Being an Accidental Carrier – the impact on your business
Rob Dombowsky, AMTA Industry Advisor, Human Resources & Labour
This article may cause a few people’s blood pressure to rise. However, if you are a professional working in the road transportation industry, you probably have a good understanding of the rules and regulations applicable to our industry. The companies that will be concerned are those that are accidental carriers or may be using incorrect labour and safety legislation.
As you will learn, determining which legislation to follow is not black and white. What may on the surface seem clear, is muddied by many factors that need to be considered. Every company should consult a competent legal advisor who understands the applicable legislation and case law before taking any actions.
Am I really a transportation company?
So, you are reading this and thinking that your business is not a “transportation company”. You are in construction, manufacturing, agriculture, or any industry. In the course of business, someone thought let’s get our own vehicle and start making deliveries. That decision may have turned part of your business into a transportation company and made you an “Accidental Carrier”.
What is an accidental carrier?
It is a company, whose primary business is not the transportation of goods or people, but currently operates a commercial vehicle in the province or out, without fully understanding the impact of this decision.
Examples could be a construction company selling grain bins or pole sheds in Saskatchewan but transporting materials and equipment from Alberta on a flatbed trailer. An organic ice creamery which, purchased a walk-in freezer truck to make deliveries to its vendors in BC and Alberta during the summer months. A manufacturing company with a truck and trailer that delivers the finished product to Vancouver or the US weekly.
These are examples of companies that accidentally became a “transportation company” in the course of their business and did not understand the potential impact of that decision. What would happen if you woke up to find that because you have a truck making deliveries out of province, some or all of your employees were now potentially subject to the Canada Labor Code instead of the more employer-friendly Alberta Employment standards? How about if your drivers didn’t have the proper paperwork and were placed out of service in the middle of nowhere?
What is a provincial or federal regulated carrier?
A road transportation company, present in Alberta, must have “Operating Status” in the jurisdiction they operate. A trucking company must decide upfront if it will cross a provincial or international border as part of its business. In the future, a company may decide it wants to work in another province, so it can change its Operating Status at that time.[1] The Alberta Motor Transport Association (AMTA) defines “Operating Status” as the geographical region of intended operation for the company’s commercial vehicles with two available options. The two options available are “Provincial” or “Federal”. The distinction between the two are spelled out below.
Are you a provincially regulated transportation company?
1.Do you operate a commercial vehicle that is registered for a weight of 11,794 kilograms or more?
2.Do you operate a commercial vehicle with a manufacturer’s is capacity originally designed for 11 or more persons, including the driver?
3.Do you operate in Alberta only?
4.Do you have provincial operating status, as defined above?
If you answered yes to the questions above, you have a transportation component to your business and you are subject to the provincial legislation as well as provincial employment legislation. If you do have a transportation component, you need to ensure you have the correct operating status and are not crossing a federal or provincial border.
Are you a federally regulated transportation company?
1.Do you operate a commercial vehicle that is registered for or weighs more than 4,500 kilograms?
2.Do you operate a commercial vehicle with a manufacturer’s seating capacity originally designed for 11 or more persons, including the driver?
3.Do you operate in multiple provinces, territories, or states? I.E. cross provincial or international borders?
4.Do you have federal operating status, as defined above?
There is no scenario that allows a provincially regulated carrier to operate outside of Alberta. If a carrier operates any regulated vehicles outside of Alberta, the carrier will be required to obtain “Federal” Operating Status.[2] In short, if your commercial vehicle is greater than 4500 KG GVW, and crosses any border on a “continuous or regular basis”, you are most likely to be federally regulated. [3]
If you answered yes, to the questions above, things may get complicated. There are several scenarios and factors that may affect your company. The main thing is understanding who has jurisdiction over your company? The province or the federal government.
Am I a federally or provincially regulated employer now?
The sections above are strictly related to compliance issues related to the transportation industry. The rules above for determining status are pretty clear, of course, there are exceptions.
Operating status does not say anything about the carrier’s legal responsibility as an employer. Certain industries fall under federal legislation, these include banking, airlines, marine transportation, and road and rail transportation among several other industries. In total, almost one million Canadians or 10% of the national workforce work for federally regulated employers.
These employers are subject to federal employment, OHS, and privacy, as well as human rights legislation. In Alberta, employers follow Alberta employment standards, as well as provincial OHS, privacy, and human rights legislation. While there are similarities between legislations, federal and provincial employment legislation are two very different beasts.
How to determine if you should be federally or provincially regulated?
One of the first questions to ask would be “Do the company’s trucks leave the province on a continuous or regular basis?” In order to be considered as a federally regulated employer, the cross-border transportation activities carried out by the Company must meet the “continuous and regular” standard developed by the courts. In general, cross-border operations of a company will be considered “continuous and regular” if the entity is prepared to offer its clients a cross-border transportation service at all times. As long as that condition is met, other factors are of little importance.[4]
Next, the courts will look to determine the degree of divisibility between the divisions of the business. To understand if an employer, in any industry, is indeed a federally regulated employer the courts would use the “Functional Integration Test” to evaluate the company. This test can be summarized as requiring some integrated activity or purpose of the otherwise local work or undertaking with the operations of the federal work or undertaking that is vital or essential. [5] Some of the questions they would ask are along the lines of:
1.Do the trucks leave the province on a continuous or regular basis?
