Peter Straszynski discusses a recent court case that
demonstrates the risks of mischaracterizing workers as independent
The Ontario Court of Appeal's decision in Keenan v.
Canac Kitchens once again reminds employers of the
potential liabilities associated with cavalier characterization of
workers as "independent contractors".
Mr. and Mrs. Keenan worked for Canac as "Delivery and
Installation Leaders" for 32 and 25 years in duration,
At some point, Canac had characterized them as (and they signed
contracts as) "independent contractors".
When Canac terminated its relationship with the Keenans in March
2009, it did not provide them with any notice of termination or
payments instead, consistent with their characterization as
The Keenans sued Canac.
Both at trial and appeal, the Court found that the Keenans had
been sufficiently "economically dependent" on Canac
(between 75% and 95% of their gross income, depending on the year)
so as to be "dependent" contractors and therefore
entitled to reasonable notice of termination or pay instead, just
like regular employees.
The Court of Appeal further upheld the trial Judge's
assessment of damages on the basis of 26 months' pay in lieu of
Having lost its appeal, Canac was further ordered to pay the
Keenans $24,000.00 in reimbursement of legal costs (in addition to
whatever costs Canac was already ordered to pay, having lost at
This case serves as a sobering alarm bell for employers who are
using "independent" contractors on a sufficiently
exclusive basis to render them "dependent" contractors or
even "employees" for severance and other statutory
Prudent employers will consider minimizing these risks either by
using contracts with binding termination clauses limiting
contractors' entitlements on termination, or perhaps even by
altering existing contractors' status and "putting them on
If you would like to learn more about this or any other
employment law topic, please reach out to me by phone or by
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