International WoodWorkers of America v. Atway Transport Inc., 1989 CanLII 3245

[1989] OLRB Rep. June 540

1634-87-U International WoodWorkers of America, Complainant v. Atway Trans­port Inc., Respondent

BEFORE: Robert D. Howe, Vice-Chair, and Board Members R. M. Sloan and J. Sarra.

APPEARANCES: W. Dubinsky, Edward Kidd, Lyle Pona and Wilf McIntyre for the complainant; Y. L. J. Fricot, D. F. Nelson and F. J. W. Bickford for the respondent.

DECISION OF ROBERT D. HOWE, VICE-CHAIR, AND BOARD MEMBER, R. M. SLOAN; June 6, 1989

1. This is a complaint under section 89 of the Labour Relations Act in which the complain­ant (also referred to in this decision as the "Union") alleges that the grievor, Edward Kidd, has been dealt with by Atway Transport Inc. ("Atway") contrary to the provisions of sections 66 and 70 of the Act. The essence of the complaint is that Mr. Kidd was terminated by the respondent in September of 1987 in contravention of the Act.

2. In its reply to the complaint, the respondent submitted that the grievor was not an employee of the respondent but was at all material times an independent contractor. The com­plainant, on the other hand, contended that the grievor was a dependent contractor and, therefore, an employee for purposes of the Act. At the commencement of the hearing of this complaint on January 6,1988, the parties agreed that the Board should hear evidence and argument concerning that issue as a preliminary matter. In this regard, it was common ground between the parties that unless the Board found the grievor to have been a dependent contractor at the time of the termina­tion, the complaint could not succeed as the Board would have no jurisdiction to hear it. (For ease of exposition, the present tense is used in parts of this decision to describe various aspects of the respondent's operations, including its relationship with contractors such as the grievor. However, for purposes of clarity, we would note that unless otherwise indicated, the time frame actually cov­ered by the decision is December of 1986 to (and including) September of 1987.)

3. The hearing of the aforementioned preliminary issue continued on March 28, 29, and

30, April 6 and 7, June 6, July 26 and 27, August 16 and 17, September 12, 13, 20, and 21, 1988, and on January 4, 5, 30, and 31, February 9 and 10, and March 7, 28, and 29, 1989. It was initially estimated that the hearing would be concluded in three or four days. However, the hearing was substantially prolonged as a result of a lamentable lack of cooperation on the part of the parties' representatives, combined with an all too frequent failure on their part to exercise good judgment regarding the conduct of the case, which resulted in numerous objections, unnecessary argumenta­tion and delay concerning production of documents, and the introduction of a considerable amount of evidence which is of marginal relevance, at best, to the issue before us. The completion of the hearing was also delayed by the unavailability of the parties' representatives on a number of days which were offered by the Board. For example, when it became apparent in September of 1988 that the hearing would not be completed in the days already scheduled, the Board offered the par­ties a total of fourteen days during November, December, and January. The parties' representa­tives were only available on the last two of those fourteen days. Thus, it was necessary to schedule continuation dates in February and March of 1989.

4. During the twenty-four days which were devoted to hearing this matter, the Board heard the evidence of Edward Kidd, the aforementioned grievor; Robert Halstead, the President of Atway; Claude Perrier, the Secretary-Treasurer of Atway; Len Salmi, a Vice-President of Atway and its Trucking Manager; and Joseph Devlin, a principal of Devlin Timber, which is a log­ging and timber company that has been operating in northwestern Ontario for many years. In addi­tion to the testimony of those five witnesses, the Board has before it sixty-one exhibits which were entered during the course of these proceedings. In making the findings of fact set forth in this deci­sion, the Board has carefully considered all of that oral and documentary evidence (with the excep­tion of the exhibits which were not properly proven after they were received by the Board and marked for purposes of identification on the basis that they would not be given any weight unless they were duly proven). We have also considered the submissions of the parties' representatives concerning that evidence, and such factors as the firmness of the witnesses' respective memories, their ability to resist the influence of self-interest to modify their recollections, the consistency of their evidence, and their demeanour. We have also assessed what is most probable in the circum­stances of the case, and considered the inferences which may reasonably be drawn from the totality of the evidence.

5. The respondent is in the business of hauling raw forest products such as sawlogs and pulpwood in northwestern Ontario. (For ease of reference, those products are generally referred to as "wood" in this decision.) It is under contract with Buchanan Forest Products Ltd. ("Buchan­an") to haul various types of wood from a number of different logging sites to twenty-two mills in various locations including Hudson, Dryden, Thunder Bay, Kenora, Fort Frances, Nipigon, and Terrace Bay. Buchanan is a timber broker that purchases wood and contracts to sell it to other firms. Buchanan, Atway, and a number of those mills, including the stud mill operated by McKen­zie Forest Products Inc. ("McKenzie") in Hudson, are part of the "Buchanan Group", which is a fully integrated forest product supply organization involved in many facets of the forest products industry. After Buchanan informs Atway that it (Buchanan) has a contract to sell a certain number of cords to a particular mill, Atway contacts the mill to determine the delivery schedule for that wood. Atway's hauling is performed by approximately one hundred trucks provided by hauling contractors such as the grievor, and a fleet of about fifty trucks (the "Company trucks") owned by Buchanan and operated by the respondent pursuant to an agreement with Buchanan. When it is operating on a single-shift basis, Atway usually employs about forty drivers to operate the Com­pany trucks. During double-shift periods, that number can rise as high as eighty. (For ease of expo­sition, persons who drive Company trucks will be .referred to in this decision as "Company driv­ers", and the aforementioned hauling contractors will be referred to as "contractors".) The Company drivers generally work in the Thunder Bay area, but the respondent sends them to Sioux Lookout and other areas from time to time when hauling problems are encountered there.

6. The hauling business that since January of 1987 has been carried on by Atway was pre­viously carried on by Agassiz Transport Inc. ("Agassiz"). Agassiz ceased to operate in January of 1987 as a result of a seizure of its assets (including its bank account) at the behest of the Workers' Compensation Board ("W.C.B."), which had billed Atway for an amount in excess of $250,000 in December of 1986 under a newly adopted experience rating system. During January of 1987, Atway became the registered operator of the aforementioned fleet of trucks which had previously been operated by Agassiz. (To expedite the changeover, a shelf company named "Maverick Trans­port Inc." was used, with its name being subsequently changed to "Atway Transport Inc.") The hauling business carried on by Atway is identical in all material respects to that previously carried on by Agassiz. (Since it is generally unnecessary for purposes of this case to distinguish between them, both Agassiz and Atway will be referred to as the "Company" in this decision.)

7. The respondent's Sioux Lookout operation is managed by Jim Miller, a Company Vice-President who reports to Messrs. Salmi and Halstead. Mr. Salmi is in charge of the Company's trucking operations. His office is in Thunder Bay but he has spent a considerable amount of time in Sioux Lookout and is quite familiar with the Company's operations in that area. As President of the respondent, Mr. Halstead has overall responsibility for the Company's activities, but confines himself to operational matters, leaving financial matters to Mr. Perrier. Their offices are also in Thunder Bay. Mr. Miller's office is located in a building in which the Company has a garage in Sioux Lookout. A Company employee named Tony Bortolot assists Mr. Miller by maintaining radio contact with loader operators at loading sites in the Sioux Lookout area. He also orders parts for Company equipment such as graders, bulldozers, and front end loaders, and looks after the stockroom in which those parts are stored. In order to provide hauling conditions which will attract contractors and ensure an efficient haul, the Company employs operators to run that equipment in the Sioux Lookout area. In addition to its garage, the Company also has a bunkhouse in Sioux Lookout where contractors from other areas can reside free of charge.

8. During the hauling season, the Company generally has between twenty and twenty-five contractors engaged at any given time in the Sioux Lookout area, and is almost always looking for more as there is much competition for their services. Because of the contractors' high mobility and propensity to shift from haul to haul, the Company had to engage a total of more than fifty con­tractors in the Sioux Lookout area during the course of 1987 in order to have between twenty and twenty-five engaged in hauling for the Company in that area at most times during the hauling sea­son. Contractors hauling in the Sioux Lookout area generally come from Sioux Lookout, Hudson, Dryden, Fort Frances, Kenora, and Ignace. However, some also come from Manitoba and Quebec at the behest of Mr. Salmi, who travels to various locations in northwestern Ontario and beyond the Province in order to attract contractors to haul for the Company. Company trucks are not usu­ally used in the Sioux Lookout area except when there is a severe shortage of contractors, or when the Company and the contractors are unable to agree upon a mutually satisfactory rate for a partic­ular haul.

9. Mr. Kidd has worked in the raw forest products industry for approximately nineteen years. He was born and raised in Sioux Lookout and has worked in that area for most of his life. Prior to hauling for Agassiz in 1986, Mr. Kidd (and a partner) operated a timber broking business under the name Northwest Logging Co. ("Northwest"). Northwest bought, sold, and loaded vari­ous types of wood for delivery to various customers. As part of that business, Mr. Kidd operated a bulldozer which he owned at that time. He also owned a loader, but sold it in the spring of 1986. Northwest paid a fixed rate per cord to contractors for hauling wood to its customers, and operated in competition with Agassiz for the contractors' services. Since the movement of contractors back and forth between Agassiz and Northwest became so frequent as to make it infeasible for both of them to operate at the same time, Mr. Kidd and Mr. Halstead (as President of Agassiz) arranged for contractors to haul for Agassiz from Monday to Wednesday, and for Northwest from Thursday to Saturday. Prior to becoming a partner in Northwest, Mr. Kidd ran his bulldozer and loader for another company, pursuant to contracts with that firm. Over the years, he bought and sold a num­ber of different trucks which he used to haul lumber and gravel for various companies.

10. When Mr. Kidd ran out of work for his bulldozer in the fall of 1986, he put it up for sale and decided to seek work as a trucker. He did not approach any of the firms in the Sioux Lookout area which employed drivers because he wanted to drive his own truck and to be in business for himself, rather than driving someone else's truck. Mr. Kidd was familiar with Agassiz's operations in the Sioux Lookout area as he had hauled for them as a contractor for about a year and a half in the late 1970's, before leaving to look after a gold extraction operation in Costa Rica.

11. In December of 1986, Mr. Kidd went to Agassiz's garage in Sioux Lookout and asked Jim Miller about the possibility of hauling for Agassiz. Mr. Miller's response was "Buy a truck and I'll give you a job", or words to that effect. Mr. Kidd then obtained a bank loan to finance the pur­chase of a tractor for $52,500 and a trailer for $11,500. (For ease of reference, we will refer to that tractor-trailer unit as Mr. Kidd's "truck", in accordance with the practice which has been adopted herein of using that term to include various types of equipment used to haul raw forest products.) Having previously owned hauling equipment, Mr. Kidd was aware that a number of different fac­tors had to be taken into account in selecting such equipment, including the purchase price and condition of the equipment, as well as fuel, repair, maintenance, and insurance costs. Mr. Kidd considered all of those factors in deciding what to purchase, and also considered the revenue that he would likely be able to generate on the basis of the Agassiz haul rates which he had heard about from other persons who hauled for Agassiz. He acknowledged in cross-examination that the fac­tors which he took into account in deciding whether or not to purchase that tractor and trailer were "business considerations" relevant to whether or not he could make a profit hauling for Agassiz.

