SUMMARY. Right to sue; Worker (test) (business reality); Independent operator (truck driver).

SUMMARY DECISION NO. 637/95 Dufault v. Dumoulin Right to sue; Worker (test) (business reality); Independent operator (truck driver). The defendants in a civil case applied to determine whether the plaintiff's right of action was taken away. The plaintiff was the exectrix of the estate of a truck driver who was killed in a motor vehicle accident. The issue was whether the truck driver was a worker or an independent operator. Although the trucking company may have wanted to avoid worker status for the truck driver, the business reality of the situation was that the driver was a worker of the trucking company. He drove only for the company. This relationship had been in effect for about two years. The company logo was on the truck. The driver had no control over profit and loss. He was paid a flat rate by the company. Since the driver was a worker within the meaning of the Act, the plaintiff's right of action was taken away. [10 pages] PANEL: Keil; Crocker; Apsey DATE: 03/04/96 WCAT DECISIONS CONSIDERED: Decision No. 921/89 (1990), 14 W.C.A.T.R. 207 consd; Decisions No. 515 refd to, 525/88 refd to, 940/88 refd to, 868/90 refd to, 785/91 consd

WORKERS COMPENSATION APPEALS TRIBUNAL DECISION NO. 637/95 This Section 17 Appeal was heard in Thunder Bay on August 29, 1995, by a Tribunal Panel consisting of: M.F. Keil : Vice-Chair, R.H. Apsey : Member representative of employers, J.A. Crocker : Member representative of workers. THE SECTION 17 APPLICATION This application under section 17 of the Workers' Compensation Act arises out of a fatal accident to Raymond Poliquin on December 12, 1990. An action was commenced in the Ontario Court General Division at Thunder Bay as Action No. 3901/92, in which Florence Dufault, as Executrix of the Estate of Raymond Poliquin, is Plaintiff and Daniel Dumoulin and Kiste's Trucking are Defendants. The Defendants are the Applicants in this matter and are represented by A. Demeo of Carrel & Partners. The Plaintiff is the Respondent in this application and is represented by D. Lenardon of Buset & Partners. THE EVIDENCE The Panel had before it the following as exhibits: Exhibit # 1: Section 17 Statement filed on behalf of D. Dumolin and Kiste's Trucking Ltd.; Exhibit # 2: Section 17 Statement file on behalf of F. Dufault; Exhibit # 3: transcript of the examination for discovery of F. Dufault; and, Exhibit # 4: August 23, 1995, correspondence from the solicitor for the Applicants. THE NATURE OF THE CASE The Applicants seek a declaration from the Appeals Tribunal that Raymond Poliquin was, at the relevant time, either an employee, or, in the alternative, an employer, as so defined in the Workers' Compensation Act. On December 10, 1990, Raymond Poliquin was killed when the tractor trailer he was driving for Toll leasing was involved with another tractor trailer, this one owned by Kiste's Trucking Ltd., which was being driven by Daniel Dumoulin on the day of the accident. At the time of the accident, Kiste's Trucking Ltd. was registered with the Workers' Compensation Board under Schedule 1 of the Act. It is not disputed that Daniel Dumoulin was a worker in the course of his employment on the date in question. 1

