. In the case of owner-operators, their so-called "chance of profit" or "risk of loss" (to borrow phrases from Montreal Locomotive) has little to do with their business acumen, sensitivity to the market, astute investment, innovation, risk taking, or a perceptive and profitable reading of customer needs or the marketplace. The owner-operator's "business" horizons are almost totally circumscribed by the Yellow organization upon which they are dependent for their work opportunities and revenue flow. It is Yellow's business efforts (and on the evidence they have been quite successful) which generate work for the drivers and owner-operators.

[47]. If the purchasers of an individual's services are numerous and of diverse character, that is, if s/he sells his/her services to the market generally, the individual looks more like a self-employed small business person than an employee. There is less likely to be the kind of economic dependence or control characteristic of an employment relationship (although even here the situation may be cloudy in the case of part-time workers who move from job to job). In the instant case however, the owner-operators have an established and consistent relationship with only one entity - Yellow - and both the terms of that relationship and the market in which they operate significantly limit their ability to put their skills to the service of others. They could "quit" and go to work for another broker just as any employee could leave Yellow's employ and go to work for another broker but, in reality, there is limited economic mobility or independence. Nor (despite Yellow's assertions to the contrary) are the owner-operators really free to reject job opportunities and work when and where they wish. Not only does economic need preclude such activity, but any personal failure to serve Yellow's customers in the manner and time specified by Yellow would undoubtedly lead to a severance from the Yellow organization. And if one asks the question "whose taxi business is it", the answer is abundantly clear. The owner-operators are not carrying on an independent business on their own behalf rather than on behalf of Yellow. They are an integral part of Yellow's operating organization, subject to Yellow's coordination and control over the "when", "where", and to some extent "how" their labour will be utilized.

[48]. In all of these respects the owner-operators resemble employees rather than the independent contractors that Yellow claims them to be. In two respects however they do not: their compensation/remuneration does not flow directly from Yellow in the form of "wages" (except perhaps in the case of Yellow's charge-account customers); and, the owner-operators often engage (or "lease shifts" to) other drivers who fill in on off-hours, weekends or holidays when the owner-operator does not want to work.

[49]. The first factor flows from the special market context of the regulated taxi industry and is probably not particularly significant. However the second factor is more troublesome because, to the extent that an individual profits in any significant sense from the labour of others, he begins to look like an employer who should not be able to take the benefit of the Labour Relations Act (see for example Canada Crushed Stone, [1977] OLRB Rep. Dec. 806 where the Board held that despite a contractor's economic dependence upon a single purchaser of his services, he was not a "dependent contractor" within the meaning of the Act because he owned a number of trucks and employed a number of drivers to operate his equipment His situation, although dependent, did not more closely resemble that of an employee).

[50]. As we have already mentioned, the taxi business is a highly regulated one in which the standard fares must necessarily be collected, in most instances, by the driver having immediate contact with the customer concerned. There are no "wages" as such. The drivers' income is derived from what is left after the fees payable to others. However, in keeping with the Board's past approach in such matters (see Blue Line Taxi Co. Limited, [1979] OLRB Rep. Nov. 1056, Niagara Veteran Taxi, [1981] OLRB Rep. Feb. 198, and Windsor Airline Limousine Services Limited, [1981] OLRB Rep. March 398) we do not think that is the critical characteristic in the owner-operators/drivers' relationship with Yellow. In Blue Line for example the Board observed:

8. It is argued that despite the flow of work opportunities being through the respondent that no compensation or reward flows directly from the respondent to the owner-drivers but rather that all revenues flow from third-party passengers and the owner-drivers are totally at risk for the collection of such; and that this factor distinguishes the instant case from previous cases considered by the Board where the responsibility of revenue collection from third parties was assumed by the respondent and payments flowed directly from the respondent to the owner-driver. In our view this single factor 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.

Similarly in Niagara Veteran Taxi the Board commented:

18. Taxi owner-operators are often a triangular relationship with the company they work for and the passengers they service. That the major source of their income happens to be paid to them directly by passengers rather than a taxi company does not itself alter the essential nature of the business relationship between the owner-operator and the taxi company.

19. Another kind of triangular relationship was fully analyzed by the Board in A. Cupido Haulage Limited, 11980] OLRB Rep. May 679 where truck owner-operators were in a triangular relationship with a broker, A. Cupido Haulage Limited, and the quarry owners, Canada Crushed Stone. In this situation when owner-operators' compensation was paid by the broker, notwithstanding the fact that they received their compensation from the broker, the Board held that the owner operators were economically dependent on Canada Crushed Stone.

