Canadian Employment Law Today

Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com Canadian HR Reporter, a Thomson Reuters business 2016 MACPHERSON LESLIE AND TYERMAN REGINA with Meghan McCreary Ask an Expert Meghan McCreary Ask an Expert 2 | April 27, 2016 Answer: Employment standards legislation in Canada applies to "employees" and "em- ployers." Who constitutes an "employee" under employment standards legislation is expressly defi ned in the legislation. A true independent contractor is not an employee under employment standards legislation or at common law, and therefore is not covered by the protections of the legislation. In many cases disputes arise respecting whether a worker is an employee, deserving of the protections of employment standards legislation, or whether the worker is an inde- pendent contractor, exempt from the shield of legislation. e ultimate question respect- ing the legal status of a worker is whether the worker is performing services "as a person in business on his own account:" see 1671122 Ontario Ltd. v. Sagaz Industries Canada Inc. If the worker is in business on his own account, he will be an independent contrac- tor, not an employee. In assessing whether a worker is an independent contractor or an employee, the following factors are relevant to consider: • e level of control exercised by the em- ployer over the worker's activities. • Whether the worker provides his own equipment and hires his own helpers. • e degree of fi nancial risk assumed by the worker. • e degree of responsibility for investment and management assumed by the worker. • e worker's opportunity for profi t in the performance of his tasks. e greater the level of control the worker has over his activities, the more likely the worker is an independent contractor. If a worker is found to be a true indepen- dent contractor, a contract for services be- tween the independent contractor and his client does not need to comply with any of the minimum protections of employment standards legislation. e parties are free to contract for whatever terms and conditions they can mutually negotiate. See 671122 Ontario Ltd. v. Sagaz Industries Canada Inc. 2001 CarswellOnt 3357 (S.C.C.) Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com Termination of employee on job-protected leave Question: If an employer has to cut the job of an employee who is on a job-protected leave due to unavoidable financial reasons, how should it proceed to avoid liability? Answer: Employers are entitled to eliminate positions due to bona fi de business reasons — even positions held by employees who are on leaves protected by employment stan- dards legislation, such as maternity leave and compassionate care leave. It is critical, how- ever, that the employer is able to prove that the elimination of the position is for a bona fi de reason, such as an economic downturn, and not for any reason related to the fact that the employee is on a protected leave. If an employee brings a complaint that the elim- ination of her position was discriminatory, in many provinces the onus is on the employer to show there was no discriminatory reason for the dismissal. It is therefore essential that before a position is eliminated, the employer ensures it can identify and produce the busi- ness records which demonstrate the fi nan- cial need for the decision to abolish a job. A job that is eliminated due to a fi nancial downturn is still a dismissal without cause under employment standards legislation and the common law. As such, an employer is required to provide notice of termination or pay in lieu of notice. For employees who are on a statutory protected leave, such as pa- rental leave or compassionate care leave, no- tice of termination cannot run concurrently with the job-protected leave. Practically speaking, this means the employee must be allowed to complete his leave and pay in lieu of notice must be provided at the conclusion of the leave, assuming that the job was abol- ished during the leave. A best practice for employers who need to eliminate the job of an employee on a protected leave is to advise the employee as soon as possible to give him a fair opportunity to consider new job op- portunities while on leave. At the same time, advise the employee that he will be provided with pay in lieu of notice at the conclusion of her leave (again, assuming the job is abol- ished before her leave ends). While employ- ees are entitled to minimum statutory pay in lieu of notice upon their termination, they may also be entitled to additional pay in lieu of notice under the common law. In such cases, I recommend obtaining a general re- lease for any severance paid in excess of the statutory minimum. e release is best ex- ecuted by the employee at the conclusion of the statutory protected leave. For employees who are on a disability leave that is not protected by legislation (for example, long term disability which exceeds the period of time protected by legislation), an employer can provide notice of termina- tion while the employee is on leave. at no- tice can run concurrently with the leave. Meghan McCreary is a partner practicing la- bour and employment law with MacPherson Leslie & Tyerman LLP in Regina. She can be reached at (306) 347-8463 or mmcreary@ mlt.com. Independent contractors and employment standards Question: Do independent contractors have any protections under employment standards legislation or are companies free to include any demands in such contracts? Employment law blog Canadian Employment Law Today invites you to check out its employment law blog, where editor Jeffrey R. Smith discusses recent cases and developments in employment law. The blog includes a tool for readers to offer their comments, so discussion is welcome and encouraged. The blog features topics such as miscarriage as a disability, employment contracts, mental stress compensation, and workplace violence. You can view the blog at www.employmentlawtoday.com.

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