FD: ACN=1929 ACC=R FD: DT:D DN: 912 STY:Ontario Motor Sales Ltd. v. Lachance PANEL: O'Neil; Beattie; Jewell DDATE: ACT: 15, 1(1)(o), 1(1)(z),

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1 FD: ACN=1929 ACC=R FD: DT:D DN: 912 STY:Ontario Motor Sales Ltd. v. Lachance PANEL: O'Neil; Beattie; Jewell DDATE: ACT: 15, 1(1)(o), 1(1)(z), 8(9), 8(11) KEYW: Right to sue; In the course of employment (travelling); In the course of employment (proceeding to and from work) (employer's vehicle); Worker (test); Casual employment; Independent operator. SUM: The defendants in a civil case applied to determine whether the plaintiff's right of action was taken away. The claim arose out of an accident in which the plaintiff, while driving a truck owned by his employer, collided with a car driven by defendant driver. At the time of the accident, the defendant driver was delivering the vehicle he was driving from the defendant company in Oshawa to a leasing corporation in Toronto. The issue before the Tribunal was whether the drivers were in the course of their employment at the time of the accident. The Tribunal found that the defendant driver was employed on a casual basis to deliver cars for the defendant company. His right to decline work was found to be evidence only of the fact that he was a casual worker and not significant to the question of whether he was an independent contractor. The Tribunal noted that the delivery service to customers was an integral part of the defendant company's business. Taking this into account, together with common law tests of employment, the Tribunal concluded that the defendant driver was in fact an employee in the course of his employment at the time the accident occurred. Similarly, the plaintiff, who was a stone mason travelling from his home in Oshawa to a job site in Toronto, was found to be in the course of employment at the time of the accident. The plaintiff's right to sue the defendants was taken away by the Act, as was the right of the plaintiff's dependants. The Tribunal further stated that as no argument had been made with respect to injury or disablement, the application should be treated in substance as an application as to which forum the matter should be pursued. Accordingly, there was no adjudication of the right to compensation. PDCON: TYPE:15; S DIST:S DECON: 86, 422/87 IDATE: HDATE: TCO: KEYPER:C. Goldsmith; A. T. Graham; P. A. Gemmink; S. Kucher; M. M. Lachance; R. Kenneth XREF: COMMENTS: TEXT:

2 WORKERS' COMPENSATION APPEALS TRIBUNAL DECISION NO. 912 IN THE MATTER OF an application pursuant to section 15 of the Workers' Compensation Act, R.S , c. 539, as amended. AND IN THE MATTER OF an action commenced in the Supreme Court of Ontario at the City of Toronto as Action No /84. B E T W E E N: ONTARIO MOTOR SALES LTD. and CLINE GOLDSMITH Applicants in this application and Defendants in the Supreme Court of Ontario Action. - and - RICHARD KENNETH LACHANCE and MILDRED MARY LACHANCE Respondents in this application and Plaintiffs in the Supreme Court of Ontario Action.

3 WORKERS' COMPENSATION APPEALS TRIBUNAL DECISION NO. 912 IN THE MATTER OF an application pursuant to section 15 of the Workers' Compensation Act. AND IN THE MATTER OF an action commenced in the Supreme Court of Ontario at the City of Toronto as Action No /84. B E T W E E N: ONTARIO MOTOR SALES LTD. and CLINE GOLDSMITH Applicants/Defendants - and - RICHARD KENNETH LACHANCE and MILDRED MARY LACHANCE Respondents/Plaintiffs WORKERS' COMPENSATION ACT SECTION 15 APPLICATION

