Case Study: “Economic Dependence or Independence? The Legal Status of Borly Holdings Ltd. in Ursic v. Country Lumber Ltd.”

Introduction

This case study examines Ursic v. Country Lumber Ltd., a 2025 British Columbia Supreme Court decision that explores the legal distinction between independent contractors and dependent contractors—a hybrid category that entitles workers to protections similar to employees, including reasonable notice upon termination.

The dispute centered on whether Borly Holdings Ltd., a trucking company providing exclusive delivery services to Country Lumber for 14 years, was a dependent contractor entitled to damages for termination without notice. The court’s analysis provides valuable insights into how courts assess economic dependence, control, and integration in commercial relationships.

Key Facts

• Parties: 
  • Plaintiffs: Boris Ursic (sole owner of Borly Holdings Ltd.)
  • Defendant: Country Lumber Ltd. (construction materials supplier)
• Relationship: Borly provided trucking services exclusively to Country Lumber from 2010 to 2024.
• Termination: Country Lumber terminated Borly’s contract without notice in March 2024, citing slow business.
• Legal Issue: Was Borly a dependent contractor (entitled to notice) or an independent contractor (no notice required)?

Court’s Analysis & Key Findings

1. Was Borly a Dependent Contractor?

The court applied the seven-factor test from Glimhagen v. GWR Resources Inc. to determine Borly’s status:

Final Determination: Borly was a dependent contractor, not an independent one.

2. Reasonable Notice Entitlement

The court rejected the argument that dependent contractors should automatically receive shorter notice than employees. Instead, notice depends on:

• Bardal factors (character of work, length of service, age, job availability).
• Degree of economic dependence.

Plaintiff’s Position: 16 months’ notice.

Defendant’s Position: 1 month (arguing a commercial relationship).

Court’s Decision: 10 months’ notice, balancing:

• Length of service (14 years).
• Commercial nature of Borly’s corporate structure.
• Tax benefits Borly received as a contractor.

3. Damages Calculation & Mitigation

The court accepted the expert report projecting Borly’s lost profits but adjusted for:

• Declining market conditions (using the last 6 months of revenue, not full history).
• Mitigation earnings ($13,640.09 in net income post-termination).

Final Damages Award: $82,953.91 (representing 10 months’ lost profits, minus mitigation).

Key Takeaways for Employers from Ursic v. Country Lumber Ltd.

The Ursic decision highlights critical considerations for businesses when engaging contractors—particularly those in long-term, exclusive relationships. Employers should take the following lessons from this case to mitigate legal risks:

1. Assess Whether Contractors Are Truly Independent

• Dependent contractors (those economically reliant on one principal) may be entitled to reasonable notice upon termination, similar to employees.
• Courts examine control, exclusivity, and integration—not just the label of “contractor.”
• Action Step: Review contractor relationships to determine if they function more like employees.

2. Avoid Excessive Control Over Contractors

• Factors that increase dependent contractor risk:
  • Dictating work hours, methods, and discipline (as Country Lumber did with Borly).
  • Requiring exclusivity (even if not contractually stated).
  • Branding contractors’ equipment (e.g., company logos on trucks).

• Action Step: Allow contractors more autonomy in how they perform work.

3. Use Clear Written Contracts

• No written agreement? Courts will look at conduct to define the relationship (as in Ursic).
• Best Practices:
  • Explicitly state whether the relationship is independent or exclusive.
  • Include termination clauses specifying notice periods (if applicable).
  • Clarify who controls work methods, hiring, and discipline.

4. Be Cautious with Long-Term, Exclusive Relationships

• The 14-year exclusive relationship in Ursic strongly favoured dependent contractor status.
• Action Step:
  • For long-term contractors, consider periodic reassessment of their status.
  • If exclusivity is required, structure the contract to minimize dependency risks.

5. Mitigate Risks When Terminating Contractors

• Terminating without notice? A dependent contractor could sue for wrongful termination.
• Action Step:
  • Provide reasonable notice (or pay in lieu) if the relationship resembles employment.
  • Document business reasons for termination (e.g., slowdown, restructuring).

6. Understand Tax & Legal Implications

• Borly benefited from contractor tax treatment, but this did not prevent the court from finding it was a dependent contractor.
• Action Step:
  • Ensure contractor classification aligns with both tax law and employment standards.
  • Consult legal counsel if uncertain about a worker’s status.

Conclusion

Ursic v. Country Lumber Ltd. clarifies that economic dependence, not just contractual labels, determines worker protections. Businesses should carefully structure contractor relationships to avoid unintended legal obligations, while contractors in long-term, exclusive arrangements may have stronger rights than they realize.

Case Citation: Ursic v. Country Lumber Ltd., 2025 BCSC 970.