Independent Contractor

If you work in the province of Ontario and the company falls under its jurisdiction, you may be covered under the Employment Standards Act, 2000. The Act sets minimum standards that an employer must comply with. If the employer fails to do so, you can file a claim on line without cost with the Ministry of Labour against the company. The Act protects you if you are exercising your rights.
There are times when you or the employer may not agree with the officer’s decision, if so, both parties have a right to appeal the officer’s decision to Ontario Labour Relations Board within 30 days. It does not cost the employee to request an appeal but the employer may be required to pay any amount found to be owing. The Board’s decision is final and binding on both parties.
To get a better picture of who is considered as an independent contractor, following case should help.     
Globex Plus Messenger Service v. Michael Wilson (17 August 2005), 3265-04-ES (Serena)
The claimant was a bike courier since 1986 with a number of courier companies. In each case, he worked as a contractor and when time permitted he would work at the bike shop he owns and operates.
He started working for Globex on September 23, 2003 using his own bicycle, courier bag, cell phone, clothing and food. The company provided him with two-way radio for which it charged $35.00 bi-monthly. The claimant provided the company with his social insurance number and signed a contract as an independent contractor. He paid his own taxes and CPP contributions. He understood he could work at his own business when he was not busy, however, he claimed he was unable to do so as he was kept busy with the company business.
The contract required that he would be paid only if the company gets paid. He would normally call the dispatcher between 8:15 and 8:30 for delivery and the calls would be made throughout the day but rarely after 5:00 p.m. He claimed he was not allowed to decline a delivery, take time off or even take a break, which made it difficult to work in his own business.
On November 4, 2003, the claimant had disagreement with the dispatcher and refused to make certain deliveries within the time limit and left them for the company to make alternate arrangement. The company accepted his decision. The claimant then resigned and discontinued working for the company.
The claimant claimed he was an employee rather than an independent contractor and the company owes him wages and vacation pay. The company on the other hand claimed he was an independent contractor who could work in his own business and the evidence suggest the claimant could refuse to accept work from the company and did refuse. 
The courts have stated one should look at the situation whether the individual is in business on his own account. If he is in business for himself, it stands to reason he would exercise control; he may also use his own tools to carry on that business. To run a business, he may have to invest money in the business and thus take a chance on profit and a risk of loss. These factors are not considered as the only considerations in making the determination of who is an employee? One should also consider the intentions of the parties and how they have arranged their affairs in carrying out that arrangement.
The fact that they agree in writing on some arrangement does not make it so in law unless it is proven by their actual conduct. In this case, the claimant retained control of whether to accept deliveries for the company and when to accept it, he also could run his own business if he wanted to. He supplied his own tools, that is, bicycle, courier bag and cell phone. The company provided a two-way radio for which it charged rent. He spent money in his tools to conduct the business he was involved with. By investing his monies, he took a chance in profit and risked loss if he was not successful.
The parties agreed to the arrangement and carried out those responsibilities according to the agreement.
On all these accounts, the claimant was considered as an independent contractor.      

This information is only provided to guide you about your entitlements under the Employment Standards Act, 2000 and should not be considered as a legal advice.

This article is provided by Rajinder K. Batra, who is a retired Employment Standards Officer with the Ministry of Labour with 15 years experience in these matters.

If you have any questions regarding your employment, please contact the writer by e-mail at [email protected]

If you don’t have access to e-mail; you can fax your question at (905) 331-1805.  

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