CASE STUDY - SHH AUTOMOTIVE DIVISION In June of 2015, Mr. Smith, Manager of SHH's automotive division received a Notice of Hearing from the Workplace Safety and Insurance Appeals Tribunal scheduled for Sept. 15, 2015. Woodstock Tim Horton's and Mister Sprinkler Snow Removal Company as co-applicants were appealing a Right to Sue Application brought by SHH's former delivery driver Mrs. Balicsak, to determine if she was an employee and not an independent contractor at the time of her March 24th, 2008 accident. SHH AUTOMOTIVE DIVISION SHH is a home health care supplier with 465 stores across Canada retailing goods in the mobility and home accessibility industry. The automotive division outfitted and sold conversion vans to be used with wheelchairs and/or scooters and modified client vehicles to make them accessible for disabled drivers (hand controls, left gas foot pedals etc.). The automotive division was also responsible for supplying new delivery vans to all of their 465 stores across Canada. In 2008, SHH had a fleet of about 200 vehicles. SHH needed drivers to drive client vehicles to their homes or to the railyard for further distribution. Often, a "chase" vehicle drove with the driver who was delivering the van. The chase vehicle would then take the driver back to the automotive division office. A chase vehicle was used about 75% of the time, if the vehicle was a new delivery truck for a retail store, an older truck would typically need to be driven back. Initially, in 2006, a husband and wife in their sixties were delivering the vehicles. Mrs. Balicsak became the third delivery driver for the automotive division and by 2008, there were 11 drivers in total. BACKGROUND On March 24, 2008, Mrs. Balicsak was driving a SHH vehicle in order to deliver it to a designated location. She was meeting her "chase vehicle" driver at the Woodstock Tim Hortons along Highway 401 when she slipped and fell in the parking lot breaking her hip. Mrs. Balicsak, her husband and her daughter initiated a $300,000.00 tort claim within the two year limitation period against both Tim Hortons and Mister Sprinkler. Tim Hortons and Mister Sprinkler became co-applicants and jointly filed an application under s. 31 of the Workplace Safety and Insurance Board for a determination as to whether Mrs. Balicsak was an SHH employee at the time of her accident. This would qualify her to collect benefits under the Workplace Safety and Insurance Board for her injuries, eliminating her right to sue. Jodilynn Pitcher wrote this case under the supervision of Professor Michiel R. Leenders and Louise Mauffette-Leenders during the 2017 Case Writing Workshop held at the Lawrence Kinlin School of Business at Fanshawe College. It was prepared solely to provide teaching materials for class discussion. The writer does not intend to Mustrate either effective or ineffective handling of a managerial situation. The writer may have disguised certain names and other identifying information to protect confidentiality. Copyright @ 2017, Jodilynn Pitcher and Lawrence Kinlin School of Business Fanshawe College Version: 17-04-28EMPLOYMENT HISTORY Mrs. Balicsak was primarily an ofcer'clerical worker over the course of her career. In 2006, she had been employed with SHII for approximately 3 months working reception when her husband was also hired as a customer service representative in the SHH automotive division. Her husband's duties as an employee of the automotive division was to arrange for the delivery of' the vehicles. Mr. Smith. manager of the automotive division then suggested to Mr. Balicsak that his wife might like to drive vehicles that needed to be delivered to their delivery locations. Mrs. Balicsak drove about two to three limes a week and never looked for other work. Although she had the right to turn down a driving assignment she rarely turned down jobs and wanted the work that was available. On March 24. 2003, Mrs. Balicsak slipped and fell in the parking lot at the Woodstock Tim Hortons and broke her hip while meeting her chase vehicle. She temporarily stopped driving as a result of her injuries and returned to driving in April of2009 until mid 201 1. At that time. Mr. Balicsak had retired from his customer service representative position and he joined the driver rotation. Almost immediately Mr. and Mrs. Balicsak were told they would no longer be used as drivers. They did not receive notices of termination when the arrangement came to an end. SHH DRIVER HIRING PRACTICES Initially, the opportunities to drive were based on seniority. As more persons became drivers, a rotational system was developed. The drivers were under no pressure to accept any one job, it merely rotated to the next driver. The work was never tendered or negotiated. The rate paid was set by SHII and all drivers were paid the same. There was no prohibition on driving for another company, no job description or reporting obligations and there was no fomial written contract that addressed Mrs. Baliesak's employment status. DRIVER DUTIES Mrs. Balicsak had a regular start time of 3:30 am, although she could vary that time if she requested. The drivers did not wear uniforms or name