Employee or an Independent Contractor?

Individuals may be considered to be employees, contractors or in some cases both. The determination may make a difference as to what law applies to their situation.

The Court will often impose its view of the nature of the relationship irrespective of what the parties have thought or agreed. Often, even when a written contract states that one of the parties is an independent contractor, the Court may determine that they are in fact an employee for the purposes of employment law.

As a result, employers may be required to pay reasonable notice or other unanticipated consequences.

Wrongful Dismissal and Cause:

The relationship between an employer and employee is a type of contract.

In our democratic and capitalist society, the law wishes to ensure that employees have jobs which provide a source of income (to spend). Conversely, the law wants to ensure that employers (who provide those jobs) are flexible, and profitable. Accordingly, employees should not lose their positions of employment without a very good reason or without notice that their jobs will end. This ensures that, as much as possible, individuals have a continuous income from employment even in transitioning to a new position and a new employer.

Employers must have a legitimate reason to dismiss their employees for “just cause.” That is, the employee must have done something wrong and improper which amounts to a breach of the contract. In this case, employers do not owe an employee any monies or notice.

If an Employer wants or needs to dismiss a perfectly good employee due to the Employer’s own business reasons, this type of breach may be known as a “wrongful dismissal”. Employers must comply with Canadian employment law requirements concerning how they deal with their employees during and after dismissal. Employers may be sued and the former employees may be awarded monies for the failure of the employer to provide “reasonable notice” and not having “just cause” for dismissal.

The amount of reasonable notice or money in lieu of that notice to which an employee will be entitled varies depending upon factors such as: age, length of service and others.

Constructive Dismissal:

Constructive dismissal is a concept concerning situations where an employee has not been dismissed but the terms of their employment have been change significantly by the Employer, without the consent of the employee. The change may relate to: among other things, compensation, or the employee’s duties. In such a case, eventhough an Employee may quit, he or she will be viewed by the Court as having been wrongfully dismissed.

Human Rights:

Ontario (the Ontario Human Rights Code, R.S.O 1990, as amended) prohibits discrimination on the basis of sex, gender, age, national origin, sexual orientation, and medical handicaps (conditions). Recent changes in the legislation means that an individual can now sue for these sorts of claims rather than applying to the Human Rights Tribunal. As a result, the remedies for these types of claims may now be broader, and obtained more quickly than in the past.

Competition Agreements, and Non-Solicitation Agreements:

These clauses attempt to limit the employee’s ability to work in the same area or industry as the employer or to solicit the employer’s customers once they leave their employment. The Court in Ontario has been very reluctant to restrict the ability of an employee to earn a living and as a result they have “struck down” or refused to enforce non-competition clauses in employment Non-solicitation clauses are generally enforceable, provided they are restrictive in scope.

A great deal of skill is required in drafting these clauses to ensure that they are enforceable.

Long Term Disability

Long Term Disability (LTD) usually insures any income and is usually part of a group benefits package supplied by employers. Employers have been found liable for providing long-term disability benefits to employees terminated before or while they experienced a disability.