Running Hot with Cold: Top Contracting Tips to Succeed in the COVID-19 Vaccine Supply Chain in Canada

Vaccine

10 billion doses of COVID-19 vaccine will likely be needed for 7.8 billion people worldwide. Supply chains around the world are being pushed to their limits to immediately deliver a cold-stored vaccine which is also the hottest commodity on the planet. The keyword being DELIVER.

Governments around the world are setting plans in motion to ensure that logistics providers are in place and ready to deliver the vaccine all across the country.

But what does that mean for transportation on the ground, in the air and by sea?

In Canada, the Public Health Agency of Canada (“PHAC”) is sourcing Logistics Service Providers to deliver a broad range of end-to-end logistics and support services for the execution of its COVID-19 vaccine logistics strategy.

For companies fortunate enough to participate in this supply chain, there are concrete steps to protect your business when you enter into new contracts for the carriage or warehousing, storage or delivery of the vaccine.

A key way to protect your business’ participation in the vaccine supply chain is to ensure all agreements are captured in clear, concise and enforceable contracts.

1. Ensure All Independent Contractors are Incorporated Companies

If you are contracting with an independent contractor ensure that the corporation that contracts with your company is properly incorporated in a province of Canada, or federally incorporated, and is in good standing. In order to comply with this recommendation, you can ensure that for every independent contractor providing driving services, you demand, obtain and file an up-to-date Corporate Profile Report.

2. Utilize a clear, up-to-date agreement with all independent contractors and operate in accordance with the agreement

All agreements with Independent Contractors should be validly executed by both parties and kept in an accessible file. This applies to drivers, warehousemen, vaccine distribution center workers, and others who are likely retained urgently to work with this highly valuable, fragile commodity.

The terms of the Agreement are very important:  the Independent Contractor Agreement should clearly differentiate between the company using the services and the corporation providing the services; describe the services provided by the independent contractor, and include information declaring that the corporation’s workers are not workers employed by the company.

3. Minimize the Company’s Control Over the Independent Contractor’s Work

The more control a company has over the independent contractor, the more likely it is that the independent contractor will be found to be an employee. Ask:

  • Does the independent contractor hire their own employee drivers and then contract the services of those employees to your company?
  • Can the independent contractor sub-contract the work? This will likely be prohibited.
  • Does the independent contractor determine the timing and manner in which services are rendered?
  • Do they carry separate and sufficient insurance?
  • Does the Independent Contractor have a meaningful ability to profit or suffer a loss?

This latter consideration can be quite influential in favour of finding an independent contractor relationship, if the answer is yes.

4. Ensure that the Independent Contractor Is Not Wholly Dependent on Your Company

This final consideration is closely related to the issue of control – even though all of the above considerations are met – if the independent contractor has only one client – your company, or has been prohibited from taking loads from other customers to hold themselves available for your company to support the vaccine supply chain, an adjudicator may find the independent contractor to be an employee, or at best a ‘dependent contractor’.

If a driver has no other source of income and is dependent upon the company for an extended period of time, that driver may also be found to be a dependent contractor or an employee.

The road ahead: preparation today is the key to success tomorrow.

While COVID-19 has turned much of the world’s infrastructure on its head, these are some of the concrete steps that a company can take today to ensure a smooth transition to tomorrow.

If you have any questions about the article, please contact Heather C. Devine.

<< Back to Blogs