Court Awards Employee Notice For Time Worked As Contractor feature image

Court Awards Employee Notice For Time Worked As Contractor

When an someone works as a contractor rather than as an employee, it is usually the case that they receive fewer benefits than someone who enjoys the status of being an employee. A contractor may not receive the same benefits as an employee, and they may not be eligible for payment in lieu of notice should their contract be terminated. However, a recent decision issued by the Ontario Superior Court of Justice resulted in an employee’s time as an independent contractor being considered when calculating her common law reasonable notice period.

The history of the parties

The employee worked in marketing and advertising. She began doing contract work for the employer in 1994. At this time she was hired as a Freelance Wardrobe Stylist. At trial, the employee submitted she was working as an employee at this time. The employer maintained she as an independent contractor. From 1996-2004 she worked exclusively for the employer, normally working between 37-40 hours per week, with the exception of the months of May and November, which the court heard were slow months for the industry. From 1996-2004, the employee would invoice the employer, who would pay her without withholding any taxes.

The employee was hired as a Wardrobe Stylist on June 3, 2004. At this time she received an annual salary of $54,000. She was promoted in 2008 and received a higher salary of $65,000.

The employee, along with eighty other employees, was terminated without cause on June 1, 2017. The effective termination date was July 6, 2017. Since the June 1 termination letter she had been paid approximately eight-months-worth of a combination of working notice and pay in lieu of notice.

The positions of the parties

The employee claimed she 24 months of pay in lieu of reasonable notice, arguing that from 1996-2004 she had been working for them as a dependent contractor, and that her work during that time should count when calculating her reasonable notice period.

The employer took the position that years leading up to the employee being hired in a formal capacity should not be used in calculating her reasonable notice period.

The court’s decision

The court agreed with the employee, finding her to have been a dependent contractor from 1996-2004. The court wrote,

“Even if I had concluded that (the employee) was an independent contractor from 1994 to 2004, it would have been wrong in principle to ignore these years of their relationship in determining the reasonable notice period. The court should take all of the circumstances into account and in the immediate case even if I had found (the employee) to be an independent contractor, I would not have ignored those years of their relationship. In either case, considering all of the relevant factors and the particular facts of this case, I conclude that the reasonable notice period (the employee) at the time of her dismissal is twenty-one months.”

It is important to work with experienced employment law lawyers in the event that you have been terminated from a job. At HMC Lawyers, we regularly review severance packages, helping our clients to determine whether a package offered to them is appropriate. We negotiate on behalf of our clients for more compensation when appropriate and represent them in any litigation following a termination. Call us at 1-800-480-3534 or reach us online to make an appointment and get advice about any employment law matters, including those related to payment in lieu of notice.

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