Logistics & Transport

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Trucking and transport industries a hotbed of contractual complexity

In this day and age most commercial activities involve the formation and application, interpretation and enforcement of contracts but none more that the trucking and logistics industry.
From service/employment agreements with employees, independent contractors and dependant contractors to truck leasing and financing agreements this industry demands both the use and interpretation of complex agreements that while not appearing complex or confusing when entered into can be when and if problems arise.
A prime example of the contractual problems that can arise in this industry commonly found in the contracting of independent owner operator drivers/contractors. It is often believed that the companies agreements either self or professionally drafted to ensure that these independent contractors cannot and will not be considered employees with all the obligations and remittances that flow from this status, however, the Courts upon review of the circumstances of this type of agreement have on consideration of the conduct of the parties and the nature of the performance of the agreed services have found that even if both parties to the contract agree and assume that the driver is an independent contractor he or she can be found to be a dependant contractor or employee raising issues both as to governmental remittances and questions as to wrongful dismissal upon termination of the agreement. This position is well outlined in the case of Decision No. 1392/17, 2017 ONWSIAT 3980 (CanLII) which held;
(iv) Decision
(a) Worker or Dependent Contractor?
[7] In this case, the ARO correctly cited Board Operational Policy Manual (OPM) Document No. 18-02-08, which states the following in regard to determining whether an individual is a dependent contractor:
Dependent contractor.
The Labour Relations Act, 1995 defines a dependent contractor as 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
In general, dependent contractors are remunerated based on the gross earnings received for performing a certain contract of work, sometimes referred to as piecework, for a contractor. The contractor does not issue a T4 statement since payroll taxes are not deducted at the source. A dependent contractor may report as a self-employed individual for income tax purposes with the Canada Revenue Agency (CRA). To be considered a dependent contractor, the worker must be covered under the contractor’s WSIB account at the time of injury.

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