The Ontario Labour Relations Board considered whether a registered massage therapist was an employee, and covered by the Employment Standards Act, 2000 or and independent contractor and excluded.
Deciding whether someone is an employee or independent contractor is determined by examining the substance of the relationship, not its form. In other words, the Board is more "interested in the substance of the relationship than in the manner in which the parties structure their compensation arrangements". According to the Board:
Ultimately, the question is whether in performing the work he was engaged to perform by the clinic, Mr. Li was performing it as a person engaged in business on his own account. If so, he was an independent contractor. If not, then he was an employee within the meaning of the Act.
The Board accepted the approach set out in its earlier decision of 2006515 Ontario Inc. (c.o.b. Greco Health Shack),  O.E.S.A.D. No. 34 (January 12, 2005) which referenced the leading Supreme Court of Canada case of 671122 Ontario Ltd. v. Sagaz Industries Canada Inc where it was held that “there is no conclusive test which can be universally applied to determine whether a person is an employee or an independent contractor”.
The Board found that Mr. Li was an employee of Active Therapy and was influenced by the fact that:
- Mr. Li was dependent on the clinic for client referrals which he saw at Active Therapy. Therefore his opportunity for profit was determined in great part by Active Therapy.
- Mr. Li had no share of the clinic’s business or any discretion in the manner in which it was conducted.
- During Mr. Li’s tenure at the clinic there were no other Registered Massage Therapists working at the clinic and, as such, he was not free to work as he pleased. Mr. Li was an integral part of Active Therapy’s business which is a strong indication that he was an employee.
- I am satisfied that the clinic exercised considerable control over Mr. Li’s schedule. The clinic had oversight of Mr. Li’s appointments, including returning clients.
- The clinic provided Mr. Li with the equipment including a massage table, sheet and towels which were required to perform his job.
This is the most recent application of the Sagaz case under the ESA and an important case particularly in this sector.