Liability may exist, despite the intention of the parties.
There is a trend in the modern workforce towards outsourcing non-core business competencies to professional service providers, consultants and other independent contractors. Whether a business engages a consultant to obtain highly specialized skills, or to avoid the costs and potential claims associated with the employment relationship, there is always an underlying risk that the consultant may later be deemed an employee. The costs associated with such a determination for a business can be substantial. They include—among other things—liability for penalties and interest under the Income Tax Act (Canada), liability for workplace safety and insurance premiums, health tax premiums, damages for wrongful dismissal on termination of the agreement, and employment standards entitlements.
