Dare Human Resources – Ontario Court of Appeal finds that placement agencies were the workers’ employers

Two Ottawa placement agencies supplied temporary workers to the Public Service of Canada and federal agencies. When these clients put out a call for temporary workers, the agencies identified appropriately qualified and willing candidates from their inventory, and negotiated an hourly rate of pay for the placement that exceeded what they paid to the workers. The agencies’ primary function during the assignment was to provide the payroll on the basis of time sheets signed off by the client, whereas the client managed and directed the workers. However, both dealt with performance and discipline issues.

In dismissing the agencies’ appeal of a decision of Hackland J that they were liable for Ontario employer health tax on the basis that they were the workers’ employers, the Court stated that Hackland J had appropriately taken into account “that the appellants are the only parties with contractual relationships with the workers and that the contractual documentation with the Government of Canada makes it clear that it was the government’s intention that the workers be the employees of the placement agencies.”

Although the situation arguably was not one of secondment, this decision provides some support for considering that seconded employees can remain employees of their original employer notwithstanding that they become subject to the superintendence and control of the organization with which they are placed.

Neal Armstrong. Summary of Dare Human Resources Corporation v. Ontario (Revenue), 2019 ONCA 549 under Reg. 100(1) – employer.