In its latest choice, Modern Cleaning Concept Inc. V Comité paritaire de l’entretien d’édifices publics de l. A. Région de Québec, the Supreme Court of Canada (SCC) considered the distinction between unbiased contractors and personnel in a franchisor-franchisee dating. The majority of the SCC upheld the decision of the Québec Court of Appeal (the “Court of Appeal”) and determined that based totally on a attention of the whole courting between the events, the franchise in question became a worker. The SCC reiterated that the words of the agreement by myself are not determinative of the connection among the parties and that the totality of the connection among the events, as demonstrated through elements such as degree of manage, ownership of gear, the danger of earnings and threat of loss, ought to be considered.
At difficulty in Modern Cleaning Concept Inc. V Comité paritaire de l’entretien d’édifices publics de l. A. Région de Québec became the right characterization of the relationship between Modern Cleaning Concept Inc. (“Modern”), and Francis Bourque, a franchisee of Modern’s whose interests have been represented by using Comité paritaire de l’entretien d’édifices publics de la région de Québec (the “Comité”). Modern’s function becomes that Mr Bourque changed into an unbiased contractor, even as the Comité maintained that he becomes a worker properly. This distinction in characterisation affected the applicability of the Decree respecting building service employees inside the Québec vicinity (the “Decree”) as well as, via extension, the Act respecting collective settlement decrees (the “Act”). Were Mr Bourque held to be a worker, he would be entitled to protections under the Act and the Decree, inclusive of, as an example, payment of minimum wage.1
Operating in Quebec, Modern presents cleaning offerings to its customers thru its franchise community. Modern is liable for negotiating master contracts with clients which it later assigns to its specific franchisees accountable for certainly imparting the services in question. Franchisees do now not participate in the negotiation of the master contracts.
Mr. Bourque joined Modern in 2013 as a subcontractor and became a franchise in 2014. The franchise agreement signed by using Mr Bourque expressly provided that Mr Bourque become an independent contractor and that he would be entitled to “whole manipulate over the control of his operations which involves a commercial enterprise danger as in another business, for which the franchisor is in no manner a guarantor.” Mr Bourque becomes also contractually required no longer to compete with Modern, to record any new cleaning opportunities to Modern (to permit Modern to barter additional master contracts), to report any lawsuits he obtained from customers to Modern, and to be chargeable for hiring and firing personnel.
Mr Bourque’s customers remitted price for Mr Bourque’s services to Modern and, in turn, Mr Bourque was paid via Modern, however most uncomplicated after Modern had deducted various (and, at instances, widespread) quantities as a result of Modern. A few months after he entered right into a dating with Modern, Mr Bourque terminated the franchise settlement.
The Comité, a corporation whose mandate is to oversee compliance and enforcement of the Decree, investigated Modern and, in 2014, the Comité concluded that Mr Bourque changed into a Modern worker. As a result, it began lawsuits in Québec for Mr Bourque’s unpaid wages.
The Trial Decision
At trial, the choose determined that Mr Bourque become an independent contractor. The trial judge determined Mr Bourque had owned his very own cleaning enterprise and acted as a subcontractor for Modern before turning into a franchise, which advised an impartial contractor relationship. Though the trial decide commented on certain records of the parties’ courting which counseled an corporation-worker relationship (along with, for example, the fixed phrases of the franchise settlement, Modern’s supervision of Mr. Bourque’s paintings, and the phrases stipulated through Modern for charge of services), the determining aspect in the trial judge’s analysis came all the way down to the parties’ purpose – the trial choose located that Mr Bourque’s intention changed into to increase his commercial enterprise.
The Court of Appeal Decision
The Court of Appeal reversed the trial judge’s choice, protecting that the failure to correctly remember the precise and tripartite nature of the contractual relationship between the parties, which supplied that Modern in the end remained liable to its customers even after assigning the contracts to its franchisees, became a mistake. The Court of Appeal held the tripartite nature of the contractual dating between Modern, its customers, and its franchisees supposed that Mr Bourque becomes well characterised a worker.