Ontario Labour Relations Board
Retail, Wholesale and Department Store Union, AFL:CIO:CLC:, Applicant v. Metroland Printing, Publishing and Distributing Limited c.o.b. as Ajax/Pickering News Advertiser, Responding Party;
Retail, Wholesale and Department Store Union, AFL:CIO:CLC:, Applicant v. Metroland Printing, Publishing and Distributing Limited c.o.b. as Oshawa/Whitby This Week, Responding Party
BEFORE: Louisa M. Davie, Vice-Chair, and Board Members W. A. Correll and H. Peacock.
APPEARANCES: Victoria E. Reaume and Guy Ha veil for the applicant; F. G. Hamilton, S. C. Raymond and Brenda Biller for the responding party.
DECISION OF THE BOARD; June 28, 1993
1These applications for certification each raise the issue as to whether certain persons engaged by the Ajax/Pickering News Advertiser ("APNA") and the Oshawa/Whitby This Week ("OWTW") are dependent contractors or independent contractors. By decisions of the Board dated April 24th, 1992 (in the case of the application for certification which pertains to the APNA) and April 28th, 1992 (in the case of the application for certification which pertains to the OWTW) a Board officer was appointed to inquire into and report to the Board concerning this dispute.
2The officer appointed conducted the usual inquiries and examinations and prepared a report for the Board. The parties were afforded full opportunity to be heard, to examine and cross-examine the witnesses, and to adduce evidence and call additional witnesses. A copy of the officer's report to the Board which includes a transcript of the evidence of the witnesses was provided to the parties. Both parties filed extensive written submissions with the Board. In addition, a hearing was convened on April 21st, 1993 at which time the Board heard the oral submissions of the parties as to the conclusions the Board should reach in view of the officer's report.
3We have considered the officer's report and the written and oral representations and submissions of the parties. In our view the persons whose status is in dispute in these proceedings are not dependent contractors as that term is defined in the Labour Relations Act ("the Act").
4Section 1(1) of the Act provides that dependent contractors are "employees" for purposes of the Act. The Act defines a dependent contractor as follows:
"dependent contractor" means a person, whether or not employed under a contract of employment, and whether or not furnishing tools, vehicles, equipment, machinery, material, or any other thing owned by the dependent contractor, who performs work or services for another person for compensation or reward on such terms and conditions that the dependent contractor 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.
5The purpose and history of the "dependent contractor" provision has been well summarized in previous Board decisions (see, for example, Algonquin Tavern, [1981] OLRB Rep. Aug. 1057; Atway Transport Inc., [1989] OLRB Rep. June 540; Diamond Taxi Cab Association (Toronto) Limited, [1992] OLRB Rep. Nov. 1143 and the cases referred to therein). We find it unnecessary to detail that purpose and history in this case. Suffice it to say that the Board's jurisprudence demonstrates that it can be quite difficult to distinguish between "dependent" and "independent" contractors.
6In our view it is essential that an assessment of whether an individual is a dependent or an independent contractor must be made having regard to the context of the industry in which the individual is engaged. For that reason we have found the Board's decisions in Journal LeDroit, [1985] OLRB Rep. Sept. 1372 and in The Citizen, [1985] OLRB Rep. June 819 to be of particular assistance in our determination. Both of these cases also dealt with newspaper operations and the status of contractor "drivers". In Journal LeDroit, the Board determined the drivers to be dependent contractors, while in The Citizen the drivers in dispute were found to be independent contractors. Indeed, these companion cases can perhaps be characterized in a more general way as the two outside book ends within which the present dispute falls. On balance, and based on the entirety of the material before us, we have determined that the contractors whose status is in dispute fall more closely to The Citizen's independent contractor end of the book shelf.
