Saskatchewan court case reveals when titles don't line up with workplace reality
The Court of Appeal for Saskatchewan recently dealt with a case examining whether a long-term worker's relationship with an organisation constituted employment or independent contracting. This distinction would determine the worker's entitlement to reasonable notice upon termination.
The worker argued that despite invoicing the organisation monthly and lacking a signed contract for her most recent position, the 16.5-year relationship had evolved into employment. She maintained that the organisation's termination options were inadequate for someone with her tenure.
The organisation argued their relationship was governed by contracts labelled as "Independent Contract," citing that the worker filed taxes as an independent contractor and provided her own work equipment. The case would determine what notice obligations arise in such situations.
The worker began as a part-time administrative assistant earning $10.50 per hour with the Saskatoon Minor Basketball Association (SMBA) and eventually reached the position of executive director with an annual salary of $48,480. Throughout this period, she worked exclusively from home and solely for the SMBA.
The working arrangement included the worker invoicing the SMBA monthly. According to the SMBA, she filed taxes as an independent contractor and remitted Goods and Services Tax. No signed contract for her most recent position was ever found, though both parties agreed one had been signed at some point.
The SMBA typically sent yearly contracts that often went unsigned. These contracts evolved over time but consistently included job descriptions, non-competition provisions, term periods (typically 12 months), and termination provisions.
The final unsigned annual contract provided "Salary and Benefits" of $48,480 per year. Its termination provisions stated the SMBA could terminate "at its sole discretion for any reason without cause" with 1.5 months' notice or equivalent payment.
Despite the contract title referencing an independent arrangement, the worker was never explicitly referred to as an "independent contractor" within any of the agreements. This detail became significant in the Court's analysis.
In March 2021, during the COVID-19 pandemic, the SMBA notified the worker that her position would end. She was given three options: accept a short-term three-month position, apply for a restructured position with nearly doubled responsibilities (including bookkeeping duties for which she had no experience), or accept six weeks' severance.
The Court of Appeal upheld the Chambers judge's finding that the worker was an employee, not an independent contractor. The analysis examined both the parties' subjective intention at the start of their relationship and the objective reality of their working arrangement.
"Fundamentally, throughout this relationship, [the worker] was not in business for herself; she was working as an employee of [the employer]," the Court noted in affirming the Chambers judge's conclusion.
While some factors like remote work arrangements and self-provided tools suggested aspects of independent contracting, the Court found stronger evidence of employment. This included her level of pay, the length of relationship, supervision, power dynamics, responsibilities, and integration with the organisation.
The Court upheld the 22-month notice period awarded by the Chambers judge (less three months of working notice already provided). This reflected consideration of the worker's position, years of service, approximate age (45-49), and comparable cases.
After reviewing similar cases, the Court determined: "An appropriate range in this case would be anywhere between 16 and 22 months. The determination of 22 months (less three for working notice) made by the Chambers judge is on the higher end of the range, but it is still within the appropriate range."
The Court also rejected the SMBA's argument that the worker failed to mitigate damages by declining further employment. The SMBA had offered a nine-month extension conditional upon signing a full release of all claims.
The Court identified key problems with the SMBA's mitigation argument: "First, the offer contemplates that [the worker] accept a position for which she had no training or qualifications. Second, the offer requires that [the worker] release [the employer] and accept nine-months' working notice when she had been claiming to be owed in excess of this amount."
The Court concluded: "Given these two facts, it cannot be said that a reasonable person in [the worker's] shoes would have taken this offer of employment. To take this offer would be to give up a significant portion of her claim for reasonable notice."
In addressing whether the worker should have applied for the restructured position, the Court agreed with the Chambers judge that: "The new Director of Operations position held twice the duties, responsibility, and work of [the worker's] old position. It simply could not be characterised as similar work for similar pay."
The Court of Appeal dismissed both of the SMBA's appeals, upholding the judgment that the worker was an employee entitled to 22 months' notice (less working notice given), as well as the Chambers judge's costs award of $11,000.
The case clarifies that when determining employment status, courts look beyond contract labels to the actual working relationship, and that mitigation duties don't require accepting substantially different roles or surrendering legitimate entitlements.
