This article was prepared with the assistance of summer law student Amy Fisher.\u00a0<\/p>\n
Contractors are generally viewed and treated as distinct entities from the engaging party, with independent contractors operating outside the structure, control and obligations that typically apply to employees. Unlike employees, contractors are presumed to run their own business, control their work and bear the associated risks and rewards. \u00a0<\/p>\n
In practice, however, the classification of work relationships is not strictly binary. Instead, it exists on a spectrum ranging from pure employment, to dependent contractors and finally to independent contractors. The recent British Columbia Supreme Court (BCSC) decision in Ursic v. Country Lumber Ltd, 2025 BCSC 970, affirms this spectrum and highlights the differences and overlaps between dependent contractors and employees, as well as the potential obligations that arise when a contractor\u2019s role becomes highly dependent.\u00a0<\/p>\n
Boris Ursic was the sole shareholder and director of Borly Holdings Inc., a trucking company. Borly entered into a verbal agreement with Country Lumber Ltd. to provide trucking services, with the relationship lasting 14 years until Country Lumber terminated the contract. Following termination, Borly claimed that he was a dependent contractor entitled to reasonable notice, as its business depended on the work from Country Lumber.\u00a0<\/p>\n
While there was no express contractual prohibition against Borly servicing other clients, the arrangement effectively limited such opportunities. Borly trucks bore Country Lumber decals when delivering materials and Borly was prohibited from performing deliveries for other companies while the decals were in place. In reality, all of Borly\u2019s work came from Country Lumber, which provided more than enough deliveries to keep the business running. Over the years, the companies operated in close alignment, displaying a degree of integration atypical for a contractor\u2013principal relationship.\u00a0<\/p>\n
The BCSC applied a non-exhaustive list of factors (citing Glimhagen v. GWR Resources Inc, 2017 BCSC 761) to assess the level of integration and economic dependence between Borly and Country Lumber. These included:\u00a0<\/p>\n
Exclusivity of services
\nControl exerted by Country Lumber
\nOwnership of tools and equipment
\nPotential for profit or loss beyond standard pay
\nWhether the work performed was central to Country Lumber\u2019s business
\nDuration of the relationship
\nDegree of mutual reliance and coordination<\/p>\n
While Borly owned its own trucks and tools, most other factors supported a finding of dependency. Country Lumber dictated significant operational requirements for Borly, and Borly\u2019s business existed almost entirely to serve Country Lumber. In total, five of the seven factors supported the dependent contractor classification.\u00a0<\/p>\n
The BCSC found Borly to be a dependent contractor and held that Country Lumber owed reasonable notice upon termination. Emphasizing that dependent contractors should not \u201cautomatically\u201d receive reduced notice periods, the BCSC awarded 10 months\u2019 notice, primarily due to the length and exclusivity of the relationship.\u00a0<\/p>\n
What does this mean for employers?\u00a0<\/p>\n
To reduce the risk of a dependent contractor finding, employers should ensure the relationship reflects genuine independence in both contract and practice. Courts assess the practical reality, weighing factors like exclusivity, control, integration and economic dependence, which vary by industry and context. Maintaining a contractor\u2019s diverse client base, operational control and ownership of tools can help preserve independence. If a contractor is deemed dependent, they may be entitled to reasonable notice, similar to employees. Clear boundaries and ongoing independence are key to avoiding unintended obligations.\u00a0<\/p>\n