In order to access the protections and rights of the Employment Standards Act, an individual typically needs to be considered an “employee” as opposed to an “independent contractor”
Reasonable Notice of Termination
Importantly, independent contractors are excluded from legislation relating to rights upon termination and reasonable notice. The dividing line between these two types of workers has been developed over many years, and is still evolving today. “Dependent contractor” is a third category of worker that must be considered. Dependent contractors are entitled to reasonable notice of termination for their services, just like employees, yet they act in many ways like independent contractors. Dependent contractor status is to be considered a “carve out” from the non-employment category and does not affect or reduce the scope and applicability of existing employment tests. Essentially, an individual may be a dependent contractor when a traditional employment relationship does not exist, yet some of the indicia of independent contractor status are missing. In determining whether an individual is a dependent contractor, and therefore entitled to reasonable notice of termination, the courts will first determine whether they are an employee or a contractor. The courts will ask: Who supplies the equipment? What degree of control does the employer have over the work? How is the worker paid? Can the worker subcontract out their work? Who bears the benefit of profit and the risk of loss? Is the relationship exclusive? What did the parties intend?
If the worker is a contractor, then the courts consider whether they are an independent or dependent contractor. Exclusivity is determinative is making this decision. This means that if the worker is only allowed to deal with one employer, they are dependent on that employer and therefore are owed reasonable notice. As with a typical employment relationship, if there is cause for dismissal there is no obligation to provide reasonable notice upon termination of the relationship. See Mckee v. Reid’s Heritage Homes Ltd., 2009 ONCA 916 and Boettcher v. Stremecki (1980), 25 A.R. 372 (Q.B.) for relevant cases. Please note that the above information does not constitute legal advice. It is general information about the law. If you require legal advice and assistance in an employment matter, please contact the experts at Ball Professional Corporation.
Canadian Employment Law
Mr. Ball is author of the authoritative and definitive text Canadian Employment Law - published by Canada Law Book (a division of Thomson Reuters). The text is used and cited by lawyers, law schools and judges across Canada.
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