Agent was contractor, but still entitled to notice pay

Employer had significant control over him

Recently, perhaps reflecting the growth of the home office and other “extra-office” work relationships, the courts have been defining an intermediate category between permanent employment and independent contractors. In this middle territory, a person can be a contractor but still be entitled to reasonable notice.

An interesting example arose recently in Orleans, Ontario. During his six-year tenure with Re/Max Real Estate, Doug Job, now 42, had started out as an employee but then signed several agreements stipulating that he was a contractor.

However, while he was responsible for reimbursing Re/Max for liability-insurance premiums and for paying his own expenses, Job was also obliged to follow Re/Max procedures and work expressly for them, on their premises.

The agreement also said that Job was to give Re/Max 30 days’ notice of termination, but that Re/Max could dismiss him without notice if they were dissatisfied with his performance.

A dispute developed in the office after Job calculated that Re/Max was collecting $64,000 in insurance premiums from the agents but paying the insurer only $46,000. However, he did not make much of this, and after the franchise owner invited any “whiner” to quit, Job told the owner that he was still “on board.”

But the owner had also decided that the agents were best advised to use only registered house inspectors, and Job became concerned that the person he often used did not qualify. He faxed the owner’s memo on the subject to the inspector, who complained to Re/Max.

Angered over this, the franchisor gave Job two hours to clear out of the office, arguing that she could do this under the agreement.

Justice Margot Panet of the Ontario Superior Court has held that, despite the great amount of control Re/Max exercised over Job, he was an independent contractor, not an employee.

However, his relationship with the brokerage fell in that limbo area where Re/Max was still obliged to provide reasonable notice of termination.

In this case, Justice Panet set that notice at six months, and topped up Job’s damages, to a total of about $30,000, by adding in his expenses of arranging new work and a refund of that part of his liability-insurance premiums which went to what Re/Max now called “legal fees and contingencies.” Justice Panet has found that nothing in Job’s agreement with Re/Max permitted it to charge him for these latter expenses.

For more information:

Job v. Re/Max Metro-City Realty Ltd., Ontario Superior Court of Justice file 97-CV-004014, Dec. 23/99.

Latest stories