The Law of Work
  • Home
  • About
  • Professor David Doorey
  • In the Media
  • Books
  • Guest Contributors
  • Useful Links
    • Archive
  • Home
  • About
  • Professor David Doorey
  • In the Media
  • Books
  • Guest Contributors
  • Useful Links
    • Archive
The Law of Work
Law of Work Archive

When is a Salesperson an "Employee" Under Employment Standards Laws?

by David Doorey April 17, 2012
written by David Doorey April 17, 2012

A person is retained by Company X to sell newspaper subscriptions door-to-door.  She is driven to a neighbourhood at a set hour, given a list of addresses and a script.  She signed a contract that says she is an “independent contractor”, and not an employee.   After a while, she asks why she isn’t being paid minimum wage and vacation pay.  She is then terminated by X, allegedly for poor sales.
The employee files a complaint under the ESA, claiming unpaid wages, vacation pay, and damages for reprisal on the basis that she was dismissed for asking for her ESA entitlements.  Company X argues the ESA does not apply, because the complainant was not their employee.  Who wins?
These were the facts in a recent decision of the OLRB in Schiller v. P&L Corp. The Board found in favour of the employee.
First, the Board found that Schiller was an ’employee’, notwithstanding her contract said she was an independent contractor. How a contract characterizes a worker (’employee’ or ‘independent contractor’) is not very important in these cases.  That’s because tribunals and courts know that the employers write the contracts, and the employees just sign them.  If employers can just call someone a ‘independent contractor’ and thereby avoid all laws that protect employees, then employment laws would be meaningless.  Therefore, we need to look at what the workers actually do.  Are they in business for themselves, as entrepreneurs, or are they really just working for the employer?
Here, the Board finds that the employer controlled virtually every aspect of the work:

In my view it is clear that in performing the work, Ms. Schiller was not engaged in business on her own account.  Based on Mr. Cupido’s own evidence, he exercised substantial control over Ms. Schiller’s activities.  Mr. Cupido provided a script and materials, including most significantly the list which allowed Ms. Schiller to solicit subscriptions on behalf of the Ottawa Citizen.  Ms. Schiller could not negotiate with the Ottawa Citizen for a different commission, and could not increase her ability to earn the predetermined commission by doing the work at times or in neighbourhoods other than those determined by Mr. Cupido.  Mr. Cupido testified that Ms. Schiller was free to work on weekends; however, he also testified that he provided the list to Ms. Schiller at the beginning of the week and reclaimed the list at the end of the week, making it impossible for Ms. Schiller to work on the weekends.  Accordingly, I find that Ms. Schiller was an employee within the meaning of the Act.

Second, Schiller was a ‘route salesperson”, and therefore did not fall into the obscure exemption buried in Reg. 285/01, Section 2(h). That section excludes from minimum wage and vacation pay coverage commissioned salespeople who work outside of the workplace.  “Route salespeople” are  not included in that exemption.  The Board discusses the meaning of Section 2(h), and explains that the intent of the section (citing a 1976 decision),

is clearly to remove the burden from an employer of paying vacation pay to those salesmen over whose time sheets he has little or no control.  The prime example would be the door to door salesman whose employer is not aware of how many hours the employee works on a day by day basis.

A route salesperson is someone who follows a particular route over the course of a day where the “employer exercises substantial control over the hours of work and the manner in which the work is performed”.  That was the situation in this case.  The employer controlled the list of potential customers, stayed in the area throughout the shift to keep an eye on her, decided the neighbourhood where Schiller was to work, and provided her with a script of precisely what to say.  Therefore, Schiller was not exempt from ESA coverage under the salesperson exemption.
Third, the Board finds Schiller was dismissed as a reprisal for claiming her ESA rights, dismissing the employer’s argument that the terminated was due to poor sales. The employer has the burden to prove the dismissal was for reasons unrelated to the employee’s claim for ESA entitlements, and it failed to do so.  The dismissal took place 1 day after Schiller asked for her ESA entitlements.  Therefore, this was an unlawful reprisal, contrary to Section 74 of the ESA.
Remedy
The Board ordered the employer to pay:
$ 501.28, unpaid wages based on minimum wage for hours worked, plus two months pay to compensate for lost income for the time it reasonably should have taken to find a new job (Schiller claimed it took her 7 months to find new work, but provided no evidence of her job search efforts, so the Board set the time at 2 months), plus one month’s pay for loss of the “reasonable expectation of employment”, plus vacation pay based on all of these lost wages, for a grand total of $3, 219.84.
Issue for Discussion

