The Dependent Contractor: A Study of the Legal Problems of Countervailing Power

Abstract

UNEQUAL power between private persons, no less than between citizen and state, is an unhappy fact of modem society. In one areaemployment relations-public policy has clearly adopted collective bargaining as a technique for redressing this imbalance of power. In another areacommercial competition-collective action is generally suspect as the vehicle by which a powerful group may overwhelm weak individuals. This study concerns the paradoxical plight of groups of competitors who may find survival difficult without collective action. They are often economically vulnerable as individuals because of the dominance of a monopoly buyer or seller of their goods or services, or because of disorganized market conditions. If viewed as independent rather than they lack the legal status which is a prerequisite of the right to bargain collectively under labour relations legislation. As businessmen, they cannot legally employ collective tactics to buy or sell or otherwise stabilize conditions, because of the combines legislation. They are prisoners of the regime of competition. Because the choice of either legal designation-employee or independent contractor-in effect prejudges the issue of their right to bargain collectively, a new term is needed: They are economically, although legally contractors. The ambiguity, the paradox, of their position is thus reflected in the term used to identify them.' Self-employed truck drivers, peddlers, and taxicab operators, farmers, fishermen, and service station lessees personify the dependent contractor. The primary aim of this study is to trace the legal problems raised by the presence of the dependent contractor on the labour market and the product market under existing law. In many instances, dependent contractors have sought to employ countervailing power in the form of unions, marketing co-operatives, or other forms of associations for concerted economic action. In acting collectively, or indeed individually, on the labour market they have become involved inevitably not only with employers but with organized employees either as collaborators or as competitors for available work opportunities. Here, the legal issues involve the labour relations legislation as well as the combines legislation. On the product market, group action has *Associate Professor, Osgoode Hall Law School. I am obliged to Professors D. G. Kilgour and J. H. G. Crispo, respectively of the Faculty of Law and the School of Business, University of Toronto, for their incisive comments on an earlier draft of this study. 1I first encountered this useful term in Schmidt, The Law of Labour Relations in Sweden (1962), chap. in (by Axel Adlercreutz). The coining of the term by a Swedish scholar writing in English at once illustrates the Scandinavian genius in labour relations, and the perils of our institutional chauvinism.

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