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Difference between revisions of "Preliminary Matters for Employment Law (9:IV)"
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Preliminary Matters for Employment Law (9:IV) (view source)
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:It bears repeating that the above factors constitute a non-exhaustive list, and there is no set formula as to their application. The relative weight of each will depend on the particular facts and circumstances of the case. | :It bears repeating that the above factors constitute a non-exhaustive list, and there is no set formula as to their application. The relative weight of each will depend on the particular facts and circumstances of the case. | ||
9- | Although this is one of the leading tests, it should be noted that there are other tests that courts would consider as well. | ||
Some additional examples of conditions that are not, by themselves, enough to ensure someone is considered a contractor are: | |||
*The worker signs an agreement that identifies him as a contractor. (Section 4 of the ''ESA'' states that you cannot contract out of the Act. If you sign an independent contractor agreement, you still must meet that definition); | |||
*The worker charges sales tax (the worker may or may not be in a lawful position to charge sales tax); | |||
*The worker is incorporated (per ''Marbry et al v Avrecan International Inc'', 1999 BCCA 172). However, the worker may wish to see an accountant or tax lawyer if they are an incorporated employee as they may not be entitled to all of the same tax benefits of other corporations; | |||
*No deductions are taken from the worker’s paycheque (this may simply mean that the employer is in violation of both the ''ESA'' and the ''Income Tax Act''); | |||
*The worker submits a “bill” for labour (it may be nothing more than a time card); and | |||
*The worker uses their own vehicle or provides their own tools (it may simply be considered a condition of employment. Note that employment related expenses are recoverable and cannot be charged to the employee). | |||
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 Ltd v Avrecan International Inc'', 1999 BCCA 172): | |||
*Duration or permanency of the relationship | |||
*Degree of reliance and closeness of the relationship | |||
*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. | |||
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/rc4110-12e.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. | |||
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 III.C.2 and III.C.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 === | |||
The distinction between employees and independent contractors under the ''Employment Standards Act'' is quite similar to that under the common law. It should be used when pursuing a claim at the Employment Standards Branch. | |||
“Employee” is defined in the ''ESA'', s 1. The Employment Standards Branch has published an Interpretation Guidelines Manual to assist in determining the difference between employees and independent contractors. It can be found at: http://www.labour.gov.bc.ca/esb/igm/esa-part-1/igm-esa-s1-employee.htm | |||
Additionally, Employment Standards Branch staff sometimes use Levitt’s discussion of the control test, four-fold test, and integration or organization test in his book ''The Law of Dismissal in Canada''. | |||
As previously mentioned, an independent contractor is not protected by the ''ESA''. However, just because an employer calls someone an independent contractor does not make him or her one. Generally, at the Employment Standards Branch, the onus is on the company to show that someone is an independent contractor. If there is a disagreement, the Employment Standards Branch will use the common law tests. Generally, the longer and more continuous the relationship, and the less control the contractor has over his or her employment, the more likely it is to be considered an employment relationship. | |||
Generally speaking, the ESA is to be given a wide and liberal interpretation (per ''Interpretation Act'', RSBC 1996, c 238, s 8; see also ''Machtinger v HOJ Industries Ltd'', [1992] 1 SCR 986 and ''Rizzo & Rizzo Shoes Ltd (Re)'', [1998] 1 SCR 27). The legislation is always construed broadly when determining whether someone is or is not an employee. | |||
=== 3. Employees v. Contractors - Human Rights Code === | |||
The distinction between employees and independent contractors under the ''Human Rights Code'' should be used when pursuing a claim at the Human Rights Tribunal. | |||
Employment is more broadly defined under the ''HRC'' compared to the common law and the ''ESA''. It includes the relationships of master and servant, master and apprentice, and some principals and agents. In some cases it may extend to include workers who would, under the common law, be defined as dependent or independent contractors. Additionally, some volunteering relationships could potentially be considered employment relationships, or alternately could be covered under s 8 of the ''HRC'' (provision of services). | |||
The four factors that most strongly determine whether a worker is an “employee” for the purpose of the ''HRC'' are (''Ismail v British Columbia (Human Rights Tribunal)'', 2013 BCSC 1079): | |||
*Whether the employer utilized, or gained some benefit, from the worker | |||
*The amount of control exerted by the employer over the worker | |||
*Whether the employer bore the burden of financial remuneration of the worker | |||
*Whether the employer has the ability to remedy any discrimination | |||
The Canadian Human Rights Tribunal also uses a broader definition of employment compared to the common law; see ''Canadian Pacific Ltd v Canada (Human Rights Commission)'', [1991] 1 FC 571 (CA). | |||