4 WORKERS' COMPENSATION APPEALS TRIBUNAL DECISION NO. 912 This Section 15 Application was heard on January 9, 1987, by: K.G. O'Neil : Panel Chairman, D.M. Jewell : Tribunal Member representative of employers, D.B. Beattie: Tribunal Member representative of workers. THE SECTION 15 APPLICATION This is an application under section 15 of the Workers' Compensation Act which arises out of Action No /84 in the Supreme Court of Ontario for damages as a result of a motor vehicle accident. The Plaintiffs in that action are Richard Kenneth Lachance and Mildred Mary Lachance, who claim damages arising out of a collision with a car owned by Ontario Motor Sales and driven by Cline Goldsmith. Mildred Mary Lachance claims as a dependant. The Applicants before the Tribunal were the Defendants Ontario Motor Sales and Cline Goldsmith, represented by A.T. Graham, barrister and solicitor. The Respondents before the Tribunal were Richard Kenneth and Mildred Mary Lachance, represented by P.A. Gemmink, barrister and solicitor. Samuel Kucher, a Co- Defendant in the Supreme Court of Ontario action, was given notice but did not appear and was not represented at the hearing. THE EVIDENCE The Panel had before it a factum from the Applicant and Respondent, and the transcript of the examination for discovery of Cline Goldsmith and Richard Lachance. The Panel heard evidence under oath from Cline Goldsmith and the payroll clerk from Ontario Motor Sales. THE NATURE OF THE CASE The issue for the Panel is whether or not Richard Lachance and Cline Goldsmith were in the course of their employment at the time of the accident. THE PANEL S REASON (i) The facts On June 10, 1983, while driving a truck owned by All Canadian Building Renovations, the Plaintiff Richard Kenneth Lachance was involved in a motor vehicle accident with two other motor vehicles, one owned and operated by Samuel Kucher and another owned by Ontario Motor Sales Ltd. and operated by Cline Goldsmith. At the time of the accident, Cline Goldsmith was delivering the vehicle he was driving from Ontario Motor Sales Ltd. in Oshawa to

5 2 Grant Brown, a leasing corporation on Lawrence Avenue in Toronto. Ontario Motor Sales is a GM dealership which also has rental cars available to dealers, which, from time to time, have to be delivered to Toronto. The need is somewhat sporadic. It can be as often as once or twice a day, or once in two or three days. Mr. Goldsmith testified he was called in when needed, and was paid by the trip. He had no benefits from Ontario Motor Sales and did not think he was covered for WCB. The driving arrangement at the time of the accident were such that he was not obliged to go in and would not go in if he did not feel like it. He said that he did at least one trip per week, seven to eight a week would be very busy, and one or two a week would be very slow. Maria Middleton, the payroll clerk at Ontario Motor Sales, confirmed that Mr. Goldsmith would deliver cars to customers. It was her testimony that he was not employed by Ontario Motor Sales but that his name was on a list of people who were available to deliver cars to Toronto. Ontario Motor Sales would call the person and say: "Could you deliver a car?". There would be no difficulty if the person said no or was unavailable, even for lengthy periods. They were paid $8.00 a trip. They were not covered by workers' compensation and no deductions were made for income tax and C.P.P. She said they were paid like a normal supplier, although they supplied services rather than parts. Mr. Goldsmith was paid through accounts payable, not payroll. When asked if the deliveries were closely linked to the purposes of Ontario Motor Sales, her answer was: "We are doing a service to the customers". She said there were three to seven people doing this job, and there was no minimum number of trips. She said that Ontario Motor Sales had 170 to 180 employees in There were hourly people who cleaned the cars, and prepared them for deliveries, salaried people who were the clerical and managerial help, commissioned staff such as the sales people, and "flat rate" people like mechanics who work on piece work. The cleaning company is paid by accounts payable. Payments to drivers such as Mr. Goldsmith were considered a "payroll related accounts payable". At the time of the accident, Richard Lachance had been working for All Canadian Building Renovations as a stonemason on a full time basis since November He was proceeding from his home in Oshawa to a job site near the intersection of Bathurst Street and Wilson Avenue in Toronto. All Canadian Building Renovations had five other people working for it as carpenters, and an owner who acted as salesman. In his examination for discovery, Mr. Lachance said he was employed by All Canadian Building Renovations, but when asked more specifically said he was a sub-contractor. He said that he was paid $1.30 per square foot for his stonemasonry work and that it was customary for him to take the truck belonging to All Canadian Building Renovations home with him every night. (ii) Argument in support of the application The Applicant/Defendant argues that while Richard Lachance is paid at a fixed rate for his work, he worked exclusively for All Canadian Building Renovations and used the vehicle owned by his employer and is therefore, a worker under section 1(1)(z) of the Workers' Compensation Act. Since he was proceeding directly to the job site in his employer's vehicle, it is submitted that he was in the course of his employment. It is argued that Lachance may be a sub-contractor for tax purposes, but for workers' compensation purposes he

