It’s a hotly debated and highly complicated situation when interpreting the differences between the independent contractor and the employee. They’re often swimming around in the same waters, especially in long-term arrangements where services are provided in the workplace.  On the other hand, from a legal point of view, they couldn’t be more different.

“Although on first appearance these two forms of work arrangement may look similar, in law there is as large a gap between an employee and an independent contractor as there is between the north and south poles.”

- Employment Contract Lawyer, Bob Yeager

If you think a written contract of employment is the be all and end all in determining who is who, think again.   Take a look at the common misconceptions below.

You believe you’re an independent contractor because:

• You have a written and signed contract of employment clearly stating you’re an independent contractor.

• Your “employer” has decided it’s more advantageous if you’re an independent contractor, and you agree.

• You invoice for services rendered and include GST in the total.

• You get paid in gross amounts without deductions and remit your own deductions on your tax return.

• You provide a professional service through your own personal corporation.

Unfortunately, none of the points above automatically guarantee your position according to the law.  In many cases, only a court of law can decide whether or not you’re considered a true independent contractor.  This is largely determined by the circumstances surrounding the employment relationship between the two parties.  It’s a highly detailed and judicious process with a careful legal examination of each case and the employment contract therein.

An Employee’s Contract of Employment

The relationship that exists in this situation is often described as being between the master (employer) and the servant (employee). The law refers to this type of agreement as a Contract FOR Service, meaning that the employer determines the type of work and may control how, when and where the employee does it. Unless there is an enforceable clause or written employment contract that states otherwise, the employee is protected by the common law principles of reasonable notice. If their position is terminated without it, the employee may be eligible for a wrongful dismissal claim.

An Independent Contractor’s Employment Contract

Examples of independent contractors can include web designers, computer programmers, home renovators, editors, project managers, etc.  The employer or client doesn't usually have control over how the contractor does their work, but does expect the job to get done, as agreed between both parties. The law refers to this type of agreement as a Contract OF Service.  These contracts of employment are generally characterized by a defined termination period and a true independent contract will adhere to its terms. Unlike the employee, the independent contractor can't claim wrongful dismissal and doesn't have any claims to reasonable notice because typically, once the work is completed, so is the contract with the client.

When an Employment Contract Ends

Many independent contractors and employers have no idea whether or not their working arrangement is legally valid, until things turn sour.  Once the courts become involved, the scrutiny into the status of the worker begins. If you’re considered a contractor with an employment contract stating the same, but are involved in an arrangement similar to an employee, you may be entitled to employee benefits.

How can an independent contractor remain independent in the eyes of the law? Find out more in the following article: How Contractors Can Remain Contractors, or for immediate answers and an in-depth look into your own situation please contact Employment Contract Lawyer, Bob Yeager.