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August 25, 2007

Precedent Setting Ruling on 'Independent Contractors'

A Workers' Compensation Appeal Tribunal ruling has thrown into question the notion that B.C. truckers are independent "owner-operators" responsible for their own WorkSafeBC coverage because they own their rigs.

WCB ruling changes status of 'independent' trucker

Tribunal says company essentially controls all aspects of driver's work

Bruce Constantineau
Vancouver Sun

A Workers' Compensation Appeal Tribunal ruling has thrown into question the notion that B.C. truckers are independent "owner-operators" responsible for their own WorkSafeBC coverage because they own their rigs.

In a dispute over workplace injury compensation payments, the tribunal ruled a Port Coquitlam truck driver was still a "worker" when he was injured on the job four years ago, and the company he drove for was still his "employer."

It's a significant ruling because it entitles the driver, 62-year-old Udham Dhami, to substantially higher benefits.

Dhami was driving for Surrey-based Landmark Transport Inc. in December 2003 when he stopped his truck in Seattle to inspect the engine. His right hand got caught up in the fan belt pulley, severing his index and middle fingers near the knuckles.

The fingers were reattached, but he was off work for four and a half months, and his injury compensation coverage -- under a Personal Optional Protection (POP) plan paid for by Landmark -- would have provided about $1,000 a month.

Now that coverage will be recalculated and could jump to more than $5,000 a month, based on his earnings as a "worker" for Landmark Transport.

The shift from Landmark drivers being considered "workers" to independent business operators responsible for topping up their own compensation coverage -- above the basic minimum provided by the company -- occurred in 1998.

A Landmark representative told the tribunal the changeover saved the company about $10,000 a year in WorkSafeBC assessment premiums.

But the tribunal said the company's "real financial savings" after the switch came with its low-claims experience with WorkSafeBC because the costs of driver injuries would be recorded under the driver's personal record, and thereby not affecting company assessments.

The ruling noted that in the master agreement between Landmark Transport and the union, truckers are listed as drivers, owner-operators or dependent contractors.

"But they are not referred to as independent operators for the good reason that vis-a-vis the work they do for [Landmark], they do not operate as independent business persons," the ruling states.

Vancouver lawyer Craig Paterson, who represented Dhami in the case, said drivers might own their trucks but trucking companies control almost everything else.

"The trailers are owned or leased by the companies, and the routes they go on are controlled by the company," he said. "The customer you deliver to, where you pick up, where you drop off, when you do the run. That's all determined by the company."

Paterson said trucking is a hazardous industry, so the question of fair and adequate workplace injury compensation coverage is a huge issue for drivers and their families.

Dhami, who still drives for Landmark, is the sole income earner in a household that includes his wife and a disabled daughter. He said the $1,000-a-month coverage under the POP plan was simply inadequate.

"It wouldn't even cover my truck payment," Dhami said.

Paterson estimates thousands of B.C. truck drivers could be affected by this ruling because, like Dhami, they are "workers" so their POP coverage is not valid.

"It's a precedent for sure," he said. "It's only a question of just how much of a precedent. There's a real question about whether POP is even lawful for anybody.

"Even if it's lawful, is it the right thing to do from a public and personal safety point of view?"

Landmark Transport owner and manager Frank Siemens feels the basis of the tribunal decision was "somewhat unique" because it ruled that a truck tractor owned by the driver was not a major revenue-earning piece of equipment.

"If that perspective was to be taken by [WorkSafeBC], then that would have an industry-wide impact," he said in an interview. "But right now, this really only has an impact on the one driver. That's all."

[email protected]

The Vancouver Sun 2007

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