Authors: David Gerecke and Fraiba Jalal
With farming being an integral part of Saskatchewan’s economy, it is no wonder that farmers and farming operations receive special protections under various pieces of provincial legislation. The Labour Standards Act (the “Act”) is one example. As with corresponding legislation in other provinces, the Act exists to protect workers and set standards for minimum wage, working hours, vacations, termination and complaints, as well as other working conditions. For example, section 12 of the Act prohibits an employer from requiring an employee to work more than 44 hours in any week except in emergency circumstances.
As we will discuss in this blog entry, farm operations enjoy an important exemption that provides critical flexibility to the employer in managing the work done by employees. The policy behind the exemption relates to the unique nature of farm work and to the seasonal nature of the work.
That exemption will not necessarily apply with respect to all employees of every operation, so, it is important to understand the scope of the exemption and when it will apply. One must also be careful not to assume that all employees will be subject to the same treatment.
The exemption is provided for in section 4(3) of the Act, which reads as follows:
4 (3) Subject to subsection (3.1), this Act does not apply to an employee employed primarily in farming, ranching or market gardening.(3.1) For the purposes of subsection (3), the following are deemed not to be within the meaning of farming, ranching or market gardening:
- the operation of egg hatcheries, greenhouses and nurseries;
- bush clearing operations;
- commercial hog operations.
Note that many larger commercial operations will not be exempt by reason of subsection (3.1). The language in subsection (3.1) appears to be fairly clear so most operations should be able to determine whether they fall within the exemptions. (As an aside, the term “commercial hog operations” is defined in the Regulations, and section 5 of the Regulations provides commercial hog operations with greater flexibility than most employers with respect to hours of work and requiring employees to work overtime.)
Earlier we observed that the exemption may not apply to all employees of a farm operation. In a recent decision of the Court of Queen’s Bench, this distinction resulted in a cattle operation being found liable to an employee who did not work directly with the cattle. In Rocking Hills Cattle Co. v Saskatchewan (Director of Labour Standards) 2011 SKQB 453 (“Rocking Hills Cattle Co.”), a former employee of the employer (“RH Cattle”) brought an action against RH Cattle for unpaid overtime and vacation time under the Act. The employee had been employed by RH Cattle as a bookkeeper and office manager. RH Cattle argued that because it was a farming and ranching operation, the Act did not apply as per section 4(3) and that it did not have to comply with the overtime and vacation time provisions under the Act.
The Court determined that RH Cattle was a farming and ranching operation as per section 4(3), but held that the exemption did not apply because bookkeeping and office management duties performed by the employee did not fall within the exemption. Therefore, the court held that RH Cattle could not rely on the exemption under section 4(3).
In analyzing section 4(3), the Court in Rocking Hills Cattle Co. utilized a “4-prong” test, holding that all the four factors must be present in order for the exemption in section 4(3) to apply. The four factors are as follows:
1. Whether the worker performs “farm type” activities:
Here, the focus is on the employee and the activities the employee performs. Courts have said that “farm type” activities means that the worker is primarily engaged in activities that are related to the “traditional occupation of farming”. In a livestock operation, such activities would include maintaining barns, looking after the animals, and providing them with water, feed and medication. In Rocking Hills Cattle Co., the court held that bookkeeping and office management did not fall under “farm type” activities.
RC Cattle applied to the Saskatchewan Court of Appeal for leave to appeal the Queen’s Bench decision that the bookkeeper/manager was not covered by the exemption. The Court of Appeal granted leave, noting that there were inconsistencies in the case law on whether a person doing non-farm-related work can fall within section 4(3) if employed by a farmer or rancher. Thus, there is at least an opening for an argument that the “farm type” activities factor is not a valid part of the test. However, RC Cattle did not pursue the appeal so the Queen’s Bench decision in Rocking Hills Cattle Co. represents the current state of the law in Saskatchewan. Until there is a change in the law, farmers and farm operations should therefore work on the basis that the Act will apply to their employees who carry out work that is not a “farm type” activity.
2. The worker is employed by a farmer or a farming operation:
The test here looks at the employer and focuses on the actual nature of the operation. This factor is not likely to often be an issue. One instance where it did matter was in Saskatoon Horses and the Handicapped Inc. v. Thibeault, 1994 CanLII 5131. Saskatoon Horses and the Handicapped Inc. was a charitable organization formed for the purpose of providing a therapeutic riding program for mentally and physically challenged individuals. Although the organization conducted many activities that one would traditionally expect to find in a farming or ranching operation, its primary purpose was to operate therapeutic riding programs and thus it was not a farming operation.
3. The work is done exclusively for the farmer or farming operation:
Under this factor, the exemption would not apply in respect of employees who are contracted out to other farming operations. Thus, if the employer directs the employee to do work for other persons, the exemption will be lost even if the work is a farm activity. This might be most likely to arise where family members each run their own farm operations but share employees, or where a farmer regularly directs his hired man to do work for a neighbour. It is not clear how rigourously this factor would be applied if the assistance to other persons is only minor or occasional, but farmers and farm operations must be wary.
4. The worker is not engaged in processing a product:
This factor would eliminate the exemption for seed cleaning plants and slaughterhouses as two examples. In Elcan Forage Inc. v. Weiler, (1992), 102 Sask. R. 197, the court analyzed this factor in detail. The court examined the end-product and whether it was substantially altered in “form, nature or content” from the raw product that entered into the process.
The test above explains what the courts look for when analyzing a claim for exemption under section 4(3) of the Act. Depending on the type of operations, the duties assigned to the worker, the nature of the process, and whether the worker performs work exclusively for that employer will determine the validity of your claim under this section. As is clear, there are traps that can result in unexpected liabilities.