WestlawNext Canada insight Blog

Digest of the Week | Distinction between Independent Contractors and Employees

On consideration of relationship between franchisee and franchisor, franchisee was employee rather than independent contractor and entitled to compensation

Modern Cleaning Concept Inc. v. Comité paritaire de l'entretien d'édifices publics de la région de Québec | 2019 SCC 28 | Supreme Court of Canada

Labour and employment law --- Employment law — Nature of employment relationship — Elements constituting relationship between employer and employee — No chance of profit by employee

M provided cleaning and maintenance services through network of approximately 450 franchises — FB entered into franchise agreement with M, but, five months later, terminated agreement — FB had become increasingly frustrated by his lack of profits and inability to develop his business — Comité paritaire de l'entretien d'édifices publics de la région de Québec, responsible for application of Decree respecting building service employees in the Québec region, commenced legal proceedings against M on behalf of FB — Comité argued that, pursuant to Act respecting collective agreement decrees, FB was "employee" and, as such, was entitled to compensation — Trial judge concluded that FB was independent contractor and was not entitled to amount claimed — Majority of Court of Appeal held that trial judge misapprehended nature of contractual relationship between M, its clients and FB — Majority concluded that FB was actually employee and M was ordered to compensate FB — M appealed — Appeal dismissed — In present case, FB did not assume business risk and had no meaningful opportunity to make profit — Hence, it could be said that FB was "employee" within meaning of Act — As such, relationship between FB and M was subject to Decree — Therefore, decision of majority of Court of Appeal should be confirmed.
© Copyright Westlaw Canada, Thomson Reuters Canada Limited. All rights reserved.