The recent B.C. Supreme Court decision in Khan v. All-Can
Express Ltd. (2014 BCSC 1429) confirms a growing trend across
Canada towards finding that contractors who are highly economically
dependent on one employer will be entitled to notice of termination
similar to that required when terminating an employee.
Khan owned his own courier truck and contracted with All-Can
(doing business as "Ace Courier") to service one of its
courier routes. Ace engaged a combination of employees driving
company-owned trucks and "owner/operators" like Mr. Khan.
The judge found that the owner/operators typically had long term
relationships with Ace, were kept busy on a full time basis, were
assigned work by Ace and were expected not to work for competitors.
They also wore Ace uniforms, had to follow Ace policies and
displayed the Ace logo on their trucks. On the other hand, Khan had
signed an agreement acknowledging he was an independent contractor,
was responsible for his truck and all related expenses and had to
hire a replacement driver when he was not available. Khan did not
participate in employee benefits or receive pay for vacation
The trial judge noted that in a series of recent decisions,
including one involving a truck "owner/operator", the
courts have found that contractors in economically dependent
relationships like Khan are entitled to reasonable notice of
termination similar to that required for employees. Adopting that
approach, he awarded Khan 4 months of notice (after 5 years of
service) based on consideration of the same factors that apply to
employees. In fact, the award is very similar to what a court might
have awarded an employee in the same job, despite the fact that
some cases have suggested that notice requirements for contractors
should be less onerous.
The case serves as a reminder to employers of dependent
contractors that their contractor status alone does not mean they
can be terminated without reasonable notice. It also underlines the
importance of including a termination clause in contractor
agreements. Had Ace included such a clause in its contractor
agreement, it could have substantially reduced its obligation to
provide notice of termination.
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