Distinguishing at law between a dependent contractor and an independent contractor can be challenging at the best of times. This issue is important to businesses and organizations because like employees, dependent contractors are owed reasonable notice upon termination, while independent contractors are not. In his decision in Keenan v. Canac Kitchens, 2015 ONSC 1055 Justice Mew provided some additional guidance in making this important distinction. Justice Mew identified the following principles as relevant in determining whether the dependent contractor category should apply to the business arrangement:
In particular, Justice Mew stressed that complete exclusivity or a high level of exclusivity weighs heavily in favour of the conclusion that the dependent contractor category should apply to the business arrangement.
In this case,the plaintiffs, Lawrence Keenan and Marilyn Keenan, were formerly employees of Canac Kitchens("Canac"). Immediately following the termination of the plaintiffs' employment with Canac, Canac drafted a service agreement to set the terms of their new business arrangement which the plaintiffs signed. Under theterms of the agreement, Canac set the rates to be paid to the installers and pay the plaintiffs, who, in turn, paid the installers. The plaintiffs, now operating under the name Keenan Carpentry, supervised the delivery, installation, and service ofkitchen cabinets for Canac for 22 years. Justice Mew found that with some minor exceptions, the plaintiffs worked exclusively for Canac, and further found that Canac condoned the limited outside work performed by the plaintiffs. In addition, the plaintiffs enjoyed employee discounts with Canac; they wore shirts with company logos; and they had Canacbusiness cards.Justice Mew found that to Canac's customers, the plaintiffs were Canac's representatives.
Justice Mew concluded that the plaintiffs were dependent contactors of Canac due to the fact that all of the relevant principles favoured the plaintiffs to a lesser or greater degree with the endresult that their business arrangement was almost exclusively for the benefit of Canac.
Justice Mew's decision reaffirms that businesses and organizations are well-advised to consider the intermediate category of dependent contractors when structuring their business arrangements with contractors.Absent a carefully structured arrangement, businesses and organizations may be held liable for reasonable notice upon termination of theirbusiness arrangement with a contractor who a court deems to be dependent.
In his decision in Khaper v. Air Canada, 2015 FCA 99, Justice Webb states the principle that the duty to accommodate does not survive the termination of employment if the employer legitimately had no knowledge of the employee’s disability at the time of termination.
Davinder Khaper filed a complaint under the Canadian Human Rights Act alleging that his former employer, Air Canada, had discriminated against him based on his mental disability, race and national or ethnic origin in terminating his employment. The Canadian Human Rights Commission (CHRC) dismissed Mr. Khaper’s complaint in a decision rendered on February 6, 2013. Mr. Khaper’s application for judicial review of the decision of the CHRC was dismissed by Justice Kane (reported at 2014 FC 138).
Mr. Khaper commenced work with Air Canada on November 24, 1997. During the time that he was employed, Mr. Khaper received a number of letters of expectation and letters of discipline in relation to his conduct at work. The letters related to either his stealing time from his employer or insubordination. On February 22, 2008 he was issued a disciplinary letter which informed him that if he stole time again, his employment would be terminated. At the grievance hearing related to the disciplinary letter the arbitrator warned Mr. Khaper not to steal time again or else he would be fired.
Almost one year later on January 22, 2009, Mr. Khaper punched in for work at 1:28 PM and, without notifying his supervisor, left work to attend court without punching out. He returned to work around 3:40 PM. Following that incident, Air Canada terminated his employment, effective January 22, 2009.
Mr. Khaper filed a grievance in relation to the termination of his employment. The grievance arbitration hearing was held in March 2009 and the labour arbitrator upheld Mr. Khaper's termination of employment. Mr. Khaper did not allege discrimination at the grievance arbitration hearing.
Following the dismissal of his grievance, Mr. Khaper retained legal counsel in April 2009. Approximately four months after he retained counsel, Mr. Khaper obtained a psychiatric report which, for the first time, indicated that Mr. Khaper had bipolar affective disorder. There was no indication that either Mr. Khaper or Air Canada was aware that he had this disorder prior to the diagnosis thereof in August 2009.
On November 12, 2009, Mr. Khaper’s union wrote to Air Canada to request that his employment be reinstated in light of this psychiatric report. This request was denied by letter dated November 23, 2009.
The CHRC notified Mr. Khaper that his complaint was dismissed because there did not appear to be any link between the alleged discriminatory acts and any prohibited ground of discrimination.
