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A contract can call someone a contractor. The working relationship gets the last word: control, tools, integration, financial risk, and termination.
§ 01: Introduction
A contract can call someone a contractor in bold type. The working relationship still gets the last word. Ontario law looks at substance: control, risk, tools, and integration.
Misclassification creates real cost. For engaging companies, the exposure is unpaid statutory entitlements, CPP and EI contributions, and tax consequences. For workers, the exposure is being treated as a contractor while operating like an employee, without the protections.
§ 02: Control
Does the engaging party direct when, where, and how the work is done? The more granular the direction, the closer the relationship to employment. A contractor relationship accommodates a scope statement and a result, not a schedule and a supervisor.
§ 03: Tools and integration
Who provides the equipment, software, workspace, and brand? A worker who sits at a desk inside the engaging party's office, uses the engaging party's systems, and carries the engaging party's email address is harder to characterise as independent.
§ 04: Exclusivity
Is the worker free to provide services to other clients? Exclusivity does not determine the answer on its own, but a contract that restricts outside work while describing an independent relationship is a common source of risk.
§ 05: Financial risk
A contractor bears a real chance of profit and a real risk of loss. An arrangement that guarantees a monthly minimum, covers expenses without markup, and does not expose the worker to financial outcomes looks more like employment than independence.
§ 06: Termination
Employment Standards Act termination and severance rules apply to employees, not genuine independent contractors. A contractor may still have contractual termination rights, and the classification can be challenged despite the label used in the agreement.
§ Continue reading
Contracts
The dangerous clause rarely announces itself. Read scope, payment, termination, IP, liability, and disputes before the contract gets leverage.
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Employment
The role may be exciting. Give the termination, compensation, bonus, restrictions, and IP clauses a colder read before signing.
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§ Apply this note
A consultation applies the framework above to the specific matter in front of you, with options, risk points, and a recommended next step.
Toronto · Ontario