20. The purpose of the dependent contractor amendments to the Act was, generally, to enable persons engage in collective bargaining who, despite numerous earmarks of independent contractors, are in essence dependent for their livelihood on the person or company for whom they perform services for compensation or reward. It would thwart the intention of the Legislature if such persons were denied dependent contractor status just because they receive their compensation directly from the client serviced rather than their employer. This is especially true when neither the scheme of the Act nor the definition of "dependent contractor" stipulates that compensation or reward must come directly from the employer.

We are inclined to accept these views. We do not think that in the context of the taxi industry the c9llection of fares (set by the City) by owner-operators or drivers is a critical element in their relationship with Yellow - particularly since Yellow retains virtually complete and unreviewable control over the flow of work opportunities and the deductions from the drivers' revenue in respect of stand or equipment rental. If Yellow were to increase these fees, as it could do unilaterally, the operators/drivers would have their income reduced proportionally, and, if dissatisfied, would have little option except to go to work for some other broker - a position analogous to that of a disgruntled employee.

[51]. The alleged "employment" of others on the other hand is particularly important from a labour relations perspective because this suggests a relationship more closely resembling that of an independent contractor who, in fact is also exhibiting certain attributes of "an employer" - a category that the Labour Relations Act quite clearly excludes from the process of collective bargaining (see Canada Crushed Stone, supra). However once again, commercial reality does not always correspond neatly with these precise legal categories. In the taxi business, the owner-operator does not engage a replacement driver to "profit from his labour" in any material sense, but rather to fill in for the times when he cannot work for Yellow, so that he can "make ends meet", and to preserve the continuity of his commitment to the Yellow organization. The owner-operator is an "employer" in form only, for the meaningful lines of accountability still run between Yellow and the working driver, who remains, on the job, subject to Yellow's rules, direction and control. The economic relationship between the owner-operator and driver is largely confined to agreeing on the split of the revenue derived from serving Yellow's customers and is either a flat fee or some percentage of the total. Like the owner-operator, the driver derives his income from the name, goodwill, and dispatch service of Yellow, and he is subject to the same rules of behaviour and disciplinary regimen. In this regard the terminology of "leasing a shift" is quite accurate. The driver is not so much being "employed" by the owner-operator, as being permitted, for a fee, to work for Yellow. Yellow can tolerate such substitution because anyone working in its system must conform to Yellow's detailed prescriptions about the way things must be done, and Yellow always retains the residual right to discipline or terminate any driver that does not meet those norms. In this regard Yellow is not unlike a construction industry employer who will be content with whomever is referred from the union hiring hail so long as s/he conforms to the prescribed standards of performance.

[52]. The use of a helper or "fill-in worker" to lighten the load of a person alleged to be a dependent contractor has never been considered, by itself, to be an entrepreneurial endeavour which would create a situation more closely resembling an independent contractor than an employee or would preclude involvement in collective bargaining. (See: Comfort Guard Service Ltd., [1978] OLRB Rep. Oct. 905, Dominion Dairies Limited, [1978] OLRB Rep. Dec. 1083, Niagara Veteran Taxi, [1981] OLRB Rep. Feb. 198, and Windsor Airline Limousine Services Limited, [1981] OLRB Rep. March 398.) In Dominion Dairies Limited the Board put the problem this way:

The line between contractors whose activities are more closely analogous to those of a wage earner, so as to make them dependent contractors, and contractors who are sufficiently entrepreneurial as to be excluded from that definition is not easy to draw. It can only be drawn in the light of the facts of each particular case. In Canada Crushed Stone the Board found that a contractor who owned 10 trucks which were driven by seven employees in an aggregate material hauling business that grossed $250,000 per year was not, by virtue of the entrepreneurial nature of his business, a dependent contractor within the meaning of the Act. In a more recent decision, Comfort Guard Services Ltd. (Board File No. 2007-77-R, as yet unreported, Oct. 6, 1978) the Board found that a heating equipment service contractor was not deprived of status as a dependent contractor merely because he sometimes made use of a helper on his service calls. In that case the Board determined that the use of a helper merely to lighten the serviceman's load was to be distinguished from the use of an employee hired on a regular basis to drive a second vehicle and make separate service calls, thereby substantially increasing the contractor's capacity for profit.

