Skip to content

“Worker” vs “independent operators” distinction clarified in Newfoundland and Labrador workers’ compensation decision

Richard Jordan

Is a worker under a contract “of” service or contract “for” service? The former means a worker is an employee whereas the latter means a worker is an independent contractor. The answer to that question has significant consequences for employers and workers alike. In the context of the Newfoundland and Labrador Workplace Health, Safety and Compensation Act (“the Act”), it determines whether employers must pay premiums for its workers, which are often significant.

As some businesses struggle to make ends meet with these rising costs, WorkplaceNL’s Injury Fund is funded by 123.4 per cent from employer premiums.

There has been an increased trend in which employers have to pay premiums for workers properly classified as independent operators – even in contexts where the employers do not even have “workplaces” where workers could be injured. We expect this to become more common as remote workplaces increase.

Stewart McKelvey St. John’s lawyers Twila Reid and John Samms successfully argued before the Workplace Health, Safety and Compensation Review Division (“WHCRD”) at External Review that insurance sales agents under contract to sell insurance policies to customers are not “workers” as defined under the Act – they were properly considered “Independent Operators”, otherwise known as independent contractors. This result overturned two prior lower level decisions whereby WorkplaceNL and the WHCRD Internal Division held these sales agents were “workers”.

In the decision, the review commissioner determined that that the workers were not “workers” under a contract of service because:

  1. The employer’s business model was such that the initial sale of insurance was separate and apart from the rest of the business – which was the renewal of already existing business. The role of the agents in the employers business was therefore separate and distinct – the sales agents made first contact, but the employer had the burden of maintaining that business. Viewed through this lens, the first-contact sales agents were not necessarily integral to the business’ success.
  2. More importantly, the employer did not exercise sufficient control over the agents in how they conducted their business, their right to sell products for multiple companies, and their overhead costs for which they were responsible. The decision is noteworthy and may be of interest to employers across Atlantic Canada given the legislative similarities across Atlantic Canada.

If you feel your business may have been wrongly classified for workers’ compensation purposes, the Labour and Employment group of Stewart McKelvey would be pleased to assist you.


This update is intended for general information only. If you have questions about the above, please contact a member of our Labour & Employment group.

 

Click here to subscribe to Stewart McKelvey Thought Leadership.

 

SHARE

Archive

Search Archive


 
 

IRCC expands authorization for foreign workers to study without a study permit: Four things you need to know

July 13, 2023

By Sara Espinal Henao Immigration, Refugees and Citizenship Canada (“IRCC”) has announced a promising new temporary measure that allows foreign workers to study for a longer duration without a study permit, opening the door for…

Read More

Canada’s first-ever Tech Talent Strategy announced

July 12, 2023

By Brendan Sheridan The Government of Canada recently announced a number of aggressive immigration measures to help attract top talent to Canada in high-growth industries in an effort to fuel innovation and drive emerging technologies.…

Read More

ESG and dispute resolution: fighting for greener ways

July 5, 2023

By Daniela Bassan, K.C. All stakeholders in the legal profession, including litigators, have a shared interest in promoting environmental, social, and governance (ESG) pathways towards building a greener society. It is crucial for litigators to…

Read More

Amendments to the Canada Business Corporations Act affecting registers of individuals with significant control

June 30, 2023

By Kimberly Bungay and Colton Smith Since June of 2019, corporations formed under the Canada Business Corporations Act have been required to prepare and maintain a register of individuals with significant control (an “ISC Register”).…

Read More

Navigating the waters: Compliance with multiple regimes

June 22, 2023

By Kim Walsh and Olivia Bungay Compliance with Russian sanctions goes beyond complying with Canada’s Russia Regulations. Canadian individuals and businesses may be unaware of several other sanctions regimes that apply to them. In conjunction…

Read More

Nova Scotia releases offshore wind roadmap

June 21, 2023

By David Randell, Robert Grant, K.C., Sadira Jan, and James Gamblin On June 14, 2023, the Province of Nova Scotia released the first of three modules (the “Module”) which will comprise the Nova Scotia Offshore…

Read More

Board, Bye!: Changes to the Municipal Appeal Process under the Urban and Rural Planning Act, 2000

June 19, 2023

By: Joe Thorne, Giles Ayers, and Jayna Green Introduction Prior to June 1, 2023, decisions made by municipal town councils in Newfoundland and Labrador could be appealed to one of four Regional Appeal Boards pursuant…

Read More

Navigating Canada’s sanctions against Russia: New guidance on ownership and control of an entity

June 16, 2023

By Kim Walsh and Olivia Bungay Canadian sanctions targeting Russia in relation to Russia’s ongoing invasion of Ukraine were significantly expanded over the past year. Critical to compliance with Canada’s sanctions targeting Russia, individuals and…

Read More

Navigating Canada’s economic sanctions against Russia

June 6, 2023

By Kim Walsh and Olivia Bungay Canadian sanctions targeting Russia in relation to Russia’s ongoing invasion of Ukraine were significantly expanded over the past year. The Special Economic Measures (Russia) Regulations impose sanctions on individuals…

Read More

Federal Government introduces amendments to expand the mandates of the two historic Atlantic Accord Acts to include offshore wind energy

June 1, 2023

David Randell, Sadira Jan, Robert Grant, K.C., Greg Moores, G. John Samms, and James Gamblin The recent tabling of federal legislation is an important step for offshore wind development in the offshore areas of Nova…

Read More

Search Archive


Scroll To Top