Historic Court Ruling Grants Employee Rights to Independent Contractors

Employee misclassification is a growing concern in Ontario.

Many employers choose to hire their workers on an ‘independent contractor’ basis, which allows them to skirt a handful of obligations they would otherwise be forced to follow by law.

One of those obligations is reasonable notice before terminating an employee’s contract – employees can essentially fire independent contractors at a moment’s notice and without severance.

The issue was recently front and centre in on Ontario court after an elderly couple who’d spent three decades working together for a Toronto-area furniture company, Canac, were let go with no notice or compensation. Since they were classified by the company as independent contractors, they were due no protection under Ontario’s employment laws.

Rather than accepting their fate as financially strained soon-to-be retirees, the Keenans took their former employer to court on the basis that their employment status had been misclassified.

In a precedent-setting decision, the court ruled in their favour this week and granted them $125,000, derived from a 26-month notice period that their former employer did not abide by. It’s the highest notice period ever awarded to a contractor in Canada.

“It’s a very strong statement against companies who are trying to avoid obligations to their workers by simply calling them contractors rather than employees,” said the couple’s lawyer, Matthew Fisher.

The final court ruling read: “For over a generation they were Canac’s public face to the outside world. Over a period of approximately thirty years — the entirety of their working lives — the Keenan’s income had come from Canac and they relied on that income to support themselves and their family.”

This conclusion complements a ruling by the Ontario Court of Appeal January that the Keenans should have been considered dependent contractors because they were economically reliant on Canac; the vast majority of their income came from working for the company, and they were treated as representatives of the Canac brand in Ontario, according to the Toronto Star.

And the lesson from all this?

“Don’t just sit back and think you can do nothing about it. Talk to somebody,” said Lawrence Keenan, one of the two plaintiffs. “You can either pursue it, or you can sit back and get nothing.”