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Appeal Court: Syncrude not "employer" under human rights legislation of contractor who failed drug test

Jurisdiction: - Alberta
Sector: - Oil & Gas

In Lockerbie & Hole Industrial Inc. v. Alberta (Human Rights and Citizenship Commission, Director), 2011 ABCA 3, the Alberta Court of Appeal ruled that Syncrude was not the "employer", within the meaning of the Alberta Human Rights, Citizenship and Multiculturalism Act, of a contractor who failed a drug test.

The contractor was employed by another company, Lockerbie & Hole Industrial, that was providing services to Syncrude.

Notably, the Alberta Court of Appeal set out the following tests for determining this issue:

In summary, a contextual approach is required to decide whether a particular relationship qualifies as "employment" under the Act. A number of factors must be taken into consideration including:

  • whether there is another more obvious employer involved;        
  • the source of the employee's remuneration, and where the financial burden falls;
  • normal indicia of employment, such as employment agreements, collective agreements, statutory payroll deductions, and T4 slips;
  • who directs the activities of, and controls the employee, and has the power to hire, dismiss and discipline;
  • who has the direct benefit of, or directly utilizes the employee's services;
  • the extent to which the employee is a part of the employer's organization, or is a part of an independent organization providing services;
  • the perceptions of the parties as to who was the employer;
  • whether the arrangement has deliberately been structured to avoid statutory responsibilities.

Where it is alleged there is more than one co-employer, the following factors are also relevant:

  • the nexus between any co-employer and the employee, including whether there is a direct contractual relationship between the complainant and the co-employer;
  • the independence of any alleged co-employer from the primary employer, and the relationship (if any) between the two;
  • the nature of the arrangement between the primary employer and the co-employer, for example, whether the co-employer is merely a labour broker, compared to an independent subcontractor;
  • the extent to which the co-employer directs the performance of the work.

Other factors may be relevant in particular cases (para 25).

As it relates to its conclusion in this case, the appeal court stated:

...Mr. Luka was admittedly employed by Lockerbie & Hole, he provided his services to it, he was directed and paid by it, and Lockerbie & Hole was his employer within the meaning of the Act. He had no contractual relationship with Syncrude, he was not functionally a part of its organization, he did not report to it, and Syncrude did not direct his work. His work did not involve extracting oil from oilsands, or operating Syncrude's plant. His relationship with Syncrude was too remote to justify a finding of employment, even under the expanded meaning given to that term in human rights legislation. It is Lockerbie & Hole that must ensure that Mr. Luka's rights under the Act are respected, and that any discrimination demonstrated by Mr. Luka is either a bona fide occupational requirement under ss. 7(3), or "reasonable and justifiable in the circumstances" under s. 11. Any duty to accommodate a disability that arises must be met by Lockerbie & Hole. Mr. Luka is not denied rights under the Act, but the burden of protecting them falls on Lockerbie & Hole (para. 26).