Canadian Ruling Accounts for Past Contractor Status When Releasing an Employee

For Canadian employers, the required notice of termination for a worker is no longer a simple calculation based on years worked as an employee. A January 2019 decision in Ontario determined that, in some cases, if a worker’s service included engagement as a contractor for an extended period before being hired as an employee, that time as a contractor should be accounted for when issuing a notice of termination.

In the case of Cormier v. 1772887 Ontario Limited, eight years of additional contractor service – between 1996 and 2004 – resulted in a change from 29 weeks’ pay in lieu of notice to 21 months of pay. The original complaint was based on the plaintiff’s claim of years working as a dependent contractor, but the judge added that the same years of service would also count for an independent contractor.

Takeaway: Employers need to consider the factors involved in any employment relationship carefully – especially in how they handle worker terminations. A long relationship may require a notice of termination period that applies to employees, even if that notice period differs from the original contract. A set of rules for testing worker status and the means of applying those rules will go a long way in avoiding surprises in pay and termination.

Canadian Ruling Accounts for Past Contractor Status When Releasing an Employee

North America

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