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Home Featured Truck driver or construction worker? Sub-Terrain Excavating on hook for termination pay after misclassification dispute

Truck driver or construction worker? Sub-Terrain Excavating on hook for termination pay after misclassification dispute

by HR Law Canada

An Alberta employment appeal body has confirmed an order requiring Sub-Terrain Excavating & Trucking Ltd. to pay termination pay in lieu of notice to a worker, who had been classified as a construction worker, after it dismissed him immediately when he gave three weeks’ notice.

The tribunal concluded that the employee’s role — driving a truck to haul sand to golf courses — did not fall under the construction exemption in the Employment Standards Regulation. As a result, the employer was ordered to pay the employee $968.67 in termination pay plus a $100 fee, for a total of $1,068.67.

In the appeal, the employer contested a May order issued under the Employment Standards Code. That order directed the employer to compensate the employee for termination pay in lieu of notice. The employer asserted that the employee had been hired as a construction worker, and that no notice or termination pay was required because the employee fell under a regulatory exemption applicable to construction.

However, the tribunal disagreed, finding that the employee’s duties did not meet the definition set out under section 5(1) of the Employment Standards Regulation, Alta Reg 14/97 (the “Regulations”).

All staff classified as construction workers

According to the record, the employee began working for the employer on June 8 and was terminated on Sept. 22 of the same year. The employee’s main task was hauling sand to golf courses in Alberta and British Columbia. In addition, the employee occasionally transported material to construction sites.

The employer, an agricultural construction company, testified that it classifies all field staff as construction workers to simplify payroll and offer workers the potential for overtime. J.B., a representative for the employer, told the tribunal that, although the company’s “primary business is construction,” the work at issue — hauling sand to golf courses — was “a side gig.”

The tribunal heard that the employer does not hire staff specifically as truck drivers. Rather, field employees are hired as construction workers, with the possibility of driving trucks and operating heavy equipment. In this case, however, the employee was only on staff for a short period and drove trucks for most of the time.

When the employee gave three weeks’ notice of resignation, the employer ended the employment immediately without offering termination pay, citing the construction exemption in the Regulations.

Construction exemption

The main question before the tribunal was whether the employee’s duties fit within the construction exemption described in section 5(1)(a) of the Regulations. That section provides that no termination notice or pay in lieu of notice is required if the employee is “employed at the site of and in the construction, erection, repair, remodelling, alteration, painting, interior decoration or demolition of any building or structure,” or other specified activities such as roads, pipelines or sewage systems.

The tribunal found the employee’s work did not meet that definition. In paragraph [14] of its written reasons, it stated: “He was employed solely driving a truck, either delivering sand to golf courses or materials to a construction site. Delivering materials to a construction site is not construction.” It further noted, “To meet the definition of construction, an employee must be present on the site and engaged in one or more of the listed activities.”

Overtime pay

The tribunal also addressed the employer’s argument that it pays its field employees overtime more generously than required for truck drivers, and that, in the employee’s case, “This resulted in the payment of 208 hours of overtime … far more than he would have been paid if he had been classified as a truck driver.”

While acknowledging that the employee earned considerable overtime under the employer’s approach, the tribunal wrote: “However, the fact that an employer provides more than the minimum standards on one item in the Code or Regulations does permit that employer to provide less than the minimum standards on other items.”

The ruling emphasized that the legal test for deciding whether termination pay applies does not hinge on whether an employer offers enhanced benefits in some areas. Rather, the tribunal said an employer cannot reduce entitlements below the thresholds mandated by the Code and the Regulations, even if it offers benefits above those minimums in other areas. It also noted that while the employer’s method of classification “may be more complex,” administrative convenience does not exempt an employer from compliance.

Termination notice

In coming to its final decision, the tribunal examined the relevant sections of the Code dealing with termination notice — sections 55, 56 and 57 — and concluded the employee was entitled to one week’s notice or, in lieu, the corresponding termination pay. Because no notice had been given, the tribunal upheld the Order of Officer that required the employer to make the payment.

In an earlier complaint involving a different worker, the employer claimed an employment standards official ruled that the individual had been a construction worker. But the tribunal held it did not have enough evidence to compare the facts of that situation with the current matter, stating, “It is difficult to know what occurred with the prior Employment Standards complaint affecting the Appellant or the bases for the determination in that case.”

It also underlined that “the Code contemplates whether individual employees are employed in construction,” suggesting each situation must be examined on its own facts.

For more information, see Sub-Terrain Excavating & Trucking Ltd. Operating as Sub Terrain Excavating v Ross, 2025 ABESAB 1 (CanLII).

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