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Safe...or Sorry

by Allan Janssen

Owner-operators in Ontario have been fed up for years with the high cost of Workplace Safety and Insurance Board (WSIB) premiums. As a result, they've been opting out of the plan, and buying their own long-term disability insurance instead. Now, at least two major shippers in that province are fed up with trying to determine who's got the proper coverage and who hasn't - and they're refusing to allow owner-ops who can't provide proof of WSIB coverage onto their property.

The issue is not whether the owner-ops have sufficient coverage to provide an adequate standard of living or retraining benefits. The shippers are concerned that workers not covered by the provincial program retain the right to sue the owner of the facility at which they were injured. The shippers are cracking down on uncovered drivers who, as far as they're concerned, are lawsuits waiting to happen.

When a shipper contracts a carrier to haul goods, he can safely assume the carrier's company drivers are all covered by workers' compensation. The same can't be said of owner-ops sub-contracted by the carrier. And since you can't tell at a glance who's a company driver and who's an owner-op, more and more shippers are now taking steps to ensure that every driver they deal with has proper coverage.

Some shippers, like steel giants Dofasco and Stelco in Hamilton, Ont., have simply stopped loading anyone who can't prove they have adequate coverage.

"We're requiring all contractors who come onto our site to have WCB coverage," says Dave Halcrow, manager of the traffic department at Dofasco. "If there's a problem on our site, we don't want to be held responsible."

The confusion stems from the option that owner-operators have in every province except New Brunswick and Saskatchewan to decline coverage from their Workers' Compensation Board - or, as it's now known in Ontario, the Workplace Safety and Insurance Board (WSIB).

For its part, Stelco has also developed a new policy regarding disability insurance. It's tied up in a new contract that lays out the responsibilities of Stelco contractors - including the type and level of insurance coverage that's required.

"We've chosen WSIB for the protection it gives to us when we do our due diligence," says Bob Easter, Stelco's transportation manager. "The policy we're putting in place does not zero in on the trucking industry. All contractors who are working on our property must show proof of WSIB."

For More Information

Workers' Compensation Board of British Columbia
P.O. Box 5350,
Vancouver, BC V6B 5L5
604/273-2266; fax: 604/276-3151
www.worksafebc.com

Workers' Compensation Board of Alberta
P.O. Box 2415, 9912-107 St.,
Edmonton, AB T5J 2S5
780/498-4000; fax: 780/498-7875
www.wcb.ab.ca

Workers' Compensation Board of Saskatchewan
200, 1881 Scarth St.,
Regina, SK S4P 4L1
306/787-4370; fax: 306/787-2513
www.wcbsask.com

Workers' Compensation Board of Manitoba
333 Broadway,
Winnipeg, MB R3C 4W3
204/954-4321; fax: 204/954-4968
www.wcb.mb.ca

Ontario Workplace Safety and Insurance Board
200 Front St. W.,
Toronto ON M5V 3J1
416/344-1000; fax: 416/344-3999
www.wsib.on.ca

Commission de la Sante et de la Securite du Travail
1199, rue de Bleury, C.P. 6056,
Succursale « centre-ville »
Montréal QC H3C 4E1
514/873-7183; fax: 514/873-7007
www.csst.qc.ca

Workplace Health, Safety, and Compensation Commission
1 Portland St., P.O. Box 160,
Saint John, NB E2L 3X9
506/632-2200; fax: 506/632-4999
www.whscc.nb.ca

Workers' Compensation Board of Nova Scotia
5668 South St.,
P.O. Box 1150,
Halifax NS B3J 2Y2
902/491-8000; fax: 902/491-8002
www.wcb.ns.ca

Workers' Compensation Board of
Prince Edward Island
14 Weymouth St.,
Charlottetown PEI C1A 4Y1
902/368-5680; fax: 902/368-5705
www.wcb.pe.ca

Workplace Health Safety and Compensation Commission
146-148 Forest Road,
P.O. Box 9000, Station B
St. John's NF A1A 3B8
709/778-1000; fax: 709/738-1714
www.whscc.nf.ca

Workers' Compensation Board of the Northwest Territories and Nunavut
P.O. Box 8888,
Yellowknife NT X1A 2R3
867/920-3888; fax: 867/873-4596

Yukon Workers' Compensation Health & Safety Board
401 Strickland St.,
Whitehorse YK Y1A 5N8
867/667-5645; fax: 867/393-6279
www.wcb.yk.ca

If you operate extraprovincially that means you have federal health and safety rules to think about as well. For information, contact your regional office of Human Resources Development Canada (www.hrdc-drhc.gc.ca).

Easter says the new policy is all about workplace safety. "This is just the way we do business," he says. "We do over 600 truck checks a quarter, looking to make sure loads are secured and tarped properly. This is just part of our on-going due diligence."

This new vigilance from shippers has been growing for some time, says Mike Burke at the Ontario Trucking Association.

"A lot of shippers are doing that, it's certainly not unique to the steel companies," he says. "They want to make sure that whoever is working on their grounds is covered by the WSIB, either through their employer or, if they're independent, that they've sought independent coverage on their own."

This attitude from shippers follows years of confusion about workers' comp coverage on the part of the trucking industry, says Dennis Blunt, a disability management advisor with a specialty in workers' comp issues at D.B. Blunt & Associates Inc., in Burlington, Ont.

"It's a growing trend for shippers to be more concerned about this because of the liability aspects of it," he says. "There have been instances that have caused shippers to be more vigilant."

Blunt says adequate disability insurance is the responsibility of the hired contractor. So if a trucking company hires an independent operator, the trucking company must ensure that the owner-operator has coverage, and that the account is in good standing.

