In January, Ontario's highest appellate court dismissed an
appeal by Canac Kitchens of a decision awarding two of its
contractors each 26 months' notice.1 Canac Kitchens
has become a notorious litigant for having provided employees with
only their minimum statutory entitlements on the closure of its
business and having now lost over a dozen cases on what constitutes
In this particular case, Canac Kitchens provided no notice or
pay in lieu of notice whatsoever when it advised two long-term
contractors of the termination of their relationship. The
contractors, a married couple, had worked for Canac Kitchens
installing and then supervising the installation of cabinets for 32
and 25 years. They were 63 and 61 years old. Both of their
relationships with Canac Kitchens had started out as employment
until, approximately 20 years prior to termination, Canac Kitchens
decided that they would be treated as independent contractors going
forward. In the last couple of years of their relationship, the
contractors had picked up a little work from other cabinet
companies, but were otherwise exclusive to and dependent on Canac
The Court of Appeal determined that the additional work
performed by the contractors for companies other than Canac
Kitchens, in the context of a lengthy relationship of exclusivity,
did not change their status as dependent contractors. The Court of
Appeal also determined that the original award of 26 months'
notice was appropriate given the ages, lengths of service and
positions performed. These circumstances were found to justify an
award in excess of 24 months' notice.
The take-away for employers from the latest Canac Kitchens
decision are: (1) reasonable notice is required on the termination
of dependent contractors and should be calculated using the same
method used for employees; (2) dependent contractors need not be
entirely exclusive for the duration of their relationship as the
overall context will be considered; and (3) a finding of
"exceptional circumstances" is not essential to support
an award in excess of 24 months' notice. Perhaps the greatest
lesson of all is that a strategy of flouting common law obligations
to employees and contractors means an employer will spend a great
deal of money on both its legal fees and those of its
1 Keenan v. Canac Kitchens Ltd., 2016 ONCA 79.
Previously published by LexisNexis
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