Employment Standards Act - Termination Pay and Employee Classification

Termination pay definition based on the Employment Standards Act

Instructions: Answer the following questions
1. Provide a definition for termination based on the Employment Standards Act.
2. Shariff worked for Home Depot for four years, when he was dismissed without cause.  Calculate how much Home Depot will have to pay Shariff in termination pay.

Refer to the Guide for the Employment Standards Act for your answers to questions 1 and 2. You will find the Guide to the Employment Standards Act at the Read the excerpt below (from the Guide for the Employment Standards Act).  Answer the following questions:
i. Why is it important to understand the difference between independent contractors and employees?
ii. What are some important distinctions between an employee and an independent contractor?

The Employment Standards Act (ESA) applies to employees. The term "employee" is defined in Section 1 of the ESA.The ESA does not apply to independent contractors, volunteers or other individuals who are not considered employees under the ESA. An individual considered an employee may be entitled to rights such as:
•    minimum wage
•    overtime pay
•    public holidays
•    vacation with pay
•    notice of termination or termination pay

Under the ESA, employers are not allowed to treat employees as if they are not employees. If an employer misclassifies an employee in this way, an employment standards officer can issue a notice of contravention that results in a penalty, a prosecution or both against the employer.Please note, the ESA provides minimum standards only. Some employees may have greater rights under an employment contract, collective agreement, the common law or other legislation.

How to tell who is an employee The relationship between an individual and the business (or person) they are working for determines whether the individual is an employee and entitled to protections under the ESA. An individual may be considered an employee under the ESA when at least some of the following describes the relationship:
•    the work the individual performs is an important part of the business
•    the business decides:
•    what the individual is to do
•    how much the individual will be paid
•    where and when the work is performed
•    the business provides the individual with tools, equipment or materials to perform the work
•    the individual cannot subcontract their work to someone else
•    the business has the right to suspend, dismiss or otherwise discipline the individual How to tell who is an independent contractor.

An independent contractor is someone who is in business for themselves. An individual may be considered an independent contractor, and not covered by the ESA, when at least some of the following applies:
•    the business can end the individual's contract for services, but cannot discipline the individual
•    the individual:
•    has the opportunity to make a profit and has a risk of losing money from the work
•    determines how, when or where the work is performed
•    decides whether to subcontract some of the work.