5,109
edits
Difference between revisions of "Preliminary Matters for Employment Law (9:IV)"
From Clicklaw Wikibooks
Preliminary Matters for Employment Law (9:IV) (view source)
Revision as of 12:37, 18 August 2021
, 12:37, 18 August 2021→1. Employees v. Contractors - Common Law
| Line 86: | Line 86: | ||
This classification will determine which statute laws apply. It will also change what entitlements are available for breach of contract (including wrongful dismissal) at common law. For example, employees can make claims for severance pay in lieu of notice, a common-law entitlement that is not available to contractors. | This classification will determine which statute laws apply. It will also change what entitlements are available for breach of contract (including wrongful dismissal) at common law. For example, employees can make claims for severance pay in lieu of notice, a common-law entitlement that is not available to contractors. | ||
In ''McCormick v. Fasken Martineau DuMoulin LLP'', 2014 SCC 39, the Supreme Court of Canada affirmed that the key to a determination of employment with regards to whether an individual is an employee or an independent contractor” is the degree of control and dependency. The Court in ''TCF Ventures Corp v The Cambie Malone’s Corporation'', 2016 BCSC 1521, noted that the ‘dichotomy’ between independent contractors and true employees is best practically assessed on a spectrum that exists between the two extremes; persons (both natural and unnatural) can find themselves on that spectrum and can bring an action for breach of an entitlement to notice of termination of their contracts, and the true nature of the relationship should be assessed on a case-by-case basis. | In ''McCormick v. Fasken Martineau DuMoulin LLP'', 2014 SCC 39 https://canlii.ca/t/g6xlp, the Supreme Court of Canada affirmed that the key to a determination of employment with regards to whether an individual is an employee or an independent contractor” is the degree of control and dependency. The Court in ''TCF Ventures Corp v The Cambie Malone’s Corporation'', 2016 BCSC 1521 https://canlii.ca/t/gt1j2, noted that the ‘dichotomy’ between independent contractors and true employees is best practically assessed on a spectrum that exists between the two extremes; persons (both natural and unnatural) can find themselves on that spectrum and can bring an action for breach of an entitlement to notice of termination of their contracts, and the true nature of the relationship should be assessed on a case-by-case basis. | ||
An employee is typically highly controlled by the employer: the employer might set the employee’s hours, provide training, decide how work should be performed, require adherence to policies such as dress codes, and discipline the employee for misconduct. The employer would also typically make Canada Pension Plan (CPP) and Employment Insurance (EI) deductions, provide Worker’s Compensation coverage, and pay for any business expenses and equipment. Employees tend to rely on their employment with a single employer or business as their primary or sole source of income. | An employee is typically highly controlled by the employer: the employer might set the employee’s hours, provide training, decide how work should be performed, require adherence to policies such as dress codes, and discipline the employee for misconduct. The employer would also typically make Canada Pension Plan (CPP) and Employment Insurance (EI) deductions, provide Worker’s Compensation coverage, and pay for any business expenses and equipment. Employees tend to rely on their employment with a single employer or business as their primary or sole source of income. | ||
| Line 94: | Line 94: | ||
A dependent contractor is an intermediate category, falling somewhere in the middle of the scale. A dependent contractor might set their own hours and hire their own employees, but derive most of their income from a contract with one business, and thus be fairly dependent on that business to earn their living. | A dependent contractor is an intermediate category, falling somewhere in the middle of the scale. A dependent contractor might set their own hours and hire their own employees, but derive most of their income from a contract with one business, and thus be fairly dependent on that business to earn their living. | ||
None of the factors listed above can alone determine the categorization of the worker. One of the leading tests to apply to determine how to categorize the worker is set out in ''671122 Ontario Ltd. v. Sagaz Industries Canada Inc.'', 2001 SCC 59, [2001] 2 SCR 983: | None of the factors listed above can alone determine the categorization of the worker. One of the leading tests to apply to determine how to categorize the worker is set out in ''671122 Ontario Ltd. v. Sagaz Industries Canada Inc.'', 2001 SCC 59, [2001] 2 SCR 983, https://canlii.ca/t/51z6: | ||
"[…]The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker's activities will always be a factor. However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker's opportunity for profit in the performance of his or her tasks." | "[…]The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker's activities will always be a factor. However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker's opportunity for profit in the performance of his or her tasks." | ||
