In Ontario the issue of employment status is analyzed by
different criteria depending on the particular legislative context:
for example, there are different tests under the Employment
Standards Act, 2000 ("ESA") and Labour
Relations Act ("LRA") for determining
whether someone is an employee or an independent contractor.
You may already be familiar with the distinction between an
employee and an independent contractor. But did you know that
there is a hybrid status between those two: the "dependent
contractor"? The recent decision of the Ontario Court of
Appeal in Keenan v. Canac Kitchens shows how the
Courts will look at the employment relationship to determine
whether someone is an employee, independent contractor, or
somewhere in between.
In Canac Kitchens the plaintiffs, husband-and-wife team
Lawrence and Marilyn Keenan, each had longstanding relationships
with Canac. While both started as full-time employees, they
were both advised at one point that they would no longer be
employees and instead would continue to provide services to Canac
as contractors, which status they each maintained for the remainder
of their time with Canac. The problem for Canac was that this
"contractor" status was not truly independent. The
trial judge found that the Keenans, even when their respective
statuses changed from employees to contractors, were dependent on
Canac for the overwhelming majority of their work and income: they
were "dependent contractors" and as such, no different
from employees. The Court of Appeal concurred, finding that
the "high degree of exclusivity" the Keenans provided to
Canac constituted dependence and the twenty-six (26) months'
notice awarded by the trial court was reasonable in the
What that meant for Canac was that they owed the Keenans
reasonable notice of termination, of which Canac had given them
none on the basis that they were contractors.
This decision is indicative of a growing trend in the courts to
provide a level of protection to this type of work that has not
always been available. In essence, this approach is falling
more in line with the broadly-inclusive approach taken under the
Labour Relations Act where findings of independence are
certainly the exception rather than the rule. Accordingly,
employers need to be wary of relying on "contractor
status" as a means to avoiding notice obligations, and instead
consider ways to minimize exposure, including the use of service
agreements with termination provisions. In that regard, the
lawyers at CCP can assist by both assessing
employment status and drafting the appropriate agreement for every
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).