In a case that could have widespread implications for small businesses, a Maple Ridge teen delivery driver has successfully argued a pizzeria should have paid him as an employee, not as an independent contractor.

B.C.'s Employment Standards Branch has ordered Big Daddy's Pizza to pay Bradley Kostachuk $682.78 in back wages and interest along with $1,500 in fines for failing to pay him minimum wage, overtime and vacation.

'I'm a little upset'

The pizzeria lost an appeal to the Employment Standards Tribunal, which is where the original decision is detailed.

"The delegate concluded that Mr. Kostachuk was an employee rather than an independent contractor," the ruling says.

"The business's customers (i.e., those placing pizza orders) were Big Daddy's customers, not Mr. Kostachuk's, and Mr. Kostachuk was an integral component of Big Daddy's business in the sense that Big Daddy's could not fulfil its customers' orders without a delivery service — of which Mr. Kostachuk was an integral part."

Big Daddy's claims its drivers are independent contractors because they deliver for other businesses at the same time. (Big Daddy's)

Big Daddy's owner Michael Bruic says he was unhappy with the ruling, but plans to pay the money because it will be cheaper than taking the case to court.

He claims many drivers for his pizzeria and other small restaurants around the province deliver for multiple businesses at the same time. It's up to them to decide if they can take a call or not.

"Is each one of those entitled to a wage?" he says. "I'm a little upset. There are multiple shops here (in the same situation)."

$5 per delivery plus tips

At the outset of his decision, Employment Standards Tribunal member Kenneth Thornicroft says the case deals with the "fundamental distinction" between employees and independent contractors.

The wage protection provisions of the Employment Standards Act apply only to employees.

"Employers, wittingly or unwittingly, hire employees but treat them as independent contractors perhaps to reduce paperwork, to avoid payroll taxes (such as employment insurance and the Canada Pension Plan), or to avoid having to pay overtime, statutory holiday pay or vacation pay," Thornicroft writes.

According to the decision, Kostachuk delivered for Big Daddy's from December 27, 2014 to February 12, 2015, when he quit.

He was paid $5 per delivery plus tips. He used his own vehicle to make deliveries, but was not reimbursed for any vehicle-related expenses.

Kostachuk earned a total of $630 during his tenure, without any deductions for income tax, employment insurance or Canada Pension.

Crucial differences

The original decision was made after a "fact finding meeting" in June 2015, during which an Employment Standards Branch delegate met separately with Bruic and with Kostachuk and his mother.

Big Daddy's owner says drivers in larger pizza chains also work in the kitchen; whereas smaller restaurants rely on contractors to make deliveries. (Frank Gunn/Canadian Press)

The Ministry of Jobs, Tourism and Labour keeps a fact sheet on its website aimed at helping employers define employees as opposed to independent contractors.

Crucial elements include the degree of control the person has over their work, the ownership of the tools needed to perform the job and their chance of making a profit.

"In order to be an independent contractor, a person performing services has to be in business for himself," the document says.

"Designating a person as an independent contractor does not decide the issue."

The delegate in the Big Daddy's case noted that — apart from certain farm work — even "where the pay system is a piece-rate scheme, the employer must still pay its employees the equivalent of at least the minimum wage."

As part of his unsuccessful appeal, Bruic attempted to introduce 11 affidavits from other Big Daddy's drivers and managers, but Thornicroft ruled them inadmissible. He also claimed the original decision was based on an error of law.

Bruic says many large pizza chains employ kitchen staff as drivers, but smaller operations don't have that luxury.

As a result of the ruling, he says he now asks drivers to sign a contract acknowledging an understanding of their role as independent contractors.

Kostachuk's mother declined comment on the case.