The appellants were placement agencies who supplied temporary workers to the Public Service of Canada and federal agencies. When these clients put out a call for temporary workers, the appellants 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 appellants’ 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 could be involved in dealing with performance or discipline issues.
In dismissing the appeal from the decision of Hackland J that the appellants were liable for Ontario employer health tax (a payroll tax imposed on employers who pay remuneration to their employees) on the basis that they were the employers of the workers (who were acknowledged not to be independent contractors), the Court stated (at para. 15) 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,” and also stated (at para. 21):
The appeal judge acknowledged, as is typical in a tripartite arrangement, that the appellants and the Government of Canada each appeared to possess some of the traditional attributes of an employer. He explicitly referenced recruitment, payroll administration, discipline issues, testing, and security clearances. While some factors may have pointed to the Government of Canada as the employer, after an analysis of all of the factors, the trial judge determined that the appellants were the employers. The appeal judge did not … fail to consider any relevant factor.
Email this Content