12. After purchasing the truck, Mr. Kidd met again with Mr. Miller and "signed a piece of paper" which Mr. Miller told him was a contract with Agassiz. Neither party was able to provide the Board with that document. However, nothing turns on whether Mr. Kidd did or did not sign a written contract, as it is clear from the evidence that the relationship between contractors and the Company is the same regardless of whether or not they sign a written contract. Moreover, the evi­dence also indicates that the actual relationship between the contractors and the Company is at variance with a number of the provisions contained in the standard form contract which the Com­pany was using at that time.

13. Mr. Miller provided the grievor with a list of the rates paid by Agassiz for various hauls and arranged for him to obtain a fuel key for use in the Company's key-lock system. Mr. Kidd gave Agassiz a $150 deposit for that key which enabled him to obtain diesel fuel for his truck at a Com­pany pump. He was under no obligation to use that fuel but chose to do so (instead of buying fuel elsewhere) because of the relatively low price of that fuel, which was offered to contractors at a price set by the Company annually, based on volume buying. That system of setting the price of Company fuel on a yearly basis was introduced in the early 1980's when rapid variations in fuel prices were creating a need for constant renegotiation of the price per cord paid by the Company on various hauls. The cost of the Company fuel used by Mr. Kidd's truck was deducted from the cheques which he received from the Company for hauling wood.

14. On Mr. Kidd's first day of hauling for Agassiz, Mr. Miller told him to go to a loading point (called the Idaho) about sixty kilometres north of Sioux Lookout for his first load. After loading Mr. Kidd's truck with eight-foot saw logs, the loader operator gave him a load slip which showed the destination of that load to be the McKenzie mill in Hudson, which is approximately twenty-five kilometres west of Sioux Lookout. When Mr. Kidd arrived there, an employee of the mill measured the volume of the load and provided Mr. Kidd with a scale slip for use in obtaining payment from the Company. After his truck had been unloaded, Mr. Kidd returned to the Idaho for another load, which he also delivered to that mill, thereby completing his shift for that day.

15. In order to increase his income, when Mr. Kidd began to haul for the Company he decided to have his truck operate on a double-shift basis. Mr. Kidd drove the truck on the night shift and arranged for an individual from Hudson named Marcel Lacasse to drive it on the day shift. The decision to have Mr. Lacasse drive the truck was entirely Mr. Kidd's; the Company had no input into the selection of Mr. Lacasse. The evidence indicates that Mr. Kidd was free to choose whomever he wished to drive his truck, and that he was under no obligation to drive it himself. Thus, he had the option of confining the vehicle to a single shift with Mr. Lacasse (or anyone else whom he wished to use) as the driver. However, he chose to operate his truck on a double-shift basis and to drive it himself on one of the shifts in order to make more money. Mr. Kidd paid Mr. Lacasse $70 a trip, and "put him on as a subcontractor" for whom he did not make any unemploy­ment insurance, income tax, Canada Pension Plan, or other deductions. That arrangement contin­ued from the time at which Mr. Kidd started to haul for the Company until the Company's loading operations were reduced to a single-shift in March of 1987. During that period, Mr. Kidd paid Mr. Lacasse a total of $5,390.00 for seventy-seven trips.

16. When Mr. Miller became aware that Mr. Kidd planned to operate his truck on a dou­ble-shift basis, he advised Mr. Kidd that he (Mr. Kidd) would need a "compensation number" from the W.C.B. The evidence indicates that it was necessary for Mr. Kidd to obtain such a num­ber because of his decision to pay Mr. Lacasse to drive the truck on the other shift. In this regard, it was Mr. Perrier's uncontradicted evidence that, in the logging industry, it is the policy of the W.C.B. to deem a contractor to be an employee of the principal with whom he contracts so long as the contractor is the only operator of the vehicle. (Mr. Perrier also advised the Board that the Company was challenging the validity of that policy through W.C.B. appeal proceedings.) How­ever, if a contractor pays someone else to drive his vehicle, the contractor is no longer treated by the W.C.B. as being an employee, but rather as being an employer who must register with the W.C.B. and obtain a registration number in order to provide Workers' Compensation coverage for the other driver. Such a contractor has the option of also obtaining Workers' Compensation coverage for himself, but Mr. Kidd elected not to do so, thereby reducing his Workers' Compensation expense but assuming the risk of uncompensated injury.

17. With the assistance of his accountant, Mr. Kidd obtained a Workers' Compensation number by paying $641.00 (based upon the general trucking rate of $6.41 per $100.00 of estimated payroll for 1987, rather than the log hauling rate of $15.12 per $100.00 of estimated payroll for 1987). Under the provisions of the Workers' Compensation Act, the W.C.B. can obtain payment from the Company in the event that a contractor fails to make the required payments to the W.C.B. To protect itself against this potential liability, the Company deducts fifty cents per cord from the amount payable to the contractor. If the Company subsequently receives a clearance from the W.C.B. (indicating that the required payments to the W.C.B. have been made by the contrac­tor), it pays to the contractor the amount which has been withheld. Mr. Kidd did not receive that payment from the Company as the W.C.B. declined to issue a clearance certificate in respect of him because he was not reporting under the proper rate. Thus, the Company has continued to hold back those funds for possible future remittance to the W.C.B.

18. It generally takes about half an hour to load a truck. To reduce waiting time at the loader, the contractors follow a schedule which Mr. Miller posts every week at the Company's garage in Sioux Lookout. That schedule indicates the time at which each of the contractors is to go to the loader for his first load of the week. When the Company is running on a single shift basis, that same time applies each day. On double-shifts, the trucks run continuously from the time of the first load to the end of the week, since each shift lasts twelve hours. Mr. Miller prepares that schedule without consultation with individual contractors. If any Company trucks are hauling in the Sioux Lookout area, they will also be included on the schedule. Adherence to the schedule by Company drivers is monitored by the Company, but there is no monitoring of the degree to which contractors adhere to it as the schedule is provided for the contractors' convenience, and not as a means by which the Company seeks to exercise control over them. As requested by the mills to which raw forest products are delivered, the Company assigns a vehicle number to each of the con­tractors' trucks and to each Company truck, in order to simplify computer entries concerning deliv­eries.

19. In addition to hauling to the McKenzie mill in Hudson, the grievor also hauled wood to Dryden and to Thunder Bay from the Idaho and other loading sites, in accordance with instruc­tions received from Mr. Miller or loader operators at the loading sites. Mr. Kidd initially testified that he had no choice concerning the type of wood to be hauled nor concerning the hauling desti­nation. In this regard, he told the Board (during examination in chief), "You take it or you go home.... [If you refuse] you don't get a load." Mr. Kidd further testified that if a contractor refused to take a load on a particular run he would be "fired". However, he later conceded that he did not know of any contractor who had been terminated for refusing to take a load. He also acknowledged in cross-examination that contractors sometimes refuse to accept a load destined for one location and elect to wait for a load going somewhere else. This was but one of several instances in which sweeping statements which Mr. Kidd made during his examination in chief were contradicted or significantly qualified in cross-examination, thereby demonstrating that Mr. Kidd had not initially been entirely candid with the Board. Those instances, together with the evasive­ness and forgetfulness which Mr. Kidd displayed in some parts of his testimony, have led us to con­clude that we should not rely upon Mr. Kidd's evidence where it is inconsistent with other evidence concerning the Company's operations, including its relationship with contractors such as the grievor. In this regard, we find no merit in the Union's contention that the relationship between contractors and the Company in Sioux Lookout differed from the Company's relationship with contractors in other areas. Having regard to the totality of the evidence, we are satisfied that the relationship between contractors and the Company is substantially similar throughout the Compa­ny's operations in northwestern Ontario.

20. In March of 1987, with the onset of half-load restrictions (necessitated by the Spring thaw) which made hauling impracticable in the Sioux Lookout area, Mr. Kidd was requested by the Company to go to a loading site (known as "Block 3") approximately 120 kilometres northwest of Thunder Bay to haul wood from that site to the Great Lakes Forest Products Mill in Thunder Bay. Mr. Kidd remained there for about a week the first time, and later returned for a few more days. Hotel accommodation in Thunder Bay was provided at no cost to Mr. Kidd and other con­tractors who came to Thunder Bay to assist with that haul. The provision of this accommodation served as an incentive for contractors from outside Thunder Bay to come there and participate in that haul along with contractors from the Thunder Bay area who would not incur any extra expense for accommodation. It also avoided any need to revise the haul rate in order to attract additional contractors. The Company deducted from Mr. Kidd's cheque the cost of the two extra nights that he remained at the hotel after the haul was completed. Mr. Kidd subsequently deducted that cost as a business expense for income tax purposes. Although Mr. Kidd initially suggested that he had no choice but to work on that haul, he subsequently acknowledged in cross-examination that he chose to participate in it because he saw a chance to make some extra money while the haul was shut down in the Sioux Lookout area. Some of the other contractors who were given that opportunity chose not to participate. After he returned to Sioux Lookout from Thunder Bay, Mr. Kidd told Mr. Miller that he was "going to Indianapolis and wouldn't be there for two weeks". Although Mr. Kidd later suggested in his evidence that a contractor cannot take a vacation without Mr. Miller's permission, his description of what he told Mr. Miller concerning that vacation is inconsistent with needing any such permission. Following his vacation, Mr. Kidd resumed hauling for the respondent.

21. The grievor also hauled wood to Thunder Bay from a stock pile at the McKenzie mill in Hudson. He did not solicit that work, but only hauled for McKenzie when Mr. Miller asked him to do so. Mr. Kidd was paid by McKenzie for some of those hauls and by the Company for others. On one of those trips he was requested by McKenzie to transport a blower from another sawmill to the McKenzie mill on his return trip. The grievor also "took something back" to the Company's Sioux Lookout garage on a return trip from Thunder Bay, at the request of Mr. Miller.

22. Mr. Kidd's truck bore only his own name and, unlike the Company trucks, did not have the Company name or logo on it. During cross-examination Mr. Kidd agreed with the suggestion by respondent's counsel that it "wouldn't make a lot of sense to go out and have an Atway sign put on the truck because it's [his] truck and [he's] in the business".

