Contract formed in Quebec

Applies to contracts formed in Quebec.

When determining whether a person is an employee or a self-employed worker in the province of Quebec, you have to examine the relationship between the worker and the payer using a three-step approach. The CRA uses this approach, which is based on the Civil Code of Québec (CCQ), to determine the employment status of a worker during the CPP/EI ruling process.

Steps

1. Determine the parties' intention

   Determine the intention of the worker and the payer when they entered into the working arrangement.

   • Did the two parties intend to enter into a contract of service (employer-employee relationship)?
   • Did the two parties intend to enter into a contract for services (business relationship)?

   It is important to know how they defined their working relationship and why they defined it as such.

   Sometimes the intention is clear and both parties are in agreement (common intention). Sometimes the two parties have a different understanding of the status of their employment relationship, in which case there is no common intention.

   You should consider both parties' intentions as part of the context of the employment to analyze. You can find the parties' intentions by reading the written contract, if any, or by examining the actions and stated intentions of both parties.

   Workers and payers can choose how they set up their affairs; however, the employment status they choose must reflect their working relationship. In other words, all of the facts, including the actual terms and conditions of employment, determine a worker's employment status, not just the intention.

2. Consider factors to determine if the employment meets the CCQ definition of a contract of employment or a contract for services

   Determine if the employment meets the definition of a contract of employment or of a business contract (contract for services) as defined in the CCQ by considering the following factors:

   • carrying out the work
   • remuneration
   • relationship of subordination

   It is important to gather the facts and analyze them in light of the specific context of the employment and the intention of the parties.

   To help you understand the process and make a determination, we briefly describe each factor and give some indicators  that show whether a relationship of subordination exists.

   1. Carrying out the work

      Whether there is an employer-employee relationship or a business relationship, the worker has to do the work. It can be part-time or full-time for a specified or indeterminate period.

   2. Remuneration

      Remuneration means how a worker is paid. It includes all consideration and benefits that have a monetary value. Whether there is an employer-employee relationship or a business relationship, the worker will receive remuneration in exchange for work. The remuneration can be calculated by time, by the piece, or in another manner.

   3. Relationship of subordination

      This factor helps distinguish the employer-employee relationship from a business relationship.

      The relationship of subordination is the capacity, the authority, or the right of a payer to exercise control over the worker's activities and the manner in which the work is done.

      Degree of control or independence

      Consider the degree of control held by the payer or the degree of independence held by the worker.

      The actual degree of control will vary with the type of work and the skills of the worker.

      Deciding the degree of control can be difficult when examining the employment of professionals such as engineers, doctors, and IT consultants. Because of their expertise and specialized training, they may require little or no specific direction in their daily activities. When examining the factor of control, it is necessary to focus on both the payer's control over the worker's daily activities and the payer's influence over the worker.

      Payer's right to exercise control

      It is the right of the payer to exercise control that is relevant, not whether the payer actually exercises this right.

      It is the control of a payer over a worker that is relevant and not the control of a payer over the end result of a product or service that they have purchased.

      Indicators showing that the worker is an employee

      • The payer directs and controls many elements of how the work is done (such as what, who, where, when, and how)
      • The payer controls the worker's absences, such as sick leave or vacation leave
      • The payer controls the worker with respect to the results of the work and the method used to do the work
      • The payer creates the work schedule and establishes the worker's rules of conduct
      • The payer can impose disciplinary actions on a worker
      • The worker has to do the work personally
      • The worker has to submit activity reports to the payer
      • The worker's activities are reserved to a single payer (exclusivity of services)
      • The worker receives training or direction from the payer on how to do the work
      • The worker accepts being part of the payer's business to have the latter benefit from their work
      • The parties have inserted a non-competition clause in their written contract
      Indicators showing that the worker is self-employed

      • The worker is usually free to work when and for whom they choose and may provide their services to different payers at the same time
      • The worker does not have to carry out the services personally. They can hire another person to either do the work or help do the work
      • The worker can generally choose the time and the manner in which the work will be done
      • The worker does not need to be at the payer's premises
      • The worker can accept or refuse work from the payer
      • The working relationship between the payer and the worker does not present a degree of continuity, loyalty, security, subordination, or integration, all of which are generally associated with an employer-employee relationship

      For certain working relationships, it can be difficult to determine whether there is a relationship of subordination. You might also want to review indicators used in common law under Consider factors to understand the working relationship and whether the facts reflect the parties' intention in the section Contracts formed outside of Quebec.

3. Compare the parties' intention with their actual working relationship

   Compare each party's intentions with their actual working relationship and decide whether the conditions of the working relationship represent the status that the parties have chosen and whether they are consistent with the definitions of the CCQ.

Examples

Additional step before determining the employment status

Review more guidance for specific professions that may apply to the situation before making a determination on the employment status.