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September 1, 2010

Employee or independent contractor?

Ligocki v. Allianz Insurance Company of Canada (2010), 100 O.R. (3d) 624 (S.C.J.)

The issue on this motion was whether the plaintiff was an employee or an independent contractor for the purpose of calculating IRBs.

Prior to the motor vehicle accident the plaintiff worked as a personal support worker for an elderly man, Mr. Deluca. Although he had initially been employed by the Victorian Order of Nurses, when it discontinued services, the plaintiff entered into an oral agreement to continue working for Mr. Deluca. The plaintiff conducted himself as if he was an independent contractor by issuing invoices and identified himself as self-employed to the accident benefits adjuster.

The Court held that despite the plaintiff's self-identification as an independent contractor, the facts indicated he was an employee, since he did not provide supplies or equipment, reported to Deluca, and did not undertake any financial risk.

One would have thought that the clear, repeated assertion by the plaintiff that he was an independent contractor would have been determinative of the issue. This decision seems to bring increased uncertainty into this area. It remains to be seen whether the decision will be appealed.

1 comment:

  1. This becomes even more difficult when companies treat their employees as subcontractors or independent owner/operators to avoid tax, WSIB and employee benefits, and the insured reports income for tax as a self-employed individual. The reality is that they are indeed employees, and yet section 64.1 (old SABS) limits what can be included to what has been reported for tax purposes. We have found that it is necessary to review each matter on a case-by-case basis.