It's important to distinguish if someone is truly a contractor or an employee
Question: What are the employment standards obligations to independent contractors where the deadline and work to be done is outlined in the contract, knowing the contractor will have to work long hours to get it done?
Answer: The simple answer to your question is this: there are no employment standards obligations in such a scenario. The basis for this statement is that if the worker is truly an independent contractor, employment standards legislation would not apply, and the statutory requirements, limitations and obligations relating to such matters as hours of work and overtime would be irrelevant.
With that said, I have written and spoken frequently in recent years regarding the misuse of the term “contractor” or “consultant.” For a variety of reasons, organizations often hire an individual to perform work on the basis that they will be considered to be an independent contractor as opposed to an employee. In many, if not most, of these cases, the individual is really an employee operating under a different name. Courts and government agencies such as the Canada Revenue Agency have made it clear that they will not be bound by the labels which the parties choose to apply to themselves and their relationship, and will look behind the wording of any agreement at the reality of the situation.
A number of tests have been developed by the courts in order to determine the true nature of the relationship. These include:
•degree of control
•tools and equipment
•financial risk/opportunity
for profit
•ability to assign others
•integration
•any other relevant factors
Essentially, courts are attempting to determine through these tests whether the worker in question is in business for herself or is really a part of the organization. By way of example, your organization may choose to retain me to provide legal advice to you. In these circumstances, there would be little doubt that I would be providing advice as an independent contractor (through my firm) and not as an employee of your organization. Conversely, if you decided to make me your new general counsel and pay me an annual salary on the basis that I work full-time and exclusively for your organization, I would be an employee.
Organizations that hire people and treat them as independent contractors do so at their own peril, as they expose themselves to potentially significant liabilities. Among other things, they can be liable for failing to withhold income taxes, employment insurance and other premiums. Furthermore, if the worker is ultimately deemed to be an employee, she will be entitled to notice of dismissal, or pay in lieu thereof, consistent with a regular employment relationship.
In many cases, when I raise this issue with our clients, they assure me the worker is perfectly content to be treated as a contractor. This is usually true until the organization purports to terminate the relationship, or insists that the worker is not entitled to overtime pay or statutory holidays. At that time, many workers realize that they will be entitled to far greater severance if they declare they are employees, which they often do.
