I’m an independent contractor that feels like an employee

THE QUESTION

I accepted a project-management position as an independent contractor but they tell me when and how to do my job, even down to what shoes to wear. It's really a full-time employee position. I have been challenging them on this, and they are now threatening to terminate the contract.

THE FIRST ANSWER

Daniel Lublin

Partner, Whitten & Lublin Employment & Labour Lawyers, Toronto

Mischaracterizing employees as contractors is the biggest façade in workplace law. Many contractors are such in name only. Workers and their employers have agreed to portray themselves in this fashion in a mutual attempt to avoid payroll taxes, government remittances and other statutory liabilities. However, when the relationship breaks down, the individuals sometimes contend that they were legally employed, in an effort to gain a right to severance. Many have a case.

A true independent contractor has actual autonomy over how and when to perform the job and essentially is operating in a business of their own. These workers are not owed any severance pay. On the other end of the spectrum is an employee, with all concomitant rights to termination pay.

There is also a recognized middle ground, referred to as a dependent contractor. Dependent contractors have key features that resemble employment in important ways. They usually work for only one employer, for long periods of time, and they are told how and when to perform the job, to name only a few factors. Dependent contractors also often perform the same or a similar job that other employees of the organization perform, the only difference being that they invoice for services and pay their own taxes. Canadian courts have ruled that dependent contractors have severance rights – and often the same rights to severance as actual employees.

In your situation, if you are laid off, fired, constructively dismissed or otherwise forced to leave, you can make a claim to your provincial ministry of labour to try to obtain statutory termination or severance pay, or for larger cases, you can sue your former "employer" in court.

THE SECOND ANSWER

Kyle Couch

President & CEO, Spectrum Organizational Development Inc., Toronto

There is a world of difference between being hired on as an independent contractor or as a consultant. While your other clients may value your ability to provide insight and perspective, your current employer is simply seeking out your functional capability.

Many progressive organizations are taking a contract approach for the majority of their work force – allowing the companies to be far more nimble in their ability to change the makeup of their in-house skill sets as their business needs change.

This approach ensures tremendous upside for the company, but it may make things more challenging for the workers themselves who must rely on their ability to remain current in their skills as free agents as they move from contract to contract.

Your role in this new gig economy is to understand which part of a business's life cycle you fit into, and market yourself appropriately. This way, you can guarantee yourself continuous stable employment. As a project manager, you should have noticed the lack of project charter, and realized you were being handed a job description.