Former independent contractor becomes employee, owed unpaid wages

A remote worker who worked full-time for an employer and who wasn’t allowed to perform other work was an employee entitled to unpaid wages and not an independent contractor, the Ontario Labour Relations Board has ruled.

Full Current was a Winnipeg-based company providing media marketing services to clients in Manitoba, Ontario, and other areas of Canada. Its services included setting up client websites, writing social media advertising, drafting press releases, and other marketing services.

The worker started working for Full Current as an independent contractor in late 2018 periodically on special projects, reporting to the company’s co-owner. The projects would last about one month and she would go three to six months between them.

The worker didn’t work at all for Full Current from January to June 2022 and only did small jobs for her mother’s company during this time. According to the worker, the co-owner offered her full-time employment in June as a copywriter and creative strategist. The position allowed her to work from her home in Ontario.

Verbal job offer after series of contracts

The co-owner verbally offered her full-time hours on two client projects for six months with a salary of $20,000 and no benefits. The worker accepted the offer verbally, although she believed that she would be sent a formal letter of employment.

According to the worker, because the position was full-time, she was told that she couldn’t carry on any other business for profit or retain her own clients on the side. She agreed and started the position in early July.

Full Current provided the worker with a company email address, connected her to its own Google workspace account – through which she received working orders – and proprietary software and workstations. She continued to use her own laptop computer, but she had to report in on a daily basis and received instructions each day on what she was supposed to work on.

A couple of weeks after the worker started her job, Full Current gave her an employee verification letter to her landlord that included her title, salary, and a statement that she was a valuable member of the Full Current team.

Delayed pay

A short time later, the co-owner told the worker that her pay would switch from monthly to biweekly, but this kept getting delayed and never happened. He also told her that her salary would increase to $60,000 per year once Full Current merged with an Ontario company. He showed her proposed merger documents that listed her as an employee with that salary.

At one point, Full Current offered to pay for an airline ticket and hotel in Winnipeg for an in-person meeting with a client, but the worker declined because she hadn’t received any pay yet.

The worker didn’t receive any compensation through October, but she continued working for Full Current, as the company had often been late paying her as an independent contractor but did so in full once it did. The company provided several excuses for the non-payment of her salary.

In late October, the worker received $5,874.80 in four instalments with no statutory deductions. She didn’t receive the rest of her salary, although by that point she had performed all of the work on the assigned projects.

In November, the worker resigned from her employment on a phone call with the co-owner because of her outstanding salary. Her access to Full Current workstations was cut off immediately. She didn’t receive any documents of her compensation for tax purposes.

Complaint over unpaid wages

The worker filed an employment standards complaint for Full Current’s failure to pay her wages. An employment standards officer determined that the worker was not an employee but was instead an independent contractor, so the Ontario Employment Standards Act, 2000 (ESA) did not give him the authority to order Full Current to pay the worker any unpaid wages.

The worker appealed the decision, contending that she was an employee of Full Current.

The board noted that the Supreme Court of Canada set out the legal test for determining if someone was an employee or an independent contractor. While there were many factors, the level of control the employer has over the worker’s activities was an important one, as was who provided the equipment and the degree of financial risk by the worker.

The board noted two factors that suggested that the worker was an independent contractor – Full Current didn’t make any statutory deductions from her pay, and the worker was initially hired to work on two specific projects for a specific amount of money.

Employee status

However, the board found that other factors tipped the scale in the other direction. Full Current provided the worker with the tools to perform her job, other than her own laptop, and exercised full control over her work through regular check-ins, assignments, and the requirement that she not take on other clients, thereby not giving her an opportunity for profit while working. The worker’s email address also identified her as affiliated with the company and essentially authorized her to send emails on the company’s behalf, the board said.

The worker claimed that she worked exclusively for Full Current between July and November 2022 and she expected a salary increase, showing a level of dependency on the job, the board added.

The board determined that the worker was an employee and not an independent contractor, so she was entitled to an order for payment of unpaid wages. Full Current was ordered to pay the worker the balance of her $20,000 promised wages plus $800 in vacation pay - $14,975.20. See Madeleine Kelly v. 7382988 Manitoba Ltd. operating as Full Current Media Agency, 2023 CanLII 85808.