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The Question

I was employed as an independent contractor at a gym that closed because of COVID-19. A dozen other workers and I haven’t been paid for the work we did in February. The owner claimed they lost so much revenue that they won’t be able to pay us. What can we do?

The First Answer

Alison Longmore, partner, Jewitt McLuckie & Associates, Ottawa

Ontario’s state of emergency was not declared until March 17 and is not a valid reason to justify withholding payments owed for work performed in February. You are entitled to payment owed for services performed pursuant to the terms of your contract with the gym.

Unfortunately, your remedies may be limited if the gym has closed entirely. Independent contractors are not covered by Ontario’s Employment Standards Act and cannot complain to the Ministry of Labour for unpaid wages. Please note that other provinces are regulated by different minimum standard legislation and slightly different rules may apply.

Your only remedy is likely pursuing a small claims court action for breach of contract and loss of earnings. If you have a written contract with the gym, it may set out specific penalties or require you to go to private arbitration instead of filing a lawsuit, or both.

You may also wish to seek legal advice to see if you can advance an ESA claim or a wrongful/constructive dismissal claim on the basis that you were wrongfully classified as an independent contractor. The answer to this question includes consideration of whether the gym controls your working relationship in terms of setting hours, whether you work exclusively for the gym and whether the gym provides all the equipment. We recommend you seek legal advice before deciding which course of action to pursue.

Finally, if you were self-employed, you may wish to apply for the new Canada emergency response benefit, available from March 15 for up to 16 weeks for periods of unemployment related to COVID-19. Please check here for the eligibility conditions.

The Second Answer

Marylee Davies, Partner, Farris LLP, Vancouver

There is a legal distinction between independent contractors and employees. In many provinces including British Columbia and Ontario, protections set out under employment standards legislation are applicable to employees. In New Brunswick, the legislation explicitly excludes independent contractors, while in most other provinces, the legislation defines employees in a way that excludes independent contractors.

For instance, under the B.C. Employment Standards Act, which is enforced by the government’s employment standards branch or ESB, independent contractors are not employees and do not receive the same protections. The terms of their engagement, including remuneration, are typically set out in a written contract for services agreement.

In B.C., the ESB takes an employee-centred approach to resolving disputes, and it is worth noting that even if your previous employer called you an independent contractor, the ESB could still decide that you were an employee if the relationship was characteristic of a typical employee-employer relationship.

Whether you are an employee or an independent contractor, you are entitled to be paid. Employee wages can be collected by making a claim through the ESB, and independent contractor fees can be collected through making a claim through the court system or here in British Columbia through the Civil Resolution Tribunal (claims under $5,000).

There is, however, a practical consideration in either scenario. If the company is experiencing financial difficulties or has a liquidity problem, or both, then you may have a hard time collecting independent contractor fees in court. There are more protections as an employee: For instance, in British Columbia, the Employment Standards Act provides a mechanism by which you can pursue the directors of the company personally for payment of your wages.

This means that the people in charge at your former workplace will be required to pay your wages out of their own pocket, even if the company has no money. Again, similar provisions exist under other provincial employment standards legislation.

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