23. The grievor was paid by the Company on the basis of volume of wood hauled. No pay­ment was made for waiting time. To obtain payment for hauls, he provided the Company with a trip report and scale slips on a bi-weekly basis. The trip report listed all of the hauls for which he was seeking payment and specified, for each haul, where the wood was picked up and the location to which it was hauled. In the absence of a trip report, it was sometimes impossible for the Com­pany to determine the proper rate to apply, because the scale slip did not generally refer to the source of the wood other than by means of a Ministry of Natural Resources ("M.N.R.") approval number, which could cover more than one loading site. When Mr. Kidd neglected to provide a trip report along with the scale slips which he submitted to the Company in June of 1987, Holly Cherry, who is a payroll clerk in the Company's Thunder Bay office, wrote the following note to him (on a scale summary dated June 12, 1987): "Please fill out trip report and hand in with time!" (The evi­dence indicates that "time" is a generic term used by the Company's payroll staff to refer to vari­ous indicators of monetary entitlement, such as scale slips submitted by contractors.) When the grievor again neglected to do so later that month, Ms. Cherry wrote the following note to him (on a scale summary dated June 26, 1987): "Please fill out Trip Reports! Next time #4 no pay $4 !" Mr. Perrier told the Board that Ms. Cherry was not instructed to write those words but merely did so on her own in attempting to convince Mr. Kidd to hand in trip reports. He also testified that the Company has never in fact refused to pay contractors without a trip report, although it has paid the lower of two possibly applicable rates in the absence of a trip report clarifying which rate should be paid.

24. Mr. Kidd was initially paid by Agassiz, but in January of 1987 he began to receive cheques from Atway after Agassiz's assets were frozen at the behest of the W.C.B. Atway assumed Agassiz's contract with Mr. Kidd and other contractors who had been hauling for Agassiz. Mr. Kidd continued to haul under the same terms and conditions, and did not discuss the change from Agassiz to Atway with Mr. Miller or anyone else from the Company.

25. The Company gave its contractors the option of obtaining life insurance coverage under its group plan. In May of 1987 Mr. Kidd requested such coverage. Thereafter, a monthly premium of $5.70 was deducted from his cheques. As persons associated with the Buchanan Group, contrac­tors were eligible to apply for coverage under a Blue Cross Health Plan which provided dental, prescription, and supplemental health care benefits. However, if they elected to enrol in that plan, they were responsible for paying their own premiums. Mr. Kidd did not enrol in that plan.

26. In income tax returns prepared for him by his accountant, Mr. Kidd was described as a self-employed equipment operator. With the assistance of his accountant, Mr. Kidd took advan­tage of a number of deductions available to self-employed persons but not to employees. In addi­tion to the aforementioned truck, the assets covered by the grievor's balance sheet included a shop where he parked and repaired it, a half-ton truck which he used for getting tires and other parts for it, and a welder and other tools which he used to make those repairs. The evidence indicates that trucks used for hauling raw forest products break down fairly frequently. Thus, one of the factors that affected how much profit Mr. Kidd made as a hauling contractor was repair costs. Mr. Kidd reduced such costs by using those assets to perform some of his own repairs.

27. While he was hauling for the respondent in the Spring of 1987, Mr. Kidd was contacted by a firm from florida that was interested in obtaining lumber from the McKenzie mill in Hudson. Following that contact, Mr. Kidd spoke with people at the mill to see what arrangements could be made. He considered purchasing or leasing a flat-bed truck for use in hauling the lumber from the mill to Ignace, where it could be loaded onto railway cars for shipment to florida via rail. Mr. Kidd told the Board that if the proposal had gone ahead, he might have obtained another truck and left the original one on the Atway haul with someone like Mr. Lacasse driving it. However, no such arrangements were made as Mr. Kidd never heard any more from the florida firm.

28. The grievor is one of several hundred hauling contractors in northwestern Ontario. Many of them have only a single truck, but some have between two and fifteen trucks. The respon­dent has numerous competitors which vie with it for hauling contractors' services. In this regard the evidence indicates that there is a chronic shortage of contractors in northwestern Ontario and that contractors move about that area quite freely, seeking the best rates and hauling conditions. As indicated above, contractors also move in and out of northwestern Ontario from Manitoba and Quebec. It was Mr. Halstead's uncontradicted evidence that there is a high turnover rate of con­tractors under contract to the respondent. He told the Board, "If we start a haul up on a Monday morning and send ten [contractors'] trucks to the haul, by Tuesday there's usually only six hauling. [The others] have gone somewhere else." He further testified that if contractors think that a better haul is available elsewhere, they will leave for a month, a week or two, or even a few days. The Company does not take any action against such contractors other than to confront those who con­tinue to use fuel obtained from the Company pump and tell them, "When you're using our fuel, haul for us and not for anyone else." Some contractors decline to accept a Company fuel key or card because they intend to continue hauling for various competitors. Contractors do not generally contact the respondent when their trucks break down or when they decide to haul for another firm. Unlike Company drivers, contractors are under no obligation to check in with the Company after each trip, and they do not do so. Most of the contractors who leave to work on other hauls later return to haul for Atway. Others, such as the grievor, choose to haul only for the Company because they find the rates and road conditions to be satisfactory, appreciate the relatively continu­ous availability of work, and wish to remain close to home. Some contractors haul for more than one company during the course of a day or week. Sometimes a contractor will work for a few days and then take some time off without contacting the Company. If this results in a shortage of haul­ing capacity, the Company will send in Company trucks to cover the shortfall, but will not take any disciplinary or other adverse action against the contractor.

29. Contractors select, purchase, and finance their own trucks without any input or assis­tance from the Company. The Company never advances money for the purchase of a truck by a contractor, nor does it become otherwise involved in the purchase. (In 1985 Agassiz did agree to make deductions for remittance to another company in respect of a rentallpurchase agreement for trailers supplied by the other company to approximately six contractors, but Mr. Kidd was not involved in any such arrangement.) Contractors' vehicles are licensed and registered in the names of the contractors, and not in the Company name. Contractors make their own arrangements for insurance and licences, and pay all insurance and licensing costs, with the exception of "tree length" permits. The Company reimburses contractors who obtain "tree length" permits to haul for the Company pursuant to an arrangement with the contractors based on the fact that "tree length" wood is only hauled sporadically and requires a special permit. (The evidence also indi­cates that such wood is difficult to haul and that contractors generally refuse to haul it, thereby necessitating the use of Company trucks and drivers.) The Company has no input into or control over the amount and type of insurance coverage which a contractor chooses to have on his truck. Other than in emergency circumstances in which the Company occasionally agrees to purchase parts for a contractor who has had a major breakdown, and then deducts the cost of the part from future cheques, the Company has no involvement in the repair and maintenance of contractors' vehicles, nor does it have any control over who drives those vehicles and the manner in which they are driven. No one from the Company exercises any control over the amount of wood a contractor chooses to have loaded on his vehicle, nor over the way in which the wood is loaded. The amount of wood to be loaded on a contractor's vehicle is left entirely up to to the contractor, as are the steps, if any, which he takes to secure or resecure his load while en route to the delivery point. Unlike Company employees, contractors are not required to and do not contact the Company after unloading at a mill. They merely return to the loading site, go to a different loading site (if that is their preference), or proceed to haul for another firm. If the load on a contractor's truck is overh­eight or overweight, the contractor pays any resulting fines and is responsible for making his own arrangements to have the excess wood removed from his truck. Contractors are under no obliga­tion to report accidents to the Company, and the Company does not investigate contractors' acci­dents nor become involved in moving or repairing their vehicles after an accident. As indicated above, contractors can hire whomever they wish to drive their trucks. The Company is not involved in the selection or retention of contractors' drivers, nor does it exercise any disciplinary or other control over them. Contractors are not bound by any of the Company rules which apply to Company drivers. The Company's disciplinary procedures apply only to Company drivers, and have no application to contractors.

30. As indicated above, contractors are paid on the basis of the volume of the wood which they haul. There is a set rate per cord (or per cubic metre) for each haul in which contractors are involved. Rates vary from haul to haul, depending on road conditions and the length of the haul. When a new haul begins to operate, or the loading site on an existing haul is moved substantially further into the bush or closer to the mill, the Company generally offers a new rate on a trial basis. Negotiations with contractors, usually through one to three spokesmen, occur during the following ten days, after which the Company establishes a rate that remains in effect until the contractors are able to persuade the Company to revise it. In this regard, it was Mr. Halstead's evidence that there is continual pressure from the contractors to increase rates. However, the negotiation process does not always lead to an increase in rates. When Mr. Miller called a meeting of the contractors in the Spring of 1987 to discuss hauling rates, the contractors asked for more money and told him how much they thought they needed. Mr. Miller said that he would take their request to Company offi­cials in Thunder Bay to see what could be done. When he returned from Thunder Bay, Mr. Miller told the contractors that there was going to be a cut in the rates on some of the hauls. However, it is unclear from the evidence whether any such cuts were actually implemented. Matters discussed during rate negotiations include distances, types of wood to be 'hauled, road conditions, loading speed, and accuracy of scales. If contractors feel that a rate is too low, they will generally stop working on that haul. Thus, if the Company wishes to move that wood, it will either have to raise the rate or find an alternative means of hauling it, such as shipping it by rail or using Company trucks and drivers to haul it.

31. Contractors are not paid for waiting time, nor are they paid for statutory holidays or vacations. No statutory deductions are made by the Company in respect of contractors. As indi­cated above, the cost of the Company fuel used by a contractor is deducted from his cheque, as is the cost of life insurance if he opts to be covered by the Company's group life insurance plan. Union dues are also deducted at the request of some of the contractors and forwarded to Buchanan for remittance to the Lumber and Sawmill Workers Union. However, no such dues were ever deducted in respect of Mr. Kidd. If the Company wishes to have contractors haul out of a dif­ferent location, it sometimes pays the cost of their accommodation in order to make it economi­cally feasible for them to perform that work (as occurred in respect of the aforementioned haul from Block 3 to Thunder Bay). When the Company has a large volume of wood to move, it some­times offers financial incentives designed to make it financially attractive for contractors to operate on a double-shift basis. However, the decision whether to operate on a single or double-shift basis remains that of each individual contractor. In making that decision, the contractor must weigh the potential extra income against such factors as the cost of hiring a driver, the cost of Workers' Com­pensation coverage for the driver, the increased risk of accident or vehicle breakdown, and the extra wear and tear on his truck. In addition to the aforementioned stable and relatively low fuel price which it offers to contractors, the Company also attempts to attract and retain contractors' services by having graders and sand trucks in operation to improve road conditions around loading sites, and by having haul tractors at those sites to assist in moving stuck vehicles.

32. If a contractor manages his operations well and operates on a double-shift basis, he can gross as much as $200,000.00 a year. Contractors who choose to operate on a single-shift basis gen­erally gross between $100,000.00 and $125,000.00. If a contractor manages his operations poorly or has bad luck regarding accidents and repairs, there is a definite risk of loss. Indeed, some contrac­tors have had to declare bankruptcy.

