Canadian HR Reporter

CANADIAN HR REPORTER OCTOBER 2019 NEWS 3 'Dependent' contractor further clarified Ontario lawyer had several agreements renewed with law office over 13-year period BY SARAH DOBSON THE QUESTION of how to characterize a worker who's not quite permanent and not quite independent was further clarified with a recent Court of Appeal for Ontario decision. "If I had to guess going forward, employers are going to be more reluctant to structure relation- ships in this way… At the end of the day, it just comes down to how [good] of a contract you have and, day to day, what is the relationship like? And can you maintain that going forward?" says Chris Justice, an associate at MacDonald & As- sociates in Toronto. "Given the evolution and the trend we're seeing, there's likely going to be more cases coming after [this] that expand on this decision and provide even further clarity," Background Barbara urston was a sole prac- titioner lawyer who provided legal services to the Office of the Chil- dren's Lawyer (OCL) in Toronto. She had a series of agreements with the office over 13 years, where she was required to apply for re- appointment for one- or two-year terms as each contract expired, with no automatic renewal. urston also maintained an independent legal practice that formed the majority of her bill- ings. Her OCL work averaged about 40 per cent of her total an- nual billings over the years. When Thurston's agreement was not renewed in 2015, she brought a claim alleging she was a dependent contractor and, there- fore, entitled to 20 months' notice of termination. e motion judge found that the lawyer's work for the OCL was continuous, performed under the OCL's control and she was per- ceived by the public to be an em- ployee of the OCL. Her billings for OCL also had increased in recent years to represent an increasingly larger portion of her income. e motion judge, therefore, concluded that these factors were sufficient to "tip the balance" in favour of urston being a depen- dent contractor. But the appeal court said the motion judge erred in its analy- sis of two cases: McKee v. Reid's Heritage Home Ltd. and Keenan v. Canac Kitchens Ltd. In the 2009 McKee, a dependent contractor was defined as a non- employment relationship where there is "a certain minimum eco- nomic dependency, which may be demonstrated by complete or near-complete exclusivity." But this is a "vaguely worded stan- dard," said Justice Grant Huscroft in his June 24, 2019 decision, add- ing that its application is "highly context-specific." "e determination as to de- pendent contractor status must be made having regard to the pur- pose of the concept: the extension of the common law entitlement to notice of termination from employees to dependent contrac- tors," he said. And in the 2016 Keenan, the court stated exclusivity was "inte- grally tied to the question of eco- nomic dependency," said Huscroft, and the determination of exclusiv- ity requires consideration of the full history of the relationship. In this case, urston did not work exclusively for the OCL, she did not have any entitlement to a minimum level of work, the chil- dren's office expected her to main- tain a private legal practice and an average of 40 per cent of her bill- ings came from the OCL, he said. "To be sure, that is a signifi- cant percentage of the respon- dent's billing, and the loss of the OCL retainer would have had a substantial impact on the re- spondent's legal practice and her income. But that is not determi- native of her status as a depen- dent contractor. On no account can 39.9 per cent of billings be said to constitute exclusivity or 'near-complete exclusivity,' such as economic dependence on the OCL is established." Near exclusivity "necessar- ily requires substantially more than 50 per cent of billings. If it were otherwise, exclusivity — the 'hallmark' of dependent contrac- tor status — would be rendered meaningless," said Huscroft. e appeal court also said the previous decision failed to con- sider all the relevant factors going to economic dependence, includ- ing whether any dependence was self-induced. e relationship was also not continuous and the OCL did not have a high degree of control over urston's work, said the appeal court. e OCL also reserved the right to terminate the retainer agreement at any time, without fault or liability. "In short, the OCL was one of the respondent's clients — a very important client, but only one of her clients. e loss of a client will be more or less significant to any contractor, but care must be taken in applying dependent contractor case law to professionals such as lawyers working under retainer agreements," said Huscroft. SOMETIMES > pg. 12 Great perks. Happy employees. Extend employee experience beyond the workplace with WorkPerks®. 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