6 3 was a worker. Mr. Graham gave the example of owner-drivers who are independent contractors for tax purposes. He said that the fact that Lachance was driving his employer's vehicle to work was sufficient to find that he was in the course of his employment. Access to the truck itself was argued to be a significant employment benefit. Similarly, the Applicant/Defendant asks us to find that because Cline Goldsmith was operating the vehicle for the purpose of the employer's trade or business, he is a worker under section 1(1)(z) of the Workers' Compensation Act and since Cline Goldsmith was delivering a vehicle for his employer at the time of the accident, he was in the course of his employment. Mr. Graham submits that section 1(1)(z) of the Act only excludes casual workers who are employed otherwise than for purposes of the employer's industry. He said delivering cars was part of the service provided by the employer. Therefore, Mr. Goldsmith was not excluded from the Act. Also he notes that the definition of worker includes a contract of service. He underlined that Mr. Goldsmith was a worker because he had a contract of service in a conventional sense. He was exclusively directed by Ontario Motor Sales, as to what car he was to take, and where he was to drive and was an integral part of the business. The Applicant/Defendant submits, consistent with the WCB's policy, that a worker is in the course of his employment where the conditions of the employment require the employer to drive the vehicle to and from work for the purpose of that employment, except when a distinct departure or personal errand takes place en route. Further, it is argued that where a worker suffers injury while using transportation provided by the employer, such injury is compensable, notwithstanding that the worker may be travelling to and from work, and that a worker is in the course of his employment if he is engaged in the performance of duties for the employer or doing something incidentally related to employment. Factors to be considered in determining whether an individual is a worker rather than an independent contractor under the Workers' Compensation Act include whether that individual worked exclusively for a single employer, whether he is paid a regular rate for work, and whether his work is an integral part of the employer's business. (iii) Argument against the application The Respondent/Plaintiff takes the position that Richard Kenneth Lachance was a sub-contractor and not a worker for the purpose of the Act. The fact that Richard Lachance was the only person who did stone-facing masonry work for All Canadian Building Renovations and all the employees of All Canadian did carpentry work, is cited as an indicator that he was not an employee. The Respondent/Plaintiff argues that where a person is not integrated into the business of a company, although the work performed is done for such business, and where the person bears the chance of profit and risk loss, the person is not a worker within the meanings of the Workers' Compensation Act. Further, Mr. Gemmink argues that a person such as Mr. Lachance who is on his way to and from work is not in the course of his employment. It is argued that Cline Goldsmith was a casual employee, and therefore not a worker under section 1(1)(z) of the Workers' Compensation Act. This is inferred from the facts that he was retired from his regular employment at the time of the accident and there was no regularity to how much or when he worked.