When the Board is faced with the question of the effect of the use of paid help by a contractor it must determine whether, in the light of all of the evidence, the person or persons used merely assist the contractor in the performance of his work or in fact perform work that is separate and beyond the work done by the contractor, so that the contractor may fairly be characterized as master of a business that profits in a substantial way from the labour of others.

In this case the Board is satisfied that the contractor-drivers who make use of a single helper, whether occasionally or regularly, do not cease to be dependent contractors by virtue of that fact. The use of a young helper to lighten the load during the summer season, to shorten the hours worked on a Saturday or to eliminate the burden of stairs on a daily basis does not thrust the contractor-driver into an entrepreneurial undertaking that can be meaningfully described as deriving profit in any substantial way from the work of others. The contractor-drivers examined used helpers when they were employed as milkmen and represented for collective bargaining purposes by the applicant prior to 1970. At that time the Board had recognized that the use of a helper did not of itself deprive an individual on his status as an employee under the Act. (Automatic Fuels Limited, [1966] OLRB Rep. Apr. 22).

[53]. We have very little evidence about the precise relationship between the owner-operators and their fill-in drivers. What we do know is that both are ultimately dependent upon Yellow for their work opportunities and, while working, are subject to Yellow's rules, regulations, and control. The "fill-in" drivers, too, are in a position analogous to drivers employed directly by the Yellow organization, and their relationship can be just as easily terminated. It is inconceivable that a driver could continue to work in the Yellow system once Yellow had indicated that s/he was no longer welcome. Similarly, in the imposition of discipline - be it suspension from the system or otherwise - there is no evidence that the owner-operator is invited into the discussion or called upon to apply his own sanctions. So far as can be determined from the evidence before us, Yellow either acts unilaterally or, based upon its own investigation, issues an ultimatum which it expects to be obeyed.

[54]. Having regard to the totality of the evidence, there is a plausible argument that the owner-operators are "employees" of Yellow despite their ownership of certain tools and equipment; however, having regard to the terms of section 1(1)(h) of the Act, we are persuaded that hey can be properly characterized as dependent contractors of Yellow and thus "employees" for statutory purposes who are eligible for collective bargaining. We are also persuaded that the fill-in drivers or helpers are employees of Yellow for collective bargaining purposes - although, as will be seen, that does not mean that the "pure drivers" and owner-operators need necessarily be grouped .n the same bargaining unit.

VIII

[55]. Section 6(5) deems a unit of dependent contractors to be appropriate for collective bargaining but gives the Board a discretion to fashion a "mixed unit" where the majority of the dependent contractors indicate their wish to be associated with other employees for collective bargaining purposes, and the collective bargaining contexts suggests that this is a sensible thing to do implicit in this formula is the suggestion that dependent contractors may well have a different community of interest from other employees which would warrant grouping them into a separate bargaining unit. Those differences flow from the hybrid character of the dependent contractor as well as the special (and perhaps competitive) relationship with other employees who, as here, may have degree of dependence on the owner-operator as well as the ultimate "employer" of their services.

[56]. In the instant case there is no affirmative evidence that the owner-operator/dependent contractors wish to be included in the same bargaining unit as the helper-drivers, and, in our opinion, the structure of section 6 contemplates something more than silence or acquiescence in this regard. "Wishes" are to be canvassed in a positive way - not as suggested here, by the absence of opposition. For example, section 6(1) envisages a representation vote to test employee wishes with respect to the bargaining unit configuration. Section 7(2) also refers to employee "wishes" and requires positive documentary evidence. Where such evidence is defective or equivocal, the Board will once again seek the confirmatory evidence of a representation vote. These explicit statutory mechanisms suggest to us that the test of employee wishes contemplated by section 6(5) must be satisfied in some positive way - not by silence, negative implication, or non-involvement. It may be only a line on a union membership card to the effect that: "if I am found to be a dependent contractor, I am content to be included in a bargaining unit with other employees"; but it should be at least as clear as that.

[57]. Here, we have clear evidence that quite a number of employees and dependent contractors want to be represented by the union and engage in collective bargaining. But there is nothing on the face of the documentary or other evidence before us to suggest that the dependent contractors have even considered the question of bargaining unit configuration or expressed their wish to be included in a mixed bargaining unit with other employees.