Justice Webb found that Mr. Khaper’s argument on appeal was based on the premise that Air Canada had a duty to accommodate him that survived the termination of his employment and that Air Canada breached this duty when it failed to reinstate him in November 2009.
Justice Webb held that when the disability underlying inadequate job performance is unknown until after the termination and such lack of knowledge is not due to such things as willful blindness or neglect on the part of the employer, the dismissal is not at all based upon a discriminatory ground and no prima facie case exists.
Justice Webb’s decision provides businesses with clarity as to the extent of their duty to accommodate employees’ disabilities being limited to employees’ disabilities during the period of employment of which they have knowledge of. That said, it is important to note that an employer’s willful blindness to or neglect of an employee’s disability will not relieve the employer of its duty to accommodate.
Pinto Wray James LLP welcomes and congratulates Jonas Granofsky on becoming an Associate with our firm. Prior to becoming an Associate, Jonas was a Student-at-Law with Pinto Wray James LLP.
Prior to joining our firm, Jonas studied law at New York Law School, and is a member of the New York State Bar Association. Jonas brings with him experience working as a legal intern at the United States Equal Employment Opportunity Commission, Schwartz & Perry LLP, a prominent New York City employment law firm, and Seiden Health Management Inc.
Pinto Wray James LLP is pleased to announce that Patrick James will serve as Chair of the Just. Magazine Editorial Board effective July 1, 2015. Just. is the official magazine of the Ontario Bar Association, shedding light on industry developments and providing a wide range of fresh perspectives on issues that matter to today’s lawyer. It is circulated to 17,000 lawyers, judges, students and law professors across the province of Ontario.
Patrick is a former member of the executive of the Ontario Bar Association. We wish Patrick much success with his term.
Please follow the link below to read the Ontario Bar Association’s full press release of Patrick James’ appointment: http://www.oba.org/News-Media/News/2015/June2015/OBA-Announces-New-Chair-of-em-JUST-em-Editoria-%21%29
The recent termination of a Hydro One employee following an incident at a Toronto FC soccer match earlier this month has been the subject of extensive public debate. The employee, Shawn Simoes, was part of a group of men who made obscene comments to a City TV reporter, Shauna Hunt. Following the video of this exchange going viral, Hydro One announced that it had terminated Mr. Simoes for a breach of their employee Code of Conduct.
The issue of whether you can be fired for off-duty conduct is not a new one. See our previous blog on this topic here.
The key legal issue is whether the off-duty conduct adversely effects the employer’s workplace or its brand. The factors for an employer to consider include, among others: whether the employee is unionized; the position occupied by the employee(i.e. whether he or she is in a position of leadership); the nature of the conduct (i.e. whether it is illegal); and the extent to which it relates back to the employer or the employee’s duties.
A non-unionized employee can be terminated without cause, assuming the appropriate notice is given or severance is paid.A unionized employee, on the other hand, can generally only be terminated for cause. Because unionized employees have the right to grieve a termination decision through the union, the employer would have to establish ‘just cause’ for its decision to terminate an employee. In exceptional circumstances where the conduct speaks for itself, for example, it is possiblethat even a unionized employee would not receive any assistance from his or her union, in which case, the employee may be left without a remedy depending on the provisions of the collective agreement.
In the case of Hydro One’s termination of Simoes, popular opinion suggests that Hydro One made the right decision. Legally however,there is not much precedent for when such appalling comments rise to a level that justifies termination of an employee (see our previous blog for some examples of conduct that a court has found to justify termination).
Some of the criteria Hydro One should have considered in making its decision to terminate Mr. Simoes include (but are not limited to) the fact that Hydro One is funded with taxpayer dollars; the extent to which the public would have been expected to know that Mr. Simoes was employed by Hydro One (i.e. the genuine impact on Hydro One’s ‘brand’); whether Mr. Simoes is in a leadership role; whether Mr. Simoes has women who report to him;and whether or not he has any relevant disciplinary history.
Since the public does not have access to all of those details, and unless Mr. Simoes challenges the decision, we will never know whether Mr. Simoes’ termination for cause is ultimatelylegally justified. With the foregoing in mind, in the age of social media, employees should remain increasingly cautious about managing their off-duty conduct, as the lines between on-duty and off-duty are increasingly blurred and such disreputable conduct may place their employment at risk.