Not So Dependable? BC Court Says Employers May Not Expect Dependent Contractors to Get Less Reasonable Notice Than Employees

Written By David M. Price and Cameron Penn

In the recent decision of Ursic v Country Lumber Ltd., 2025 BCSC 970 (Country Lumber), the Supreme Court of British Columbia held that there is no presumption that dependent contractors ought to receive less reasonable notice of termination than employees, distinguishing from prior case law suggesting otherwise. Rather, a dependent contractor’s notice period must “reflect where a relationship falls on the continuum between employee and independent contractor”.

A Distinction Without a Difference? Country Lumber Finds No Presumption of Reduced Reasonable Notice Period for Dependent Contractors

At common law, there is a longstanding principle that employees are entitled to reasonable notice of termination or damages in lieu thereof (subject to a valid agreement ousting that right). Independent contractors do not enjoy this entitlement. However, courts have recognized that workplace relationships may exist on a “continuum” between pure employee and pure independent contractor, with an intermediate category of “dependent contractor” that may only be terminated upon reasonable notice. In Country Lumber, the Court examined the question of whether dependent contractors should receive the same or less notice as an employee would receive.

The plaintiffs in Country Lumber were an owner-operator and his trucking company. Through the trucking company, the plaintiffs had provided delivery services to the defendant lumber company for 14 years. The defendant terminated its verbal agreement with the plaintiff’s company, resulting in the plaintiffs suing for damages in lieu of reasonable notice of termination. The plaintiffs claimed the trucking company was a dependent, not independent, contractor of the defendant.

The Court sided with the plaintiffs, finding that the plaintiff company was a dependent contractor and thus entitled to reasonable notice, given that:

• the plaintiff company relied exclusively on Country Lumber, making it economically dependent on Country Lumber;
• while the plaintiff company maintained some independence over its drivers, its operations were largely dictated by Country Lumber;
• there was no risk of the plaintiff company not getting paid for the work it completed;
• the plaintiff company’s services were closely integrated into the defendant’s business;
• the relationship was longstanding; and
• Country Lumber relied on the plaintiff company’s work.

The Court then turned to its analysis of what level of reasonable notice was appropriate to terminate the agreement. The Court acknowledged that certain prior authorities suggest that dependent contractors will always receive notice that is “somewhat less than what would be payable to an employee”, citing Pasche v MDE Enterprises Ltd., 2018 BCSC 701 (Pasche). However, the Court chose to follow the reasoning in Liebreich v Farmers of North America, 2019 BCSC 1074 and Cvjetkovich v Breezemax Web (Ca) Ltd., 2024 BCSC 808, rejecting the proposition that “dependent contractors should automatically have their notice periods arbitrarily reduced”.

Rather, the Court held that “the period of notice should reflect where a relationship falls on the continuum between employee and independent contractor.” However, intriguingly, the Court acknowledged that, in the “vast majority of cases”, this will amount to a “distinction without a difference”.

In the case before it, the plaintiff company was a corporate entity that hired its own employees – significantly distinguishable from an employment relationship. Accordingly, the Court awarded a lower notice period of 10 months “to reflect the true nature of the relationship[.]” The Court noted that this reflected the length of the relationship, the control exercised by the defendant, the commercial nature of the plaintiff, and the tax benefits received by the plaintiff as a result of not being directly employed.

Reasonable Notice for Dependent Contractors in Other Provinces

Country Lumber acknowledged that the approach to calculating reasonable notice for dependent contractors is not settled law. For instance, in Pasche, the Court stated that “[a] dependent contractor is also entitled to notice, albeit somewhat less than that of a regular employee” (citing the Alberta case of Weber v Coco Homes Inc, 2013 ABQB 180). This excerpt can be viewed as a pointed statement of law, which conflicts with the more nuanced approach in Country Lumber. The Court in Liebreich criticized the reasoning in Pasche and Weber for lacking “an analytical basis or legal justification”. Indeed, another Alberta case—JKC Enterprises Ltd v Woolworth Canada Inc, 2001 ABQB 791—rejected the proposition that “intermediate” category cases should arbitrarily have the notice period reduced from that of which an employee would receive. That case pioneered the approach in Country Lumber and Liebreich, finding the notice period should reflect where the relationship falls on the “continuum”.

The above-described approaches seem to differ from the case law in Ontario, which suggest there is no difference in the method of calculating reasonable notice between employees and dependent contractors.

In light of the differing approaches in the existing case law, further appellate authority would be helpful to settle this issue. However, per the Court’s reasoning in Country Lumber, it may be that the nuanced approach in British Columbia effectively results in a distinction without a difference. If the notice period is to properly reflect a worker’s status on the continuum between employee and independent contractor, it follows that the further away from employee status one is, the less notice they should require.

Key Takeaways for Employers

Country Lumber affirms that, at least in British Columbia, dependent contractors may receive no automatic reduction in their reasonable notice period (as compared with being an employee). Rather, the court’s assessment must reflect where the relationship falls on the continuum between employee and independent contractor.

Employers with contractor relationships should take note of this decision and be aware of the potential consequences of misclassifying workers as “contractors”. To ensure contractors are treated as such by courts and not found to be employees, employers should consider adopting the following practices:

• allow the contractor to service other clients (i.e., not have exclusivity over the contractor’s services);
• execute a written agreement that clearly establishes the contractor’s independent status, and seek legal advice in the drafting of same;
• give the contractor autonomy over its own operations and personnel decisions;
• ensure the contractor provides their own tools and personnel for the performance of their services; and
• have the contractor collect and remit its own taxes for its services.

As well, in the case of contractors—whether dependent or independent—employers should consider including clear termination provisions in their contracts in order to delineate a contractor’s termination entitlements and waive any common law reasonable notice that would otherwise be required.

If you have any questions about any of the issues discussed in this post, or if we can help advise your business on similar or other employment-related issues, please contact one of the authors, or another member of the Bennett Jones Employment Services group, for more information. 

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