7 4 Mr. Gemmink argued that it was possible that Mr. Goldsmith came under the old Act but not under the new Act. He provided services and was not under a contract of service. He underlined that there was a distinction between a contract of service and a contract for services. He said Goldsmith did not hold a job as we know it. He did not have to be available. Mr. Gemmink suggested the analogy that if a window had been blown out in the building, the management would call someone to fix it. He said that you could not have little contracts of service, that those are contracts for services. He said that the vital distinction is whether or not the person involved can take or leave the work. (iv) Matters not decided There is no argument that the right of action is taken away as against the co-defendant Kucher. Section 8(11) is the only interest of Kucher, but there is no application before us on his behalf. Although a constitutional issue was raised in the Respondent's factum, the issue was not argued before this Panel, although Mr. Gemmink reserved what rights his clients could reserve. We make no decision on any constitutional matter. (v) Conclusions (a) What was the status of Mr. Goldsmith? The Panel must first decide whether Mr. Goldsmith was an employee or a contractor for services. There was no argument that he was not in the course of his employment. The Tribunal has dealt with the question of the difference between a worker and an independent operator on a number of occasions, most recently, to our knowledge, in Decision No. 422/87. We agree with the factors to be considered, listed there, as follows: ownership of the equipment used in the business; evidence of co-ordinational control as to where and when the work is performed; form of compensation (fixed rate or variable remuneration with prospect of profit or loss); intention of the parties; business or government records which reflect on the party's intention. In Mr. Goldsmith's case, the first three factors are clearly on the side of his being an employee and not a contractor. Ontario Motor Sales owned all the equipment used; they determined when and where the work was to be performed. Although Mr. Goldsmith had the right to decline work, he did not have any discretion as to when or where he did the work. The Panel is of the view that the right to decline work is one of the factors that makes a worker casual, not one that determines whether or not he or she is an employee or a

8 5 contractor. Mr. Goldsmith was paid a fixed rate of pay for each trip and had no prospect of profit or risk of loss at all. The intention of the parties is not entirely clear. The evidence suggests that Ontario Motor Sales did not intend to treat Mr. Goldsmith as an employee in that they did not make income tax or C.P.P. deductions. However in terms of whether they intended to give Mr. Goldsmith any independence, or whether they intended to control what Mr. Goldsmith did and when, it is abundantly clear that they intended to exert control over every aspect of the work except whether or not he did a particular trip. On the question of whether Mr. Goldsmith was part of Ontario Motor Sales, it is apparent that providing the delivery service to customers was an integral part of the business. The fact that it may have been a minor part of the business, does not make it any less integral. It was not in any way separate from the Ontario Motor Sales business. With respect, we do not see it as analogous to repairs such as to broken windows, which is clearly separable from the business of selling and leasing cars. The evidence that Mr. Goldsmith's pay was considered as an accounts payable rather than as a payroll item, cannot be determinative. The fact that the company considered it a payroll-related accounts payable is indicative that the status as a service was not as well defined, even in the employer's mind, as was argued. Furthermore, as outlined in Decision No. 86, whether or not the worker works exclusively for a single employer is relevant. That was the case with Mr. Goldsmith. We are of the view that the balance of factors indicates that Mr. Goldsmith was a casual worker The exclusion in section 1(1)(z) from the definition of a worker which is applicable here is: A person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's industry. The employer's industry is that listed under Class 11(3) Schedule 1, namely new and used automobile - sales business. Schedule 1 is entitled "Industries the employers in which are liable to contribute to the accident fund." Therefore, each of the classes constitutes an industry. Additionally, industry is defined in section 1(1)(o) to include an "establishment, undertaking, trade, business or service and, where domestics are employed, a household." It was not seriously argued that Mr. Goldsmith was driving the car otherwise than for the purposes of Ontario Motor Sales as an automobile sales business. We find that he was operating the car for the purpose of the industry of which Ontario Motor Sales was a part and therefore, although he is a casual worker, he is not excluded from the definition of worker. (b) What is the status of Mr. Lachance? Mr. Lachance was working in an industry which has movable job sites. There is no fixed place of work, and often the distance to the work site will be considerable. Mr. Lachance testified that All Canadian Building Renovations