33. As a result of public and governmental concern generated by a number of serious acci­dents, safety has become a major issue for the respondent and most other companies and individu­als involved in hauling raw forest products. In an effort to remedy the situation and avoid direct governmental intervention, representatives from local safety committees, along with representa­tives from various associations and branches of government, formed an ad hoc committee (which later came to be known as the Northern Ontario Log Trucking Association ("N.O.L.T.A.") Com­mittee) to develop proposals to ensure that logs would be transported safely. The committee for­mulated sixty-nine recommendations, which came to be known in the industry as the "69 rules", although not all of the recommendations were implemented. One of the recommendations that was not implemented called for all companies that own or "hire" haul units to ensure that each driver has a valid classified licence before going to work. When the respondent and other compa­nies attempted to implement that recommendation in respect of contractors and their drivers, the contractors refused to provide the necessary information on the ground that it was none of their business who was driving contractors' trucks. Other recommendations which were followed in respect of Company drivers but could not be implemented in respect of contractors due to resis­tance on their part included those pertaining to reference checks, orientation, examinations, and road testing.

34. Copies of the "69 rules" were provided to the Company (and other firms) for distribu­tion to contractors and Company drivers. Mr. Salmi forwarded some of those copies to Mr. Miller in Sioux Lookout for distribution to contractors. A monitoring committee, comprised of represen­tatives from local safety committees, monitored the implementation of the "69 rules", which were enforced against contractors primarily by the mills to which they delivered. If, for example, a con­tractor arrived at a mill with an unsafe load, he would not be permitted onto the mill's property to unload until he had rectified the situation. If a contractor continually ignored the "69 rules", he could be sanctioned by means of "time off" during which mills, at the instance of the local safety committee, would refuse to accept any loads from him. If a member of management saw a contrac­tor operating in a careless manner, he would report the contractor to the local safety committee, regardless of whether the contractor was hauling for the respondent or for another company.

35. One safety matter of particular concern to residents of Sioux Lookout was the danger posed by trucks with overheight loads hitting the Sioux Lookout railway underpass and spilling part of their load. To remedy this problem, the Sioux Lookout safety committee (which included in its membership Mr. Miller and representatives of McKenzie, the Ministry of Transportation (the "M.O.T."), the M.N.R., the O.P.P., and the Sioux Lookout Town Council) formulated the fol­lowing procedure. If a contractor carrying an overheight load failed to remove all the wood which spilled from his vehicle as a result of hitting the underpass, the company for which he was hauling would deduct $200.00 from his cheque to cover the average cost incurred in cleaning up such a spill. The respondent accepted and implemented that procedure in order to assist the committee in dissuading contractors from creating a safety hazard by overloading their trucks.

36. Mr. Kidd testified that Mr. Miller occasionally called safety meetings which he wanted contractors to attend. Mr. Kidd and most of the other contractors in the Sioux Lookout area attended those meetings, although he acknowledged that "sometimes some guys didn't show up" and conceded that to the best of his knowledge nothing had ever happened to persons who failed to attend. At those meetings Mr. Miller and other persons from the local safety committee stressed the need for safety.

37. As noted above, in addition to the approximately one hundred trucks provided by con­tractors, the Company has a fleet of trucks which are driven by Company drivers who are unques­tionably employees of the Company. Unlike contractors, the Company drivers have no financial interest in the vehicles which they drive. The Company arranges and pays for licensing, insuring, maintaining, and repairing Company trucks. Persons seeking to become Company drivers are required to fill out a detailed application form and to provide references. They also must take and pass a written driving test (similar to the one given by the M.O.T. in respect of Class "A" licences). That test is administered by Mr. Salmi. The Company contacts the M.O.T. by telephone to ascertain the number of demerit points which the employment applicant has accumulated, and to verify that he has a valid Class "A" licence. If the individual has six or more points against his licence, the application proceeds no further. If he has between two and five points, the Company defers any further consideration of his application until after it obtains a written driver's licence abstract from the M.O.T. If that abstract demonstrates that the points were accumulated as a result of minor infractions that do not demonstrate poor driving habits, or if an applicant has no points against his licence, the Company proceeds to give him a road test to test his driving skills. If he passes that test, he is given a booklet containing sixty-five Company rules concerning safe oper­ating procedures. Those rules cover such matters as the protective equipment to be worn by Com­pany drivers, pre-trip inspection of vehicles, fueling, loading, preparing loads for transport, deliv­ering loads, unloading, and parking. They also specify what a Company driver must do if he is involved in an accident. After reading those rules over in the presence of Mr. Salmi who answers any questions he may have concerning them, the new driver is required to sign a copy of that book­let to acknowledge that he is aware of all of the rules and will abide by them. He is also provided with a copy of the booklet for future reference. An employment file is then opened for him and the signed booklet is filed in it along with a photocopy of his driver's licence. The new driver is then given a tour of the Company's Thunder Bay shop and introduced to its mechanics. Following that tour, the Company's dispatch system is explained to him and he is shown how to record his hauling trips and other activities for purposes of payment.

38. Company drivers are paid a set amount per trip, regardless of the volume of wood hauled. The respondent has haul foremen at the loading sites to ensure that Company trucks are safely and efficiently loaded. The amount of wood to be loaded on a Company truck is determined by the Company. If the load on a Company vehicle is overheight or overweight, the Company is notified by the M.O.T. or the O.P.P. and takes steps to remedy the situation, such as sending out one of its self-loading trucks to unload some of the wood. Any fines imposed as a result of a load on a Company truck being overheight or overweight are paid by the Company. If poor weather or road conditions lead a haul foreman to believe that it is unsafe to haul, he can stop Company trucks from operating. However, he has no authority to stop a contractor's vehicle. The decision as to whether or not to continue operating is made by the contractor and not by the Company. When Company drivers are delayed by circumstances beyond their control, such as truck or loader break­down, they are paid an hourly rate. They are also paid by the hour for time spent changing tires, washing Company trucks, helping mechanics with repairs, and cleaning up the Company yard. Full-time Company drivers generally gross about $35,000.00 per year. They are paid for statutory holidays and also receive vacation pay. The Company makes the usual statutory deductions for unemployment insurance, income tax, and Canada Pension Plan, and also makes deductions for life insurance coverage (which is mandatory for all Company drivers), and for coverage under the Blue Cross Health Plan (for those employees who opt for such coverage). The Company pays the cost of O.H.I.P. coverage for all Company drivers. Union dues are also deducted from employees' wages where such deductions are requested by the employees. As in the case of union dues deducted at the request of contractors, the deducted dues are forwarded to Buchanan for remit­tance to the Lumber and Sawmill Workers Union. Company drivers do not pay fuel costs or any other of the other costs involved in operating, repairing, and maintaining Company trucks. When Company drivers are temporarily based outside of Thunder Bay, the Company pays for their accommodation and also gives them $20.00 a day for meal expenses.

39. Company drivers are dispatched by a Company dispatcher pursuant to schedules pre­pared by Mr. Salmi. Each Company driver is required to apprise himself of his place on the weekly schedule, and to call the Company approximately one hour before his scheduled departure time to confirm that his vehicle is operational. Upon arriving at the yard to begin his shift, he must report to the dispatcher, who checks to ensure that he is wearing safety boots and a hard hat, and that he is not under the influence of alcohol. The dispatcher also informs the Company driver of any changes in the haul schedule and of any adverse weather conditions of which he is aware. After speaking with the dispatcher, the Company driver is required to do a "circle check" of the vehicle that he has been assigned to drive, which involves checking its oil, water, lights, wipers, horn, and air lines, as well as ensuring that it has all of the proper safety equipment aboard. He must then drive to the gate, bring the vehicle to a full stop, check for last minute instructions, and proceed to the loading site to which he has been directed. Upon arriving at the loading site, the Company driver must report to a haul foreman or site mechanic any mechanical difficulties encountered on the trip to the site. A Company driver must take whatever load is given to him; unlike a contrac­tor, he cannot park his truck and wait for a different load. He must also obey all directions given to him by dispatchers, site foremen, and site mechanics. If a Company driver fails to comply with such instructions or with Company rules, he may be disciplined by the Company. Disciplinary action ranges from verbal warnings for minor infractions to discharge for serious misconduct, with suspensions being given for intermediate matters or repeated minor infractions.

40. After the vehicle has been loaded, the Company driver must tie down and trim his load and then do a "mini circle check" of his vehicle (i.e., a shortened version of the aforementioned "circle check"). He then proceeds to the first check point, where he is required to resecure his load before driving to the second check point, at which he must drive his truck through load liners before entering the highway. After arriving at the mill, having his load weighed (or measured) and unloaded, and receiving a scale slip, he must telephone the Company dispatcher to advise of his location and receive further instructions regarding matters such as whether he is to return to the same loading site or to proceed to a different loading site to obtain his next load. If the truck is being operated on a double-shift basis, the Company driver must telephone the cross-shift driver before leaving the mill after his last trip and returning to the Company yard (unless he knows that there is a mechanical problem with the unit, in which case he must telephone the dispatcher to inform him of the situation). Following his final trip for the shift, a Company driver must return to the yard, fuel up the truck, park it in its designated parking spot, and fill out a repair requisition form (indicating the nature of any necessary repairs). Company drivers are expected to complete a specified number of trips per shift, depending on the length and conditions of the routes to which they are assigned. They have no choice as to the trucks they drive, the hauls they drive them on, or the shifts on which they work. The Company rotates their shifts weekly when it is operating on a double-shift basis.

41. The Company obtains a driver's licence abstract from the M.O.T. for each Company driver, and updates that information three or four times a year to keep abreast of any changes in their driving records. No such information is obtained in respect of contractors. Management also uses a tachometer card system to monitor Company drivers. Each Company truck is equipped with a unit into which a tachometer card is inserted from time to time to enable the Company to moni­tor driving speeds, length of stops, and other aspects of the manner in which the vehicle is being driven. If the cards show infractions such as speeding or "over revving the engine", disciplinary action will be taken. No tachometer card or other monitoring system is used in respect of contrac­tors.

42. The Company holds general safety meetings three times a year at which attendance is mandatory for Company drivers. At those meetings Company officials review the Company safety rules and apprise Company drivers of any new developments that have occurred regarding safety. There is also an open forum discussion of safety matters raised by the drivers. Contractors do not attend those meetings, nor are they involved in the "mini-meetings" which Mr. Salmi holds from time to time with small groups of Company drivers to go over specific safety matters. In 1987 the Company arranged for all of its Company drivers to take a defensive driving course. A mandatory five segment course called "The Fifth Wheel" was also held exclusively for Company drivers. Any Company drivers who failed to attend lost a day's pay as a disciplinary measure. If a Company driver is involved in an accident, he must notify the Company as soon as possible. Upon receiving such notice, Mr. Salmi proceeds to the accident site to investigate the matter by taking measure­ments, photographs, and statements. He then arranges for the truck to be repaired after its load has been transferred to another vehicle.

43. Section 1(1)(i) provides that, in the Labour Relations Act, "'employee' includes a dependent contractor". Section 1(1)(h) defines that term 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.