2.How is the company structured? Are all divisions under one company?
3.Do the employees work for one division? Do they cross over or rotate?
4.Are there separate management and admin services or are they the same people?
5.Who controls, hiring, firing, discipline? Is it the same people for all employees?
6.Who is responsible for payroll, deductions, WCB, Etc.? Is it the same people for all employees?
7.Do divisions share equipment, tools, resources? Computers, internet, forklifts? How frequently?
8.Are all divisions located at one address or geographical region?
9.Who are the owners/directors? Are they the same across the divisions?
10.Is each division self-sufficient or does one rely on the other for survival?
11.Is the revenue for all divisions sent to one central place?
If the company is not easily divisible and the company leaves the province with some regularity, then they are likely federally regulated and subject to the Canada Labour Code.
What does this mean?
This may be the moment you begin to wonder if you have it all wrong. If you have been managing your company under the wrong legislation, this one truck may have made you a federal employer, or vice versa, you should be a provincial employer. There are pros and cons for being federally regulated, but as transportation is not your primary business, it probably does not make sense to do so. On the other hand, dependent on the situation, it may be beneficial to the Company.
Next Steps
Every situation is unique. Without full details of the company and input from the correct professionals, it is hard to say for sure whether a company is federally regulated or not. Some, part or none of your company may be set up correctly today. This shouldn’t be taken as an absolute and it is strongly recommended that you contact a knowledgeable Labour Lawyer to evaluate your situation and advise you on a course of action.
Our Services
AMTA can provide members with one-on-one guidance on the information provided in this article. If you have any questions, please contact AMTA and our experienced staff will be happy to help. For your Safety, Compliance, and Human Resources questions, please email Workplace Support Services at wss@amta.ca. For more information on issues raised in this article please contact Rob Dombowsky at AMTA (403) 214-3439.
Case Studies
Greaves v Actton Transport Ltd 2015 CanLII 10860 (ON LA)
In short, the arbitrator disagreed with the assertation that Actton Transport was liable, as the employees worked for a separate division, and that division did not meet the test to be considered a federal employer. Super Save, a division of Actton, was the company that the workers were employed by, and as they did not leave the province, Super Save was deemed a provincial employer. Actton, is a federal employer.
Total Oilfield Rentals Limited Partnership v Canada(Attorney General), 2013 ABQB 263 (CanLII)
Total Oilfield Rentals operated inter provincially, but trucking constituted a small portion of their business. After the death of an employee on-site, the court had to determine whose jurisdiction they fell under. The provincial courts ruled that because transportation was not a key component of their business, they would fall under provincial jurisdiction.
A company mistakenly applied federal regulations to its employees when over time, it stopped being an inter-provincial carrier and became a provincially regulated carrier. When an employee took the complaint to the federal jurisdiction, the court ruled it was a provincial matter and subject to provincial legislation.
Dodson v. OPDI Logistics and Ontario Potato Dist. (Alliston) Inc. 1991, 2014 HRTO 1042 (CanLII)
The employee complained to the provincial Human Rights Tribunal that his former employer had discriminated against him. The employer argued that this was the wrong venue, as OPDI was subject to federal regulations, not provincial. OPID showed that his work was essential to the business in interprovincial transportation, so the tribunal agreed that they did not have jurisdiction.
[1] Government of Alberta (2021) https://open.alberta.ca/dataset/c5d46860-b4ba-474e-a466-4185cf0010a4/resource/50f9ad9f-aa47-48d6-b391-f9f38d9f78bd/download/trans-commercial-vehicle-safety-compliance-in-alberta-2021-complete-document.pdf Commercial Vehicle Safety Compliance in Alberta manual
[2] Government of Alberta (2021) https://open.alberta.ca/dataset/c5d46860-b4ba-474e-a466-4185cf0010a4/resource/50f9ad9f-aa47-48d6-b391-f9f38d9f78bd/download/trans-commercial-vehicle-safety-compliance-in-alberta-2021-complete-document.pdf Commercial Vehicle Safety Compliance in Alberta manual
[3] Government of Alberta (2021) https://open.alberta.ca/dataset/c5d46860-b4ba-474e-a466-4185cf0010a4/resource/50f9ad9f-aa47-48d6-b391-f9f38d9f78bd/download/trans-commercial-vehicle-safety-compliance-in-alberta-2021-complete-document.pdf Commercial Vehicle Safety Compliance in Alberta manual
[4] The Provincial or Federal Jurisdiction of Transportation Companies in Quebec (8 March 2019) McCarthy Tetrault. https://www.mccarthy.ca/en/insights/blogs/mccarthy-tetrault-moves/provincial-or-federal-jurisdiction-transportation-companies-quebec
[5] Federal or provincial – are you certain which laws to follow?, Wiggins A.,(02 Dec 2015) Human Resources Director. https://www.hcamag.com/ca/specialization/employment-law/federal-or-provincial-are-you-certain-which-laws-to-follow/158518