Crossing borders: a look at federal jurisdiction

Occupational health and safety for federally regulated transportation businesses.

When it comes to labour relations and occupational health and safety, Canadian employers must abide by provincial or federal laws. The majority of employers are provincially regulated, but depending on how a business operates, it may fall under federal jurisdiction. This is the case for a number of IHSA member firms in the transportation industry.

“Federal jurisdiction is based on the operation of the business, not where the company is registered,” Elizabeth Tavares, an Occupational Health and Safety Officer for Employment and Social Development Canada’s Labour Program, recently told the IHSA Safety Podcast.

“If your road transportation company regularly crosses provincial or international borders and your business operates as a common carrier, you’re likely to be federally regulated and therefore covered under the Canada Labour Code (CLC),” she says.

Understanding jurisdiction is important because provincial and federal labour laws are created by separate legislative bodies and have different requirements. In Ontario, workplace health and safety is governed by the Occupational Health and Safety Act (OHSA). Workplaces that are federally regulated must abide by the Canada Labour Code, Part II.

“The determination of an employer’s jurisdiction for labour laws can be complex, and no two cases are alike,” Tavares says. Jurisdiction determinations are made by the Labour Program of Employment and Social Development Canada (ESDC) or the Canada Industrial Relations Board.

“Jurisdiction is based on the business’s nature of operation and the ongoing character of the business,” she says, noting that the jurisdiction an employer falls under can change. For example, a carrier that routinely crosses into another province may be considered federally regulated. However, it would likely move into the provincial jurisdiction if it became an exclusively local transportation company.

Steps toward federal compliance

It’s important for businesses to know which regulations apply to their operations, in order to ensure that all components of their occupational health and safety management system (OHSMS) are compliant with the right legislation. For this reason, it can be useful for federally regulated transportation businesses—especially smaller firms—to employ a health and safety expert who is knowledgeable about the Canada Labour Code, Part II.

“As an employer, it is important to understand the duties and obligations that are set out for you under the Code,” Tavares says.

Federally regulated companies should include the following basic elements in their OHSMS:

• A policy statement that sets up a top-down safety culture.
• Training for managers—including supervisors—and employees that covers their occupational health and safety duties.
• Internal structures, such as a health and safety committee, to identify risks, decide on preventive measures, create safe-work procedures, organize workplace inspections, and investigate accidents.

Employers must also create a hazard prevention program—according to Part XIX of the Canadian Occupational Health and Safety Regulations—that includes hazard identification, preventative measures, and employee training. Employers must then review that program “at least once every three years, or whenever necessary,” Tavares says.

The CLC requires that employers provide managers, supervisors, and employees with occupational health and safety training and on-the-job training. Additional training is also required under the Work Place Harassment and Violence Prevention Regulations.

“Once an employer has complied with the requirements that are set out in the Canada Labour Code, Part II, and the applicable regulations, they should have a solid occupational health and safety program,” Tavares says.

Worker misclassification: a common concern

The Canada Labour Code, Part II lays out health and safety protections for federally regulated employees, but worker misclassification—the improper designation of an employee by an employer—can prevent workers from qualifying for those protections. Worker misclassification happens when an employer fails to treat a worker as an employee, even though they meet the criteria to be classified as one.

For example, Tavares says there is a long history of companies encouraging drivers to self-incorporate and operate as independent contractors. This system is called the incorporated driver model.

“For the purpose of the Code, these drivers would likely be considered employees,” she says. “The employment relationship is determined by examining the total working relationship between the parties. Calling a worker an independent contractor does not mean that they’re not an employee.”

When determining the working relationship between an employer and an employee, the ESDC Labour Program considers factors like control over the contractor’s business, ownership of tools and equipment, chance of profit and risk of loss, and exclusivity of the contract.

Worker misclassification can negatively affect both employees and employers. Employees may lose access to things like paid sick leave, employer contributions to employment insurance and the Canada Pension Plan, and provincial workplace injury compensation. A misclassified driver also would not receive the same occupational health and safety rights and protections that an employee is entitled to under Part II and Part III of the Canada Labour Code.

Tavares says federally regulated employers who misclassify workers risk enforcement and compliance measures from ESDC, which can include counseling and guidance, public naming on the Government of Canada website, and monetary penalties.