7We do not intend to set out an exhaustive review of the evidence in relation to the eleven factors listed in Algonquin Tavern, supra, which alone or in combination have been utilized by the Board to assist in the determination of this issue. Neither do we intend to quote at length from the Board's decision in The Citizen or Journal LeDroit. The law in this area is well established and recognizes that inevitably this issue is a factual determination which requires consideration of the particular circumstances of each case. The circumstances before us contain many "grey" areas and for that reason we propose only to highlight those factors which, on balance, have persuaded us that the drivers whose status is in dispute fall on the independent contractor side of the imaginary line which stretches across the continuum of the independent contractor on one side to the dependent contractor on the other side. In so doing we will note some of the circumstances which distinguish this case from both The Citizen and Journal LeDroit as well as making note of some of the similarities.
8We note at the outset that Metroland Printing, Publishing and Distributing Limited is the corporate entity which carries on business as APNA and OWTW. For ease of reference therefore throughout our decision we will be referring to the responding party as ("Metroland"). The persons whose status is in dispute will be referred to as either ''drivers” or ''contractors''.
9The starting point of our determination is the contractors' agreement which each of the persons whose status is in dispute has signed. That agreement is with Metroland and states:
CONTRACTOR AGREEMENT
BETWEEN
division of
METROLAND PRINTING PUBLISHING &
DISTRIBUTING DIVISION OF HARLEQUIN
ENTERPRISES LIMITED
("Metroland")
- and -
("Contractor")
WHEREAS Metroland publishes
("the newspaper");
AND WHEREAS the Contractor is an independent newspaper agent desiring to distribute the newspaper on the terms set forth below;
THE UNDERSIGNED ACKNOWLEDGES AND AGREES
AS FOLLOWS:
That the Contractor has undertaken, to effect and be fully responsible for delivery of ("the newspaper"), flyers, other publications and products on the route(s) and days outlined in Schedule "B" attached which is part of this Agreement.
That the Contractor shall be responsible to take all steps necessary for the prompt and timely delivery of the newspaper, flyers, publications and products on the said route(s) in good condition.
That the Contractor shall receive payment for services rendered for Metroland as described in the attached Schedule "A" which is part of this agreement.
That the Contractor may engage agents or employees to provide services under this Agreement. The Contractor may sub-contract his route(s) with the permission of Metroland.
The Contractor and any employees of the Contractor are not employees of Metroland and shall not be entitled to receive from Metroland any vacation or vacation pay or any other benefits, including employer's contributions for Unemployment Insurance, Canada Pension Plan and Workers' Compensation. The Contractor agrees to obtain Workers' Compensation coverage with respect to any employees who provide services under this Agreement, and the Contractor must provide a "clearance certificate" as proof of such coverage upon the commencement of renewal of this Agreement if any employees will provide services under this Agreement. The Contractor shall have sole responsibility for labour relations relating to its employees and shall be responsible for complying with all applicable legislation relating to its employees.
The Contractor hereby indemnities Metroland from and against all claims, costs or damages of every nature which Metroland may suffer as a result of the negligence of the Contractor, any sub-contractor, or the agents or employees of either in the performance or non-performance of this Agreement.
Either the Contractor or Metroland may terminate this agreement by giving the other thirty (30) days' notice of termination in writing.
Metroland may terminate this agreement without notice where the Contractor has failed to carry out the terms of this Agreement.
DATED AT _____________________ Ontario
this ____________ day of ____________,1991.
SIGNED, SEALED AND DELIVERED
in the presence of
_____________________ ____________________
Contractor Witness
_____________________ ____________________
Metroland Witness
SCHEDULE "B"
- Your delivery area will be in the following zones in ______________
Zones may be adjusted from time to time, as required by Metroland.
- DELIVERIES are to be completed by:
Wednesday delivery 2:00 p.m. Friday delivery 2:00 p.m. Sunday delivery 2:00 p.m. Off-day distribution (flyer) 2:00 p.m.
PICK UPS are to be made by:
Wednesday pick up 9:00 a.m. Friday pick up 9:00 a.m. Sunday pick up 9:00 a.m. Off-day distribution (flyer) pick-up 9:00 a.m.
- Scheduled times for pick up may be rescheduled due to unforeseen circumstances (ie. late press runs). Distribution times are to be met unless otherwise stipulated by the Distribution Manager.
We note parenthetically that some of the contractor drivers have established independent proprietorships with separate business names. In those instances, the contractor agreement is between Metroland and that business.
