A recent decision of the Superior Court of Justice in Ontario
has granted payment in lieu of notice to a consultant who was found
to be a dependent contractor. In the case of Tetra Consulting v. Continental Bank et
al., the defendant ("the Bank") retained the
services of the plaintiff
("Tetra"), a consulting firm
owned by Mr. Lewis Cassar, to provide expertise in obtaining
approval from the federal regulator to operate as a Schedule 1
It was the common intention of all parties that although Mr.
Cassar commenced work as a consultant (through Tetra), he was
to become an employee of the Bank following approval from the
federal regulator. Mr. Cassar commenced work in January 2013,
and with this common intention in mind, was appointed the Chief
Compliance Officer and Chief Anti Money Laundering Officer. The
Bank received approval in December 2014. In January 2015, prior to
the finalization of Mr. Cassar's employment contract, the
business plans for the Bank were changed and Tetra was orally
advised that it was being terminated immediately.
Tetra and Mr. Cassar commenced this action seeking reasonable
notice. Counsel for the Bank contended that Tetra/Mr. Cassar had
remained a consultant up until his termination. The Court concluded
that he had not only become an employee following the
Bank's approval in December in absence of a formal employment
contract, but that Mr. Cassar, even when wearing his
"Tetra hat", was a dependent contractor prior to that
time. The Court noted that he worked exclusively for the Bank, used
the Bank's tools, had an office and email address, was subject
to the Bank's control, and represented himself to third parties
as an employee of the Bank. The Court awarded Mr. Cassar 8 months
of notice as a dependent contractor, noting his holding of a senior
position, his sophisticated knowledge of operations, his
specialized skill to the job, his high salary, and taking into
account the short term of employment.
This decision serves as a cautionary reminder to employers that
a formal categorization of a worker as an employee or a
consultant/contractor does not necessarily make them so. Employers
cannot avoid their responsibilities to an employee through a label.
It has been well established that courts will take into account a
variety of objective factors in classifying an employment
relationship, however this decision opens up the possibility of
taking into account subjective factors such as a common intention
between the parties in making this determination.
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