9 6 did work refacing foundations in front of houses, usually small jobs for residential home owners. He testified that he had been working for his cousin but stopped because All Canadian Building Renovations paid him more and was working for them exclusively at the time of the accident. He had been working for them full time for six months at the time of the accident. As to whether Mr. Lachance was a worker or an independent contractor the same considerations apply to him as to Mr. Goldsmith. We had no information on who owned the cement equipment used by Mr. Lachance, but the renovations company owned the car he was driving. The salesman, whom Mr. Lachance referred to as his "boss" in the examination for discovery evidentially secured the work and directed where, if not exactly when, the work was performed. The worker was paid a fixed rate per foot. The fact that this could be variable according to how many feet, does not say anything about whether or not the worker was an independent contractor or an employee in that there are many employees who are paid on piece work or production basis. As to the intentions of the parties, the evidence is inconclusive, and as stated in Decision No. 422/87 where the evidence is inconclusive, the decision must be based on the other factors. On the general organizational test as to whether or not a stonemason is an integral part of a company that refaces the fronts of houses, it is clear that he was integral to the organization. He worked entirely for one employer at the time of the accident and there was no evidence that he had any risk of loss, although there was no evidence that he was guaranteed any work. The Panel finds that the balance of factors indicates that Mr. Lachance was a worker for the purposes of the Workers' Compensation Act. On the question of whether Mr. Lachance was in the course of his employment, Mr. Gemmink emphasizes that he was on his way to work. He said that if he had been in his own vehicle, he clearly would not have been considered to be in the course of his employment. He referred to the case of Edwards v. Wingham, [1913] K.B. 596 which held that an employee who was going home from work on a bicycle provided by his employer was not in the course of employment. He acknowledged that the argument was not in line with Board policy. However, he argues that WCB policy is only persuasive and not binding. He said that it was important to note that the policy applies only where the conditions of the employment requires a vehicle be driven to and from work and that we had no evidence that it was required. As to whether or not he was in the course of employment, the fact that he had to go to Toronto from Oshawa and that he was provided a truck in which he was to do so indicates that this case should be considered as a "travelling employee" case rather than a "going to and from work" case. It is always different to state at what distance an employee is travelling, rather than commuting to and from work. However, we are satisfied that the distance between Oshawa and Toronto is sufficient in an industry with moving work places, for which an employer provides a vehicle, to categorize Mr. Lachance as a travelling employee. He was making the trip for the benefit of the employer

10 7 in the employer's truck. There was no personal purpose to the work at all and there was no allegation that he had deviated from the route. We therefore find him to have been in the course of his employment at the time of the accident. Therefore the Panel finds: 1. Kenneth Lachance was a worker working for a Schedule 1 employer and that he was in the course of his employment at the time of the accident. 2. Goldsmith was employed, even if casually, for a purpose of the employer's trade or business and is therefore a worker within the definition of section 1(1)(z) of the Act. He, too, was in the course of his employment at the time of the accident. The application asks for a declaration that Richard Kenneth Lachance is entitled to compensation under Part 1 of the Act and that he has no right of action against Ontario Motor Sales and Cline Goldsmith nor right to recover damages against them. We have made findings which trigger section 8(9) in that we have found that both Mr. Lachance and Mr. Goldsmith were workers of Schedule 1 employers in the course of their employment at the time of the accident. Since no argument was made on the question of injury or disablement, both of which determinations would be necessary in order to finally determine the Plaintiff's right to compensation, the Panel takes the application to have been in substance an application on the question of whether the right of action was taken away so that the parties will know in which forum the matter must be pursued. However, the injury pleaded is an injury for which benefits are payable under the Act. In order to make a successful claim for benefits both injury and disablement will have to be established. As has been held several times by the Tribunal in circumstances such as this, derivative claims such as Mary Lachance's against Cline Goldsmith and Ontario Motor Sales, are also taken away. We therefore find that section 8(9) removes the right of the Plaintiffs to sue Ontario Motor Sales and Cline Goldsmith. Since there have been no findings of negligence and indeed no argument or information about the lawsuit as against Samuel Kucher, the Panel refrains from making specific findings as to the application of section 8(11) other than to say that because of our finding above, Ontario Motor Sales is a Schedule 1 employer and Cline Goldsmith is a worker of a Schedule 1 employer. THE DECISION The application is allowed. The Plaintiffs' right to sue Ontario Motor Sales and Cline Goldsmith is taken away by the Act. DATED at Toronto, this 7th day of October, SIGNED: K.G. O'Neil, D.M. Jewell, D. Beattie.