Severance Pay for Truck Drivers

Truck driver with a contract that says you’re independent? You could still be an employee

Like all non-unionized employees, truck drivers are owed severance pay if they are terminated without cause, as long as it’s not for severe misconduct.

As an employment lawyer, I’ve found that time and again, truckers are surprised to find out they have a legal right to compensation.

This misconception often stems from the fact that their employer has labelled them an independent contractor rather than an employee. The truckers I speak to believe they can’t get severance because they pay their own income tax and cannot apply for employment insurance, collect HST or GST, and have a contract that clearly states they are contractors, not employees.

Employee or contractor: what’s the difference?

In the trucking industry, it’s common to classify drivers as contractors. There are definite advantages to this practice for employers:

• The employer does not need to remit payroll deductions, which simplifies payroll
• The employer does not have to pay overtime, vacation pay or statutory holiday pay to their drivers
• If a driver is truly an independent contractor, they won’t be owed severance if they are let go.

Classifying workers as contractors has become widespread due to these advantages. But the law states that it is illegal to misclassify a worker as a contractor when they are in fact an employee.

WATCH: Employment lawyer Lior Samfiru identifies what independent contractors need to know on an episode of the Employment Law Show.

Recent win for a client

Last year, I represented a tow-truck driver who had been classified as a contractor and had not been paid any severance when he was let go (Mazanek v. Bill & Son Towing).

There were several indications, however, that my client was part of his employer’s business and not running his own business. My client did not own the truck he drove, was required to wear his employer’s uniform, could not choose his schedule, had to follow his employer’s rules and procedures, and was closely monitored at all times via GPS.

A court eventually determined that my client was an employee, and he was awarded six months’ severance, as well as back pay for the vacation pay he should have received all along.

Truckers can get up to 24 months of severance pay

It used to be that truckers and manual labourers would not receive the same severance as more senior employees, such as managers and executives. The logic was that it is easier to find a trucking or labourer job than it is to find an executive-level role. Severance would be less because the employee would likely be unemployed for less time.

Our courts questioned this assumption in another case won by our firm in 2011. It may actually be harder for truckers and labourers to find a new job because they may not have the same network or transferable skills as other employees. Having a non-executive role does not necessarily mean you’re owed less severance than someone who was in a managerial position.

LEARN MORE
• How severance works in Ontario
• Severance packages for Alberta employees
• Understanding BC severance pay

The kind of work the employee performed is not the only factor to be considered when calculating severance. An employee’s age, length of service, and the availability of similar employment also factor in to how much severance an employee is owed.

An employment lawyer, like the ones at Samfiru Tumarkin LLP, can review the details of your employment to understand what your rights to compensation are. A vast majority of these matters can be negotiated and settled with little stress, well before they ever need to reach a courtroom.