Further, it is also accepted that Toll Leasing was a Schedule 1 employer at the relevant time. The contentious issue is the status of Raymond Poliquin. The Panel must determine whether, at the time of the accident, he was a "worker", an "employer", or an "independent operator" within the meaning of the Act. THE PANEL S REASONS (i) Legislative context The first issue that the Panel must decide is whether Raymond Poliquin was a worker at the time of the accident. If the Panel finds that Raymond Poliquin was a worker, then section 10(9) of the Act may preclude civil proceedings. If the Panel finds that he was not a worker, it will then need to explore whether he was an "independent operator." If the Panel were to find that Raymond Poliquin was an independent operator, then the civil proceedings may proceed but if the Panel found that he were an "employer", then the provisions of subsection 8(9) of the Act may again preclude the Plaintiff from continuing her action. The relevant section of the Act provides: 10(9) No employer in Schedule 1 and no worker of an employer in Schedule 1 or of such worker has a right of action for damages against any employer in Schedule 1 or any executive officer or any director or any worker of such employer, for an injury for which benefits are payable under this Act, where the workers of both employers are in the course of their employment at the time of the happening of the injury, but, in any case where the Board is satisfied that the accident giving rise to the injury was caused by the negligence of some other employer or employers in Schedule 1 or their workers, the Board may direct that the benefits awarded in any such case or a proportion of them shall be charged against the class or group to which such other employer or employers belong and to the accident cost record of such individual employer or employers. "Worker" is defined in clause 1(1): "worker" includes a person who has entered into or is employed under a contract of services or apprenticeship, written or oral, express or implied, whether by way of manual labour or otherwise, and includes, (a) a learner or student, (b) a member of a municipal volunteer fire brigade or a municipal volunteer ambulance brigade, (c) a person deemed to be a worker of an employer by a direction or order of the Board, (d) a person summoned to assist in controlling or extinguishing a fire by an authority empowered to do so, 2

(e) a person who assists in any search and rescue operation at the request of and under the direction of a member of the Ontario Provincial Police Force, (f) (g) a person who assists in connection with an emergency that has been declared to exist by the head of council of a municipality or the Premier of Ontario, an auxiliary member of a police force, but does not include an outworker, an executive officer of a corporation, or a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's industry. Independent operator is defined as well: "independent operator" means a person who carries on an industry set out in Schedule 1 and who does not employ any workers for that purpose. Lastly, employer is defined as follows by the Act: (ii) "employer" includes every person having in the person's service under a contract of hiring or apprenticeship, written or oral, express or implied, any person engaged in any work in or about an industry and includes, (a) the Crown in right of Ontario and any permanent board or commission appointed by the Crown in right of Ontario, (b) a trustee, receiver, liquidator, executor or administrator who carries on an industry, (c) a person who authorizes or permits a learner to be in or about an industry for the purposes mentioned in the definition of "learner". Testimony of Florence Dufault Ms. Dufault testified that she had been the common-law spouse of Raymond Poliquin for 14 years. He had been driving a truck for ten years prior to his death and had owned his own truck through this period. The truck he was in at the time of his accident had been purchased in March of 1987. In 1988 Raymond Poliquin had incorporated as a company. His son, P. Poliquin and a friend, G. Dummies, had been driving for him. According to Ms. Dufault, R. Poliquin had always done his own repairs on the truck whenever there had been a problem. She told the Panel that Raymond Poliquin had started driving for Toll Leasing about one and a half years before his death. Before that he had driven for other companies. Ms. Dufault explained that the work for Toll had not been steady as there "were breakdowns at the mine" but she added that he did not drive for anyone else while he was driving for Toll. 3