10The existence of this written agreement is one factor which distinguishes this case from either The Citizen or Journal LeDroit. However, we have not set out the terms of this agreement because it is determinative of the issue before us. To the contrary, we accept counsel for the trade union's submissions that the substance of the relationship between the respondent and the contractors should be looked at and not the form of the agreement. Thus, although we find the existence and terms of this contractor agreement to be a factor which the Board must consider and balance, we do not find the agreement itself to be conclusive of the issue in dispute. We have set out the terms of this agreement however as it captures both the duties and obligations of the persons in dispute, and outlines the financial arrangements between the parties to the contract. These are two factors which we have considered in deciding this matter.
11The contractors whose status is in dispute are responsible for delivering the product given to them by Metroland (primarily newspapers and flyers) to drop off points along a route established by Metroland. In this instance that primary responsibility also includes:
(a) the pick up of the product at the employer's warehouse at specified times;
(b) accurately "counting" the newspapers and flyers prior to their delivery to ensure the appropriate number is delivered to each drop off point; and
(c) the ultimate delivery of the product by a specified time at specified drop off points.
For providing this service the contractors receive a fairly standard amount of remuneration which is based on the number of papers, flyers etc. delivered.
12At first blush these obligations and the manner in which they are established tend to suggest a relationship which more closely resembles the relationship of an employee than that of an independent contractor. Metroland controls what is to be delivered and when and where it is to be delivered. Moreover, the evidence discloses that the contractors are required to "count" the product at Metroland's premises. They are given a schedule or "manifest" of the route to deliver which sets out what Metroland believes is the most expedient order of completing the deliveries.
13Upon closer examination, however, these factors are less significant than they might first appear when examined in the context of the newspaper industry. As noted in both The Citizen and Journal LeDroit the newspaper product may be likened to a perishable good. Part of the process of delivering that product must therefore necessarily include getting the product to the consumer at the right time. In addition, although drivers are given a route which outlines the drop off points in a particular order, the evidence discloses that a contractor is not obliged to follow the order set out. The drivers are free to change the order of the drop off locations and are not required to inform Metroland of such changes. On the totality of the evidence it is apparent that Metroland is only concerned that the proper number of items is delivered to the appointed locations by a specified period of time. There is little evidence that Metroland exercises any further control about how the drivers are to perform the work specified in the contractor agreement. On balance therefore we find the factor of control to be mostly a neutral factor with perhaps only a slight shading towards the independent contractor end of the spectrum.
14The scope of the work involved with delivery of the product is less than the Journal LeDroit and The Citizen cases where the papers were delivered six days a week. The APNA is produced and delivered three times each week. At the OWTW four papers are produced and delivered each week. In addition to the delivery days for the papers, the evidence discloses that the drivers may count the product on days when they do not deliver newspapers or flyers.
15The financial arrangements between Metroland and the drivers which are referred to in the contractor agreement more closely resemble those found in The Citizen than those found in Journal LeDroit. With respect to these financial arrangements we find that although there is evidence of a limited amount of individual negotiation of the rates paid under the agreement (with Metroland generally and unilaterally first setting a standard rate) on balance the financial arrangement set out in the agreement does not unequivocally point to either the dependent or independent contractor direction.
16The service itself is fairly standarized. A uniform fee structure is not in and of itself determinative in such circumstances. Moreover, on the evidence it is apparent that there is some room for individual negotiation. Similarly, although drivers do not deal with customers directly (nor do they handle any monies relating to customer accounts) and there is little evidence of risk taken by the drivers, the drivers are able to reduce their costs (and increase their profits) by such mechanisms as the ability to freely organize their routes more efficiently, controlling their expenses relating to the delivery vehicles used, and the use and payment of substitute drivers or helpers.
17Drivers do not receive vacation or vacation pay or any other benefits including employer contributions for Unemployment Insurance, Canada Pension Plan, and Workers' Compensation. At APNA the drivers invoice Metroland and are paid once per month. At OWTW payments are made weekly. There are no deductions made for Tax, Unemployment Insurance or Canada Pension. Some of the drivers charge the Goods and Services Tax to Metroland on the services they provide.
