The delivery driver services used by retail pharmacies generally come in three (3) legal forms. Pharmacies can hire a delivery driver as an employee, use the services of a self-employed worker or hire the services of a specialized enterprise. This bulletin contains a brief overview of the three (3) types of contracts and the rights and obligations they confer on pharmacies.
Hiring a Delivery Driver as an Employee
Nature of the Contract
The contract entered into between a pharmacy and a delivery driver employee is considered a contract of employment within the meaning of articles 2085 and 2087 of the Civil Code of Québec (the "Civil Code"). Contracts of employment are also governed by certain provisions of public order, such as those set forth in the Act respecting labour standards, CQLR c N-1.1 (the "ALS"), the Act respecting occupational health and safety, CQLR c S-2.1 (the "AOHS") and the Act respecting industrial accidents and occupational diseases, CQLR c A-3.001 (the "AIAOD").
As employees, delivery drivers are also subject to the provisions of the Labour Code respecting unionization.
Obligations and Responsibilities of the Pharmacies
As the delivery driver's employer, the obligations and responsibilities are numerous. Pursuant to the AOHS, pharmacies must to see to their delivery drivers' occupational health and safety.
Under the ALS, pharmacies must ensure that delivery drivers benefit from the minimum labour standards required by law, such as those relating to wages, overtime, annual vacation, statutory holidays and personal leave.
Under tax legislation, pharmacies must make payroll deductions for income tax purposes, Quebec Pension Plan and employment insurance purposes, and for other social benefits to which they must also contribute.
Finally, pharmacies remain liable to third parties for faults committed by their delivery drivers within the performance of their duties.
Termination of the Contract
Pharmacies that are employers cannot terminate a delivery driver's contract of employment without giving reasonable notice of termination within the meaning of the Civil Code. Moreover, pharmacies cannot terminate a contract of employment for any of the reasons prohibited under section 122 of the ALS. And finally, delivery drivers credited with more than two (2) years of uninterrupted service with a pharmacy enjoy job protection. In such cases, the pharmacy may only dismiss them for good and sufficient cause (ALS, sec. 124).
Practical Considerations
To maintain the employment of delivery drivers and preserve their interest as employees, pharmacies must justify a minimum volume of deliveries or, subsidiarily, guarantee some form of remuneration, which can in some cases be costly. Also, pharmacies have little flexibility to use additional and temporary delivery services during peak periods.
Use of the Services of Self-Employed Delivery Drivers
Nature of the Contract
The contract entered into between pharmacies and self-employed delivery drivers is a contract of enterprise or for services within the meaning of articles 2098 to 2129 of the Civil Code.
However, even if delivery drivers can be considered as self-employed for the purposes of the Civil Code and tax legislation, they can also be considered as employees within the meaning of the ALS and the AIAOD, which were drafted to protect "small dependant contractors". This is often the case when delivery drivers are natural persons that contract directly with their only client.
Obligations and Responsibilities of the Pharmacies
Determining whether or not a delivery driver is self-employed takes on crucial importance when determining the obligations and responsibilities of the pharmacies using their services.
If a delivery driver is considered to be an employee, the obligations of the pharmacy using his or her services will be the same as those described at greater length in the first section.
Even if a delivery driver is recognized as being self-employed, he or she may be considered
a "worker in the employ" of a pharmacy pursuant to sections 1 and 9 of the AIAOD. Pharmacies must therefore include a delivery driver's remuneration in their payroll for assessment purposes. Pharmacies also remain responsible for any potential industrial accidents their delivery driver might suffer.
Additionally, if a master and servant relationship is established between a delivery driver and a pharmacy, the latter will remain responsible for the third party damages that result from faults committed by the delivery driver within the performance of his or her duties.
Termination of the Contract
In theory, pharmacies can unilaterally terminate service contracts with self-employed delivery drivers. However, at the time the contract is terminated, especially if the delivery driver is a natural person that contracted directly with a single client, a dispute will often ensue regarding his or her real status.
Obviously, if an enterprise is considered to be the delivery driver's employer, it will then have to assume all of the obligations and responsibilities of an employer described in the first section.
Practical Considerations
Using the services of a self-employed delivery driver generally affords pharmacies greater flexibility. However, that flexibility is limited if the pharmacy requires additional and temporary delivery services during peak periods.
That said, pharmacies using the services of a self-employed delivery driver should pay close attention. They must ensure that, legally, they are doing things right throughout the contractual relationship or risk being recognized as the delivery driver's employer.
Use of the Delivery Services of a Specialized Enterprise
Pharmacies will often use the services of enterprises that specialize in courier services.
Nature of the Contract
The contract entered into between the pharmacy and specialized enterprise is governed by the provisions of the Civil Code respecting service contracts. Generally, the specialized enterprise is a company, and there is no contractual link between the pharmacy and delivery driver. It is the specialized enterprise that transacts directly with the delivery driver.
Obligations and Responsibilities of the Pharmacies
Provided that pharmacies do not intervene in the contractual relations between the specialized enterprise and delivery driver or in the management of how the delivery services are performed, they will only be responsible for paying the price agreed on with the specialized enterprise. The pharmacies therefore incur no liability under the labour legislation or in respect of any potential fault committed by a delivery driver against a third party.
Termination of the Contract
Since the contract entered into between the pharmacies and specialized enterprises is a true service contract within the meaning of the Civil Code, pharmacies may terminate it without reason or notice. Pharmacies will then only be required to pay for those services already rendered and to reimburse any expenses incurred by the specialized enterprises.
Practical Considerations
Specialized enterprises may prove to be a flexible way of hiring additional and temporary delivery services during peak periods without creating any obligation for pharmacies. Provided the pharmacies do not intervene in the contractual relations between the delivery drivers and specialized enterprises or in the management of how the delivery services are performed, they will incur no liability as employers. They remain the specialized enterprises' clients, answerable only to the enterprises.