44. The history and purpose of that provision were described by the Board as follows in Airline Limousine, [1988] OLRB Rep. March 225:

45. The term "dependent contractor" is of relatively recent origin. It was introduced into Ontario's legal lexicon by Professor Harry Arthurs in 1965 to describe individuals whose eco­nomic situation resembles that of an independent entrepreneur in some respects, but, when viewed in its totality, really involves a degree of subordination and economic dependence more closely resembling 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.) Then, as now, the distinction between employment and "self-employment" could be legally significant. Important rights, or statutory protections could turn upon the label attached to the particular economic relationship. The designation "employee" led to certain legal results. The designation "independent contractor" led to others. Classification was important. A "con­tract of service" was considered to be very different from a "contract for services"; and adjudi­cators therefore struggled to analyze and distinguish the two - all the while recognizing that there was no "litmus test" for deciding the question. The distinction between employment and self-employment is genuinely fluid, and difficult to draw at the margins.

46. In this area of legal ambiguity the Courts have considered a variety of factors, including the so-called "four-fold test" enunciated in Montreal v. Montreal Locomotive Works Ltd. 1945 CanLII 410 (SCC), [1946] 1 D.L.R. 161, where Lord Wright examined "a complex involving (1) control; (2) ownership of the tools; (3) chance of profit; (4) risk of loss", then added:

…In many cases the question can be settled by examining the whole of the various elements which constitute the relationship between the parties. In this way it is in some cases possible to decide the issue by raising as the crucial question whose busi­ness is it, or in other words by asking whether the party is carrying on the business, in the sense of carrying it on for himself or on his own behalf and not merely for a superior.

Others suggested an "organization test" according t&which an individual would be said to be an employee if s/he was really "part and parcel of the [alleged employer's] organization" (Bank Voor Handel En Scheepvart N. V. v. Slatford [1952] 2 All E.R. 956); or was "integrated into" the business as opposed to being "only accessory to it" (Stevenson Jordan & Harrison Ltd. v. MacDonald et at. [1952] 1 T.L.R. 101). [For cases in which Canadian Courts have embraced this "organization test" see, for example: Cooperators Insurance Association v. Kearney (1965) 1964 CanLII 21 (SCC), 48 D.L.R. (2d) 1 (S.C.C.), and, more recently, Meyer v. J.P. Conrad Lavigne Ltd. (1980) 1979 CanLII 2088 (ON CA), 27 O.R. (2d) 129 (O.C.A.). In one of a number of "milk store cases" in the mid-1970's the Alberta Court of Appeal concluded that an individual store operator may be an employee within the meaning of the relevant labour legislation even though he fixes his own hours of work, engages and discharges his own employees, is not supervised in the manner of carrying out his duties, and runs the risk of loss. The Court suggested that a useful test is whether the operator of the store is in effect carrying on the business on his own behalf or on behalf of a superior. See: R v. Mac's Milk Ltd. (1973) 1973 ALTASCAD 74, 40 D.L.R. (3d) 714].

66. Very early on, the U.S. National Labour Relations Board emphasized another factor - statu­tory context - arguing that the real issue was whether the disputed individuals fell within the ambit of the statute or exhibited the disability which the statute was designed to remedy. That formulation was endorsed by the U.S. Supreme Court in N.L.R.B. v. Hearst Publications Inc. (19~) 322 U.S. 111 where the Court said this:

The mischief at which the Act is aimed and the remedies it offers are not confined exclu­sively to "employees" within the traditional legal distinctions separating them from "independent contractors". Myriad forms of service relationship, with infinite and subtle variations in the terms of employment, blanket the nation's economy. Some are within this Act, others beyond its coverage. Large numbers will fall clearly on one side or on the other, by whatever test may be applied. But intermediate there will be many, the incidents of whose employment partake in part of the one group, in part of the other, in varying proportions of weight. And consequently the legal pendulum, for purposes of applying the statute, may swing one way or the other, depending upon the weight of this balance and its relation to the special purpose at hand.

Unless the common-law tests are to be imported and made exclusively controlling, without regard to the statute's purposes, it cannot be irrelevant that the particular workers in these cases are subject, as a matter of economic fact, to the evils the statute was designed to eradicate and that the remedies it affords are appropriate for presenting them or curing their harmful effects in the special situation....

In short, when the particular situation of employment combines these characteristics, so that the economic facts of the relation make it more nearly one of employment than of independent business enterprise with respect to the ends sought to be accomplished by the legislation, those characteristics may outweigh technical legal classification for pur­poses unrelated to the statute's objectives and bring the relation within its protections.

To eliminate the causes of labour disputes and industrial strife, Congress thought it necessary to create a balance of forces in certain types of economic relationships. These do not embrace simply employment associations in which controversies could be limited to disputes over proper "physical conduct in the performance of the ser­vice". On the contrary, Congress recognized those economic relationships cannot be fitted neatly into the containers designated "employee" and "employer" which an earlier law had shaped for different purposes. Its Reports on the bill disclose clearly the understanding that "employers and employees not in proximate relationship may be drawn into common controversies by economic forces", and that the very disputes sought to be avoided might involve "employees (who) are at times brought into an economic relationship with employers who are not their employers". In this light, the broad language of the Act's definitions, which in terms reject conventional limitations on such conceptions as "employee", "employer" and "labour dispute", leaves no doubt that its applicability is to be determined broadly, in doubtful situations, by underlying economic facts rather than technically and exclusively by previously estab­lished legal classifications.

[emphasis added]

67. In practice, the application of these various common law tests and the resulting distinctions between "employees" and "independent contractors" were often artificial and difficult to sus­tain from a labour relations viewpoint. Individuals could be excluded from collective bargaining merely because the form of their relationship might not resemble that of "employer-employee", even though in substance they might be just as controlled by and economically dependent upon the party using their services as any employee. The legal label assigned could foreclose the exer­cise of the statutory right of self-organization, even where the "mischief' contemplated by the statute was clearly present. In Professor Arthurs' opinion, individuals, in a position of economic dependence, analogous to that of an employees, should be entitled to engage in collective bar­gaining. He wrote:

Unequal power between private persons, no less than between citizen and state, is an unhappy fact of modern society. In one area - employment relations - public policy has clearly adopted collective bargaining as a technique for redressing this imbalance of power. In another area - commercial competition - collective action is generally suspect as the vehicle by which a powerful group may overwhelm weak individuals. This study concerns the paradoxical plight of groups of competitors who may find sur­vival difficult without collective action. They are often economically vulnerable as individuals because of the dominance of a monopoly buyer or seller of their goods or services, or because of disorganized market conditions. If viewed as "independent contractors" rather than "employees" they lack the legal status which is a prerequisite of the right to bargain collectively under labour relations legislation. As businessmen, they cannot legally employ collective tactics to buy or sell or otherwise stabilize condi­tions, because of the combines legislation. They are prisoners of the regime of compe­tition.

Because the choice of either legal designation - "employee" or "independent contrac­tor" - in effect prejudices the issue of their right to bargain collectively, a new term is needed: "dependent contractor." They are "dependent" economically, although legally "contractors". The ambiguity, the paradox, of their position is thus reflected in the term used to identify them. Self-employed truck drivers, peddlers, and taxicab operators, farmers, fishermen, and service station lessees personify the dependent contractor.

Insofar as dependent contractors share a particular labour market with employees, it is submitted, first, that they should be eligible for unionization. Such a result would require a new definition of the term "employee," perhaps along the lines of that adopted in Sweden: "For the purposes of this Act a person shall be regarded as an employee even if no normal engagement exists, provided that he performs work for another person and thereby occupies in relation to that person a position of depen­dence essentially similar to that occupied by an employee in relation to his employer." Second, courts and labour boards dealing with attempt by organized employees to immunize themselves from the impact of competition from dependent contractors should view this objective realistically.

In 1968, the (Federal) Woods task force on labour relations accepted and reiterated this concern in the following terms:

We are concerned about accessibility to collective action by groups of self-employed persons who are economically dependent for the sale of their product or services on a very limited market or who for other reasons may have economical characteristics of employees. We have in mind such groups as fishermen, owner-drivers of taxis, and independent owner-drivers of trucks and delivery vans.

In 1972, Professor Max Cohen, for the Newfoundland Royal Commission on labour legislation had this to say:

The issue of independent owner drivers, franchised owner drivers performing distri­bution functions for such industries as dairy products and bakery products, owner drivers of taxicabs, perhaps catering and janitorial services, home workers in the gar­ment industry, etc., was not raised in any of the proceedings or briefs of the Commis­sion. This is at least in part due to the fact that the level of organization in these seg­ments of industry is not great.

Nevertheless, the report must give some consideration to this category of persons on the grounds that they are in many circumstances analogous to employees in an eco­nomic sense although not meeting the definition of employee in the traditional legal sense of the master servant relationship which has been incorporated into the interpreta­tion of labour relations legislation....

On the merits, those persons at the margin who are denied collective bargaining rights on the fairly technical grounds of the narrow legal rules of the master servant relationship would seem to be an appropriate group for inclusion in collective bargaining legislation. These groups are similarly disadvantaged or subject to the disparate power of a single economic interest for whom they ultimately work in return for a fairly fixed payment based either on piece work or time consumed. The issues which these per­sons would want to discuss with the source of their payment, and, to some extent, direction, are closely analogous to those which employees have to discuss with the more traditional employer.

In addition, where this technique of independent contracts is a circumvention technique to avoid collective bargaining, the purposes of public policy are directly flouted and such practices ought not to be tolerated on the grounds of technical legal distinctions.

At the present time, such groups cannot collect their strength in dealing with the would-be employer without running the risk of infringing the Combines Investigation Act - to the extent that they, by virtue of their work affect the trade in commodities. Should services come under the Combines Investigation Act, their incapacities in this regard would exist despite the absence of any effect on articles of trade or commerce. In extending rights of collective bargaining to independent or "dependent" contrac­tors, it remains necessary to draw some lines between the dependent category to be granted the protection of collective bargaining and those whose collective action is not held necessary and is seen as an undue impediment to the market forces to which competition policy is directed. Collective bargaining policy represents a deliberate exclusion authorizing market forces to be impeded within certain rules in pursuit of the sccial interests of distribution of wealth and the capacity of individuals in a depen­dent relationship to cope with their environment - which environment includes the dominant economic interests with which they must deal. Since the traditional master servant relationship rules do not provide a totally adequate basis for this definition, it is to be recommended that rules that adopt a set of criteria which recognizes the eco­nomic realities of dependency be introduced. It is therefore recommended:

Workers in a position of economic dependence analogous to that of the employment relationship should be accorded the right to organize and bar­gain under labour relations legislation.

68. In 1975, the Ontario Legislature accepted those propositions and enacted what is now sec­tion 1(1)(h) of the Labour Relations Act. It altered the legal regime to meet the perceived needs of individuals in a particular kind of economic relationship. A number of other provinces and the federal jurisdiction have similar provisions in their collective bargaining statutes; however, the language which the Ontario Legislature used, makes it abundantly clear that individuals may be entitled to collective bargaining whether or not they are employed under a contract of employment - that is, whether or not they would be considered to be employees in the tradi­tional common law sense.

69. 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:

70. 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.

71. 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.

