CAALL — Canadian Association of Administrators of Labour Legislation
New Employment Relationships Project (NERP) — Final Report 2007
An Analysis of Issues in New Work Relationships and their Implications for Development of Public Labour Policy and Law in Canada
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PHASE III-IV — Overview of Labour Legislation and Government Programs
Own-Account Self-Employed
Occupations where OASE is common include Hairstylists/Barbers, Child Care and Home Care, Construction, Other Elemental Sales, Light Duty Cleaners and Truckers. The evidence collected to date also suggests that the challenges and issues faced by workers have more to do with their employment relationship as OASE workers than with the occupation in which they are employed.
As noted, there has been a significant increase in OASE over the past few decades. While the increase has been particularly pronounced in certain occupations, it is not clear whether the nature of the work itself has actually changed markedly, suggesting that many in these occupations may not be working as independent contractors. Indeed, there are reports that workers are sometimes mislabelled as "self-employed" by employers, possibly in an effort to evade legal responsibilities. In other words, the apparent increase in OASE should be interpreted with caution, because many may be so-called "disguised employees."
Labour Relations
In general, OASE who are independent contractors are not able to organize because they do not have a sole employer, and because they may not be recognized as "employees" by a labour relations tribunal. This is the case in Quebec and indeed in most other jurisdictions, where self-employed individuals have problems in bargaining collectively because they are not deemed to be employees. OASE workers who are dependent contractors are explicitly recognized by labour relations legislation in five jurisdictions and are able to form associations and be represented by a collective agreement in a workplace. Their status may be ambiguous, or they may be excluded from labour relations protections, in other jurisdictions.
Employment Standards
In general, OASE workers who are independent contractors are not covered by employment standards protections. Own-account self-employed workers are not considered to have access to employment standards protections because there is no particular "employer" who can be responsible for the provision of minimum protections. Because employment standards legislation generally does not differentiate between independent and dependent contractors, OASE workers who are dependent contractors and have only one client may lack access to the legislation. However, enough ambiguity exists to make it possible for some dependent contractors, on a case-by-case basis, to be considered as employees.
In Yukon, the self-employed are excluded from coverage, yet the definition of "employee" in Yukon’s employment standards legislation includes contract workers in a position of economic dependence on, and under an obligation to perform duties for, another person for compensation or reward. In another example, Manitoba’s employment standards legislation could be interpreted to apply to a dependent contractor who is in a position of economic dependence to an employer who exercises control over the work and pays the wages.
In general, the occupations in this study are never specifically excluded from the application of laws establishing employment standards. However, in Prince Edward Island, Hairstylists paid on commission are exempt from minimal labour standards and the same is true for those who rent a chair in Newfoundland and Labrador. A similar theme emerges in the child care and homecare occupations where, for example, it appears workers are rarely paid overtime.
Occupational Health and Safety
Occupational health and safety legislation typically applies to the OASE. However, self-employed workers in higher-risk industries, such as construction, might not be connected to the occupational safety and health system unless they apply for voluntary coverage. As noted below, occupational safety and health initiatives are based on workplace injury tracking data. Gaps in the injury data may have the effect of rendering uncovered workers “invisible” and hinder the development of an injury prevention strategy that can reach these workers.
Workplace Insurance
Hairstylists/Barbers are not included as mandatory-covered industries under the workplace insurance system in Manitoba and Ontario. However, self-employed workers can apply for voluntary coverage at relatively low cost. For example, a hairdresser in Manitoba may acquire voluntary coverage for as little as $150 per year under the voluntary rate code for beauty parlours and barbers, and for about $180 per year in Newfoundland and Labrador. In doing so, the hairdresser would need to demonstrate that he or she is operating a business.
Because certain industries are not included under mandatory coverage and self-employed persons acquire voluntary coverage on their own application, workplace insurance does not cover all workers (e.g. in Manitoba about 70% of workers are covered). This may have implications for uncovered workers and occupational safety and health. As injury prevention initiatives are generally developed from injury data that are tracked through workplace insurance, uncovered workers are not ”connected” to the occupational safety and health system.
Government Programs
No distinctions are made between OASE and permanent workers in the Canada/Quebec Pension Plan. OASE are excluded from Employment Insurance coverage except in Quebec, where such workers have been able to collect benefits during maternity and parental leaves since January 1, 2006. However, eligibility might be a factor for OASE workers in terms of the threshold of earnings for pension contributions and in making both the employer’s and the employee’s contributions to the Canada/Quebec Pension Plan.