Classifying workplace relationships as employer/employee or
principal/contractor can be problematic. Courts have wrestled with
determining the intent of the parties (step 1) and whether the
objective reality supports the parties' expressed intentions of
the employer-worker relationship classification (step 2).
The recent unanimous decision of the Federal Court of Appeal in
Appeal in 1392644 Ontario Inc. (o/a Connor Homes) v The
Minister of National Revenue 2013 FCA 85 [Connor
Homes] does not establish a new test for answering the
question of whether or not an individual is performing services as
their own business on their own account. The decision is
significant, however, because it succinctly pulls together the
fragments of several previous decisions that, when pieced together,
form the two-step approach a Court should use to sort out whether a
worker is an employee or an independent contractor.
Although the decision in Connor Homes was released only
a few months ago, it has already been followed in five subsequent
cases and considered in two others. Employers should consider
Connor Homes to be the "new" leading case on
determining the employer-worker relationship.
Everyone knows the golden rule is to "treat others as you
would like to be treated". However, in the context of
classifying employer-worker relationships, Connor Homes
suggests employers should heed a slight twist on this classic
maxim: "treat your workers as you would like a Court to treat
Choosing whether to have your workers be employees or
independent contractors is best done on a case-by-case basis.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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