Ontario, Canada Court Determines Plaintiff Employee (Not Independent Contractor) Wrongfully Terminated By Common Employers

• Published date: 30 September 2022
• Subject Matter: Employment and HR, Contract of Employment, Unfair/ Wrongful Dismissal
• Law Firm: Littler - Canada
• Author: Ms Rhonda B. Levy and George Vassos

In a wrongful dismissal action against four corporate defendants that were part of a family business, the plaintiff claimed the defendants were common employers, that he was their employee prior to his dismissal, and was therefore owed damages for pay in lieu of notice. The defendants in Scamurra v Scamurra Contracting, 2022 ONSC 4222, conceded the plaintiff was an employee for two of three family businesses; however, they argued that he was an independent contractor for the third. The court disagreed and found the plaintiff was an employee, and that the defendants wrongfully terminated his employment without cause and without sufficient notice (only 6.5 months' notice was provided but 22 months' notice was required). Accordingly, the court and found the defendants were common employers and were jointly and severally liable for the damages ($119,860).

Background

The plaintiff is a member of the Scamurra family. The defendants are Scamurra family business ventures that were controlled initially by the plaintiff's father and subsequently by his brothers. The plaintiff worked for these businesses for 26 years.

From 1986 to 1991, he was a general labourer for SS Contracting, which provides sewer, watermain, and drain services, and has snow plough contracts.

From 1991 until 2005, he worked at Scamurra Banquet Hall (SBH) managing the hall and catering business.¹

In 2005, the plaintiff was transferred to another family business, AFJ Disposal Inc. (AFJ), a garbage disposal company. While working there he drove a company truck, hired part-time drivers who reported to him and dispatched them to customers, handled customer requests, and fielded complaints about outstanding invoices referring them to his brother for payment.

In December 2012, the plaintiff's employment with AFJ was terminated without cause and he was given 6.5 months' notice. The plaintiff claimed wrongful dismissal against the defendants alleging that they were common employers, and he was their employee for 26 years.

Decision

Was the plaintiff an employee or an independent contractor?

The court stressed that caselaw indicated that the central question when considering whether a worker is an employee or an independent contractor is, "...whether the worker who performs services for an entity does so as a person in business on their own account." It stated further that the caselaw provides that the non-exhaustive list of factors to consider include:

• The level of control the entity exercises over the worker's activities;
• Whether the worker is limited exclusively to the service of the entity;
• Whether the worker provides their own equipment or has an investment or interest in the tools relating to their service;
• Whether the worker hires their own helpers;
• The degree of financial risk taken by the worker;
• The degree of responsibility for investment and management held by the worker; and
• The worker's opportunity for profit in the performance of their tasks.

Taking these factors into account, the court concluded that, for the following reasons, the plaintiff was AFJ's employee:

• AFJ provided the plaintiff with...