In White v Al-Man Trucking Inc, 2026 ABCJ 94, the Alberta Court of Justice held that a truck driver who had worked exclusively for the defendant trucking company for more than eight years was an employee at common law—not an independent contractor—and had been wrongfully dismissed without reasonable notice.
Substance Over Form
The worker began hauling bread deliveries in 2014 under an equipment rental agreement for the company’s truck. Although the company characterized him as an independent contractor and paid him as a subcontractor without statutory deductions, the Court found that the actual working relationship reflected employment. Applying the Supreme Court of Canada’s established common law test, the court concluded that the company exercised significant control over the worker’s schedule, routes and rates of pay, provided the truck and paid all operating expenses, and that the worker assumed virtually no entrepreneurial risk. He worked exclusively for the company, did not incorporate or invoice for services, charge GST, hire assistants, or operate an independent business.
The Court emphasized that the parties’ characterization of the relationship was not determinative, particularly where the written agreement dealt only with the truck rental rather than the nature of the working relationship. The court also noted that, following a payroll audit, the Canada Revenue Agency determined that the worker had been an employee and reissued his income as employment income on a T4. Alternatively, the Court held that even if he had not been an employee, the exclusivity and duration of the relationship would have established dependent contractor status, entitling him to reasonable notice.
The Credibility Contest
The central factual dispute concerned whether the worker had resigned or had been dismissed. After becoming ill in January 2023, the worker called the company’s owner to explain that he needed additional time to see a physician. The worker testified that the owner responded, “No, no, you’re done. You’re done.” The owner instead asserted that the worker had announced he was tired and would no longer work. The Court preferred the worker’s evidence, finding that he had no intention of resigning from his sole source of income after more than eight years of service and that his evidence was consistent with his subsequent diagnosis of serious heart failure.
The Court found the owner’s testimony lacking credibility, noting inconsistencies and the late introduction of allegations that the worker had been yelling and swearing during the conversation. The company’s own Employment Insurance letter referring to the worker’s declining health further undermined its assertion that he had voluntarily resigned.
Notice Entitlements and Damages
Applying the traditional reasonable notice factors—including the worker’s age (48), over eight years of service, and the nature of his employment—the court fixed reasonable notice at seven months and awarded $44,461.06 in wrongful dismissal damages. The court declined to award vacation pay during the notice period because doing so would require speculation about whether vacation would actually have been taken. However, it awarded $2,242.87 for unpaid historical vacation pay, limiting recovery to the two years preceding commencement of the action under Alberta’s limitation legislation.
The worker ultimately received a net judgment of $44,603.93, together with costs and applicable interest.
Key Legal Takeaways for Alberta Employment Law:
- Courts will determine employment status based on the substance of the relationship, not contractual labels.
- Long-term, exclusive workers who lack entrepreneurial independence are likely to be found employees or, at minimum, dependent contractors.
- An employer bears a heavy burden to prove that an employee resigned; clear, unequivocal words or conduct demonstrating an intention to resign are required.
FAQs
Does calling someone an “independent contractor” make them one?
No. The Court confirmed that labels are not determinative. Instead, it examines the true nature of the working relationship, including who controls the work, who owns the tools and equipment, whether the worker bears business risk, whether they can work for others, and whether they are operating an independent business. In White, despite being called a contractor, the worker was found to be an employee because the company controlled virtually every aspect of his work.
Can an employee be found to have resigned simply because they say they are unable to work?
Not necessarily. A resignation must be clear, voluntary, and unequivocal. In White, the Court found that the worker’s statement that he was ill and needed additional time to see a doctor did not amount to a resignation. The employer’s decision to treat the conversation as a resignation instead constituted a dismissal.
If someone is not an employee, can they still be entitled to reasonable notice?
Yes. The Court held that even if the worker had not been an employee, he would have qualified as a dependent contractor because he worked exclusively for the company for more than eight years. Dependent contractors are economically dependent on a single business and are generally entitled to reasonable notice upon termination.
Does a Canada Revenue Agency ruling that a worker is an employee decide the issue in court?
No, but it can be persuasive. Employment status for tax purposes does not automatically determine common law employment status. However, the CRA’s finding that the worker was an employee supported the Court’s conclusion that the company’s classification of him as an independent contractor did not reflect the reality of the relationship.
Can an employer recover payroll taxes and penalties after misclassifying a worker?
Generally, no. In White, the employer attempted to recover the Canada Revenue Agency assessments, penalties, and interest it paid after the worker was reclassified as an employee. The Court rejected the claim, holding that the employer had no legal basis to shift responsibility for its own payroll remittance obligations onto the worker.