Alberta Court Limits Concept of “Employer”

On January 11, 2011, the Alberta Court of Appeal ruled unanimously that an “employer” under the Alberta Human Rights Act (“the Act”) does not include the owner of an industrial site who receives the benefit of services provided by employees of an arm's length contractor: Lockerbie & Hole Industrial Inc. v. Alberta (Human Rights and Citizenship Commission, Director), 2011 ABCA 3.

The complainant in the case was an employee of Lockerbie & Hole Industrial Inc., a contractor retained to construct facilities on an oil sands upgrader construction project of Syncrude Canada Ltd. Syncrude was not his employer in any conventional sense: it did not hire him, pay him or direct his activities on its work site.

Nevertheless, a Human Rights Panel reviewing a discrimination complaint filed by the complainant under the Act found Syncrude to be his employer because it controlled the work site and was the beneficiary of his services indirectly, through Lockerbie & Hole.

On appeal, the Court of Queen's Bench of Alberta overturned the decision of the Human Rights Panel.

The case attracted significant interest from oil sands industry participants, including the Construction Owners Association of Alberta, Construction Labour Relations – An Alberta Association and the International Brotherhood of Electrical Workers, all of whom intervened in the subsequent appeal to the Court of Appeal of Alberta.

In upholding the Queen's Bench ruling that Syncrude was not the complainant's employer for the purposes of the Act, the Court of Appeal indicated that a contextual approach is required to decide whether a particular relationship qualifies as “employment” under the legislation.

Factors relevant to this determination include whether there is another more obvious employer involved who has the direct benefit of, or directly utilizes, the employee's services.

Where it is alleged that there is more than one employer, it is also necessary to consider factors such as the nexus between each purported employer and the employee, the nature of the arrangement between the primary employer and the co-employer and the extent to which the co-employer directs the performance of the work.

In the case at hand, the Court of Appeal held that the complainant's relationship with Syncrude was too remote to justify a finding of employment, even under an expanded meaning of that term.

He provided his services to Lockerbie & Hole and was directed and paid by it. He had no contractual relationship with Syncrude, was not functionally a part of its organization and neither reported to, nor received direction from Syncrude.

This decision should provide greater business and operational certainty for site owners who control, and adopt policies regulating access to, a work site.

For purposes of the Act at least, such site owners will not likely be considered in most circumstances to be “employers” of the potentially large number of contractors and subcontractors who work on site, even though the site owners ultimately receive the benefits of their services.

Daniel Stachnik, QC, of Miller Thomson LLP represented the respondent Lockerbie & Hole; Barbara Johnston of Stikeman Elliott LLP represented the respondent Syncrude.

The appellant the Director of the Alberta Human Rights Commission was represented by Audrey Dean and Arman Chak of the Alberta Human Rights Commission.

The intervenor International Brotherhood of Electrical Workers was represented by William Johnson, QC, and Wayne Benedict of McGown Johnson.

The intervenor Construction Owners Association of Alberta, Construction Labour Relations was represented by Thomas Wakeling, QC, of Fraser Milner Casgrain LLP.