As a matter of fact, Raymond Poliquin had put a $5,000.00 deposit on a new truck before he died. Ms. Dufault testified that Mr. Dummies would have been driving the new truck because her husband was planning on a "semi-retirement." When questioned by Mr. Demeo, Ms. Dufault explained that "Ray had incorporated because [a pervious employer] had demanded it but Toll didn't care". She agreed that the agreement with Toll had been signed by the son but the truck was Raymond Poliquin's and it was really his arrangement. She stated that Raymond Poliquin did most of the driving and that D. Dummies would fill in. Her husband had paid Mr. Dummies but there had been no U.I.C. deductions, no T4 slips, no payroll maintained and no reporting to the WCB. Ms. Dufault testified that her husband had been driving a Toll trailer when he was killed, which had been insured and licensed by Toll. Raymond Poliquin had sold his trailer when he started working for Toll Leasing. He had been towing twin barrel tanker trailers for them and had worked for them from April of 1989 until his death in December of 1990. She agreed that Toll Leasing's name was on the tractor when he towed for them. He kept the tractor at his place and when he got a call he would go to Thunder Bay to pick up the trailer and then take the load to Hearst. He did not look for work elsewhere as Toll had told him not to do that. At one point, she said, P. Poliquin had taken the tractor to Ottawa to look for work and "Toll fired them as a result." Raymond Poliquin had talked to Toll Leasing and they had "agreed to take him back" as long as P. Poliquin did not drive for Toll any longer. Ms. Dufault also agreed that Toll required Raymond Poliquin to take a driving test before he could drive for them, that they required a tachograph be put in the truck and that he use a card key for fueling up that was supplied by Toll. Raymond Poliquin was paid on a per mile basis by Toll in the amount of $1.05. In respect to compensation matters, Ms. Dufault stated that her husband had not paid WCB benefits nor had Toll on his behalf. She did tell the Panel that she had initially elected to collect benefits from the Board but that Toll had filed a report to the WCB indicating that Raymond Poliquin was an independent operator. She explained that Raymond Poliquin had had personal WCB coverage when he worked for previous employer "B" (the one which required him to incorporate as a company) as that company made that a job stipulation. Another employer, "K" had paid for WCB coverage for her husband. She testified that Toll did not pay for coverage because the company had told Raymond Poliquin that he was an independent operator. (iii) Mr. Demeo's submissions Mr. Demeo suggested that the best possible interpretation of the facts would be that Raymond Poliquin should be considered as dependent contractor and therefore a "worker" for Toll Leasing. In support of this position, Mr. Demeo referred to Tribunal Decision No. 868/90, in which the Panel set out the criteria for independent operators. Specifically, that Panel referred to a Workers' Compensation Board paper entitled "Determination of Worker Independent Operator Status: Impact of the Organizational Test" which contained the following: 4

To be considered an independent operator and to remain consistent with the organizational test, it would need to be shown that, among other things, a trucker: drives, on a regular basis, for more than one firm; is not subject to discipline by the principal; works under own operating licence rather than under a carrier's licence; does not operate under the rules and regulations of the principal; is retained on an as-needed basis only; does not operate using the same route selection as employee drivers; and is not held out to be a representative of the principal. Where these criteria are not satisfied, then the trucker would be considered a worker of the principal trucking company - unless the individual circumstances of the case should dictate otherwise. Mr. Demeo argued that Raymond Poliquin met none of these criteria. That is, he had to drive only for Toll Leasing and at a fixed rate; the company's name was displayed on the truck; he had to use a tachograph and the company's gas card. The company could (and did) terminate employment at any time. Raymond Poliquin had none of the indicia of a company or independent operator. He drove a truck for Toll Leasing and that was the extent of it - he was an employee in any meaningful sense. The fact that the company had tried to shift the onus for WCB coverage onto Raymond Poliquin at the time of the signing agreement did not mean that, in actual fact, he was anything but a "worker" within the meaning of the Act. Mr. Demeo also referred to Tribunal Decision No. 785/91 as being supportive of his submission that Raymond Poliquin was a worker. In that decision, the Hearing Panel cited the "hybrid test" or business reality test" set out in Decision No. 921/89 (1990), 14 W.C.A.T.R. 207. That Panel set out the principles of the "business reality test" which included a consideration of: ownership of equipment used in the work or business; the form of compensation paid to the worker or the independent operator; business indicia; evidence of co-ordination control as to where and when the work is performed; the intention of the parties, often evidenced by an agency agreement, employment agreement, contract for service, contract of service or limited term contract; business records which reflect upon the status of the parties; the economic or business market; the existence of the same or very similar services supplied to an "employer" by a person or persons who are classified as "workers" under the Act; substitute services; size of the consideration or payments; and degree of integration. Mr. Demeo noted that that Panel had concluded its criteria with the following observations: The list is not exhaustive, nor is any one of the factors referred to normally, of itself, determinative of the issue. The best that can be hoped for is that a consideration of a number of these factors will 5

