Self-proclaimed self-employed contractor entitled to income replacement benefits calculated as an employee - Micheal Kennedy

Mr. Ligocki was involved in a motor vehicle accident in 1999 and became unable to work. He was not provided with a Record of Employment from Mr. Deluca's son. He hired a bookkeeper to file business tax returns for the tax years subsequent to his accident. He described himself as "self-employed" on his accident benefits forms. It was not until he changed legal representation in 2003 that he held himself out as "employed". Accordingly, a dispute arose as to Mr. Ligocki's true employment status.

Justice Hennessy acknowledged that, "ironically, the declaration as a self-employed person, which triggered advantageous consequences in terms of income taxes, had an opposite and adverse impact on [Mr. Ligocki] when the IRBs were calculated." However, Justice Hennessy held as follows:

The determination that a worker is an employee or an independent contractor is largely a finding of fact. There is no one conclusive test which can be universally applied to determine whether a person is an employee or an independent contractor.

The factors to be considered include: the level of control over a worker's activities; whether a worker provides his or her own equipment; whether a worker hires his or her own helpers; the degree of financial risk taken by a worker; the degree of responsibility for investment and management held by a worker; and a worker's opportunity for profit in the performance of his or her tasks.

Justice Hennessy determined that the facts supported a finding of employment, as Mr. Ligocki's activities and hours were dictated by Mr. Deluca's son, Mr. Ligocki used equipment, food and items provided by Mr. Deluca or his son, Mr. Ligocki had not hired anyone to assist him and he undertook no financial risk with respect to the work.

Justice Hennessy concluded that the intention of parties is relevant but not determinative in the assessment of whether a party is an employee. The court stated that parties are likely motivated by self-interest in characterizing their contract.

This case demonstrates that it is difficult to predict when a party is considered to be an independent contractor and this should be taken into consideration in the assessment of income replacement benefits.

Self-proclaimed self-employed contractor entitled to income replacement benefits calculated as an employee
Michael Kennedy Partner	March 2010 By Michael Kennedy Published in McCague Borlack's Transportation Newsletter In Ligocki v. Allianz Insurance Company of Canada, 2010 ONSC 1166, the Ontario Superior Court, on February 22, 2010, confirmed that a self-proclaimed "self-employed contractor" may be entitled to income replacement benefits calculated as an employee. Mr. Ligocki was a home-care nurse employed by the Victorian Order of Nurses, which assigned him to provide care for Mr. Deluca. After six months, the Victorian Order of Nurses discontinued providing care to Mr. Deluca. Subsequently, Mr. Ligocki directly contracted with Mr. Deluca's son to provide nursing services. Mr. Ligocki submitted invoices to Mr. Deluca's son, received no worker benefits, filed business tax returns, and was paid a gross amount without any source deductions.
Mr. Ligocki was involved in a motor vehicle accident in 1999 and became unable to work. He was not provided with a Record of Employment from Mr. Deluca's son. He hired a bookkeeper to file business tax returns for the tax years subsequent to his accident. He described himself as "self-employed" on his accident benefits forms. It was not until he changed legal representation in 2003 that he held himself out as "employed". Accordingly, a dispute arose as to Mr. Ligocki's true employment status. Justice Hennessy acknowledged that, "ironically, the declaration as a self-employed person, which triggered advantageous consequences in terms of income taxes, had an opposite and adverse impact on [Mr. Ligocki] when the IRBs were calculated." However, Justice Hennessy held as follows: The determination that a worker is an employee or an independent contractor is largely a finding of fact. There is no one conclusive test which can be universally applied to determine whether a person is an employee or an independent contractor. The factors to be considered include: the level of control over a worker's activities; whether a worker provides his or her own equipment; whether a worker hires his or her own helpers; the degree of financial risk taken by a worker; the degree of responsibility for investment and management held by a worker; and a worker's opportunity for profit in the performance of his or her tasks. Justice Hennessy determined that the facts supported a finding of employment, as Mr. Ligocki's activities and hours were dictated by Mr. Deluca's son, Mr. Ligocki used equipment, food and items provided by Mr. Deluca or his son, Mr. Ligocki had not hired anyone to assist him and he undertook no financial risk with respect to the work. Justice Hennessy concluded that the intention of parties is relevant but not determinative in the assessment of whether a party is an employee. The court stated that parties are likely motivated by self-interest in characterizing their contract. This case demonstrates that it is difficult to predict when a party is considered to be an independent contractor and this should be taken into consideration in the assessment of income replacement benefits.
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