EMPLOYMENT AND CONTRACTOR RELATIONS. www.sportlaw.ca. EMPLOYEES. EMPLOYMENT RELATIONSHIP GOVERNED BY: ‘Employment Standards Legislation’ (absolute minimums) Personnel policy of organization (beyond the minimums) Individual employment contracts (beyond the personnel policies).
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EMPLOYMENT AND CONTRACTOR RELATIONS
EMPLOYEES EMPLOYMENT RELATIONSHIP GOVERNED BY: • ‘Employment Standards Legislation’ (absolute minimums) • Personnel policy of organization (beyond the minimums) • Individual employment contracts(beyond the personnel policies)
EMPLOYMENT STANDARDS CODEOvertime Overtime and Overtime Pay • In each week, hours worked in excess of 8 per day must be totaled and the number of hours worked in excess of 40 per week are deemed overtime hours. • An employer must pay an employee overtime pay at least 1.5 times the wage. Overtime Agreements • Employees and employers may enter into a written agreement, re time in lieu of overtime (1.5 times). • Time off must be taken within 3 months unless authorized by Employment Standards Branch. • Who decides when overtime will be worked? • Employees cannot work overtime without the knowledge or permission of their employers.
Vacation and Vacation Pay • After one year of employment – 2 Weeks • After five years of employment – 3 Weeks • Setting dates for vacation: • If unable to agree, Employer will give the employee at least 15 days notice of the date on which the vacation is to begin.
Director’s Liability • A Director is liable to an employee for the following unpaid wages of an employee: • Wages (Other than vacation pay) payable within the last 6 months in which the person was a Director. • Vacation pay accrued within the last 22 months in which the person was a Director.
Termination of Employment – Employer (Without Cause) Employers wishing to terminate to provide written notice or pay in lieu of notice: • 1 week, if employed more than 30 days but less than 1 year • 2 weeks, if employed 1- 3 years • 4 weeks, if employed 3 - 5 years • 6 weeks, if employed 5 - 10 years • 8 weeks, if employed over 10 years Notice may be modified by: • Personnel policy or Employment contract. • Common law (Availability of alternate employment, length of service, position with employer, age, salary, lack of good faith and fair dealing by the employer)
TERMINATION WITH CAUSE • Defined as “willful misconduct or disobedience, or willful neglect of duty that is not condoned by the employer” • No notice is required or pay in lieu of notice • Must issue warnings specific to termination • Must show progressive discipline and a paper trail • What is sufficient depends on circumstances of each case
ADVANTAGES FOR EMPLOYEE • Stable pay with no risk of loss • Paid holidays, lieu days and sick pay • Statutory protection (Employment Standards Code) • Vicarious liability of employer • Skills training • Reasonable notice to terminate • Tax deducted at source and submitted for you • Pay into Employment Insurance scheme • Employer contributes to EI, CPP • Other employment benefits provided
DISADVANTAGES FOR EMPLOYER • Expensive (about 20 percent higher due to statutory obligations) • Less flexibility in staffing • Vicarious liability • Employer liability (termination, severance, other statutory requirements, administrative burden)
CONTRACTOR RELATIONSHIP: • The ‘Contract’ • Contract law and language
Contractor • Contractor is a person who carries on an independent business, and is therefore under a contract "for services" . • A contractor undertakes to produce a given result but in the actual execution of the work is not under the order or control of the person for whom it is done. • However, no single conclusive test exists to determine whether a worker is an employee or independent contractor.
Test to Determine Status • Control test (the worker’s independence) • Integration test (are worker’s tasks integral to organization’s day-to-day business) • Economic reality test (control over work, ownership of tools, financial risk) • Specific result test (is work time-specific or ongoing)
EMPLOYEE or CONTRACTOR No single test determines employment status, rather the tests are used in combination and are applied to the circumstances of each individual case. The purpose of the tests is to draw attention to the true nature of the relationship.
