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I often encounter loggers who describe a long working history with a licencee. Similarly, I encounter truckers who may have had a truck seniority position for twenty or thirty years, or who may have spent substantial sums of money purchasing a seniority position. Unfortunately, I usually encounter these clients when there is trouble brewing. The logger thinks that his long relationship with the mill must mean something, and that the mill cannot terminate him. The trucker thinks that his valuable seniority position cannot be taken away without compensation. Unfortunately, these clients are quite wrong in their beliefs.

Let me say that this article does not apply to those loggers and truckers holding replaceable (also called “evergreen”) contracts or subcontracts under the Timber Harvesting Contract and Subcontract Regulation (commonly called “Bill 13”). Those persons have a much stronger legal position—see my previous articles and my website on this. In fact, the reason for Bill 13 in the first place was to overcome the weaknesses that exist without it.

Let me also say that my article does not speak to the situation where a collective agreement exists between the log haulers and the licencee. It is possible, in some circumstances, for owner-operators to become certified as a bargaining unit under the Labour Code. The collective agreement will, in those circumstances, spell out what the seniority list is, how it is applied, whether seniority positions may be bought and sold and, if so, who may buy them. Log haulers under a collective agreement have, usually, more rights than those who are not.

So, what does a longstanding working relationship mean in the eyes of the law? The answer is “very little”. Either party to a relationship like this is fully entitled to terminate that relationship. Just because ABC Forest Products has used one particular contractor for thirty years does not mean that it is obligated to continue indefinitely with that relationship. Just because that same licencee has dispatched using a truck seniority list for forty years doesn’t mean that the licencee is beholden to that method of having its timber hauled. In law, the licence holder could terminate the entire group of haulers. It could decide to make hauling the responsibility of the harvesting contractor, or it could purchase its own trucks and hire employee drivers. Or, for that matter, it could throw the seniority list out the window and decide to call in log haulers on a rotational basis, or based upon alphabetical order, or by throwing darts at a dart board.

I have one important qualification to these statements, though. Where a logger or a trucker has relied upon one party for all or substantially all of his work for a long period of time, the law will regard him as a “dependent contractor”. This has also described by the law as an “intermediate relationship”, somewhere between a traditional employer/employee relationship and a true independent contractor relationship (where one party is looking to many different customers for work).

In the case of a longstanding dependent contractor relationship, one party to that relationship can terminate the relationship only upon giving reasonable notice to the other. (I have one important caveat, however. In appropriate cases of serious wrongdoing, there may be immediate termination “for cause”.) What constitutes reasonable notice? There is no easy answer to that question. It depends upon a number of factors including length of service, degree of dependence, amount invested, and the ability to find replacement work. The law seems to indicate that twelve months is the upper limit for reasonable notice. That would apply to the most compelling of cases. Less compelling cases will result in a shorter notice period.

A dependent contractor that falls victim to a termination without reasonable notice may sue the other party for compensation. Compensation will be calculated based upon lost net revenues (not gross revenues) that would have been earned to the end of the notice period. Net revenues earned from substitute work will be deducted from the claim. Compensation is not based upon the perceived market value of the seniority position or the “goodwill” in the business.

So, if you are considering purchasing a non-replaceable logging contract or a truck seniority position, be forewarned. Usually you are buying only a hope that the relationship will continue. It is the type of hope that has little in the way of legal teeth.

John Drayton is a Kamloops lawyer practicing in the area of motor transport and forestry law.