Court decision
Paid as a contractor? You may still be owed notice
You invoice, or you're paid commissions. Your tax slip says "self-employed". Then the company you've worked with for years cuts you off and says it owes you nothing, because you were never an employee. An Ontario court has just shown that some contractors are owed notice too.
19 years of sales, then no cheque
In Faragher v. ProRich Seeds (2016) Inc., 2026 ONSC 4161, decided on July 16, 2026, a salesman had sold one company's seed to farmers from 2002 to September 2021. He was paid commissions through a $5,000 advance every month, with self-employed tax slips.
In 2021 the company, unhappy with his sales, held back his monthly advance for the first time. He was 61. When he protested, he was told he wasn't an employee, and the company treated him as having resigned.
Not an employee, but still owed notice
The judge agreed he wasn't an employee: the company didn't control his hours, his customers or how he sold. But the law has a middle category, the dependent contractor, who is entitled to reasonable notice (time, or pay instead, to find other work) like an employee. What counted:
- The label doesn't decide. Neither what the parties called the relationship nor how he filed his taxes settled it.
- Length. About 19 years with the same company.
- Dependence. The significant majority of his income came from it, and he sold seed for no one else, even though he also traded cattle on the side.
Holding back the advance without warning, after paying it every month for years, was a constructive dismissal: the company's own breach ended the contract. The court set reasonable notice at 21 months.
The catch: what the money was really worth
His damages were based on the commissions he had actually been earning, not the larger advances: $56,000.70 in all. And because the advances were to be reconciled against his sales each year, the company could claim back $59,334.19 of unearned advances from the 2020-2021 season on, though not from earlier years it had let pass in silence. In the end, he owed the company $3,333.49.
Are you really "just a contractor"?
If most of your income has come from one company for years, don't assume you can be dropped with nothing. Courts look at how the relationship really worked.
Read our summary of the decision, browse more dependent contractor decisions, or run your numbers to see what reasonable notice could look like after your years of service.
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Sources
This article is general information about Ontario employment law, not legal advice. The law and its application change, and every case turns on its own facts: for advice about your situation, speak with an Ontario employment lawyer.
