This document provides an overview of key considerations for small businesses in organizing their workplace to avoid common pitfalls. It discusses the importance of using written employment contracts that clearly outline terms and limit liability. It also explains how to properly classify workers as employees or contractors to avoid penalties for misclassification. The document notes legal requirements for unpaid internships and an employer's duty to accommodate employees under human rights laws to avoid discrimination claims.

1. ORGANIZING YOUR
WORKPLACE:
PITFALLS TO AVOID
A GUIDE FOR SMALL BUSINESSES
Note: the information in this presentation is intended as an overview and is not provided, nor should it be relied upon, as legal advice

2. AGENDA
1. Getting the Employment Contract Right
2. When is a Contractor actually an Employee?
3. How to Properly Use Volunteers and Interns
4. The Duty to Accommodate and an Employer’s Obligations

3. THE EMPLOYMENT CONTRACT
• Spell out the terms of employment in a written contract.
• Give the individual time to review before signing.
• Do not allow the individual to start work before the contract has
been signed: clearly specify the start date.

4. THE EMPLOYMENT CONTRACT
The Terms of the Contract
• Consider including confidentiality & non-solicitation obligations.
• Ensure it contains an enforceable Termination Clause.
• Consider including a temporary lay-off or probation clause.

5. THE EMPLOYMENT CONTRACT
Potential Liability
• Failing to implement an enforceable written employment contract can
expose your business to significant liability, including claims for: pay in lieu
of reasonable notice and overtime pay.
• The best strategy is to take pro-active steps before an issue arises.
• Instituting an enforceable contract is an effective way to limit potential
liability and protect your business.

6. THE EMPLOYMENT CONTRACT
Example
Without prior notice, you let go an 8-year employee, 48 years old,
earning $40,000 per year:
Liability with an enforceable contract:
8 weeks ($6,153.85)
Liability without an enforceable contract:
8-10 months ($26,666.66 - $33,333.33)

7. CONTRACTOR VERSUS EMPLOYEE
“If it looks like a duck, if it quacks like a duck”
A contractor is not the same an employee.
• Contractors are not subject to the requirements of the Employment Standards
Act (i.e. vacation pay; overtime pay; parental leave; severance pay)
• Contractors are treated differently for tax purposes – employers do not have
to remit CPP and EI for contractors. The individual contractor bears this
obligation.

8. CONTRACTOR VERSUS EMPLOYEE
The Contractor Test
To determine if an individual is a contractor, ask:
1. Who has control? (place of work, tools supplied, hours working, discipline)
2. Is the individual dependent on your business? (does the contractor provide
services to other parties)
3. Is the individual working for your business, or for him/herself? (do they have an
opportunity to profit/or risk of loss)

9. CONTRACTOR VERSUS EMPLOYEE
Potential Liability
• Choosing to treat an individual as a contractor, when they are actually an
employee, can result in substantial liability.
• The CRA may find that the employer failed to properly remit for CPP and EI.
• The employer can be found liable for failing to comply with the ESA.
• The employer can be required to pay severance pay, termination pay etc.

10. UNPAID INTERNSHIPS
“It has been estimated that young workers engage in over
300,000 illegal unpaid internships every year across Canada and
collectively forego tens of millions of dollars in wages, vacation
pay and contributions to Employment Insurance and Canadian
Pension Plan.”
Andrew Langille – Youth Worker Advocate

11. UNPAID INTERNSHIPS
Criteria for legal unpaid internships in Ontario
1. The person must be receiving training, similar to that in a vocational school.
2. The training is for the benefit of the intern (i.e. new knowledge or skills).
3. The employer derives little, if any, benefit from the activity of the intern
while he or she is being trained.
4. The training doesn't take someone else's job.
5. The employer isn't promising a job at the end of the training.
6. The intern has been told that they will not be paid for their time.

12. Results from MOL 2014
Summer Blitz
$48,543 assessed as
owing to employees.
Most common violations
were for:
• Minimum wage
• Vacation pay
• Public holiday pay

13. ACCOMMODATION AT WORK
The Ontario Human Rights Code
Prohibits discrimination against an individual on one of 14
protected ‘enumerated grounds’
• Age
• Race
• Colour
• Sexual Orientation
• Marital Status

14. ACCOMMODATION AT WORK
Discrimination
• Can be direct/indirect
• Includes treating someone differently
• Occur when hiring/interviewing, while employed or in dismissal.
Duty to Provide Accommodation
• For example, if an individual has a physical disability
• Could include: flexible scheduling; a quiet workspace; computer
screen magnifiers, an ergonomic chair.

15. ACCOMMODATION AT WORK
Duty is to provide ‘reasonable, not preferred accommodation’
Duty does not apply only if it would place undue hardship on your
business.
What is undue hardship?
• Requires an objective enquiry
• May be hard to show (can include excessive cost)
• Average accommodation costs less than $500

16. ACCOMMODATION AT WORK
Recent Examples (of what not to do)
Bouraoui v. Ottawa Valley Cleaning & Restoration
• Told job applicant they only hire ‘white men’.
• Sent 6 text messages saying:
“Try learning English” “I don’t hire foreners I keep the white man working” [sic]
• Ordered to pay $8,000.00
Partridge v. Botony Dental Corporation
• Changed employee’s job while on maternity leave. On her return, her pay had been
reduced, her role was changed, and her hours conflicted with her childcare
obligations.
• Ordered to pay $20,000.00

17. Vey Willetts LLP
Employment Lawyers
1-800-296-7989
paul@vwlawyers.ca
windsoremploymentlawyers.com
vwlawyers.ca/blog