Employee versus Self - Are you an Employee or Self-Employed...

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Are you an Employee or Self-Employed? In a modern cross-depending business relationships status of the Service Provider and its relationships with a Service Taker are not always clear. This is not a problem when mutual transactions are going smoothly. However, when there is a dispute between the parties then, depending on the status of the relationships, there are different ways to define mutual liabilities and consequences of the breaches of those relationships. This brief research will outline major differences between employment and self-employment, as well as it will also outline major remedies available to the parties in case of breaches of the employment contracts. Employment involves one person performing work for another. More specifically Employee is in “Master-Servant” relationships with his Employer, where Employee is a “Servant”, and acts under the direction and control of the “Master” – the Employer. In Ontario, according to the definition provided in s. 1, of the Employment Standards Act , 2000: “Employee” includes, (a) a person, including an officer of a corporation, who performs work for an employer for wages, (b) a person who supplies services to an employer for wages, (c) a person who receives training from a person who is an employer, …, or (d) a person who is a homeworker, and includes a person who was an employee…”; Same section of the Employment Standards Act , 2000, defines “wages” as: 1
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(a) monetary remuneration payable by an employer to an employee under the terms of an employment contract, oral or written, express or implied, (b) any payment required to be made by an employer to an employee under this Act, and (c) any allowances for room or board under an employment contract or prescribed allowances…” Therefore, in general, the Employee is an individual performing works, services and/or providing labour to the Employer under Employer’s full control and direction, and according to the terms of the verbal, written, or implied contract in consideration for wages payable by the latter. If there is no clear written contract of employment, then is case of a dispute the adjudicator will apply some tests to determine the nature of the relationships. The general set of test for determination of the relationships between Employer and Employee was set by Supreme Court of Canada in its decision in case 671122 Ontario Ltd v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983. Justice Major, providing analysis of the relationships between the parties, stated at paragraphs 47, 48: … The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker’s activities will always be a factor. However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the 2
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This note was uploaded on 03/29/2010 for the course HST 810 taught by Professor Thobino during the Spring '10 term at Canadian University College.

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Employee versus Self - Are you an Employee or Self-Employed...

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