72. The task of distinguishing between the individual worker and the true entrepre­neur has never been easy. There exists an economic spectrum - colored 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.

73. 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 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 a four-fold 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" test is the more appropriate for identifying the "master-servant" relationship is not here material. The per­tinent question is whether the factors in 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 modern 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 dependence 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....

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 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 relationship, 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.

In Adbo, the Board was elaborating upon the observations of a differently constituted panel of the Board in Nelson Crushed Stone, [19771 OLRB Rep. Feb. 104:

Suffice it to say for our purposes that the Legislature intended by the amendment to address itself to the mischief created by persons who may very well outwardly manifest the trappings of independent entrepreneurs but who in an intrinsic sense are clearly in such a subservient economic position vis-a-vis the beneficiary of his [sic] services that he ought to be extended the protection intended by the collective bargaining process. In this context the Legislature recognized the economic vulnerability of depriving the "so called" small businessmen of rights under the Act and thereby exposing him to the arbitrary whims of the person upon whom he is dependent for his livelihood. Not only is this individual denied benefits commonly accepted in our enlightened society as industrial relations norms (e.g., unemployment insurance, workmen's compensation, statutory holi­days, vacation pay, minimum wage and maximum hours, etc.) but is also by operation of The Combines Investigation Act susceptible to civil and penal sanctions should he, along with his colleagues, seek by concerted action to redress perceived wrongs in his relationship with his ostensible employer. The watch word of the definition is "dependent" and dependent is to be interpreted in a manner consistent with the economic reality of the relation­ship with the beneficiary of the service having regard to the industry or undertaking under review. It therefore follows that the status of the "de­pendent contractor" must be matched and plotted in relation to the terms and conditions of "employees" in like industries to determine whether he, in a de facto sense, more resembles them. And, alternatively, it may very well be that, notwithstanding shortcomings in his development as a busi­nessman, he may be without the need or the assistance of collective secu­rity. We perceive that the Legislature has instructed the Board in the con­duct of such analysis to sacrifice form for substance, to dispel superficial distortion that disguises industrial reality and to supplant individual want by supporting, in appropriate circumstances, collective equality. In short, the Board must deal with the new problem of defining the parameters not only between the employee and entrepreneur but also mid-way between that spectrum of distinguishing and isolating the "dependent contractor" who has statutorily been extended separate and distinct treatment.

70. For collective bargaining purposes the Legislature has abandoned the traditional common law distinction 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 has been designed. The legal form of the relationship or the possession of particular assets (for example, the owner­ship of vehicles - something specifically mentioned in section 1(1)(h)) are no longer determina­tive of an individual's status for collective bargaining purposes. There is no requirement that s/he receive "wages", as there was in the Alberta legislation under review in: Re Yellow Cab Ltd. and Board of Industrial Relations et al. 1980 CanLII 228 (SCC), [1980] 2 S.C.R. 761. The test is whether the dis­puted individual is more like an employee than a self-employed entrepreneur, when viewed from a collective bargaining perspective and the "mischief' which this labour legislation was designed to remedy. It remains, as always, a question of just where to draw the line, because no magic formula can be propounded for determining which factors should, in any particular case, be treated as determinative. The Board must necessarily perform a balancing operation weigh­ing up the factors which point in one direction or the other, and assessing them in light of labour relations policy considerations.

71. In Algonquin Tavern, [1981] OLRB Rep. Aug. 1057, at paragraph 64, the Board listed eleven factors which, alone or in combination, have been found to be of assistance in some circum­stances in determining whether an individual is a dependent contractor:

72. The use of, or right to use substitutes. It has been considered inconsistent with an employment relationship if one could fulfill the bargain with someone else's labour rather than one's own work and skill. This is significant however, only to the extent that it is the alleged employee who makes that decision.

73. Ownership of instrumentalities, tools, equipment, appliances, or the supply of materials. These factors indicate something in the nature of a capital investment so that gains or losses will depend upon something other than the individual's own labour. On the other hand, reliance upon another's financial loss on capital infrastruc­ture for the essential tools necessary for performance of the work is more likely to be associated with an employment relationship.

74. Evidence of entrepreneurial activity. This factor is closely associated with ownership of tools and encompasses self-promotion, advertising, use of business cards, soliciting to develop "clients", the use of agents, and organizing one's "business" (by incorpora­tion or otherwise) to take advantage of limited liability or the tax laws. It may be sig­nificant whether the individual has a "chance of profit" or "risk of loss"; that is whether business acumen, sensitivity to the needs of the market, astute investment, innovation, or risk taking, yield a reward or financial loss.

75. The selling of one's services to the market generally. If the purchasers of [an] individu­al's services are numerous and of diverse character, the individual looks more like an independent self employed person than an employee. If, on the other hand, an indi­vidual has a long standing and consistent relationship with one or a limited number of purchasers, he is more likely to be considered a "dependent" contractor or employee - especially if the circumstances or contractual relationship limit his ability to dispose of his skill to other purchasers, or his "prime customer" is given priority.

76. Economic mobility or independence, including the freedom to reject job opportunities, or work when and where one wishes. Of course, few independent contractors are entirely free in this regard, but the question is one of the degree. A "self-employed" person has more scope for choice than an employee or dependent contractor who must look for the bulk of his work opportunities to one or restricted number of sources with whom he has "tied his fortunes".

77. Evidence of some variation in the fees charged for the services rendered. This factor is less helpful when those services are standardized and the market is relatively competi­tive. In such circumstances, one would expect a uniform fee structure even if the indi­viduals providing the services were doing so as "independent contractors", and indi­vidual employees may also bargain about their wage levels; however, the ability to bargain or fix the contract fee in accordance with the work or the purchaser's ability to pay, may indicate independent contractor or self employed status.

78. Whether the individual can be said to be carrying on an "independent business" on his own behalf rather than on behalf of an employer or, to put it another way, whether the individual has become an essential element which has been integrated into the operating organization of the employing unit. Integration in this sense usually presupposes a sta­ble rather than a casual relationship and also involves the nature, importance and "place" of the services provided in the general operation of the employing unit. The more frequent the re-engagement or longer the duration of the relationship, the more likely the individual will be regarded as part of, or integrated into, the employer's organization. In the case of entertainers, the cases suggest that it may also be useful to determine the extent to which the artist's material or co-workers are influenced by the employer; that is, whether the artist is left to entertain in his own right, or whether his talents are moulded to conform with the employer's artistic vision or interests. Even an individual engaged for a short time may be considered "integrated" into the employer's operation in the manner of an employee, if he is required to devote the whole of his working time during the period to the service of the employer, promote its organization, or fill in his "non performing" time with unrelated ancillary duties. (See: Whittaker, supra.)

79. The degree of specialization, skill, expertise or creativity involved. If these are [a] dom­inant element in the relationship, the control test becomes less useful as an indicator of employee status, and in the absence of "integration" into the respondent's organi­zation, the disputed individual is [a] "self-employed" professional.

80. Control of the manner and means of performing the work - especially if there is active interference with the activity. However, it is the right to interfere rather than the ability to do so which is significant. The fact that a particular occupation involves technical skill, putting control of the details beyond the capacity of the employer, does not pre­clude a skilled employee from being so regarded, since the right to control may exist even though the ability to do so does not. Similarly, the power to discipline, withhold rewards, or terminate the relationship at will and without cause may indicate an employment relationship whether or not the employer exercises this power.

81. The magnitude of the contract amount, terms, and manner of payment. If the financial terms of the relationship approximate wages (for example, if deductions are made for income tax or other benefits are provided or if an individual is paid by the hour rather than the result) an employment relationship may be indicated. The magnitude of the contract amount can sometimes be significant, (although sports celebrities and profes­sionals may be very highly paid yet still be "employees"; and independent profession­als may charge an hourly rate rather than a block fee).

82. Whether the individual renders services or works under conditions which are similar to persons who are clearly employees. The employer's established employee complement may provide a useful benchmark against which the activities of its alleged indepen­dent contractors can be measured. If the so-called independent contractor substitutes for a firm's employees, or performs duties out of his ordinary line of work and similar to those of employees (for example, a trapeze artist also acting as a usherette, or a dancer also acting as a waitress) it is more likely that (s)he will be considered an employee.

See also Ontario Hydro, [1986] OLRB Rep. June 790; Journal La Droit, [1985] OLRB Rep. Sept. 1372; The Citizen, [1985] OLRB Rep. June 819; Tremways (1982) Limited, [1983] OLRB Rep. Feb. 289; Windsor Airline Limousine Services, [1981] OLRB Rep. Mar. 398; A. Cupido Haulage Limited, [1980] OLRB Rep. May 679; Niagara Veteran Taxi, [1980] OLRB Rep. Mar. 337; Purple Heart Film Corporation, [1979] OLRB Rep. Sept. 900; and Dominion Dairies Limited, [1978] OLRB Rep. Dec. 1083.

46. It is clear from the evidence adduced in this case that Mr. Kidd is a contractor. What we are called upon to determine in this decision is whether or not he is a dependent contractor within the meaning of section 1(1)(h). As in most situations, some of the factors suggest an element of dependence, while others point towards independence.

47. The first factor referred to in Algonquin Tavern is the use of, or right to use substitutes. As indicated above, having decided to increase his income by operating his truck on a double-shift basis, Mr. Kidd unilaterally decided who would drive on the other shift and how much he would be paid for doing so. Moreover, Mr. Kidd was under no obligation to drive the vehicle himself; he was at liberty to fulfill the contract by arranging for someone else to drive his truck if he elected to have it operate only on a single-shift basis, or to arrange for two (or more) other persons to drive it on a double-shift basis. Indeed, that is what he planned to do in the event that the proposed arrange­ment with the florida company for flat-bed hauling of lumber had come to fruition. As noted in Algonquin Tavern, it has generally been considered inconsistent with an employment relationship if a contractor is at liberty to fulfill the bargain by using someone else's labour rather than his own work and skill.

48. The second factor is ownership of instruments, tools, equipment, appliances, or supply of materials. Mr. Kidd purchased his truck at a cost of $64,000.00 without any financial assistance from the Company. He received no direction or input from the Company regarding the selection of that vehicle, but rather selected it on the basis of his experience in and knowledge about the haul­ing industry. To enhance its profitable operation, he utilized a number of assets which he had pre­viously acquired in conjunction with other ventures, including his shop, half-ton truck, welder, and tools. Thus, this second factor is also suggestive of independence in the context of this case. How­ever, as indicated in section 1 (1)(h), the fact that a contractor furnishes such assets is not disposi­tive.

49. The third factor is concerned with evidence of entrepreneurial activity. There is no evi­dence that Mr. Kidd engaged in self-promotion or advertising in respect of his hauling operations, nor that he used business cards or otherwise solicited customers. However, when he was contacted by the aforementioned Florida company, he did speak with people at the McKenzie mill to see what arrangements could be made, thereby demonstrating an interest in acquiring another truck in order to expand his hauling activities. Moreover, with the assistance of an accountant, he took advantage of tax laws by claiming various deductions which are not available to employees. He also sought to increase his profits by paying for Workers' Compensation at the rate applicable to general trucking rather than the higher rate applicable to log hauling, by electing not to obtain Workers' Compensation coverage for himself, and by making no statutory or other deductions from his payments to his driver, Mr. Lacasse. Thus, this factor does not point unequivocally toward either dependence or independence in the circumstances of this case.

