4145-98-ES North Park Dental Centre operated by Dr. Dilshad Hirji, Applicant v. Lisa Allen and Ministry of Labour, Responding Parties.

BEFORE: D. L. Gee, Vice-Chair.

DECISION OF THE BOARD; January 31, 2000

1This matter is an appeal of an order to pay issued by an employment standards officer on March 27, 1997 pursuant to section 68 of the Employment Standards Act (the “Act”). The officer determined that Lisa Allen was an employee of North Park Dental Centre operated by Dr. Dilshad Hirji (“Dr. Hirji”) and that her employment was terminated in contravention of the pregnancy provisions of the Act. The officer ordered Dr. Hirji to pay Ms. Allen damages in the amount of $22,880. Dr. Hirji appeals the officer’s order to pay on the basis that Ms. Allen was not an employee and that her employment was not terminated in contravention of the Act. In the alternative, Dr. Hirji disputes the quantum of damages determined by the officer. This decision deals with the issues of whether Ms. Allen was an employee and whether her employment was terminated in contravention of the Act.

2It is my determination that Ms. Allen had an employee-employer relationship with Dr. Hirji for the purposes of the Act and that her employment was terminated in contravention of the pregnancy provisions of the Act.

Relevant Provisions of the Act

3The following provisions of the Act are relevant to my determinations:

"employee" includes a person who,

(a) performs any work for or supplies any services to an employer for wages,

(b) does homework for an employer, or

(c) receives any instruction or training in the activity, business, work, trade, occupation or profession of the employer,

and includes a person who was an employee;

"employer" includes,

(a) any owner, proprietor, manager, superintendent, overseer, receiver or trustee of any activity, business, work, trade, occupation, profession, project or undertaking who has control or direction of, or is directly or indirectly responsible for, the employment of a person therein, and

(b) any associated or related corporations, individuals, firms, syndicates or associations treated as one employer under section 12, where any one has control or direction of, or is directly or indirectly responsible for, the employment of a person therein,

and includes a person who was an employer;

3. (1) Subject to section 4, no employer, employee, employers' organization or employees' organization shall contract out of or waive an employment standard, and any such contracting out or waiver is null and void.

(2) A person who receives a benefit under a compromise or settlement described in subsection 65.1 (1) or section 73.0.3 is bound by it if the person required to give the benefit under the compromise or settlement does so.

(3) A compromise or settlement is not binding if it is entered into as a result of fraud or coercion.

43. (1) The employer of an employee who has taken pregnancy leave or parental leave shall reinstate the employee when the leave ends to the position the employee most recently held with the employer, if it still exists, or to a comparable position, if it does not.

Findings of Fact

4There is no real dispute with respect to the facts. Ms. Allen commenced work with Dr. Hirji two days per week on October 24, 1994. Ms. Allen is a dental hygienist and Dr. Hirji is a dentist. Ms. Allen was paid $35 an hour, seven hours per day for two days a week. Her hourly rate was subsequently raised to $37.50 an hour. Ms. Allen did not invoice for her services or collect GST. No statutory remittances were deducted from her pay. Ms. Allen declared herself as self-employed for income tax purposes. Ms. Allen also worked two days a week with another dentist.

5Ms. Allen’s duties involved scaling teeth, oral hygiene, taking x-rays, fluoride application and dental charting. Ms. Allen’s patients were scheduled by Dr. Hirji from 9:00 a.m. to 5:00 p.m. Her pay was not affected by the number of patients she saw in a day. She also performed office tasks including filing charts, phone calls to patients, sterilization of instruments and office and washroom cleaning. She attended office staff meetings.

6Dr. Hirji was responsible for the collection of patient accounts. Accounts receivable or debts of the dental practice did not affect Ms. Allen’s remuneration. Dr. Hirji determined the patient treatment plan. Ms. Allen was not permitted to hire an assistant or send in a replacement.

7Dr. Hirji owned all of the dental equipment used by Ms. Allen except for roughly two sets of scaling instruments that were supplied by Ms. Allen. All disposable materials were provided by Dr. Hirji.

8Prior to Ms. Allen’s maternity leave, Dr. Hirji initiated discussions with Ms. Allen regarding payroll deductions. Dr. Hirji offered to deduct Employment Insurance. Ms. Allen did not agree. Discussions took place concerning Ms. Allen’s return to work date. Ms. Allen’s last day of work was September 26, 1996 and she anticipated returning four months later. Dr. Hirji agreed that, when Ms. Allen returned, her days of work would be increased to four days per week. Based on such agreement, Ms. Allen told the other dentist she was working for that, following her return from maternity leave, she would only be working a half day on Fridays.

9During Ms. Allen’s absence on maternity leave, Dr. Hirji hired a new dental hygienist at a lower hourly rate.

