Dependent contractor wins constructive dismissal but still owes his employer

A 21-month notice win, undone by one number the company almost forgot to collect

Dependent contractor wins constructive dismissal but still owes his employer

A veteran seed salesman won his fight to prove he was effectively forced out after nearly two decades on the job. Then the arithmetic turned against him, and he walked away owing his former company money.

In a decision released July 16, 2026, Justice Spencer Nicholson of the Ontario Superior Court of Justice found that the salesman had been constructively dismissed by ProRich Seeds when it withheld his monthly cheque, and set his damages at $56,000.70 based on a 21-month notice period. But the company's counterclaim for years of overpaid advances succeeded in part, and the net result was that the worker owed ProRich $3,333.49.

How the court classified the salesman

The worker sold ProRich's seed to farmers in Alberta, Manitoba and Ontario from 2002 until September 2021, paid through monthly advances against commission. He argued he was an employee, or at minimum a dependent contractor, and therefore entitled to reasonable notice. ProRich maintained he was an independent contractor whose real living came from buying and selling cattle.

Justice Nicholson found he was not an employee, concluding that ProRich set no hours, no territory, and no rules on how he sold, and issued him tax slips for self-employed commission. But across roughly 19 years the relationship carried enough exclusivity of time and income to place him in the intermediate class of dependent contractor, which does carry a right to notice.

The court weighed his side businesses, including cattle sales and a stint selling minerals, against the fact that seed selling was his main source of revenue for most of those years. That tipped the balance toward dependence rather than independence.

When the monthly cheque stopped

By August 2021, ProRich told the salesman it would not keep issuing his monthly draw unless his sales justified it. When his September 1 cheque did not arrive, he texted that he was being constructively dismissed and pressed to be paid.

Justice Nicholson found the worker had not resigned, since his messages showed he wanted his money rather than a way out, and that pulling his advance for the first time in years of steady payment amounted to constructive dismissal. As the judge put it, having never withheld funds before, "it was a breach of their contract to do so in the summer of 2021."

The salesman also alleged that the company's principal had threatened to break his legs during the dispute. Justice Nicholson found he was not satisfied that any such threat was made, and declined to lengthen the notice period based on how the relationship ended.

Why the outcome left him owing money

ProRich had also counterclaimed, saying the salesman owed roughly $168,000 in advances that had outrun his actual commissions since 2016. Each year he had drawn $60,000, while his earned commissions fell short, building up annual shortfalls.

Justice Nicholson found the company was blocked from collecting most of that amount. ProRich had tucked reconciliation statements into his pay envelopes but never actually chased repayment or raised the deficits with him for years, so it could recover only the 2020-2021 season and part of 2021, totalling $59,334.19. Set against his award, that left him owing $3,333.49.

The judge acknowledged the outcome might look harsh, but pointed out that the salesman was being allowed to keep money he had not earned, precisely because "ProRich did nothing to enforce this Agreement for many years."

See Faragher v. ProRich Seeds (2016) Inc., 2026 ONSC 4161 

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