Canadian Employment Law/Employment Relationship

Overview
The existence of an employment relationship is a necessary precondition to the application of the various employment laws. Although other situations exist, most commonly the issue of whether an employment relationship exists is in misclassification circumstances. Misclassification refers to situations where workers are classified as independent contractors, but certain qualities of the relationship point to them being employees. Although there are benefits to independent contractor relationships, workers classified as such are not subject to employment standards in any Canadian province. Workers who successfully argue that they are a misclassified employee may entitlements under the employment standards legislation and the common law. This may include vacation pay, termination pay, minimum wage among other entitlements.

Existence of the Relationship
Answering whether a relationship of employment exists between two individuals can be complex. Canadian and English courts have formulated a variety of tests which were reviewed by the Supreme Court of Canada in the case of Sagaz. The Sagaz case included an issue of misclassification.

According to the Court in Sagaz there is no concussive test that can be universally applied to each relationship, instead a search for the total relationship between the parties must be made in order to determine whether an employment relationship exist.