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BLURRING THE LINE BETWEEN CONTRACTORS AND EMPLOYEES

Last week, I wrote about changes to the Employment Insurance system which blur the traditional line separating independent contractors from employees.  A review of recent decisions in other forums suggests there is an ongoing trend towards treating these two groups as one.

In the E.I. world, previously only true employees were eligible for coverage.  Not having that aspect of our social security net to fall back on was just one of the risks of being self-employed and operating as an independent contractor.

In late 2009, the federal Fairness for the Self-Employed Act was passed.  It permits self-employed persons to opt into the E.I. program to receive certain special benefits.  The E.I. coverage for which the self-employed are now eligible includes maternity, parental, sickness, and compassionate care benefits.

In the labour relations realm, a decision out of Alberta suggests that independent contractors may be treated as employees for the purpose of determining whether they can unionize.

The Alberta Labour Relations Board reviewed the circumstances of taxi drivers, including those who are owner-operators of their taxis or lease them from other owner-operators.  The taxi drivers, represented by the Teamsters union, were engaged by Access Taxi.

The Board addressed their application to unionize by applying a “purposive” approach to the definition of “employee” found in the Alberta Labour Relations Code.  The Board determined that, even if the drivers were in some sense self-employed, the taxi company exercised a sufficient degree of control and supervision that they should be treated as employees and be allowed to unionize.

The Ontario Court of Appeal recently determined that the definition of “employed” in that province’s Occupational Health and Safety Act must be interpreted broadly enough to encompass independent contractors. 

That decision arose out of a worksite accident involving a truck driver – an independent contractor – providing services to United Independent Operators Limited.  The Ontario Ministry of Labour laid charges against United for failing to comply with the requirements of the Act.

Although the Workplace Safety and Insurance Board, Revenue Canada, the Employment Standards Branch, and the lower courts had all determined that United’s truck drivers were independent contractors, the Court of Appeal unanimously held that the truck drivers were “regularly employed” for the purposes of the Act.  This is a decision which seems destined for a final word from the Supreme Court of Canada.

In B.C., the Human Rights Tribunal recently determined that an equity partner at the law firm of Fasken Martineau Dumoulin LLP could be considered to be employed for the purposes of the Human Rights Code.

Fasken’s had attempted to force equity partner John McCormick to retire from the practice of law, at age 65, in accordance with the firm’s partnership agreement.  McCormick filed a complaint of discrimination pursuant to the Code.

Fasken’s argued that the Tribunal had no jurisdiction because McCormick was not in a relationship of “employment” with the firm.  The Tribunal disagreed, gave a broad, liberal, and purposive interpretation to the Code, and held that McCormick was employed by Fasken’s in the context of how that term is used in the Code.

These various developments seem, to me, to amount to four clear blows to the integrity of the legal status of independent contractors.  Where I come from, that amounts to a trend but where it will go next is anybody’s guess.

Robert Smithson is a labour and employment lawyer, and operates Smithson Employment Law in Kelowna. For more information about his practice, or to subscribe to You Work Here, visit www.smithsonlaw.ca.  This subject matter is provided for general informational purposes only and is not intended as legal advice.