Pizzadrivers.ca

DELIVERING YOUR PIECE OF THE PIE

THE EMPLOYEE OR INDEPENDENT CONTRACTOR TEST

What is the test that EI and CPP use to determine your status for their purposes?

The factors both E.I. and CPP consider when trying to determine whether a person is an employee are  included in their pamphlet, “Employee  or Independent Contractor?” The pamphlet was designed to help pizza drivers, and others determine their employment status. It is a tool to assist you, and does not replace the formal ruling request, but it is a pretty good indicator of your situation. This pamphlet can be obtained at your local EI outlet, or just ask us. We will be glad to send one to you.

Generally, the courts have provided guidelines in the form of a four-fold test to determine whether a person is employed under a contract of service, (employee), or contract for service (independent contractor). This requires Tribunals and Courts to review terms and conditions of the working arrangement as they relate to the following four factors:  1. Control.  2. Ownership of tools. 3. Chance of profit/Risk of loss. 4. Integration.  

CONTROL:  This is the most important factor. Generally, in an employer-employee relationship, the employer controls, directly or not, the way the work is to be done and the work method used. If the employer does not directly control the worker’s activities, but has the right to do so, the notion of control still exists.

Generally, the payer exercises control if he has the right to hire and fire, determines the wages or salary, and decides the time place and manner in which the work is to be done. Specifically; the hours of work the assessment of the quality of work; the workers periodic activity reports; the list of clients and the territory covered; training and development. In short, the payer exercises control if he has the right to decide where, when, and how the work will be done.

OWNERSHIP OF TOOLS        

In an employer-employee relationship, the employer generally supplies the equipment and tools required by employees. In addition, the employer covers the related costs of repairs, insurance and operation. (e.g., fuel). With most pizza drivers, the fact they are required to use their own cars, will be used as an argument against them. Pizza companies consider this to be a tool, and will use that definition in Court to bolster their argument to circumvent the Law. In some trades, however, it is customary for employees to supply their own tools. This is generally the case for garage mechanics, painters, and carpenters who are hired as employees.

CHANCE OF PROFIT / RISK OF LOSS

Generally, in an employer-employee relationship, the employer alone assumes the risk of loss. The employee does not assume any financial risk, and is entitled to his full salary or wages regardless of the financial health of the business.

INTEGRATION

If you are not able to determine the nature of the relationship with the first three factors, control, ownership of tools, and chance of profit/risk of loss, the final factor, integration, should settle the question. Integration has to be considered from the view of the worker, not the payer.

Where the worker integrates his activities to the commercial activities of the payer, an employee-employer relationship probably exists. The worker is acting on behalf of the employer. He is connected with the employer’s business and is dependent on it. The question asked by the Courts is “Was the work subject to co-ordinated control as to the ‘where’ and ‘when’ as well as the ‘how’. This is usually the case with most pizza drivers.

Perhaps the central question is-“Is the driver in the business of carrying goods, or was he simply delivering pizzas for the owner’s business?”

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There are many other questions that can be asked to determine the status of the worker. This is a list of some of the questions an investigator may ask.

Control     

Who makes the major business decisions, including obtaining clients,  hiring and firing, signing contracts and deciding on the direction of the business?    

 Who is responsible for planning the work to be done?

 Who decides how and how much the worker is to be paid?                                                       

  Who decides on the time frames?

  Who decides how the work is to be done?                                                   

 Who decides on the hours of work?  

 Who decides on the work  location?                                                  

Who assigns the individual tasks?  

Who supervises the tasks?  

Who sets the standards (Quality, Volume, Time frame) to be met?

Who decides whether the work must be redone?                                                 

Who covers the related cost?                                                 

Who is responsible for training?  -Who covers the related costs?                                               

Who decides the territory to be covered?                                                     

Who decides the periodic activity reporting?                                                    

Who decides if the work is to be done by the worker himself?

If you answer “Payer” to most of these questions, it means that the payer exercises control over you. An employer-employee relationship probably exists. Otherwise, it indicates that it is a business relationship.

Other questions an investigator may ask to help him determine your working status:

Who covers the cost of damage to equipment or materials?

Who covers the costs of liability insurance?

Who covers office expenses?      

Who covers delivery and shipping costs?  

Who covers costs relating to bad debts? 

Who assumes responsibility for ensuring that guarantees relating to materials, performance and quality are honoured?

Who covers the costs incurred by the worker in carrying out the work?

Who covers the cost of the workers benefits (paid vacation, sick leave,  life insurance premiums, etc)?

If you answer “Payer” to most of these questions, an employer- employee relationship probably exists. Otherwise, it indicates a business relationship may exist.

There are other questions an investigator may ask. We will be happy to E-mail a more complete list on request.

HOW LONG WILL IT TAKE TO INVESTIGATE MY STATUS?  The EI and CPP application should take about two months. The Labour Relations Board application might take a bit longer, as they are always a bit back-logged.  If there are appeals it will take quite a bit longer. Remember, patience is always a virtue.