Hayer v The Queen, 2012 TCC 392

Download PDF

Cab Drivers vs Cab Owner: Employees or Contractors?

Hayer v The Queen, 2012 TCC 392

The issue was whether workers employed by appellant were in “pensionable employment” – were they employees or independent contractors.

The TCC held that based on the factor present (intention was not a factor since there was evidence of a lack of intention) – factual control by drivers but right to control with owner; owner owned tools; limited chance of profit – the drivers were employees and not contractors.  The Court asked, “who’s business is this?”, and held that it was the owner’s and not the drivers’ business.


The Appellant owned two cabs. He was registered with a cab dispatch company to whom he paid a monthly fee for certain cervices.  He used various persons to drive the cabs he owned. He did not direct the drivers where they should go, except to assign airport shifts, but monitored their trips using data from GPS. He split gross revenues with the drivers on a 60/40 basis.  The Appellant took care of the gas and the maintenance of the cabs, and shifts were scheduled without considering the availability of the drivers. When cabs were being repaired, the appellant paid the drivers $10 per hour lost on a shift.


The TCC identified that the issue turned on the question of whether the drivers were employees or not, and that the test was set out in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, which requires an assessment of the entire circumstances and also approved of the factors in Wiebe Door Services v. Minister of National Revenue (1986), 87 D.T.C. 5025 (F.C.A.).  The Court also noted that in the most recent decisions, the courts have look at the intention of the parties as a factor to be considered in the total relationship (a common, shared view of the relationship).

In this case, the parties did not have a shared view of the relationship (contract did not refer to either employees or contractors), removing intention as a factor.

The control factor was examined, and the court held that although there was actual control by drivers over who they picked up and how many, the appellant maintained the ultimate right to control drivers.  It is right to control, not actual control, that points to an employee-employer relationship.

The Appellant provided the tools needed for drivers, and this again points to an employee relationship.

Though the drivers were working on a profit split, the court held that this is not an ultimate test. Here there was no evidence of negotiation as to the split of profits, each driver earned about the same, shifts were pre-established, and the drivers were required to provide driving services exclusively to the appellant. There was therefore little chance of additional profit, which points to an employee relationship.  The Court distinguished Labrash v. M.N.R., 2010 TCC 399, [2010] T.C.J. No. 309, on the basis that in that case there was clear evidence of a common intention and there was no requirement to provide services exclusively (driver control was also used to distinguish 1022239 Ontario v. M.N.R., 2004 TCC 615, [2004] T.C.J. No. 455).

The appellant argued that the rules were set by the dispatch company.  The Court noted that the appellant was a shareholder of that company and that the agreements were between the appellant and the drivers, and as such ” the drivers and the drivers were engaged to perform certain services under the umbrella of the existing and established regulations of” the dispatch company.

Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3

If you like this website, please share it with others.

Back To Top OR Home