18All but one of the contractors provide their own vehicle for delivery. Metroland has had no financial involvement with the contractors (other than paying the amounts set out in the agreement) and in particular does not own and has not financed the vehicles operated by the contractors. All expenses related to the delivery of the product and the maintenance of the vehicles are borne by the contractors. This includes gas, insurance~ maintenance, repairs, and license fees. Each of the drivers recognized that their profit was related to their ability to control expenses relating to the delivery of the product and in particular the expenses relating to the operation of their vehicles. For tax purposes most of the contractors deducted these expenses from their revenues. Although the ownership of the tools certainly suggests independence, the Act clearly indicates that factor is also not dispositive of this issue.
19During the course of the examinations many of the drivers referred to themselves as "employed by" either APNA, OWTW or Metroland and indicated they did not consider themselves as independent business persons. In addition, the evidence discloses a long term stability in the relationship between the drivers and Metroland. Many of the contractors have long service with Metroland (3 in excess of 18 years and most for more than 3 years).
20This evidence however must be balanced with the fact that in correspondence to Metroland which preceded the filing of these applications and which is signed by a group of the drivers, the drivers refer to themselves collectively as "independent business people like yourselves". In addition the majority of drivers (and certainly the greater majority of those who filed tax returns) treated themselves as independent or self-employed business persons for tax purposes. Thus, they were able to take advantage of tax laws by claiming various deductions which are not available to employees. These actions are inconsistent with the assertion of employee status. In our view this treatment for tax purposes is some evidence of entrepreneurial activity, affects the ability of the drivers to increase profit and reduce loss, and also distinguishes the drivers from other employees at Metroland.
21In this latter regard we briefly note some other features which distinguish the drivers from other employees at Metroland. Unlike Metroland employees, the drivers do not fill out employment application forms, do not receive annual performance appraisals, are not subject to Metroland's discipline policies (although there are certain rules relating to their delivery of the product), receive no training from Metroland, receive no benefits, have no deductions made on their behalf and have no vacation entitlement.
22Unlike Metroland employees, drivers are not required to notify Metroland if they are sick or will be absent. Their only responsibility is to ensure that the route covered by their agreement is serviced. This latter aspect leads us to the use of substitutes and helpers by the drivers as well as an examination of the evidence as it relates to any practical and legal impediments which may affect the status of the drivers as dependent or independent contractors.
23As noted some of the drivers have established businesses and it is these independent proprietorships which have entered into the agreement with Metroland. Some of the drivers service more than one route. A number of the drivers have other full-time employment. Thus one driver estimates he works 55 hours per week for another employer and that 60 per cent of that time is spent in the USA and away from the Ajax/Pickering area. Another contractor works 40 hours per week as a transport driver. A third operates a janitorial business, another works in the construction industry, while yet another also works as a mechanic. As a result of these types of factors the evidence discloses that it is not unusual for the drivers to have "helpers" to assist them, or to use "substitutes" to cover the run either on a regular basis or on those occasions when they are sick or wish to have some time off. The majority of drivers use family members (spouses, children, siblings) as helpers or substitutes on those occasions although that is not an exclusive practice.
24The evidence as to whether Metroland's "approval" is required before a substitute or helper is used, and the involvement of Metroland in providing coverage for either "drivers" or "counters" is mixed. Generally the drivers indicated that they advised Metroland if another driver was going to drive the route or count the product. There is no suggestion in the evidence however that Metroland is involved in arranging for such coverage. Neither is there any evidence that Metroland has ever disapproved of, or otherwise refused the use of any such substitute or helper by the contractor. It is also not clear that all drivers advise Metroland with respect to the use of substitutes. On balance, having regard to the entirety of the evidence we have determined that the evidence can be placed no higher than that Metroland merely wants to be kept informed as to who will be responsible for providing services required under the agreement at any time. As a result, we find the fact that the drivers generally inform Metroland when they are unable to perform the duties and that a replacement will be utilized not to be very significant.
