Cannabis exec in Alberta worked unpaid for over a year, then lost everything
A cannabis company executive who worked without pay for over a year lost his entire claim for wages and benefits after an Alberta appeal board ruled he had transitioned from employee to independent contractor and filed his complaint too late.
Vice-chair Karen Scott of the Alberta Employment Standards Appeal Board revoked an order requiring Nine Lions Bioscience to pay Rodney Andrew Nelson $74,314 in unpaid wages, vacation pay and general holiday pay.
Nelson had worked as vice-president of operations from September 2022 earning $10,500 monthly until payments stopped in May 2023. Despite the non-payment, he continued working until October 2024.
The case turned on whether a General Service Agreement signed in September 2023 transformed him into a contractor and whether he waited too long to file his employment standards complaint.
When agreements trump practice
In September 2023, Nelson signed a General Service Agreement through his numbered company, 170 Ltd., changing his role to part-time vice-president of finance and logistics for $6,933 monthly plus GST. The agreement explicitly stated the relationship would be "one of principal and independent contractor" and noted that "nothing in this Agreement or in the provision of Services shall construe or imply and employment, partnership or any other legal form of relationship."
Nelson testified he simply signed because CEO James Lafferty asked him to, claiming the agreement was invalid because Lafferty allegedly lacked authority. The board rejected this argument, finding Nelson had discussed the terms with Lafferty and reviewed the document before signing.
Supporting the board's conclusion, text messages from September 2023 showed Nelson listing himself among "contractors" when asked by Paul Kobasiuk for a breakdown of staff versus contractors. He cited his GSA pay rate rather than his former employee salary.
Control, risk and investor factor
The board applied the Supreme Court of Canada's test from Sagaz Industries, asking "whether the worker is performing services as a person in business on his own account." After September 2023, evidence showed Kobasiuk and replacement CEO Stephen Moore exercised minimal supervision, communicating sporadically by text and email with gaps of 10 or more days.
The GSA required only 20 hours weekly and permitted Nelson to work for other clients. While Nelson argued he couldn't work from home due to Health Canada licensing requirements, the board found these constraints reflected his own view of operational needs rather than employer direction.
Critically, Nelson alleged in his Statement of Claim that he owned 5.6314 percent of Nine Lions' voting shares and described himself as an "investor." In a February 2024 text to a director, he complained that "there have been 3 of us footing the bill" for company operations.
The board concluded this demonstrated "a degree of financial risk and opportunity to profit from the [employer’s] operations that went beyond the ordinary employee."
Six-month deadline trap
Even though Nelson was an employee before Sept. 1, 2023, and may have been owed wages for that period, the board dismissed those claims under section 82(2) of the Employment Standards Code. That provision requires complaints be filed "within six months following the termination of that employment."
Nelson's employment ended Sept. 1, 2023, when the GSA took effect. He filed his complaint June 14, 2024, more than nine months later. As the board concluded: "Accordingly, the Complaint, in relation to the period prior to Sept. 1, 2023, must be dismissed."
The board ultimately allowed the appeal and revoked the officer’s order in its entirety, finding that, from Sept. 1, 2023 onward, Nelson was an independent contractor and, while he might have a contractual claim to fees under the General Service Agreement, he was "not entitled to wages, vacation pay, and/or general holiday (pursuant to the Code) for his work after Sept. 1, 2023."