[58]. There is also some evidence that the fill-in drivers may have a different community of collective bargaining interests from the full-time owner-operators. If Yellow ultimately controls the fund of available work opportunities, the owner-operators also have a measure of control over the distribution of those work opportunities which they consider to be surplus. An owner-operator may decide to fill in the open spots in his schedule with one helper or three, and is theoretically free to strike a different bargain with each of them. The drivers remain ultimately responsible to Yellow for their performance on the job, but the owner-operator has a degree of control or influence over their job prospects - not least because if the owner-operator is in some way dissatisfied or chooses to work longer hours, s/he can terminate the relationship forcing the driver to look for work elsewhere. Similarly, (although there is no actual evidence to this effect) an owner-operator may admonish a driver for conduct deemed unacceptable (particularly if Yellow expressed that opinion) and could conceivably sever his relationship with a driver for that reason. Finally, the evidence does suggest that owner-operators may provide on-the-job training for new drivers (subject to rules established by Yellow) which may involve some measure of performance assessment.

[59]. In summary then, we really do not have concrete evidence that the owner-operators wish to be included in a mixed bargaining unit with helper-drivers and there is some indication that those drivers may have a different community of interest which would warrant their inclusion in their own bargaining unit. We should also note that just as there is no evidence that the owner-operators wish to be grouped together with drivers, neither is there any evidence that the drivers wish to be grouped together with the owner-operators with whom they have an economic relationship.

[60]. In all of the circumstances and given the state of the evidence, we are persuaded that the most prudent course is to designate two bargaining units: one of single car/plate owner-operator dependent contractors whom the statute deems to be an appropriate bargaining unit, and a second unit of other drivers who work within the Yellow system.

IX

[61]. The final question which we must address concerns the position of the "fleet owners" and other respondents whom the union contends are "related employers" within the meaning of section 1(4) of the Act. The union contends that in order to establish a sensible and realistic collective bargaining framework, these respondents should be assigned to the employer side of the equation and grouped together as "related employers" with Yellow and Transportation Unlimited.

[62]. Section 1(4) of the Act was enacted in 1971 and deals with situations where the economic activity giving rise to employment or collective bargaining relationships regulated by the Act, is carried out by, or through, more than one legal entity. Where such legal entities carry on related business activities under common control or direction, the Board is empowered to pierce the corporate veil and, for collective bargaining purposes, group together those entities which control or influence employer-employee relationships. Section 1(4) ensures that the institutional rights of a trade union and the contractual rights of its members, will attach to a definable commercial activity, rather than the legal vehicles through which that activity is carried on. Legal form is not permitted to dictate or fragment a collective-bargaining structure; nor will alterations in legal form undermine established bargaining rights. In J. H. Normick Inc., [1979] OLRB Rep. Dec. 1176 the Board described the effect of section 1(4) in these terms:

21. Section 1(4) recognizes that the business activities which give rise to the employer-employee relationships regulated by the Act, can be carried on through a variety of legal vehicles or arrangements; and it may not make "industrial relations sense" to allow the form of such arrangements to dictate, and possibly fragment, the collective bargaining structure. In order to have orderly and stable collective bargaining, the bargaining structure must have some permanence and accord with underlying economic and industrial relations realities. Where two employers are nominally independent but are functionally and economically integrated, the essential community of interest between them and the employees employed by one or both of them may make it appropriate to treat them as one employer for some or all collective bargaining purposes. This is not to say, however, that common economic control or related business activities will automatically cause the Board to issue a section 1(4) declaration. The Board, having satisfied itself that the businesses or activities before it are under common control or direction, is given a discretion as to whether or not to issue a section 1(4) declaration. If the scheme of the Act would be better served or the collective bargaining structures placed on a sounder footing by refusing to make a section 1(4) declaration the Board will exercise its discretion accordingly. (See Zaph Construction Ltd., [1976] OLRB Rep. Nov. 741 and Ellwall and Sons Construction Limited, [1978] OLRB Rep. June 535.) In view of the broad language of the section which extends to cover such a wide range of business relationships, the labour relations considerations which govern the exercise of the Board's discretion are paramount in determining whether the Board should declare two or more businesses or activities to be one employer for purposes of The Labour Relations Act.

