Independent Contractor or Employee? That is the Question.

Sep 14, 2016

Many companies hire contractors instead of employees. As we have written before, some advantages for contractors are paying less taxes and being able to claim more tax deductions. However, a contractor is not protected by the Employment Standards Act. Those protections include pregnancy and parental leave, termination and severance pay, and overtime pay.

Just because a company labels you as an independent contractor does not mean you are one.

In a recent case, the Court has allowed 7000 sales agents of a company to bring a lawsuit together claiming that they were in fact employees mislabeled as independent contractors.

The Case: Omarali v Just Energy Group Inc. 

Just Energy has been relying on sales agents since 1997 to go door-to-door to potential customers to sell its products.  All of these sales agents had written contracts that stated they were independent contractors. Omarali, the representative plaintiff, made $3.32 per hour in his first month working 12-hour days.

Despite the contract stating they were independent contractors, the court found there was the potential that they were employees. The major factor in this case was the amount of control that Just Energy had over the contractors.  The Court found that there was enough evidence that Just Energy did have some control. Examples of this control was that Just Energy set the schedule, uniform, could discipline them and instructed the workers on what to say when completing sales.

Lessons

Workers rights differ depending on whether they are classified as an independent contractor or employee. There are advantages and disadvantages for both types of worker. It is helpful to examine and understand your obligations when you enter into a new contract.

Even if you have signed a contract as an independent contractor, that does not necessarily mean you are one. It is always helpful to consult an employment lawyer to determine whether you are an contractor or employee, and what your rights may be. In the case above, Omarali earned $3.32 per hour as an contractor. If he is found to be an employee, he would be entitled to at least minimum wage and could be owed substantial compensation.

If you would like to speak with an experienced lawyer at MacLeod Law Firm about this issue, please contact us at [email protected] or 647-204-8107.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

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