provide a hearing panel with a sense of or opinion on the overall prevailing character or substance of the relationship - i.e. the business reality. It is the substance, not the form, of the relationship that determines whether a person is a "worker" or "independent operator" for compensation purposes. Mr. Demeo argued that, on balance, Raymond Poliquin was a worker and section 10(9) of the Act operated to remove the action of the plaintiff. Mr. Demeo submitted that, if Raymond Poliquin had been either a worker or an employer, then Ms. Dufault's right of action would be taken away. In the event that the Panel was not convinced that Raymond Poliquin had been a worker within the meaning of the Act, he argued, in the alternative, that there was some convincing evidence to suggest that Mr. Poliquin had been an employer. Firstly, the WCB considered him to be an employer, according to correspondence from the claims adjudicator dated April 8, 1991. Secondly it was undisputed that Raymond Poliquin paid others to work driving his tractor. Mr. Demeo referred to Tribunal Decision No. 525 and Decision No. 525/88, both of which endorsed the principle that employers have immunity from action where the accident occurred while they were carrying on their business. He cited Decision No. 525, at pages 6 and 7, where the Panel found as follows: It is the Panel's view that section 8(9) is intended to provide employers from immunity from court action, in return for their contributions to the Accident Fund.... The Act is not intended to protect any employer, in any circumstance, from a lawsuit by any worker. What is intended, in our view, is that Schedule 1 workers and employers are protected in situations in which all parties are acting in their capacity of carrying on business. Mr. Demeo concluded by saying that, while he thought the evidence was most supportive of finding that Raymond Poliquin was a "worker" within the meaning of the Act, he could also be characterized as an "employer". What Raymond Poliquin was clearly not, however, was an independent operator. (iv) Mr. Lenardon's submissions Mr. Lenardon referred to Tribunal Decision No. 868/90 at page 4 where the Panel indicated that, "when the driver is the owner of the truck, but the company holds the PCV licence, the owner/driver is considered to be a worker unless the owner/driver signs an agreement indicating the relationship is one of contract for service and not employer/worker." He pointed out that such an agreement existed between Raymond Poliquin and Toll Leasing. That agreement specified that Mr. Poliquin was responsible for obtaining personal coverage from the WCB as an "owner/operator." Mr. Lenardon submitted that the hybrid test set out in Tribunal Decision No. 785/91 was the appropriate one to apply in this case. Were the Panel to apply the test as set out in the list provided by 6

that Panel, Mr. Lenardon argued that it would be apparent that Raymond Poliquin was not a "worker" within the meaning of the Act but was, rather, operating as an "independent contractor." In support of this, he noted that Raymond Poliquin paid cheques to P. Poliquin and to G. Dummies when they made truck runs; he had to pay his own insurance; he was not in a long-time service but worked month to month; he did not receive any benefits such as holiday pay that would accrue to a worker; he was terminated for breech of the agreement not fired from employment; and, under the contract there was no right for Toll Leasing to discipline Raymond Poliquin. Mr. Lenardon stated that it was clear that the indicia of an employer/employee relationship were not present in the instant case. He also indicated that the Tribunal cases found in the Applicants' statement were not applicable to the facts of this case. Decision No. 940/88 was decided on the basis of a collective agreement which did not exist in this case; in Decision No. 868/90 the driver did not have a risk of profit or loss which Mr. Lenardon argued differed from the status of Raymond Poliquin; and in Decision No. 785/91 wherein it was decided that the driver was a worker, there was no contractual agreement as existed between Raymond Poliquin and Toll leasing. In summary, Mr. Lenardon argued that the weight of evidence established that Raymond Poliquin was an "independent operator" within the meaning of the Act and that Ms. Dufault's right of action would not be taken away. (v) The Panel's findings The Panel in Decision No. 785/91, at page 6, has aptly articulated the inherent problems in determining the status of an owner/driver thus: The situation before the Panel is typical of most cases involving an owner/driver. Typically there are certain signs that Mr. Gabski was an owner/operator (e.g., ownership of equipment, variation in earnings, deductible expenses, absence of "employer" paid benefits). There are also indicia which suggest he should be treated as a "worker" for purposes of the Act (e.g., services restricted to FFF, FFF name on cab, control by dispatcher, subject to disciplinary measures). The best a panel can do in these situations is weigh the various indicia and form an impression as to the prevailing character of the relationship. That Panel also cited Tribunal Decision No. 921/89 (1990), 14 W.C.A.T.R. 207, when it addressed itself to the primary responsibility of a panel when applying the criteria of the "business reality" test in such situations: What is important is that parties have an idea of the factors to be considered by the Appeals Tribunal in determining status as a "worker" or "independent operator". By referring to these factors, parties may themselves develop a sense of the character or reality of the business relationship and thus make a realistic assessment of the situation. It is the opinion of this Panel that the factors enumerated in this decision 7

