Court decision adds the concept of “integration” as a factor to be relied upon by the court

Posted By | 2017-12-05T17:19:43+00:00 October 26th, 2017|

The addition of the concept of Integration was added to the “buckets” (Control, Tools, Risk of Loss, Chance of Profit) because of cases at the time showing that contractors who were PSB’s were integrated into companies.

671122 Ontario Ltd. v. Sagaz Industries Canada Inc.

  • A test based on five principles later referred to as the Sagaz/Belton analysis that is used in later cases to determine whether a relationship is one of employment or that of an independent contractor
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Case Summary

671122 had lost a supply contract with Canadian Tire to its competitor Sagaz. 671122 subsequently learned that a consultant, hired by Sagaz to obtain the Canadian Tire account, had done so by bribing the head of Canadian Tire’s automotive division. 671122 commenced a claim against Sagaz on the basis that it was vicariously liable for the actions of its consultant. In order for vicariously liability to be found, the consultant would have to be an employee of Sagaz.

Agency does not create vicarious liability; requires a much stronger connection (one of employment).

Criteria of an employee relationship:
1. Control over the worker
2. Ownership of the tools/equipment used
3. Chance of profit remains with the employer
4. Risk of loss remains with the employer
* Not an exhaustive list
Application:
A. was in control of his job functions
• He worked on his own commission rates
• His chances of profit/risk of loss depended completely on his own initiative

The Supreme Court found that Sagaz was not liable as the consultant was not an employee of Sagaz, but rather, an independent contractor.

SOURCE

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