He says if an owner-operator who doesn't have workers' compensation or equivalent private insurance coverage is injured on the job, the carrier and the shipper are both in very vulnerable positions.

"That driver now has the option to sue everybody and anybody, including where he was on-site doing his delivery," says Blunt. "It's human nature to go after the company with the largest pockets.

"There have been circumstances where either that large company has lost a lawsuit or settled out of court, and they've learned a very costly lesson."

Only in Ontario?

On the surface, the practice of opting out of WCB seems to be an Ontario-specific issue, largely due to the astronomical premiums - which can exceed $9.00 per $100 of insurable earnings. Compare that to Alberta or Nova Scotia where well managed fleets enjoy coverage at less than $4.00 per $100.

The larger issue is that of Ontario-based owner-ops working in other jurisdictions where the practice of opting-out isn't as widespread. Many shippers in those jurisdictions could find themselves on the hook if an uncovered owner-op decides to sue following an injury.

Ralph Boyd, president of the Atlantic Provinces Trucking Association, says that there may be a lack of awareness of the issue in regions outside Ontario. "I think the shippers in this region have more or less taken for granted that the drivers who venture onto their premises are covered by Worker's Comp," says Boyd.

But that may be changing.

Gary Alderdice, of Aldercomp Occupational Health & Safety Associated Ltd. in Halifax, suggests that more shippers are indeed becoming concerned about workers from other jurisdiction working in Atlantic Canada. "I've heard various shippers in this region indicating that they'll be moving in that direction," he says. "We're starting to hear rumors that drivers aren't getting loaded because they aren't covered specifically under a WCB account."

Halcrow says Dofasco has cracked down after years of non-compliance by carriers on the issue of WSIB coverage for their company drivers and contracted owner-ops.

"We can't have some people on our site who are covered and others who are not," Halcrow says. "I'm going after the corporation that hires these independent owner-operators. I'm going down the chain of command only one layer. If you subcontract that work out, it's your responsibility to see that your subcontractor meets my requirements. Otherwise, do not subcontract it out."

He says Dofasco looked at many options to ensure compliance, including a signed letter from the carrier assuring that all drivers would be covered and Dofasco would not be on the hook for any injuries occurring on Dofasco property. The idea was dropped, because a letter "isn't worth the ink it's written with," says Halcrow.

"I would think it would be thrown out in court because the owner-operator who has just started to work for ABC carrier company ...doesn't know that this letter between ABC and Dofasco is on file," he explains. "He never made an agreement with ABC that he'd be covered in this way. So it would be thrown out right away."

Instead, what Dofasco wants is a WSIB certificate of clearance pertaining to every driver who will be on site. The certificate, updated every three months, guarantees that the insurance account is up-to-date and in good standing.

Furthermore, for Dofasco anyway, it must be WSIB. "Our corporate people on the legal side are saying they don't want to deal with private coverage," he says.

This can be a problem for some owner-operators who consider workers' comp coverage to be too expensive, especially those from Ontario.

Leo Van Tuyl of the Truckers' Business Consulting Group in Kitchener, Ont., is a former owner-operator who now deals in business skills seminars, business software, and insurance. He says, generally speaking, most owner-operators would prefer not to be forced into workers' compensation because of the cost. Geared to income, WCB coverage can run in excess of $3300 a year.

More problematic, however, is that because owner-operators understandably want to keep their taxable income as low as possible, when they make a claim they're often assessed on an income figure that's been reduced for tax reasons.

"It's priced like a Cadillac, but it's Geo quality when it comes to making a claim," Van Tuyl says. "Workers' comp doesn't reflect reality at all. It's certainly not geared to the owner-operator."

He says he likes the B.C. model in which owner-operators can purchase relatively affordable minimum coverage from the Workers' Compensation Board of British Columbia and then top it up with private insurance.

High-Risk Relationship

For Halcrow, the issue has less to do with the fear of liability than it does with having a safe workplace. "Our carriers drive through some areas of the plant where there are definite hazards," he says. "They have to get on the back of that truck, they have to chain their loads down, they have to do load securement, and there are overhead cranes moving above them. It's not exactly devoid of safety hazards."

Halcrow admits it has taken some time for the carriers and drivers to get used to the new vigilance. A few recent "blitz days" identified a number of drivers who hadn't provided proof of WSIB coverage. Halcrow says those drivers will be turned around at the front gate if they don't get their paper together.

"They didn't think we were serious," he says. "Well, I'm getting more serious as the days go on and we will continue to get more serious about this issue until it's locked down solid."

Like Halcrow, others in the shipping community are becoming concerned with the difficulty in tracing the owner-op who arrives to pick up the load back to the carrier who sent him there. The issue of load brokering has created a serious problem in assigning accountability.

Lisa MacGillivray, managing director of the Canadian Industrial Transportation Association, a group representing the viewpoints and concerns of Canadian shippers, is urging her members to do more carrier checks to ensure that shippers won't be held liable for the actions of a party they had no part in hiring.

"You get into this rather Byzantine maze of relationships in trying to determine whether or not these owner-operators are actually employed by or contracted with the shipper, or whether they're contracted with carriers who then send them to their clients to pick up loads," she says. "The companies are just looking for an expeditious way to find the thread of proof that somebody is doing something."

So here's a word to the wise: be prepared to show proof of WCB or WSIB coverage to the next shipper you visit. They may well demand to see it before they agree to load your truck. If you aren't presently covered by a provincial workplace health insurance program, you'd better be ready to fork over some serious dough to buy the coverage that shippers are demanding. And they're within their rights to ask for proof.

"We're saying, sure, you have the option to opt out of WSIB. That's fine. But you also have the option of not working at Dofasco," Halcrow says. "We simply want everybody coming on our site to be covered, and we've stopped loading some drivers who don't meet the requirements."

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