assist in this goal to a greater extent than merely asking whether the work is "integral" to the overall business operation. The question to be asked is 'what is the true nature of the service relationship between the parties, having regard to all relevant factors impacting on that relationship?' This Panel agrees that is only through an examination of the true nature of the service relationship between the parties that the status of Raymond Poliquin, within the meaning of the Act, can accurately be determined. With this in mind, the Panel acknowledges that, in the case before us Raymond Poliquin's status has certain formal indicia of "independent contractor" and certain indicia of "worker". It should be noted that, for the period of time in qustion, Mr. Poliquin was not incorporated; that had been the request of a previous trucking company with which he had done business.predominantly, however, the abstract indica support the idea of an owner/operator while the concrete indicia are supportive of Raymond Poliquin having an employee relationship with Toll Leasing. The most telling example of this, in the Panel's mind, is the signed agreement which does, as Mr. Lenardon has argued, confirm that Raymond Poliquin was responsible for his own WCB coverage and was an independent operator. What the agreement says and how the everyday reality played out are at variance. This Panel prefers to accept the actuality of the relationship rather than the largely hypothetical nature articulated in the agreement. Specifically, Raymond Poliquin displayed the logo of Toll Leasing; he used its gas card key; had a tachograph in the tractor; could accept no other work except that of Toll Leasing; and, most tellingly, was "fired" when his son acted contrary to the company's instructions. One can argue, as Mr. Lenardon did, that the agreement was merely terminated but as Ms. Dufault made quite clear in direct testimony her husband's sense of the situation was that he had been "fired." At the risk of stating the obvious, only employees are fired. Only employees are totally dependent on the employer for their remuneration; and, only employees are strictly bound by the directives of the employer as to when they work, how much they can work, where they work, with whom they can work and, how they comport themselves when they work. Raymond Poliquin had no genuine, business reality apart from his relationship with Toll Leasing. For almost two years, Toll Leasing was the only company for whom Raymond Poliquin worked. In the Panel's mind, this is a long-term relationship. Raymond Poliquin had no control over profit and loss. He worked only when Toll Leasing told him to work and he was paid a flat rate when he did so. It is true that he owned the tractor which he drove but the possible independence that this might have given him was subsumed by the employment relationship he took on with Toll Leasing. Toll Leasing may have instructed Raymond Poliquin to obtain personal WCB coverage and it may not have extended employee benefits but we do not find these factors to have been a true indication of his status. Rather they seem to indicate the responsibility that Toll Leasing wished to avoid. Naming a thing does not necessarily transform it into what it has been called. Naming Raymond Poliquin an owner/operator when he had few of the salient, attendant features does not mean that he was one. 8

That the Workers' Compensation Board initially found Raymond Poliquin not to have been a worker seems largely the result of information supplied to it by Toll Leasing and, given this Panel's findings, ought not to have been relied on. The Panel finds that the business reality of the situation was that Raymond Poliquin was an employee of Toll Leasing and, was therefore a "worker" at the time of his death. Having found that Raymond Poliquin was a worker at the time of his death, it is obvious that the Panel does not find him to be an employer and, accordingly, those arguments need not be dealt with at this time. THE DECISION The application by the Defendants is allowed. The Panel finds Raymond Poliquin to be a "worker" within the meaning of the Act and the Plaintiff's right of action is taken away by section 10(9) of the Act. DATED: April 3, 1996 SIGNED: M. Keil, R.H. Apsey, J.A. Crocker 9