Using independent contractor not a “get out of jail free” card

April 12, 2017 Stringer LLP Conferences, Employee Relations, Employment/Labour Standards, HR Policies and Procedures, Human Resources, Notice, Damages and Settlements, Payroll, Recruiting and Hiring, Source Deductions and Reporting, Training and Development, Wages and Compensation

A business’ obligations to its workers will depend on whether the workers are employees or independent contractors. However, a recent decision reminds us that, even where a worker is a true independent contractor, this distinction may not preclude a business being liable to third parties, such as customers, when the worker does something wrong.

In Chieffallo v Ghuman o/a Appleseed Snowblowing Service, the employer ran a snow removal business. The plaintiff alleged that a snowblower operator assaulted her by intentionally hitting her with the snow and slush discharge from his snowblower, and using a highly offensive racial slur against her.

The plaintiff sued the employer, rather than the snowblower operator, in small claims court. The plaintiff did not allege that the employer itself had done anything wrong; the only issue at trial was whether or not the employer was vicariously liable for the actions of the worker.

The trial judge found that the operator was an independent contractor, not an employee, and that the operator’s actions were not “connected to the work for which he was contracted”. As such, the judge found that the employer was not liable for the operator’s actions.

The Appeal

In upholding the trial judge’s decision, the appeal court noted that employers are more likely to be found vicariously liable for the actions of employees as opposed to those of independent contractors. This is because employers exercise more control over employees by the very nature of the employment relationship. However, the employee/independent contractor distinction is not the end of the inquiry.

If the employer’s business creates or enhances a risk, and the wrong in question flows from that risk, then vicarious liability is more likely to be appropriate. Courts will also consider two policy objectives: ensuring a just and practical remedy for the party injured party, and deterring future harm. Courts have held that, generally, the risks of operating a business should be borne by the business, and not by employees, contractors, or the public.

In the case at hand, the appeal court agreed with the trial judge that clearing snow from driveways did not create or enhance the risk of such an assault. Further, the court noted that the employer’s policy prohibited operators from interacting with customers, and customers were told to communicate any complaints to the head office, and not directly to operators.

The takeaway

There is no hard and fast rule for when vicarious liability will be imposed on an employer for the wrongful actions of one of its workers; it will depend on the particular facts and circumstances of each case. It will not be determined solely by the independent contractor/employee distinction, although this can be an indicator.

Employers should consider whether there are any risks created or enhanced by their business, and should take steps to mitigate such risks by instituting appropriate policies, training workers, and using progressive discipline where appropriate.

To learn more about the factors courts use to decide whether a worker is an employee or independent contractor, and the way in which this can impact your business, register to Learn the Latest^® at the Ontario Employment Law Conference.

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Stringer LLP

Employment and Labour lawyers at Stringer LLP

Stringer LLP is a leader in Canadian HR law. For over 50 years, they have taken a client-centered approach to responsive service, representing employers with labour relations and employment problems. Their firm’s practice covers a broad spectrum of HR law, including employment law, occupational health & safety, labour relations and arbitration, human rights, workers’ compensation, pay equity and corporate immigration, as well as issues under the Accessibility for Ontarians with Disabilities Act. They also provide training, seminars and conferences on the above topics. Read more