On September 6, 2012, the Commission des lésions professionnelles (the CLP) deliberated on the interpretation of article 316 of An Act Respecting Industrial Accidents and Occupational Diseases (the Act) which states that the Commission de la santé et de la sécurité du travail (the CSST) can require from an employer that retains the services of a contractor to pay the assessment due by said contractor.
Fruits & Légumes G Bono Inc. (the Employer), a fruit and vegetable wholesaler, had no truck drivers on its employment roster. To transport merchandise, the Employer used various external trucking companies. Transportation contracts were negotiated verbally and on a case by case basis depending on the Employer's needs. In the case at hand, the Employer retained the services of Transport Georges Léger Inc. (the Contractor) numerous times in 2007.
The Contractor did not pay its CSST assessment for 2007 due to a bankruptcy. The CSST then turned to the Employer, demanding that it pay the $12,746.53 owed by the Employer, a figure based on the total price of services billed to the Employer for that period ($878,060) and the amount relative to the salaries paid out for those services ($160,333.53).
The Employer requested that the CLP overturn the CSST's decision.
To support its application, the Employer invoked that the contract for transportation does not fall under the ambit of article 316 of the Act because it does not constitute a business or services contract under the Civil Code of Québec. The CLP rejected this argument, explaining that past case law indicates that the word "Contractor" is not explained solely in the light of business contracts under the Civil Code of Québec – it must be given a broader interpretation. According to the CLP, the analysis centered on whether an Employer that requires the services of a transportation company is providing work similar to that of a "Contractor" within the meaning of article 316 of the Act. In light of the case law, the CLP answered that question in the affirmative.
Moreover, the Employer asserted that it should not be held responsible for the Contractor's unpaid assessment because trucking does not fall within the scope of the Employer's economic activities. The CLP rejected this argument, deeming it incompatible with the objective of article 316 of the Act, since the Employer, by requesting the external services, created the potential risk of an unpaid assessment. The Employer's business, after all, would not exist without external trucking companies. The Contractor's services, were therefore accomplished for the benefit of the Employer.
To prevent claims based on article 316 of the Act, employers should verify with the CSST that the contractors with which they do business are registered with the CSST and are in compliance with their obligation to pay their annual assessment. To that end, employers can request the following documentation:
- Confirmation of the contractor's registration with the CSST (prior to the employer engaging in a business relationship with the contractor);
- Compliance confirmation (while the contract is carried out); and
- Certificate of compliance (once the contract is finished).
Lastly, it is noteworthy that employers that have recourse to contractors may also be held liable to pay unpaid salaries owed to contractors' employees in accordance with article 95 of the Act Respecting Labour Standards Act.
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