Simon's Megalomaniacal Legal Resources

Employment - Employment versus Independent Contractor

. R. v. Greater Sudbury (City)

In R. v. Greater Sudbury (City) (SCC, 2023) the Supreme Court of Canada, in an unusual case where the court issued a split decision (leaving the Court of Appeal ruling governing), regarding occupational health and safety. These quotes are from the four-judge ruling (Martin JA) that would have dismissed the appeal.

In this quote the court characterizes 'independent contractors', in contrast to employees:

[18] Second, at common law, a person’s relationship with an independent contractor is typically characterized by a lack of control on the part of that person over the contractor (671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, at paras. 33-48). The phrase “contract for services” is used, at common law, to refer to such relationships. Comparatively, “contract of service” is used to denote an employment agreement. By referring to a “contract for services” in the definition of “employer”, the legislature signaled its intent to capture employer‑independent contractor relationships under the “employer” definition (Wyssen, at pp. 196-98). Since Wyssen found that such relationships are captured by the definition, it follows that a person can be an employer under the Act even where they lack control over the worker or the workplace. Wyssen’s interpretation applies to all employees and workplaces, including those in the construction industry.

. Dean v 3150 Hawthorne Road Ltd.

In Dean v 3150 Hawthorne Road Ltd. (Div Court, 2023) the Divisional Court considered a JR brought by an employee against a WSIAT ruling that the respondent employer could not be sued because they were a Schedule 1 employers under the WSIA [pursuant to WSIA s.118(2) and 123].

In these quotes the court considers the distinction between an employee and an independent contractor:

[22] As the applicants concede, the Tribunal properly considered the leading Supreme Court of Canada case, as well as the relevant Board policies relating to employees versus independent contractors. In the leading case of 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, at para. 47, Major J. wrote on behalf of the Supreme Court:

Although there is no universal test to determine whether a person is an employee or an independent contractor, I agree with MacGuigan J.A. that a persuasive approach to the issue is that taken by Cooke J. in Market Investigations ... The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker's activities will always be a factor. However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker's opportunity for profit in the performance of his or her tasks. [Citations omitted.]

[23] In addition to considering this very paragraph from Sagaz, the Tribunal considered the Board's policy entitled "Workers and Independent Contractors". At para. 44 of her decision, the Vice-chair wrote:

In essence, Sagaz and the Board’s policy state that one must look at the totality of the relationship between the parties, rather than any one specific criterion in determining whether a person is a worker or an independent operator. Factors to consider in determining whether a person is a worker or independent operator include:

. an examination of the degree of control that the individual is subject to in doing the work;

. ownership of tools and/or equipment;

. the opportunity that the individual has to make a profit or suffer a loss in doing the work; and

. whether the person is part of the employer’s organization or operating his or her own separate business.

. European Staffing Inc. v. Canada (National Revenue)

In European Staffing Inc. v. Canada (National Revenue) (Fed CA, 2020) the Federal Court of Appeal set out briefly the test for employment versus independent contracting:

[7] Connor Homes imposes both a subjective and objective test. Although the Court is to look at the intention of the parties, and whether they actually thought they were in an employment relationship or considered themselves to be independent contractors, the inquiry does not end there. The Court must also look at the overall circumstances through an objective lens. That inquiry is informed by the four objective criteria set forth in Wiebe Door Services Ltd. v. Canada (Minister of National Revenue), 1986 CanLII 4771 (FCA), [1986] 3 F.C. 553 (Wiebe Door) – the degree of control exercised over the worker, the ownership of tools, chance of profit and risk of loss and the integration of the workers into the employer’s business. There is no dispute that the judge correctly identified the governing legal tests.