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According to the Labour Standards Code, RSNS 1989, an employee means “a person employed to do work”. But as with most things in law, what is meant by “employed to do work” requires a more complicated answer. More importantly, that answer can have implications for businesses and the people working for them, and especially when that working relationship comes to an end.

Many businesses employ independent contractors rather than hire employees for various reasons; however, simply labeling a person an independent contractor will not actually create that relationship at law. Whether a person is an independent contractor or an employee requires a factored analysis looking at the details of the relationship. Complicating matters further, McKee v. Reid’s Heritage Homes Ltd, a case decided by the Ontario court of Appeal in 2009, describes an additional category, the dependent contractor– a person who is not an employee, but may have more entitlements than an independent contractor based on their relationship with the business they worked for.

Why is this important? Where you would normally see a court make a determination of the status of an employee would be when the working relationship ends. If a person is an employee or dependent contractor, they may be owed reasonable notice- more commonly known as severance- both under the Labour Standards Act, and under the common law if they are dismissed without cause.

This means that if you have people working for you as independent contractors, but based on the facts, they could be found to be employees or dependent contractors, you may have obligations accruing to your business of which you are not aware. Conversely, if you are working as an independent contractor for a business and are dismissed, you may have rights on dismissal beyond what is stated in your contract.

My job is to help businesses figure out what categories of workers they are engaging, and with that knowledge, to help them craft contracts and policies so that they can determine what their obligations to their workers are both during the working relationship and when the working relationship ends. I also help workers who have been dismissed to determine what their rights are upon their termination, whether they are employees, dependent contractors, or independent contractors. If you feel that you would benefit from a review of your termination and any severance offered, or that your business would benefit from a review of its obligation to its employees or contractors, please call or office and arrange for a consultation.

Disclaimer: This blog post is intended to provide general information only. The law is constantly changing and requires nuanced analysis. Therefore, nothing in this blog post should be considered legal advice or opinion. In order to obtain a legal opinion or advice on a business matter, make an appointment to speak with a business lawyer in your area.

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