5,416
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 23:11, 30 August 2016
, 23:11, 30 August 2016→D. Determine if the Worker is an Employee or Independent Contractor
| Line 80: | Line 80: | ||
Note that different statutes have different objectives and definitions, and as a result, “employee” and “independent contractor” may be interpreted differently under each statute. These interpretations are generally similar and sometimes follow the same tests; however, the ''ESA'' and particularly the ''HRC'' may define “employee” more broadly than the common law tests would – see [[{{PAGENAME}}#2. Employees v. Contractors - Employment Standards Act | Sections IV.D.2]] and [[{{PAGENAME}}#3. Employees v. Contractors - Human Rights Code | IV.D.3]], below. As a result, those who would be categorized as dependent or independent contractors under the common law may sometimes be categorized as employees under the ''HRC''. | Note that different statutes have different objectives and definitions, and as a result, “employee” and “independent contractor” may be interpreted differently under each statute. These interpretations are generally similar and sometimes follow the same tests; however, the ''ESA'' and particularly the ''HRC'' may define “employee” more broadly than the common law tests would – see [[{{PAGENAME}}#2. Employees v. Contractors - Employment Standards Act | Sections IV.D.2]] and [[{{PAGENAME}}#3. Employees v. Contractors - Human Rights Code | IV.D.3]], below. As a result, those who would be categorized as dependent or independent contractors under the common law may sometimes be categorized as employees under the ''HRC''. | ||
=== 1. Employees v. Contractors - Common Law === | |||
When considering an employment related claim, it will be important to determine if the claimant was an employee, dependent contractor, or an independent contractor. | |||
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 relationship is the degree of control and dependency. | |||
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 | 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 independent contractor is generally not significantly controlled by the employer: the independent contractor might set their own hours, determine how to perform the work, make their own payments for CPP, EI, and Worker’s Compensation coverage, pay for their own business expenses and equipment, and determine whether to hire their own employees or subcontractors to assist in performing the work. Independent contractors often contract with more than one business, and as a result are less dependent on a single business to earn their living. | An independent contractor is generally not significantly controlled by the employer: the independent contractor might set their own hours, determine how to perform the work, make their own payments for CPP, EI, and Worker’s Compensation coverage, pay for their own business expenses and equipment, and determine whether to hire their own employees or subcontractors to assist in performing the work. Independent contractors often contract with more than one business, and as a result are less dependent on a single 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: | 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: | |||
:[...]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 118: | Line 122: | ||
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. | ||
If the worker appears to be a dependent or independent contractor, and the worker has a legal issue that is covered by the ''ESA'' or the ''HRC'', see Sections | If the worker appears to be a dependent or independent contractor, and the worker has a legal issue that is covered by the ''ESA'' or the ''HRC'', see Sections IV.D.2 and IV.D.3 below to determine whether these statutes’ broader definitions of “employee” include the worker in question. Otherwise, continue to the next step of the checklist. | ||
=== 2. Employees v. Contractors - Employment Standards Act === | === 2. Employees v. Contractors - Employment Standards Act === | ||