tags. Her driving was coordinated with the driver of the \"chase" vehicle and that coordination was arranged by her husband in his role as an employee of SHH. The drivers had no say in which driving assignments they given or which drivers they were to work with. There was no specic \"end time\" and personal vehicles were never used. Drivers were given a gas card to pay for fuel for the vehicles. Driver's could agree between them who would drive the delivery vehicle and who would drive the \"chase" vehicle. They were free to choose their own routes to the destinations. Personal deviations were accepted and iflhe ofce was closed upon returning alter a delivery, the vehicle was left in the SHH parking lot with the keys in the tailpipe. Paperwork would be left in the van. or keys and paper work might be brought in the ofce the next day. Personal deviations in the route were allowed as long as the vehicle was returned to Sl-II-l parking lot by end of delivery day. On one occasion she was allowed to bring a friend with her to a delivery in Ottawa and stay overnight. NATURE OF THE BUSINESS RELATIONSHIP The drivers were initially referred to as casual help that reflected the fact that the work was occasional. Around 2017. as more drivers were needed they began to be referred to as independent operators. The business relationship was structured as a formal matter to reect independent operator status. SHH did not deduct taxes or pay El or CPP. There was no entitlement to vacation pay or sick pay. The drivers had no benets. There was no retirement plan. Drivers were set up in the system as vendors and paid by the accounts payable department in Toronto as were other vendors such as cleaning and landscaping services. They were not set up to be paid from the payroll function. as employees. In 2008. at the time of the accident, Mrs. Balicsak was entitled to be paid the higher of l 1 cents a mile or the then minimum wage. Usually she claimed for the mileage rate, but the option to claim minimum wage protected her against unexpected delays. There was also a small extra payment of $5.00 vehicle inspection. This method of payment was changed in 2009 to a straight mileage rate. Mrs. Balicsak was paid irregularly. It would usually take a week or two after she submitted the invoice to be paid. When deliveries required more than one day. arrangements were made through SHH. She was required to pay for the motelfhotel however this was reimbursed along with her meals. Mrs. Balicsack had not taken any steps to formalize her driving activity as a business activity. She had not incorporated her business. She did not have a business name. She did not have any business expenses. She did not have a home office. She did not advertise. She did not register a business name or style. She did not have a telephone listing for a business. She could decline work but could not send somebody else in her place to do the driving. She was expected to do the driving personally. She typically made less than $5,000.00 per year and did not bother to le any tax returns. She did not add GSTI'HST to her invoices. She did not have a GST-IST number. She did not keep the funds in a separate business account. She kept a file of her payment stubs in her ling cabinet. The funds were paid to her personally into the personal joint account that she had with her husband. She was initially paid by cheque and then by direct deposit. She did not negotiate the basis upon which she was paid. All the drivers were paid the same amount. based on mileage and flat amounts for inspection and car wash. In 2008. she was also entitled to claim minimum wage instead ofthe mileage rate if' she preferred. WORKPLACE SAFETY AND INSURANCE APPEALS TRIBUNAL This hearing stems from a \"Right to Sue" application under section 31 of the Workpface Safety and Insurance Act {the WSIA) by Mrs. Balicsak. her husband and her daughter who are the Plaintiffs in the tort action filed in Woodstock in the Ontario Court as File No. 6344-1. Tim Horton's and Mister Sprinkler were coapplicants in an appeal to the Workplace Safety and Insurance Appeals Tribunal. If Mrs. Balicksak is determined to be an employee in the course of employment at the time of her 2008 accident, the right of action of Mrs. Balicsak, her husband and her daughter against Tim Hortons and Mr. Sprinkler is taken away. 1. Using the CRA guide, (you may also refer to WSIB operational policy Policy #1202-01) do a full analysis as to whether Mrs. Balicsak is a worker (employee) at the time of her 2008 accident. Your analysis should include: a. Identification of all categories and factors used to determine whether an individual is an employee or independent contractor 1:. Provide an analysis under each category as to whether Mrs. Balicsak resembles that of an employee or an independent contractor (chart form is acceptable) c. Weigh the balance of the evidence and provide your opinion as to why you believe Mrs. Balicsak is either an employee of SHH or an independent contractor. * *not an exhaustive list. 3. Discuss the legal implications your decision has on: d. SHH Automotive Division e. Mrs. Balicsak f. Tim Hortons and Mister Sprinkler