notice of termination. The court disagreed,
finding that they were dependent contractors,
in light of the following factors:
(a) With the exception of a few weekend
jobs, the Keenans did work exclusively
for Canac for over 20 years.
(b) Canac maintained effective control
of the business. Canac established
service standards, received deficiency
notices and complaints, dictated
work flow, set deadlines and provided
support with respect to payroll
obligations. While the Keenans were
responsible for paying installers, the
installers were not the Keenans’ employees
and the rates of pay of both
the installers and the Keenans were
set and eventually paid by Canac.
(c) By providing an office and a filing
cabinet at its business premises, as
well as a pager, car phone and mobile
phone, Canac supplied the Keenans
with many of the tools they required.
(d) After signing the agreement, the
Keenans continued to be paid on
a piece-work basis for each box or
unit installed. There was no genuine
opportunity to generate additional
profit and there was no correlation
between the degree of risk assumed
by the Keenans and the expectation
of profit.
(e) To the outside world, the Keenans
were Canac representatives, and the
Keenans considered themselves loyal
employees of Canac. They enjoyed
employee discounts, were required
to wear the company logo on clothes
and the vehicle they used for work
and had company business cards.
Lawrence even received a ring for 20
years’ service.
The above-noted evidence overwhelmingly
favoured the conclusion that the
Keenans were dependent contractors. As a
result, the court concluded that they were
entitled to pay in lieu of 26 months’ reasonable
notice of termination at common
law, amounting to over $124,000 in damages.
The court also awarded the Keenans
$70,000 in legal costs as a result of the
wrongful dismissal.
legal words
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TIPS FOR HR PROFESSIONALS
Keenan v. Canac Kitchens should remind
businesses of the risks they assume (or
may not avoid) when entering into independent
contractor relationships. Just
because you have an independent contractor
agreement with workers does not
mean that they are independent contractors.
Keep the following tips in mind:
(a) When retaining independent contractors,
consider your organization’s
liability if they are later deemed to be
employees or dependent contractors.
Your organization may be required
to pay years of taxes and statutory
withholdings and deductions. Upon
dismissal, pay in lieu of notice of termination
may also be owing.
(b) At the hiring stage and throughout
the course of the relationship, carefully
consider the factors outlined
above. No one factor is determinative.
When in doubt, seek legal
advice.
(c) Include a termination clause in
your independent contractor agreements
that limits the worker’s rights
to those set out in the Employment
Standards Act, 2000, in case the
worker is dismissed and later found
to be an employee or dependent
contractor.
(d) When introducing a new contract
that imposes such limitations to existing
workers, provide them with
a new benefit – known as “consideration”
– to render the contract
enforceable, particularly where they
were not bound by the limitation in
the past. Consideration can take the
form of a promotion, an increase in
compensation or a one-time bonus.
(e) Give workers the opportunity to obtain
independent legal advice before
requiring them to enter into any independent
contractor arrangement.
n
Rich Appiah is a partner at Israel Foulon
LLP in Toronto. He and his associate,
Andrew Carricato, regularly advise employers
with respect to the many complex issues
that affect employment relationships.
14 ❚ JULY/AUGUST 2015 ❚ HR PROFESSIONAL