25The evidence clearly discloses that the contractors are responsible for paying substitutes or helpers. On the other hand there is evidence that the practice is to pay substitutes the same rates as the drivers themselves receive from Metroland. That portion of the evidence suggests that the use of someone else's labour by the drivers is not designed to increase the drivers' own profit. Although the factor of profiting from someone else's labour would point towards independent contractor status, the situation before us is not so clear. In addition, and at least insofar as OWTW is concerned, if a driver chooses to use another person to "count" the product, that counter is chosen by the contractor from a list provided by Metroland.
26We have determined that on balance the factor which focuses on the use of, or the right to use, substitutes points towards independence in the circumstances before us. As the jurisprudence repeatedly notes it has generally been considered inconsistent with an employment relationship if a contractor is able to fulfill the agreement with someone else's labour rather than the contractors own work and skill. The fact that some of the drivers regularly use others to perform all or significant portions of their obligations under the agreement (ranging from all or some of the counting, to all and some of the driving, to and all or some of both) is a factor which points strongly towards independent contractor status. In the circumstances before us, the fact that the substitute or helper is often a family member and the fact "profit" is not necessarily made from the use of such labour does not significantly alter that fact. The fact remains that another individual's labour is used to perform the agreement. Certainly, the evidence with respect to the use of helpers and substitutes, and the existence of other full time employment is a much stronger indicator of independence in the evidence before us than the facts as set out in either The Citizen or the Journal LeDroit decisions.
27With respect to the practical and legal impediments in the relationship which affect the drivers' status the evidence is also mixed primarily because not all contractors personally perform the duties set out in their agreement. Thus, although some of the drivers spoke of work weeks that exceeded 30 hours per week, some of the other drivers did not work any hours performing the duties set out in their agreement, while others indicated they spent less than 12 hours a week performing duties set out in their agreement. Some of the contractors who testified about spending a significant number of hours working at or for Metroland were persons who had been, engaged by other contractors to do either some or all of that other contractor's "counting" of the product and some or all of that contractor's driving of the route. For that work they would be paid by the other contractor and not Metroland. In those circumstances it may not be entirely accurate to characterize the obligations of the agreement as a full-time job.
28On balance we have concluded that the number of hours required to fulfill the agreement does not practically impede the economic mobility and independence of the drivers. Neither is there any legal impediment which restricts the contractors scope of activity. Although the contractors are restricted from delivering other products while they are delivering Metroland products~ there is no impediment which restricts the contractor from delivering other products at other times~ or which prevents contractors from doing other jobs. Exclusivity of labour is not a part of the relationship between Metroland and these drivers.
29In the circumstances before us it simply can't be said that the economic dependence, if it exists at all, flows from the terms and conditions between the contractors and Metroland. Some of the contractors have other full-time jobs or businesses. Many use others to fulfill all or part of their agreement. The degree of economic dependence, if it exists at all, is far less than that noted by the facts in Journal LeDroit.
30With the exception of one driver whom the applicant admitted was an independent contractor there is little evidence of entrepreneurial activity in the sense that drivers do not advertise their services, do not solicit clients etc. On the other hand, it is also to be noted that drivers do not wear company uniforms, and do not have company logos affixed to their vehicles.
31Finally, we have already referred to the factors which distinguish these contractors from other Metroland employees. We also find it useful to compare the contractors whose status remains in dispute with the one contractor whom the applicant agrees is an independent contractor. Although there are a number of differences between that clearly independent contractor (the operation of a cartage or delivery business, the use of a business card, the hiring of others) there are also a number of significant similarities which go to the heart of the relationship between Metroland and the drivers. Thus, this independent contractor operates under identical terms and conditions as all the other contractors. For example he uses his own vehicle, is paid in the same manner and on the same basis as the other contractors, and like a number of other contractors this independent contractor also hires another person to do the counting.
32In the result therefore and on balance having regard to all of these factors we find that the contractors whose status is in dispute in these applications are independent contractors and are not dependent contractors within the meaning of section 1(1) of the Act. Accordingly, these applications for certification are dismissed.