Ontario court confirms long-term GM entitled to reasonable notice
On March 20, 2026, Justice Matheson of Ontario's Divisional Court dismissed an appeal by Canada Suites, a short-term rental business, upholding a $25,436 judgment in favour of a general manager terminated without cause or notice after seven years.
The court confirmed that he was a dependent contractor entitled to reasonable notice and ordered Canada Suites to pay an additional $6,000 in appeal costs.
More than 90% of the GM's income came from one company, and he was always on call.
Contract versus working reality
Canada Suites manages furnished rental properties for guests on a short-term basis. The individual worked for the company for about seven years, eventually holding the title of general manager, before being terminated without cause or notice.
He sued for damages claiming reasonable notice and other relief as an employee or as a dependent contractor. On Feb. 11, 2025, the Small Claims Court found that while the GM was not a formal employee, he was a dependent contractor and awarded damages for reasonable notice totalling $25,436 plus interest.
Canada Suites appealed on four grounds:
- misapplication of the legal test for a dependent contractor
- failure to consider key evidence
- misinterpretation of the contract's terms
- an unfair process.
However, Justice Wendy Matheson dismissed all four grounds and upheld the lower court's decision.
Exclusivity and dependency
The pivotal question was whether the GM’s work was exclusive or near-exclusive enough to establish economic dependency. His QuickBooks summary showed income from four sources over more than three years before his termination: Canada Suites, a related company, a family business, and one other source.
Income from Canada Suites alone accounted for more than 90% of his total earnings.
Evidence also showed that the GM "typically worked more than 40 hours a week, and was always on call, which excluded the opportunity to work for others."
Justice Matheson found that Canada Suites had not established a palpable and overriding error in the lower court's finding that his work was exclusive or near-exclusive, and upheld the dependent contractor classification.
What exclusivity really means
The court applied the established standard from prior case law: "Dependent contractor status is a non-employment relationship in which there is 'a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity.'"
Under that same standard, "'minimum economic dependency' is a vaguely worded standard, and its application yields outcomes that are highly context-specific." Further, the court stated: "It follows that a judge's decision as to the nature of a working relationship is generally entitled to deference."
Canada Suites also raised new arguments on appeal regarding the impact of the COVID-19 pandemic and whether the relationship was a series of fixed-term relationships rather than an ongoing one. Justice Matheson declined to consider those new arguments.
