If you have recently been terminated from your job, there is no doubt you will have questions. For example, you may want to know about reasonable notice or what other rights you are entitled to.
What you may not know is that the answers will vary depending on your employment status: are you an employee, a dependent contractor or an independent contractor? These are particular terms with special meaning in employment law, and we can help you understand where you fall in the continuum. As a result, we can help you claim the rights that you are entitled to.
Employee or contractor?
The first major split to understand is between employees and contractors. In order to access the protections and rights of the Employment Standards Act, you typically need to be considered an “employee”. Employees’ rights include vacation pay, statutory holidays, overtime pay, notice upon termination and the right to collect EI (Employment Insurance) benefits.
This dividing line has been developed over many years, and it is still evolving today.
Questions that the courts will ask include the following:
- 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 above factors point towards being an employee, then that person will have the protections and rights of the Employment Standards Act. By contrast, contractors will not.
You can think of contractors as having more control over their operations. The more factors that point toward a worker keeping control over their own work (setting their own hours, setting the scope of work, owning their tools , negotiating fees, incurring expenses, etc.), the more likely that they are considered a contractor.
What about “dependent” contractors?
There is a special subset of contractors called “dependent contractors”, and they are treated a bit differently than both employees and independent contractors.
Although they are treated like independent contractors in many ways, dependent contractors are actually entitled to reasonable notice of termination for their services, just like employees. Dependent contractor status is considered a “carve out” from the contractor category, and it does not affect or reduce the scope and applicability of existing employment tests.
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, as stated above. 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.
One important point to remember is that just because you sign a contract that states you are an independent contractor, it isn’t necessarily true. The courts and other agencies will look at the actual nature of your employment relationship, not just the title that you signed.
As you can see, there is no black and white definition of an employee or a contractor, and we recognize that everyone’s situation is different. This is why it’s important to contact a legal professional, and the experts at Ball Professional Corporation are happy to help. They can analyze your situation and assist you based on your employment status.