What do you think about the tribunal’s decision to ignore the contract term saying Schiller was an “independent contractor”?
Neoclassical law and economics scholars argue that courts and tribunals should just enforce whatever the contract says.  On their theory, if the worker wants to be an “employee”, they will bargain that.  Alternatively, if there is value to the business in having workers treated as “independent contractors”, they will offer the worker something of value in exchange for the term declaring them to be ‘independent contractors’.   So the contract represents the give and take of ‘free’ bargaining, and the courts/tribunals should respect that.  Do you agree with that argument?  Why or why not?

 

2 comments
0
FacebookTwitterLinkedinEmail
David Doorey

Professor Doorey is a Full Professor of Work Law and Labour Relations at York University. He is Academic Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and a Senior Research Associate at Harvard Law School’s Labor and Worklife Program. Professor Doorey is a graduate of Osgoode Hall Law School (LL.B., Ph.D), London School of Economics (LLM Labour Law), and the University of Toronto (B.A., M.I.R.).

Leave a Comment Cancel Reply

You must be logged in to post a comment.

previous post
An Evening with Professor Paul Secunda Discussing the Wisconsin Attack on Public Sector Unions, and its Backlash
next post
On Pilot Fatigue, Planets, and Charter Challenges

You may also like

This Blog Entry is About the Lunacy of...

July 21, 2019

A Cross Country Update on the Card-Check versus...

October 3, 2018

The Folly of Not Voting to Strike in...

September 16, 2018

Unifor Posts Photos of Replacement Workers as Gander...

September 10, 2018

A Wrongful Dismissal Case and the Absence of...

August 29, 2018

China Said to Quickly Withdraw Approval for New...

August 27, 2018

The Latest Hot E-Commerce Idea in China: The...

August 27, 2018

The Trump Administration Just Did Something Unambiguously Good...

August 27, 2018

Unstable Situations Require Police In Riot Gear Face...

August 27, 2018

Trump’s War on the Justice System Threatens to...

August 27, 2018


Follow Us On Social Media

Substack
Bluesky

BlueSky Latest Posts

No posts available.

Categories

  • Alberta
  • Artificial Intelligence
  • Australia
  • British Columbia
  • Charter of Rights and Freedoms
  • Childcare
  • Class Action
  • Climate and Just Transition
  • Collective Bargaining
  • Common Law of Employment
  • Comparative Work Law
  • competition law
  • construction
  • Constructive Dismissal
  • COVID-19
  • Diversity
  • Employee Classification
  • Employment Insurance
  • Employment Regulation
  • Europe
  • Financial Industry
  • Fissured Work
  • Freedom of Association
  • frustration of contract
  • Gender
  • Gig Work
  • Health and Safety
  • Health Care
  • Human Rights
  • Immigration
  • Interest Arbitration
  • International Law
  • Labour Arbitration
  • Labour Economics
  • Law of Work Archive
  • Legal Profession
  • Manitoba
  • Migrant Workers
  • Minimum Wage
  • New Zealand
  • Newfoundland
  • Nova Scotia
  • OLRB
  • Ontario
  • Pension Bankruptcy
  • Privacy
  • Public Sector
  • Quebec
  • Real Life Pleadings
  • Saskatchewan
  • Scholarship
  • Sports Labour
  • Strikes and Lockouts
  • Student Post
  • Supreme Court of Canada
  • Tax Law
  • technology
  • Transnational Law
  • Uncategorized
  • Unions and Collective Bargaining
  • United States
  • Videos
  • Women and Work
  • Wrongful Dismissal
  • Home
  • About
  • Guest Contributors
Menu
  • Home
  • About
  • Guest Contributors
  • Legal Scholarship
  • Useful Links
  • Archive
Menu
  • Legal Scholarship
  • Useful Links
  • Archive

2020. Canadian Law of Work Forum. All Rights Reserved.