There are many different types of relationships which businesses can have with the people and corporations who perform services for the business, including but not limited to employment relationships, independent contractor relationships, dependent contractor relationships and partnerships. Different legal rules apply depending upon the type of relationship(s).

While there is no single conclusive legal test for determining whether a relationship is an employment relationship or not, courts often consider the level of control the purported employer has over the worker’s activities, the degree to which the worker provides his own equipment, whether the worker has the power to hire and fire fellow workers or helpers, the degree of financial risk and opportunity for profit of the worker, and the degree of responsibility for investment and management held by the worker.

Businesses deciding to operate within Canada should determine the degree to which the various services required to be performed for the business should be performed by employees, and the degree to which these services should be performed by contractors, partners or via other types of legal relationships. Those wishing to conduct business in Canada should be aware of the basic employment and labour law regimes in Canada and be cognizant of the potential legal obligations which employment relationships are subject to...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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