In Brantwood Manor, [1986] OLRB Rep. Jan. 9, the Board added these observations:

101. When the application of subsection 1(4) is in issue, the Board is concerned with the definition or potential redefinition of a continuing collective bargaining relationship, not with the assignment of vicarious liability for an occasion of negligence, nor solely with the interpretation and application of the language of a collective agreement. If there is a serious debate over which of two entities is the employer of persons who are conceded to be someone's employees, that will be because some of the important attributes of an employer can be seen in each of them. When each of the entities appear to have a real stake in and influence on matters of relevance to the labour relations of employees in a bargaining unit, then even from their perspective it may make sense to treat them both as the employer for labour relations purposes than to choose between them and designate one as employer for labour relations purposes to the exclusion of the other, who might for other purposes be treated as employer. The possibility that a choice is unnecessary or inappropriate should be considered before the choice is made.

102. It is important to observe that, in determining whether to declare that two distinct legal entities constitute one employer for the purposes of the Labour Relations Act, the question whether the discretion to do so exists in the circumstances at hand and the question whether such a declaration ought to be made in those circumstances are two distinct questions. Accordingly, it is not particularly helpful to test the reasonableness of a proposed interpretation of the phrases "associated or related activities or businesses" and "common control or direction" by asking whether that interpretation could embrace circumstances in which a declaration ought not to be made. In giving the Board a discretion whether to make or not make a declaration when the preconditions it specified had been made out, the Legislature recognized that there could well be circumstances in which "associated or related activities or businesses" are carried on by two entities "under common control or direction" without there being any valid labour relations reason for treating the two entities as constituting one employer for the purposes of the Act. Thus, we can accept the proposition that the degree and nature of the control and direction which a standard form construction contract permits a contractor to exercise on a construction project over an otherwise independent subcontractor would not ordinarily warrant making a declaration that the contractor and subcontractor are one employer for the purposes of the Labour Relations Act, without having to accept also the argument that the parties to such a relationship are not "under common direction or control" as those words are used in subsection 1(4). Apart altogether from the fact that the contracts with which we are concerned here contain provisions which are not found in standard construction contracts and which do play a significant part in our analysis, the suggested analogy with the usual contractual hierarchy on a "typical" construction project is inapt, if only because it does not take into account the collective bargaining relationships which typically co-exist with that contractual hierarchy and which typically make it either unnecessary or inappropriate from a labour relations perspective to treat contractors and their subcontractors as one employer for the purposes of the Act.

[63]. The problem in the instant case arises not from these general propositions, which we accept, but rather from the ambiguity of their application in the circumstances before us. For reasons that we have already discussed, the evidence indicates that Yellow exercises substantial -indeed overriding - control over the way in which the individuals whom the union seeks to represent go about their daily routine. We can readily conclude that Yellow and Transportation Unlimited should be treated as "one employer" for collective bargaining purposes, and we so declare. There is virtually no evidence with respect to the other named respondents and no reason to believe that their inclusion in a related employer declaration would make much difference. It is tempting to accept the union's submission that collective bargaining matters would be simplified if all of the business entities potentially associated with Yellow and having some economic relationship or degree of influence over the group whom the union seeks to represent were treated as "one employer" for collective bargaining purposes. However, the evidence before us simply does not warrant that exercise of our discretion even if, from both a commercial and linguistic perspective, Yellow, Transportation Unlimited, and the other named respondents are engaged in related business activities under the common control, direction and coordination of Yellow and its principals.

[64]. We conclude, therefore, that Yellow and Transportation Unlimited should be, and are hereby declared to be "one employer" for the purposes of the Labour Relations Act, but that the section 1(4) application in respect of the other named respondents should be dismissed - without prejudice to the union's right to bring such further application as the circumstances may warrant.

[65]. For the foregoing reasons, we conclude:

1. That the single car/plate owner-operators are dependent contractors of Yellow and therefore entitled to engage in collective bargaining.

2. That on the evidence before us there should be two bargaining units: one consisting of dependent contractors and another consisting of drivers.

3. That the union's plea to "tie in" the other named respondents as "related employers" must be dismissed for lack of evidence or proof of collective bargaining necessity - but without prejudice to a further application should such appear to be warranted.

[66]. With these determinations and general observations, the Board hereby remits this matter back to the Labour Relations Officer, already appointed, for the purpose of sorting out any remaining questions concerning the employee lists or the composition of the bargaining units. The Board (but not necessarily this panel) will remain seized of any outstanding issues and will entertain such further representations as any of the parties may wish to make.