Digest of Benefit Entitlement Principles  Chapter 4 - Section 7

4.7.0 Independent workers - Particular types

Independent workers include workers who act as independent contractors in order to obtain employment in their trade. They generally work under a contract for services rather than a contract of service, thereby controlling their own working hours (FCA A-24-16).

4.7.1 Tradespersons

Many independent workers are primarily interested in pursuing their trade rather than operating a business. To do this, they contract themselves out to other persons and, normally, fulfill their contractual obligation without the help of anyone else, although they may at times hire the services of helpers. This is common in the construction industry.

The general rule is that these independent workers are considered as working full working weeks and, therefore, are not entitled to be paid any benefits as long as they are engaged in fulfilling a contract. On the other hand, when they have no contract, they are considered unemployed (CUB 76074; Jurisprudence Index/week of unemployment/independent workers/). The same does not necessarily apply in the case of persons who seem more interested in operating a business as a contractor, rather than the mere pursuit of work in their trade (Digest 4.6.0).

In order for tradespeople to prove that they are available for work, it is not enough to show that they are looking for new contracts as independent workers. They must also be prepared to accept and seek work as employees under a contract of service.

4.7.2 Truck owners

A distinction must be made between persons who wish to operate a trucking business on their own account, and those whose interest is the pursuit of their trade as independent workers.

Workers in the latter case are, as a general rule, the owners of a single truck that they drive themselves while hauling products such as wood, stone, sand, or other goods, on a contract basis. Where this is the case, the worker's situation becomes similar to that of the tradespersons discussed above and will be treated alike. With respect to their availability for work when unemployed, these workers must be prepared to accept and seek work either on a contract basis with their truck or under a contract of service with other employers.

4.7.3 Taxi drivers

Taxi drivers are regarded as working full working weeks when they work long hours that are not controlled by an employer. As a result, they are not considered unemployed, and are not entitled to EI benefits (EIR 30(1)).

Whether the taxi is rented, personally owned or is driven by someone else, is not a decisive factor. Similarly, the amount of earnings derived from the activity is irrelevant except perhaps in cases where the earnings may be directly related to the number of hours worked. It is also irrelevant whether the activity is carried on in the evening or at night rather than during the day, if it is an activity which people normally carry out at any time as a principle means of livelihood (Digest 4.6.4.2).

4.7.4 Real estate agents or salespersons

The legislation contains regulatory provisions related to the interruption of earnings and which make it clear that EI benefits are not intended for real estate salespersons with a license, except for periods of unemployment due to incapacity, maternity, parental or providing care for a family member (EIR 14(5); Jurisprudence Index/interruption of earnings/real estate salespersons/). This is true no matter how many hours a week an individual devotes to this activity, as the regulation does not refer to the number of hours a real estate agent works, as a factor when considering whether they have an interruption of earnings.

In spite of the above considerations, the fact remains that the provisions regarding an interruption of earnings have little to do with whether or not a week is a week of unemployment. Therefore, they have no application when the time comes to determine if a claimant has worked a full working week. The holding of a license is not in itself sufficient to support a finding that a person is not unemployed. Once it is found that a claimant had an interruption of earnings for the purpose of establishing a benefit period, the criteria applicable to determine whether persons who control their own working hours have a week of unemployment, will be applied to real estate agents and commission salespersons (FCA A-58-94, CUB 23879).

With respect to employment, the question is not whether it was full or part time, but rather whether it was minor in extent (Digest 4.6.4.1; FCA A-697-95, CUB 29511).

4.7.5 Elected public officials

Any person who has been elected and holds the office of mayor or other office in a municipal council is considered to be in employment within the meaning in the regulatory provisions. It is also considered employment in respect of which the hours of work are controlled by the individual. This leads to a conclusion that any week within the term of an office is a full working week unless the activity required of the mandate is so minor in extent that a person would not normally follow it as a principal means of livelihood (EIR 30(1); EIR 30(2)).

The office of mayor generally requires more time than that of other officials within the municipality council. The size of the community and the interest individuals may reflect in the exercise of their own mandate are other factors that have a bearing on the number of hours devoted to the office.

As a general rule, the determination of whether officials within a municipal council must be regarded as working full working weeks will depend on the nature of the mandate and the size of the community. Where the mandate is such that it normally requires full-time attention, then the individual is considered to work full weeks; should it not be of this nature, the individual will be considered unemployed unless there are strong indications that a significant number of hours are being devoted to the activity each week.

4.7.6 Professionals – Doctors, lawyers, accountants, etc.

Professional people, such as doctors, lawyers or accountants, who carry on their activity in an independent office may easily be regarded as a distinct group when compared with independent workers who contract their services, and persons who operate a business on their own account. In fact, while they may not be primarily interested in conducting a business or in performing under a contract for services, they nevertheless become self-employed in order to pursue their own profession, and their activity generally requires the services of at least one employee who looks after administrative work.

As such, claimants who find themselves in this category of workers would be considered working full weeks and would not be eligible for EI benefits. Very exceptional circumstances would have to be proven on behalf of an individual to show that such employment is so minor in extent that a person would not normally follow it as a principal means of livelihood.

Appendix "A" – Type of contract

Difference between a contract of service and a contract for services

Contract of service

A contract of service is an arrangement (either written or oral) whereby an individual, the employee, agrees to work on a full-time or part-time basis for the other party to the contract, the employer, for either a specified or indeterminate period of time.

Under such a contract, one party (the employee), serves another party (the employer), in return for a salary or some other form of remuneration. The employer has the right of control and can direct the manner in which the employee carries out the duties to be performed.

Contract for services

A contract for services is an arrangement whereby one party agrees to perform certain specific work for another party, as stipulated in a contract; it usually calls for the accomplishment of a clearly defined task, but does not normally require the party paying for the service to do anything themselves. There is no right to control the methods of work and no "boss/employee" relationship.

Difference between a contact of service and a contract for services
Contract of service Contract for services
Indicates an employer/employee relationship. Indicates a principal (payer) to independent contractor (worker) relationship.
One party agrees, for either a period of time or indefinitely, to work either full or part time, for another party. It is a contract for one party to serve another party for remuneration. One party (the worker) agrees to do a specified job or task for another. It is a contract to produce a thing or result for a price. Usually for a specified period of time.
Payer determines not only what is to be done but also how it is to be done. Worker determines the method for accomplishing the work.
Worker is performing the services for the payer's profit or loss. Worker is performing the services for the profit or less of his own business.
The payer has the right to control the worker (whether or not the right is actually exercised). The payer does not have the right to control the worker in the performance of his services. (The fact that the payer has the right to determine what he wants and when should not be construed as controlling how the worker accomplishes his job).
The greater the amount of direct control, the stronger the argument for a contract of service. The greater the independence from control, the stronger the argument for a contract for services.

[April 2021]

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