50. The fourth factor listed in Algonquin Tavern pertains to the number of purchasers of the contractor's services and the extent to which the contractual relationship or the circumstances limit his ability to serve other purchasers. During the period from December of 1986, when he became a contractor for the Company, to September of 1987, when his contract was terminated, Mr. Kidd hauled almost exclusively for the Company. He also hauled on a limited basis for McKenzie, but those opportunities also came to him through the Company. Although the exis­tence of a consistent relationship of that sort is often highly suggestive of economic dependence, it appears from the totality of the evidence that, contrary to what Mr. Kidd told the Board, a number of other hauling opportunities were available to him. However, he chose not to haul for others during the period in question because he found the Company's rates and road conditions to be sat­isfactory, appreciated the relatively continuous availability of work, and wished to remain close to his place of residence. Thus, although the fact that Mr. Kidd hauled almost exclusively for the respondent during the material period of time lends weight to the complainant's contention that Mr. Kidd was economically dependent upon the respondent, the fact that this was a matter of choice rather than a matter of necessity dictated by the circumstances of the industry or the terms of his contractual relationship with the respondent substantially reduces the determinative value of that fact in the instant case.

51. The fifth factor pertains to economic mobility or independence, including the contrac­tor's freedom to reject job opportunities, or work where and when he wishes. As indicated above, although he did not avail himself of the opportunity, we are satisfied on the totality of the evidence that Mr. Kidd was free to refuse a load and to wait for another load on the basis of his personal preference concerning the type of wood to be carried or the mill to which he wished to haul. He was also at liberty to haul for other firms whenever he so desired without notice to the Company or risk of any sanction. In view of the chronic shortage of hauling contractors in northwestern Ontario and the numerous firms which compete with the respondent for the services of such contractors, this was clearly a viable option for Mr. Kidd, notwithstanding the fact that, as a matter of personal preference, he chose not to exercise it. Thus, this factor is also suggestive of independence in the the circumstances of this case.

52. Under the sixth factor the Board considers whether there is evidence of some variation in the fees charged for the services rendered. As might be expected in a competitive situation in which contractors frequently communicate with one another at truck stops and by means of "C.B." radios, the rates paid by the Company do not vary from contractor to contractor, although they do vary from route to route, depending upon such factors as distance and hauling conditions. As noted above, there is a rate set by the Company for each route, following negotiations with repre­sentatives of the contractors hauling on the route. If the Company and the contractors are unable to arnve at a mutually satisfactory rate for a route, contractors are under no obligation to and gen­erally do not continue to haul on that route. In such circumstances, if the Company wishes to move that wood it either has to raise the rate or find an alternative means of hauling it, such as shipping it by rail or using Company trucks and drivers. On the whole, we do not find the evidence concern­ing rates to be of much assistance in deciding the issue that is before us.

53. The seventh factor calls for consideration of whether a contractor has become an essen­tial element which has been integrated into the operating organization of the Company. Here the evidence does indicate some integration of contractors into the Company's operations. With the exception of relatively isolated instances in which Company trucks are dispatched to cover hauls for which a mutually acceptable rate has not been arrived at between the Company and the con­tractors, virtually all of the Company's hauling in the Sioux Lookout area is done by contractors such as Mr. Kidd. Where Company drivers and contractors are hauling on the same route, all of the trucks are generally listed on the same schedule. However, Company drivers are strictly required to adhere to that schedule (unless otherwise directed by Mr. Salmi or their dispatcher), whereas contractors are not obliged to do so. Nevertheless, contractors generally do follow the schedule, at least for their first haul of the week, in recognition of the fact that schedules for con­tractors were introduced by the Company at the contractors' request to reduce waiting time at the loader. Contractors have the option of obtaining life insurance under the Company's group plan. However, unlike Company employees, their participation in the plan is not mandatory. Moreover, unlike Company trucks, contractors' trucks do not bear the Company name or logo. This reflects the fact that each contractor is at liberty to haul for other firms and, as noted above, is under no obligation to devote all or any specified amount of his hauling time to the service of the Company. Thus, although the seventh factor does provide some support for the complainant's position, it does not point unequivocally toward dependence.

54. The eighth factor is the degree of specialization, skill, expertise, or creativity involved. This factor is not very helpful in the instant case, except to the extent that the various steps which the Company takes to ensure that Company drivers possess and properly exercise the driving skilland expertise necessary to haul safely and efficiently stand in sharp contrast to the lack of control exercised by the Company in that regard in respect of contractors and their drivers. As indicated below, the substantial difference which exists between the manner in which the Company deals with Company drivers and the manner in which it deals with contractors is of assistance in deciding the issue of Mr. Kidd's status.

55. The ninth factor involves consideration of the extent to which the respondent controls the manner and means of performing the work. In contrast with the extensive control which the respondent exercises over Company drivers through Company rules, tachometer card monitoring, driver's licence abstracts, and disciplinary action, the Company exercises almost no control at all over the manner and means by which Mr. Kidd and other contractors perform their work. As indi­cated above, contractors select, purchase, and finance their own trucks without any input or assis­tance from the Company. Contractors such as Mr. Kidd are not bound by any of the Company rules which apply to Company drivers. The Company's disciplinary procedures apply only to Com­pany drivers and have no application to contractors and their drivers. The loading schedule which was instituted by the Company at the request of the contractors in order to eliminate unnecessary waiting time at the loading sites has already been discussed and found to be of little assistance in determining the status of the contractors as they are not obliged to adhere to it. The Company does not control the amount of wood hauled by contractors, nor the manner in which they drive their trucks. Contractors are under no obligation to report accidents to the Company, and the Company does not investigate contractors' accidents. The Company's deduction of $200.00 from the cheque of a contractor whose vehicle hits the Sioux Lookout railway underpass and spills its load covers the average cost of cleaning up such spills. Moreover, it was not devised by the Com­pany, but rather is a procedure formulated by the Sioux Lookout safety committee and imple­mented by the Company in order to assist the committee in dissuading contractors from creating a safety hazard by overloading their trucks. Thus, the preponderance of the evidence pertinent to the control factor is clearly indicative of independence rather than dependence.

56. The tenth factor, which is the magnitude of the contract amount, terms, and payment, also points toward independence rather than dependence. Unlike Company drivers who are paid on a per trip basis and have an hourly rate for waiting time and time spent changing tires, washing Company trucks, helping mechanics repair Company trucks, or cleaning up the Company yard, contractors are paid solely on the basis of the volume of wood which they haul. No statutory deductions are made by the Company in respect of contractors, although deductions are made for fuel obtained from the Company, and for life insurance coverage if the contractor opts for such coverage. As previously indicated a contractor can gross as much as $200,000.00 a year. How much of that remains with him as profit depends upon a number of variables, including the costs incurred in operating and maintaining his truck, the amount paid to others for driving it, insurance costs, and financing charges. While some of those costs are beyond his control, others may vary substan­tially depending upon decisions which the contractor makes concerning such things as the age and condition of the truck which he chooses to purchase, the driving skills of the driver(s) he selects, and the amount and type of insurance coverage which he obtains.

57. Under the final factor in the Algonquin Tavern decision, the Board considers whether the contractor renders services or works under conditions which are similar to persons who are clearly employees. As indicated above, the Company drivers are unquestionably employees. While on a general level it can be said that Company drivers and contractors render the same service by hauling wood from various load sites to various mills, a closer examination clearly indicates that there are substantial differences in the relationship between the respondent and Company drivers on the one hand, and the respondent and contractors such as Mr. Kidd on the other. A number of significant differences regarding their selection, control, and remuneration have already been detailed in this decision and need not be repeated. It is sufficient to note at this juncture that the various procedures described above by which the Company tests, hires, regulates, and disciplines Company drivers have no counterpart in the context of the conditions under which contractors pro­vide hauling services to the Company.

58. In summary, although some of the aforementioned factors (such as factors 3, 4, and 7) are somewhat equivocal or (as in the case of factors 6 and 8) are of little assistance in the context of the instant case, several major factors point towards independence rather than dependence. Mr. Kidd was at liberty to fulfill his hauling contract with the Company by having whomever he wished drive his truck, and was under no obligation to drive it himself. He was also free to accept or reject any load offered by the Company, to operate on a single or double-shift basis, and to haul for other firms whenever he wished to do so. The Company had almost no control at all over the man­ner or means by which Mr. Kidd provided hauling services. Moreover, there is a dramatic contrast between the highly controlled relationship which existed between the respondent and its Company drivers, and the very loose relationship which existed between the respondent and contractors such as Mr. Kidd. Thus, having carefully considered the totality of the evidence and the submissions of the parties, we are of the opinion that although Mr. Kidd performed work or services for the respondent for compensation, he was not in a position of economic dependence upon, and under an obligation to perform duties for, the respondent more closely resembling the relationship of an employee than that of an independent contractor.

59. In reaching that conclusion, we have not overlooked Mr. Kidd's evidence that in their dealings with him, some members of management occasionally used terminology that is more often used in the context of an employment relationship than in the context of the relationship between a purchaser and an independent contractor. For example, Mr. Kidd testified that on July 20, 1987, Mr. Miller told him that Mr. Halstead had telephoned that morning and told him that Mr. Kidd was to be "fired". It was also his evidence that later that same day he had another conversation with Mr. Miller during which the latter advised him to phone Mr. Halstead, "talk real nice to him", and may be he would "get [his] job back". (Mr. Miller subsequently telephoned Mr. Kidd and asked him to resume hauling for the Company.) Mr. Kidd gave that evidence on March 28, 1988, more than eight months after those conversations. Since Mr. Kidd did not impress us as being a person who possesses an exceptional memory (and did not suggest that he had made any contemporaneous notes of those conversations), it is questionable whether he was in a position to recall precisely what was said on that occasion. However, even if it is assumed that Mr. Kidd's rec­ollection of those conversations is entirely accurate, the use of terms such as "job" and "fire" is no more determinative of the issue before us than is the description of Mr. Kidd as a self-employed equipment operator in his income tax returns. Moreover, the issue is not whether management thought that Mr. Kidd was an employee (and the preponderance of the evidence indicates that they did not), but whether on the Board's interpretation of section 1(1)(h) of the Labour Relations Act, he was in actuality a dependent contractor (and, therefore, as a matter of law, an employee for purposes of the Act).

