In a recent decision, Keenan v. Canac Kitchens
Ltd., the Ontario Court of Appeal upheld a lower
court decision, confirming that two "dependent
contractors" were owed 26 months payment in lieu of notice at
You may recall from the original decision that Lawrence Keenan
and his wife began working as employees of Canac Kitchens Ltd.
(Canac) in 1976 and 1983 respectively, supervising
the installation of Canac kitchens. In 1987, Canac ended its
employment contract with the Keenans and hired them on as
contractors. The contract indicated that the Keenans would be
sub-contractors of Canac and devote their full-time and attention
to the company. Despite their change in status to independent
contractors, the Keenans' working relationship with Canac
remained unchanged. They continued to work exclusively for
the company until 2006 when, as a result of declining Canac orders,
they picked up some work for another kitchen installation
company. Throughout the relationship, the Keenans continued to
earn the majority of their income from the work they did for
In 2009 Canac told the Keenans that it was closing its
operations and the Keenans' services were no longer
needed. The Keenans, aged 63 and 61 were provided no notice
or payment upon termination, as Canac took the position that they
were independent contractors.
Dependent or Independent Contractors
The appeal focused on the finding of exclusivity by the trial
judge. The lower court's decision was based on the fact
that Mr. and Mrs. Keenan had worked exclusively or near exclusively
for Canac since 1976 and 1983, respectively. On appeal, Canac
had argued that exclusivity is a matter to be determined at the
time of termination of the relationship and, at the time of
termination, the relationship was not exclusive.
The Court of Appeal stated that the trial judge's
understanding of exclusivity was correct and that exclusivity
cannot be determined on a "snapshot" approach, as
suggested by Canac. The concept of exclusivity was found to be
tied to the determination of economic dependency and, as such,
consideration of the full history of the relationship is
The Notice Period
Canac also argued that the award of 26 months in lieu of notice
should be set aside as being too high. The Court stated that
the reasonable notice period is determined by case-specific facts
and there is no absolute upper limit on what constitutes reasonable
notice. However, generally only exceptional circumstances will
support a notice period in excess of 24 months. The Court of
Appeal upheld the lower court decision finding that the parties had
submitted an agreed statement of facts including an agreed damages
calculation for up to 26 months' notice. Further,
factoring in the ages of the Keenans, their length of service and
positions, the notice period was considered reasonable and the
Court of Appeal refused to interfere with the decision.
This case reaffirms what the lower court decision in Keenan
v. Canac KitchensLtd taught us: where contractors
work exclusively or near exclusively for one company, there is a
significant risk that they will be considered "dependent"
rather than independent contractors. As this case
demonstrated, dependent contractors can be entitled to notice
periods which are akin to notice periods to which similarly
situated employees would be entitled. In this case,
exceptional circumstances, including the individuals' ages,
length of service and the character of the positions that they
held, warranted awarding compensation reflecting a 26 months'
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