Court victory for Ontario couple sets new precedent for precarious workers

Update:

The Court of Appeal for Ontario, overruled a May 2, 2014 Superior Court of Appeal decision today, that stated that Canadians living outside of Canada for five (5) or more years, should be allowed to participate in the Federal Election by voting. The rule disenfranchising Canadians who have been abroad for more than five years was enacted in 1993 amid debate about the strength of their ties to Canada and their knowledge of domestic politics.
The Court of Appeal for Ontario’s ruling (see Keenan v. Canac Kitchens Ltd., 2016 ONCA 79) has wide-reaching implications for the growing number of workers who are being classified as contractors. Worker’s rights activists say employee misclassification is a growing problem in Ontario, as some employers seek to minimize their obligations under the law. Independent contractors have no rights under the Employment Standards Act. Employer’s beware: when somebody works for you, you can call them employee or you can call them a contractor – but, they’re going to be entitled to notice.

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Judge hands Lawrence and Marilyn Keenan highest notice period ever awarded to contractors in Canada

It was furniture that brought Lawrence and Marilyn Keenan together, and furniture that earned them a place in legal history.

What would become a 43-year-marriage all started when handyman Lawrence fixed Marilyn’s broken chesterfield. The pair went on to spend three decades working together for a Toronto-area furniture company renovating kitchens. When the business closed in 2009, the Keenans were abruptly let go, with no notice or severance.

The reason: their company had classified them as “independent contractors,” a category with no protection under Ontario’s employment laws.

Now, in a precedent-setting victory for precarious workers across the province, the Keenans have challenged that designation — and won. They have been awarded $125,000 after a judge found Canac Kitchens misclassified their employment status and owed the couple 26 months’ notice. It’s the highest notice period ever awarded to a contractor in Canada (see: Keenan v. Canac Kitchens Ltd., 2016 ONCA 79)

“We spent the best years of our working life there,” Marilyn told the Star. “It was good to know that there’s someone there who can help you get what you deserve.”

“It’s a very strong statement against companies who are trying to avoid obligations to their workers by simply calling them contractors rather than employees,” their lawyer Matthew Fisher added.

In a statement to the Star, Kohler — the American furniture giant that owned Canac Kitchens — said it respected the court decision but believed “the law reasonably applied to the facts presented in this case required a different outcome.”

To the Keenans, who lost their jobs at ages 63 and 61, the outcome is the recognition they say they earned.

Lawrence was hired as an employee by Canac in 1976, and his wife followed suit in 1983. The couple says they poured their life into the company, but in 1987, Canac informed the Keenans they would no longer be considered employees and instead categorized as independent contractors, according to court documents.

The Keenans say the reclassification meant little to them. They say their relationship with the company remained essentially the same, and they continued to see themselves as loyal employees of Canac — sporting company-branded clothes and even receiving a signet ring for lengthy service.

“For over a generation they were Canac’s public face to the outside world. Over a period of approximately thirty years — the entirety of their working lives — the Keenan’s income had come from Canac and they relied on that income to support themselves and their family,” the final court ruling said.

“We liked our jobs. We expected to just work there until we retired. It was a good job,” Marilyn told the Star.

Until it wasn’t.

The couple said they felt shock and betrayal when they were informed in 2009 by the company they were being let go with no notice or severance. The panic set in when they realized they had no way to stay financially afloat as they approached retirement.

So instead of accepting their fate, the unassuming couple who grew up on farms and lived in Oshawa, decided to take on their old bosses. And after a lengthy court battle, the Ontario Court of Appeal ruled in January that the Keenans should have been considered dependent contractors because they were economically reliant on Canac: the vast majority of their income came from working for the company, and they were treated as representatives of the Canac brand in Ontario.

Under the law, their dependent contractor status meant they were entitled to reasonable notice before being terminated. The Keenan’s $125,000 pay out came in lieu of the 26 months’ notice the judge said they were owed.

The court’s ruling has wide-reaching implications for the growing number of workers who are being classified as contractors. Worker’s rights activists say employee misclassification is a growing problem in Ontario, as some employers seek to minimize their obligations under the law. Independent contractors have no rights under the Employment Standards Act.

The Keenans’ lawyer says their win reaffirms that precarious workers can successfully challenge misclassification cases, and win themselves the protections they are entitled to.

The ruling also sends a clear signal to employers, Fisher said.

“When somebody works for you, you can call them employee or you can call them a contractor. But they’re going to be entitled to notice.”

And although victory was never a given for the couple, the Keenans say they simply hope their experience will embolden others.

“Don’t just sit back and think you can do nothing about it. Talk to somebody,” Lawrence said.

“You can either pursue it, or you can sit back and get nothing.”

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