60. We also find it appropriate to briefly mention two other matters raised by Mr. Dubin­sky during argument. It was his contention that the respondent had the burden of proving that Mr. Kidd was an independent contractor as it was the respondent that was attempting to exclude him from the benefits of the Act. Under the circumstances, we find it unnecessary to deal with that argument. The matter of which party has the burden of proof is generally only relevant where there is no evidence before the Board or where the evidence before the Board is equally balanced. Neither of those situations obtains in the instant case. As indicated above, we are satisfied on the totality of the evidence that Mr. Kidd was not a dependent contractor within the meaning of sec­tion 1(1)(h) of the Act.

61. Mr. Dubinsky also submitted that the respondent's failure to call Mr. Miller as a witness should prompt the Board to draw an inference that Mr. Miller's testimony would have been evi­dence against the respondent's interest. In appropriate circumstances, a party's failure to call a par­ticular person as a witness may warrant the drawing of an inference that the person's evidence would have been unfavourable to that party's case or at least would not have supported it. See, generally, Anderson Metal Industries Inc., [1981] OLRB Rep. Apr. 415, and B & S Furniture Man­ufacturing Limited, [1980] OLRB Rep. May 645. However, as contended by respondent's counsel, no such inference can legitimately be drawn in the circumstances of the present case. Many of the sweeping statements made by Mr. Kidd during his examination-in-chief which might have called for an explanation from Mr. Miller were contradicted or significantly qualified in cross-examina­tion. Moreover, as noted earlier in this decision, those instances, together with the evasiveness and forgetfulness displayed by Mr. Kidd in some parts of his testimony, have led us to conclude that we should not rely upon Mr. Kidd's evidence where it was inconsistent with other evidence concerning the relationship between contractors and the Company. Finally, we are satisfied that the detailed information which Messrs. Halstead, Perrier, and Salmi were able to provide in their evidence con­cerning the Company, including its operations in Sioux Lookout, obviated any need to call Mr. Miller and thereby further extend these protracted proceedings.

62. For the foregoing reasons, this complaint is hereby dismissed.

DECISION OF BOARD MEMBER JANIS SARRA; June 6,1989

1. With the greatest respect to my colleagues, I have concern that the majority has made findings of fact beyond the scope of the issue before the panel and that these are inappropriate in the circumstances. This is a complaint under section 89 of the Labour Relations Act in which the complainant union alleges Mr. Kidd has been fired contrary to sections 66 and 70 of the Act. The preliminary issue was whether or not Mr. Kidd was a dependent contractor. The number of hear­ing days was less a function of the magnitude of the issue than of the factors outlined in paragraph 3 of the majority decision. This was the case of one individual, hauling for the respondent in the Sioux Lookout area, who alleged the respondent took actions against him contrary to the Act and that as a dependent contractor defined by section 1(1)(h) he was entitled to the protections afforded by the Act. There was considerable evidence led on this issue and in large measure I agree with the findings of the majority as they relate to Mr. Kidd.

2. This case was however, unusual in two respects. It was a first look at hauling in the raw forest products industry in the context of a challenge to the status of tractor-trailer drivers. Thus there was no existing case law on point. Secondly and perhaps more important, unlike all the case law relied upon by the majority, this was not a case where the status of a group of individuals was being considered and where the industry precedent was being set based upon a thorough canvas­sing of those employment relations. Rather it arose in the context of the status of one individual. It was not a consideration of the industry as a whole nor was it a consideration of the entire operation of the respondent. There was no agreement that Mr. Kidd was representative of the contractors. There was no representative group of truckers who gave evidence. In fact, there was no evidence from any trucker, either "company driver" or "contractor" other than Mr. Kidd. In these circum­stances it is inappropriate for the Board to have made findings about the employees or contractors, beyond the issue of Mr. Kidd's status.

3. Although it is the parties who shape any case through the evidence they lead, it is invar­iably the panel that scopes the case and defines its parameters. This panel attempted to do just that and there were innumerable rulings during the 24 days of hearing, both procedural and evidentiary (all unanimous) which answered the question: "what is the relevance or arguable relevance to the specific issue of whether or not Mr. Kidd was a dependent contractor?". Such rulings by necessity precluded information about parts of the respondent's operation and its corporate and economic relationship to the Buchanan group of companies. Having scoped the hearing in such a manner, it is now inappropriate for the Board to make findings on the operation and employment relations of the respondent on such a broad scale.

4. The term "dependent contractor" was coined to recognize those individuals whose employment, although involving some degree of independence, when viewed in the totality of eco­nomic activity and in a labour relations context, involved a degree of economic dependence resem­bling more that of employee than self employed entrepreneur. The majority decision has concisely summarized and characterized the development of the Board's case law and the legal tests which have evolved and it is not necessary to repeat them. The case law reflects the view that those work­ing in an economic position more analogous to an employee should be afforded the protections of the Labour Relations Act and enjoy the benefits of collective bargaining. In approaching that ques­tion it is useful to bear in mind the comments of the U.S. Supreme Court in N.L.R.B. v. Hearst Publications Inc. (1944) 322 U.S. 111:

“…it cannot be irrelevant that the particular workers in these cases are subject, as a matter of economic fact, to the evils the statute was designed to eradicate and that the remedies it affords are appropriate for presenting them or curing their harmful effects in the special situation...

In short, when the particular situation of employment combines these characteristics, so that the economic facts of the relation make it more nearly one of employment than of independent business enterprise with respect to the ends sought to be accomplished by the legislation, those characteristics may outweigh technical legal classification for purposes unrelated to the statute's objectives and bring the relation within its protections.”

5. As the Board said in Airline Limousine, [1988] OLRB Rep. March 225, the reason for inclusion of dependent contractors in the Act was to cure an inherent weakness in the definition of employee. It recognized that the right of self organization by individuals in a position of economic dependence is a right conferred by the law as a method of redressing the imbalance of power through engaging in collective bargaining. The tests which have been developed are a means by which the Board can assess whether individuals fall within the ambit of the Act and its purpose which is to foster harmonious relations between employers and employees by encouraging the practice and procedure of collective bargaining. Bearing this in mind, the Board should be adopt­ing an incremental decision-making approach when taking a first look at any sector of economic and employment activity. In this case, the Board should not be deciding a question beyond the scope of Mr. Kidd's status.

6. I give a few examples as illustration of the inherent danger in deciding the employment "facts" for individuals not at issue. In terms of the "organization test", whether the individual is an essential element integrated into the respondent's operation, Mr. Kidd may well be "in business" for himself; however the evidence was that Atway uses contractors exclusively to perform the work of its ongoing contractual commitments with Buchanan Forest Products Ltd. to haul in the Sioux Lookout area (except the one time company drivers were sent in). The evidence suggested that despite the movement of individuals, there was some stability of the employment relationship in that the contractors work full-time on an ongoing or returning basis, and that these contractors are an integral part of the operation of the business. Similarly, there was some evidence to suggest that the running of single or double shifts is less an independent business decision to maximize profit than one of economic necessity to offset the decrease in income during the half-load season. The comparison of the employment relations of the company with its own drivers certainly assists, how­ever the fact that there are no company drivers in the Sioux Lookout area somewhat limits the probative value of this. The Board did not have the benefit of any evidence of the respondent's other contractors who are hauling in a number of regions to 22 different mills.

7. A second example is in terms of evidence of entrepreneurial activity. The Board has used tests such as self-promotion, advertising, soliciting to develop clients, the use of agents and organizing one's "business" to take advantage of limited liability or tax laws. Again, in the specific case of Mr. Kidd, the panel had evidence that he attempted to arrange some entrepreneurial activ­ity in florida; sought to organize himself for tax reasons and to by-pass his liability with respect to the Workers' Compensation Board. The panel received absolutely no evidence with respect to other contractors, whether there was any indication that they engaged in any activities indicative of entrepreneurial activity; what their tax arrangements were; nor was there any evidence that these contractors sought to by-pass the requirements of the Workers' Compensation Act. If as the respondent alleges, these contractors are independent, then the Board should be cautious in mak­ing a finding of fact based upon the company's evidence alone in this regard.

8. The evidence is less than clear that Mr. Kidd's situation can be extrapolated company wide. For example, the majority found that in 1985, the respondent undertook some financial arrangements for six (about one quarter of the total) contractors, with Atway making deductions for remittance to another company in respect of a rental/purchase agreement for tractor-trailers. Similarly, whether it is the scheduling of haul pick-ups without consultation or negotiation; the requirements by the Workers' Compensation Board to cover single shift operators as employees; the arbitrary hold back of monies for spill clean ups, fuel keys, road fines and workers' compensa­tion; the assignment of hauling on occasion for other companies without consultation or negotia­tion; the provision of hotel or trailer accommodation for contractors working out-of-town; the deduction of union dues for a number of contractors although not Kidd; the change of companies from Agassiz to Atway without consultation or negotiation of a contract or terms of reference; the setting of haul rates without contractual negotiations with each contractor and no evidence as to whether the one or two that are negotiated with are single owners or multiple truck owners; none of these factors are conclusive, but what is clear is that the evidence even as found by the majority points in a number of directions. Without the benefit of any evidence of any contractors in any other part of the respondent's extensive operation, it is not appropriate to make findings beyond the issue of Mr. Kidd's status.

9. For each of the eleven factors or tests developed by the Board there are findings of fact on Mr. Kidd's situation with which I concur. However, for each test there are also compelling indi­cators that point in the opposite direction. This panel did not have before it the issue of the status of all contractors of the company. The parties did not suggest that Mr. Kidd was representative of other contractors. If that had been the issue the parties may well have led more evidence. Although some evidence was led on the contractors as related to Mr. Kidd's status, there is no rea­son to assume the panel heard all the relevant evidence. The panel did not have the evidence in a balanced and thoroughly canvassed manner that would enable it to make findings for all the con­tractors. Yet the majority wrote in paragraph 19 "Having regard to the totality of the evidence, we are satisfied that the relationship between the contractors and the Company is substantially similar throughout the Company's operations in northwestern Ontario". That finding is based upon the majority preferring the company's evidence because of what the majority characterizes as the eva­siveness and forgetfulness of Mr. Kidd's evidence. That forgetfulness may well go to preferring the evidence of the company in the determination of Mr. Kidd's status, but it appears to provide no basis whatsoever for a finding on all the respondent's contractors.

10. The 1975 amendments to the Labour Relations Act adding dependent contractor were aimed at curing a perceived weakness of the statute that individuals who, because of their eco­nomic position on the continuum of labour between employee and independent contractor, should have access the rights and protections of the Labour Relations Act. In this case, the question was "is the employment relationship of Mr. Kidd that of a dependent contractor?" In answering that question, can the Board go any further in its analysis or is the finding with respect to all the compa­ny's contractors inappropriate? With the greatest respect to my colleagues, the many pages in their decision devoted to the historical analysis of the dependent contractor concept speaks to a liberal and expansive construction to be given in approaching the question in any given case. Yet this analysis is not applied here where the majority decision may foreclose any future effort by a group of these contractors who may seek status to enjoy the benefits and protections afforded by the Act. For these reasons, I concur only with the specific issue before this panel, that on balance the evi­dence does not establish Mr. Kidd was a dependent contractor during the period in question.