A recent decision of the British Columbia Court of Appeal reminds employers that work relationships falling on a continuum between employee and independent contractor may be subject to reasonable notice of termination.
The appellant Zupan owned a trucking company that was on a list of companies regularly engaged by the City of Vancouver to perform trucking services for its engineering department. The appellant’s trucking company operated one truck for the City five days of almost every week, with Zupan being the principal driver. The company was removed from the City’s list without notice when a substitute driver occasionally used by Zupan was found using marijuana while operating the truck for the City.
The Court pointed out that there is an “intermediate category” of relationships falling between employee, in which there is an implied obligation to provide reasonable notice of termination, and independent contractor, in which there is no such obligation. Work relationships falling within the intermediate category may be subject to notice of termination.
In deciding whether a work relationship falls within this intermediate category, the Court cited the following three factors:
- the duration or permanency of the relationship;
- the degree of reliance or closeness of the relationship; and
- the degree of exclusivity.
The Court found that the chambers judge had properly considered these factors and correctly concluded that Zupan’s relationship with the City did not fall within the intermediate category. As a result, Zupan was not entitled to notice of termination of his company’s contract.