The employee vs. independent contractor classification is an ongoing issue that underlies employment law disputes. This is because employees are afforded greater protections by law under the Employment Standards Act, including reasonable notice or pay in lieu of notice upon termination.
Independent contractors are not entitled to the same rights, unless these terms were specifically negotiated. This means that being classified as an independent contractor could be fatal to a wrongful dismissal claim.
However, an individual can classify as an employee regardless if the contract labels them as an independent contractor. A court will examine the whole of the relationship to assess its character.
Factors that may be considered in determining the nature of the relationship include: level of control of the principal (for instance, in setting hours of work); supply/ownership of tools; expectation of profit; degree of functional integration in the business; the level of undertaking of risk by that individual; and whose business it is.
Misclassification of the working relationship by an employer is prohibited by section 5.1 of the ESA and can result in added exposure to liability against the employer.
If you believe that you have been misclassified as an independent contractor, you can give us a call for a free consultation.