10On January 10, 1997, Ms. Allen was informed by Dr. Hirji’s husband, Mr. Kara, that she could return to work but her hourly rate would be reduced to $28 per hour. Ms. Allen was told that she could take it or leave it. Her responsibilities were to remain the same. On February 6, 1997, Ms. Allen delivered a letter to Dr. Hirji stating that she was ready, willing and able to commence her employment under the previous terms and conditions. On February 10, 1997 Ms. Allen returned to work but was told that she no longer had a job and that she was dismissed.

The Test

The test applied by adjudicators in determining whether a person is an employee for the purposes of the Act has been thoroughly canvassed in the jurisprudence. In Roman Stefanic c.o.b. as Roman’s Decor and Painting (March 21, 1988) ES 2368, Referee R. J. Roberts), the Referee observed at page 5:

In considering these facts, I start with the basic proposition that the Act constitutes broad remedial legislation which is susceptible of the broadest of interpretations in enforcing its legitimate objects. The specific provisions of the Act which are at issue in this case, i.e., the definitions of "employer" and "employee", reads as follows:

1(c) "employee" includes a person who,

(i) performs any work for an employer for or supplies any services to an employer for wages

(ii) does homework for an employer, or

(iii) receives any instruction or training in the activity, business, work, trade, occupation or profession of the employer

and includes any person who was an employee;

1(d) "Employer" includes any person who as the owner, proprietor, manager, superintendent, or overseer of any activity, business, work, trade occupation, or profession, has control or direction of, or is directly or indirectly responsible for, the employment of a person therein, and includes a person who was an employer. ...

It can be seen from these definitions that for an employer‑employee relationship to be found within the meaning of the Act, the alleged employer must have "control or direction of" or be "directly or indirectly responsible for" the employment of the alleged employee.

This generally has led to application of the classic fourfold test established at common law for determining whether a person is an employee or independent contractor. Applying this test, the decision maker considers (1) who has direction and control of the work; (2) who has ownership of the tools; (3) who seeks to benefit from entrepreneurship, i.e. the chance of making a profit; and, (4) who bears the risk of loss. More recently, case law has enlarged the first element of this fourfold test. See Mayer v. J. Conrad Lavigne Ltd. (1979), 1979 CanLII 2088 (ON CA), 27 O.R. (2d) 129 (Ont. C.A.). In that case, the court, concerned that limiting the inquiry to the question of who has "direction and control" of the work might be too narrow in the modern business context, expanded this element by considering whether the alleged employee was part of the organization of the alleged employer, even though the latter did not have authority to control the way in which the work was done. Despite the absence of control over the "how" of the work, the court said, an employment relationship could still be found so long as the work "was subject to the co‑ordinational control of management", id. at p. 133, as to where and when the work was performed.

Findings

11The facts overwhelmingly establish that Ms. Allen was an employee of Dr. Hirji. The fact that Ms. Allen declared herself as self-employed for income tax purposes is of little if any relevance to a determination as to whether Ms. Allen is an employee for the purposes of the Act. The expenses claimed by Ms. Allen on her income tax do not persuade me that she was not an employee of Dr. Hirji. While Ms. Allen may have been incurring expenses to advance her professional development they do not change the nature of her relationship with Dr. Hirji. It simply was not established that those expenses were incurred in relation to the work she performed with Dr. Hirji.

12It is submit on behalf of Dr. Hirji that Ms. Allen is estopped from asserting her legal rights. I am not persuaded that such is the case. The Act specifically stipulates in section 3 that no employee shall waive an employment standard and that any such waiver is null and void. Thus, pursuant to the Act, Ms. Allen could not promise not to assert her legal rights. In any event, I do not accept that there was detrimental reliance by Dr. Hirji. Ms. Allen clearly put Dr. Hirji on notice by way of her letter of February 6, 1997 that she intended to pursue reemployment. Dr. Hirji’s confirmation of Ms. Allen’s dismissal was made after her receipt of such letter. Thus, at the point in time that Dr. Hirji dismissed Ms. Allen, Dr. Hirji was aware that Ms. Allen intended to assert that she was entitled to be reinstated to her former position.

Determination

13It is my determination that Ms. Allen was an employee of Dr. Hirji and that Dr. Hirji’s failed to reinstate her to her position following her pregnancy leave was a contravention of section 43 and 44 of the Act.

Continuation of Hearing

14The hearing of this matter will continue on Friday, February 4, 2000 commencing at 9:30 a.m. at the Board’s offices located at 505 University Ave. 2nd Floor, Toronto, Ontario for the purpose of determining the issue relating to quantum of damages.

15I am seized.

“D. L. Gee”

for the Board