Difference between revisions of "Preliminary Matters for Employment Law (9:IV)"

== Determine if the Worker is an Employee or Independent Contractor ==

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''.

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.

"[…]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."

Although this is one of the leading tests, it should be noted that there are other tests that courts would consider as well.

The BCSC has recently adopted Alberta’s ruling that dependent contractors are also entitled to notice, albeit possibly to a lesser degree than that of a regular employee (''Pasche v. MDE Enterprises Ltd.'', 2018 BCSC 801).  

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  

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.

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.  

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.

The distinction between employees and independent contractors under the ''Human Rights Code'' should be used when pursuing a claim at the Human Rights Tribunal.  

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),  at paras 9-15.

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