Law Times

www.lawtimesnews.com LAW TIMES 12 COVERING ONTARIO'S LEGAL SCENE | JANUARY 28, 2019 FOCUS Large costs could hit employers for misclassifying employees of economic dependence upon, and under an obligation to per- form duties for, that person more closely resembling the relation- ship of an employee than that of an independent contractor." Dependent contractors are between independent contractors and employees, says MacDonald. Independent contractors are not financially dependent on one par- ticular employer for their income and can work for many employ- ers, she says. Dependent contractors cannot do that. "Dependent contractors are not generally recognized in Cana- dian employment standards leg- islation," says MacDonald. "The provinces and territories are re- ally failing to recognize this kind of category. The concept of the de- pendent contractor has not thor- oughly been litigated nationwide. "There are countless decisions where the Supreme Court has seen work to be one of the most fundamental aspects in a person's life in recognizing that it provides the individual with a means of fi- nancial support, and a contribu- tory role in society and that their employment is essentially the ingredient or essential compo- nent of their sense of identity and sense of self worth and emotional well-being," she says. "We need to now apply that type of sentiment that's been ex- pressed for the employment rela- tionship for those relationships that are dependent contractor and characterized as such, be- cause they really do bear the same hallmarks as the employ- ment relationship." The practical realities of the working relationship determine if a worker is an employee, in- dependent contractor or a de- pendent contractor, says Kumail Karimjee, a lawyer at Karimjee Law in Toronto. "The law is very clear [that] what matters is the substance of the relationship and not just the form of contract that may be en- tered into between an individual providing services and the work- er and the company," he says. "The result of that is that the relationship can always be challenged and re-assessed by a number of adjudicative bodies that may have an interest in the relationship." There could be large costs to employers for misclassifying employees as independent con- tractors, he says. Karimjee advises employers and employees to consider how their working relationship will look. Some workers may want to be independent contractors for tax benefits, he says, but changes to income splitting means those benefits may not be as great as they think. He encourages employers to consider writing termination clauses in their independent contractor agreements that re- semble the benefits for termina- tion outlined in the ESA.But it's a "delicate balance," he says, noting that it might be more difficult for employers to insist that someone is an independent contractor if the agreement has many benefits similar to the ESA. "There is no magic bullet," says Bonny Mak, a partner at Fasken LLP. "Courts and adjudi- cators will really look at how the relationship is on the ground." Mak advises employers about how to classify workers. Some- times, employers hire indepen- dent contractors to provide a service they need but don't in- tend to or can't provide on their own, she says. Employers should always be ready to describe their relation- ship with workers, regardless of whether the contract specifies them as "independent contrac- tors" or "employees," she says. Practically speaking, if there's an investigation or a lawsuit, the employer will be asked to prove if a worker is an "independent contractor" or "employee." "The employer is always ex- pected in a practical matter to put its best foot forward in terms of providing facts or arguments," says Mak. LT Continued from page 10 Notice 'fundamental part' of law of termination Continued from page 11 to change remaining staff 's schedules and make them work excessive hours, he says. "The point of notice is to af- ford the employee time to find new work," he says. "If that em- ployee is suddenly expected to work double shifts, they're not pounding the pavement." Bawden says this case is a rare "textbook case" that gives a thorough explanation of how the ESA works, he says. "Notice is really a funda- mental part of the law of ter- mination," he says. "We always talk about notice and the pay in lieu of notice, but rarely do we see jurisprudence on what it means to give notice to an employee and what can and cannot happen during that notice period. Given that no- tice is such a fundamental part of what we do in the employ- ment bar, it's a pretty big deci- sion." LT Bonny Mak says employers hire indepen- dent contractors to provide a service they need but don't intend to or can't provide on their own. © 2019 Thomson Reuters Canada Limited 00256CN-95864-NP Canada's trusted franchise law resource Print + ProView Order # L96090-65203 $478 4 volume looseleaf supplemented book + eBook Anticipated upkeep cost – $344 per supplement 3-5 supplements per year L96090 Supplements invoiced separately ProView only Order # L96091-65203 $478 Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. 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