Descriptors of a Contractor • No deductions • No statutory holidays • No mention hours of work • Chance of profit and some risk of a loss • Works away from the employer’s business. If not feasible, pay a “rental” of the premises used by the contractor • No job title or a business card • No minimum notice of termination • No job description • Pay a “rental” for use of any employer’s equipment • Submit an invoice for payment each month • Charge GST • Incorporation
Moose Jaw Kinsmen Flying Fins v. Minister of National Revenue • Swimming instruction and training is integral to the business and the sole reason for the existence of the business • Coach required to comply with bylaws and all rules • Required to be available during the hours set by the Club • Could be dismissed for misconduct • Coach incurred no expenses, supplied no facilities, took no business risks
FLYING FINS … 2nd • Any financial gain or loss resulting from the Club’s operations fell to the Club, not coach • Certain degree of control was exercised by the Club • Coach required to supply personal services to the Club – could not substitute the services of others for his own • Canada Revenue Agency determined that the coach was an employee and not a contractor
National Capital Outaouais Ski Team v. Minister of National Revenue • Individual deemed an Employee by MNR • Individual working as a coach between 2004-2005 • MNR relied on the following: • Non-profit organization providing ski program. • Coach controls day to day operations. • Hired under a written agreement which was never signed.
NCOST vs. MNR Continued • Coach prepared equipment and taught programs • Coach paid $3,400 per month • Reimbursed for expenses • Did not receive paid vacation nor vacation pay • Hours of work were not recorded • Reported to the Head Coach as deemed necessary • Head Coach supervised the Coach • Board Approval required prior to taking action. • Coach tried to collect EI.
NCOST vs. MNR Continued • Actual reality of their intent did not reflect characterization of the relationship. • Coach was subordinate to the Organization. • Judge asked whose business is it? It was the Organization’s.
THE PERILS OF GETTING IT WRONG • Taxes have to be paid retroactively • Employer and employee have to pay out EI and CPP contributions • Employee must pay more taxes because of improperly-claimed expenses • Directors may be personally liable • Fines and penalties may be imposed on both employer and employee
WHICH DO YOU WANT …. • Employer perspective • Employee/contractor perspective
CONTRACTOR AGREEMENT • Deliverables • Term of agreement • Compensation • Reporting relationship • Termination • Risk, indemnification, insurance • Confidentiality • Proprietary Rights
EMPLOYMENT CONTRACT • Description of job duties • Term of agreement • Compensation, benefits, holidays • Supervisory relationship • Performance appraisal • Termination and severance • Confidentiality • Proprietary Rights • Link to personnel policies (if applicable)
Complying with CRA – T4 Slip • You have to complete a T4 slip to report the following: • Salary, wages (including pay in lieu of termination notice), tips or gratuities, bonuses, vacation pay, and all other remuneration you paid to employees during the year; • Taxable benefits or allowances; • Deductions you withheld during the year
Complying with CRA – T4 Slip • You have to complete T4 slips for all individuals who received remuneration from you during the year if: • You had to deduct CPP/QPP contributions, EI premiums, or income tax from the remuneration; or the remuneration was more than $500. • You must give employees their T4 slip on or before the last day of February.
Complying with the CRA – T4A • Complete a T4A slip if you are an employer and you paid any of the following types of income: • Lump-sum payments • Self-employed commissions • Fees or other amounts for services
T4A Continued • You have to complete a T4A slip if you made any of the payments listed above and: • The total of all payments in the calendar year was more than $500; or • You deducted tax from any payment. • You must give recipients their T4A slips on or before the last day of February
GOVERNING DOCUMENTS Give the sport organization: • Structure • Power • Methods by which it governs or rules itself
SPORT ORGANIZATIONS RUN INTO TROUBLE WHEN: • They do not set out rules [policies] or procedures to deal with something • They set out rules [policies] but they are incomplete, vague or contradictory • They set out rules [policies] but then choose not to follow them • They have rules [policies] that do not “fit” with their culture or their resources
POLICIES ARE YOUR BEST FRIEND • They provide you with a guide for your actions • They help you to avoid a problem or crisis • In the event you cannot avoid a problem or a crisis, they will help you to act uniformly, consistently and fairly in how you manage your problem or crisis
STRUCTURE & PROCESS Constitution (Purposes) By-laws Key Governance Policies Other Policies SUBSTANCE (WHAT, HOW)
KEY GOVERNANCE POLICIES Selection -> award benefits in sport Conduct, Discipline, Harassment -> revoke benefits of sport Appeals, Mediation, Arbitration -> disputes over allocation of benefits Personnel -> employees, volunteers, contractors Conflict of interest -> statutory requirements Privacy-- > protects personal information
Policies “For many sport organizations, it is a sobering lesson to learn that policy is what’s written on the paper and not what’s in the mind of the drafters of the policy, or in the collective memory of the organization” [Your Risk Management Program: A Handbook for Sport Organizations, 1998]
Steven Indig firstname.lastname@example.org 647-348-3080 www.sportlaw.ca