| Line 112: | Line 112: | ||
All of these factors will be considered, but do not determine the issue. | All of these factors will be considered, but do not determine the issue. | ||
In some cases, a worker may fall into the category of dependent contractor. Those who fall under the intermediate category are entitled to reasonable notice. Some of the factors that are considered in determining whether a worker falls under this category are (''Marbry Distributors Limited v Avrecan International Inc'', 1999 BCCA 172): | In some cases, a worker may fall into the category of dependent contractor. Those who fall under the intermediate category are entitled to reasonable notice. Some of the factors that are considered in determining whether a worker falls under this category are (''Marbry Distributors Limited v Avrecan International Inc'', 1999 BCCA 172, https://canlii.ca/t/546j): | ||
*Duration or permanency of the relationship | *Duration or permanency of the relationship | ||
| Line 118: | Line 118: | ||
*Degree of exclusivity | *Degree of exclusivity | ||
In the case of ''Marbry'', the incorporated company, Marbry Ltd., distributed Avrecan’s products almost exclusively for 11 years. Marbry Ltd. employed Mr. Marbry as well as one salesperson. Considering the above factors, the court found that the contractual relationship between Marbry Ltd. and Avrecan required reasonable notice to terminate. See also ''Zupan v Vancouver (City)'', 2005 BCCA 9; ''1193430 Ontario Inc v Boa-Franc Inc'', 78 OR (3d) 81, 260 DLR (4th) 659; ''Hillis Oil & Sales v Wynn’s Canada'', [1986] 1 SCR 57. | In the case of ''Marbry'', the incorporated company, Marbry Ltd., distributed Avrecan’s products almost exclusively for 11 years. Marbry Ltd. employed Mr. Marbry as well as one salesperson. Considering the above factors, the court found that the contractual relationship between Marbry Ltd. and Avrecan required reasonable notice to terminate. See also ''Zupan v Vancouver (City)'', 2005 BCCA 9, https://canlii.ca/t/1jk91; ''1193430 Ontario Inc v Boa-Franc Inc'', 78 OR (3d) 81, 260 DLR (4th) 659, https://canlii.ca/t/1lwkv; ''Hillis Oil & Sales v Wynn’s Canada'', [1986] 1 SCR 57. | ||
The BCSC has | The BCSC has adopted Alberta’s ruling that dependent contractors are also entitled to reasonable notice, albeit possibly to a lesser degree than that of a regular employee (''Pasche v. MDE Enterprises Ltd.'', 2018 BCSC 801, https://canlii.ca/t/hrs4z). It appears there may also be a judicial shift away from the concept that dependant contractors could be entitled to a lesser degree of reasonable notice than a regular employee. In Liebreich v. Farmers of North America, 2019 BCSC 1074, https://canlii.ca/t/j196n, the BCSC found there was no “principled basis to automatically give less notice to a dependent contractor than an employee”. | ||
For additional discussion of intermediate contracts, see “Intermediate Contracts of Employment”, Stephen Schwartz, Employment Law Conference 2010, Paper 4.1, CLE BC. | For additional discussion of intermediate contracts, see “Intermediate Contracts of Employment”, Stephen Schwartz, Employment Law Conference 2010, Paper 4.1, CLE BC. | ||
For additional discussion of intermediate contracts, see “Intermediate Contracts of Employment”, Stephen Schwartz, Employment Law Conference 2010, Paper 4.1, CLE BC. For additional discussion of the tests used to determine whether a worker is an employee or an independent contractor, see the Canada Revenue Agency publication: ''Employee or Self-Employed'' (RC4110). This useful publication lists a number of indicators to help determine whether a worker is an employee or an independent contractor | For additional discussion of intermediate contracts, see “Intermediate Contracts of Employment”, Stephen Schwartz, Employment Law Conference 2010, Paper 4.1, CLE BC. For additional discussion of the tests used to determine whether a worker is an employee or an independent contractor, see the Canada Revenue Agency publication: ''Employee or Self-Employed'' (RC4110). This useful publication lists a number of indicators to help determine whether a worker is an employee or an independent contractor but note that it does not consider the category of dependent contractor. It can be found at: http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-16e.pdf | ||
Cases where the worker may be considered a dependent or independent contractor, rather than an employee, can be quite complex. Although this chapter includes some information regarding dependent and independent contractors, its focus is towards the rights and responsibilities of employees. Ensure that you thoroughly research case law if you have a case involving dependent or independent contractors. | Cases where the worker may be considered a dependent or independent contractor, rather than an employee, can be quite complex. Although this chapter includes some information regarding dependent and independent contractors, its focus is towards the rights and responsibilities of employees. Ensure that you thoroughly research case law if you have a case involving dependent or independent contractors. | ||
