NIAGARA FALLS, Ont. — You know the trucking industry faces a challenging landscape when a lawyer presents a business update against a framework of lessons learned through Sun Tzu’s Art of War.
“It’s not really a friendly environment for us this year,” said Heather Devine of Isaacs and Co., as she stood at the podium to open the Private Motor Truck Council of Canada’s annual meeting.
She offered the potential demise of NAFTA and the thickening of the border as proof of the challenges to come.
Devine questioned whether U.S. authorities will begin to use border-crossing data to argue that Canadian drivers are spending more than 120 days south of the border in a given year. That would expose such drivers to U.S. taxes on worldwide income, she said, suggesting carriers might want to track how work is distributed.
Meanwhile, some shippers may begin to reference new tariffs as a way to get out of contracts, citing a legal term known as force majeure that recognizes unforeseeable circumstances. Canadians are already coming to her firm to ask if that’s possible.
A significant change to Ontario’s Employment Standards Act has also affected the way employees and independent operators are viewed, starting with the assumption that a contractor is an employee, she said.
Someone is defined as an employee if the business decides what they do, how much they are paid, when work needs to be completed, and how and where the work is completed. But there’s a big problem if they work for only one business.
“Are they working for you and do they work for someone else?” she asked fleet managers in the crowd. “If not? Good luck.”
The costs of a ruling can quickly escalate, she added, referring to unclaimed retroactive benefits such as pregnancy and parental leave, overtime pay, statutory holidays, termination and severance.
Devine also sees the pending legalization of recreational cannabis as another issue to monitor.
“Very shortly cannabis is going to be as legal as the alcohol we had at our reception last night,” she said, noting how illness linked to drug and alcohol use is already costing Canadian employers more than $39.8 billion.
Devine stressed the need to ensure HR teams focus on developing clear policies, recognizing addiction as a disability. “If your policies are clear, at least you can have a dialogue,” she said. “It’s going to be legalized. It’s not going to go away.”
Still, there are opportunities to be realized as well, Devine said, referring to how the drug needs to be transported. “Can you do cross-border transfer of cannabis?” Some of her warehousing-focused clients are already looking at business to be had. “They say to me, ‘Heather, green is the new black.’”
A recent Supreme Court ruling, meanwhile, makes it a bigger challenge to terminate federally regulated employees.
“You can’t terminate non-managerial employees without worrying they’ll get their job back,” Devine said. “It’s an expensive result if you don’t handle it well.”
But federally regulated fleets can protect themselves with clear policies that include plans for progressive discipline and a paper trail.
“Don’t think that backing a truck up over another employee is incompetence,” she said to a few chuckles in the crowd. Neither is not showing up for work or poor performance. It’s what the policies say that matters most.
Devine stresses the value of conducing a performance review prior to the end of a year and terminating employment contracts before the protection of the Canada Labour Code applies. Hiring employees on a fixed contract for a year or less is another strategy, but such contracts must be reviewed every year and not “evergreened”.
When it comes to technology, Devine is a fan of electronic logging devices (ELDs), but warned that one of her clients faced challenges when the they discovered they were using a non-compliant system.
“Make sure that the ELDs you purchase actually do comply,” she said. “We found that out in an unpleasant way during an audit.”
Telematics can also make it possible to optimize routes, she added. “Don’t just collect this information and let it sit.” Such details, for example, can help to ensure individual drivers don’t spend more than 120 days a year in the U.S.
But Devine doesn’t recommend being an early adoption of blockchain, which tracks every change in an online document. “Don’t be the people having the debate on VHS or Beta,” she said, referring to the once-competing videotape standards. “It [blockchain] is not ready to be of great use to you guys yet.”
Given the value of a good safety rating, she also stressed the value of educating drivers to challenge tickets every time. “The driver is charged, it goes on the company CVOR,” the lawyer reminded the crowd, referring to Ontario’s Commercial Vehicle Operator’s Registration. “Cultivate a relationship between a paralegal or a lawyer.”
Devine actually cautions insurance brokers not to sign carriers who have had an operating authority for a year or less. Specifically, she referred to a numbered company that is now operating at the same address as the two-truck fleet that had been involved in a crash that killed 16 members of the Humboldt Broncos. Only the company directors are different.
“That legal machination, that compliance, has got them back on the road making money,” she said.
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