While true independent contractors are not owed severance, many workers in Manitoba are legally “dependent contractors.” If you work almost exclusively for one company and they control your workflow, you may be entitled to full common law severance pay when your contract ends.
The modern workplace has changed drastically. Across Manitoba, from tech workers in Winnipeg to transport drivers in Steinbach, companies are increasingly hiring people as “independent contractors” rather than traditional employees. For the business, this saves thousands of dollars by avoiding EI premiums, vacation pay, and payroll taxes.
However, simply putting the word “contractor” at the top of an agreement does not magically erase your employment rights. 🔍 The law in Canada looks at the actual day-to-day reality of your job. If a company treats you like an employee but calls you a contractor to avoid paying a fair severance package when they let you go, a local employment lawyer can help you fight back for the compensation you deserve.
Step-by-Step Process to Claim Severance as a Contractor
Challenging a large company on your employment status requires clear evidence. If your contract was abruptly cancelled, follow these steps to determine if you are owed a severance package.
Step 1: Evaluate Your “Dependency”
Ask yourself how much control the company had over you. 🤔 Did you work for them 40 hours a week? Did they forbid you from taking on other clients? Did you have to wear their uniform or use their company email address? If you answered yes, you are likely a “dependent contractor” or a misclassified employee.
Step 2: Do Not Sign a Final Release
When a company terminates a contractor, they often offer a tiny payout (like one or two weeks of pay) in exchange for signing a full release. Never sign this document immediately. Doing so will completely block your ability to sue for the 6 to 12 months of common law severance you might actually be legally owed.
Step 3: Gather Proof of the Working Relationship
Collect documents that prove you were integrated into the company. 📁 This includes old schedules, performance reviews, emails from managers telling you how to do your job, and your invoices showing that 100% of your income came from this single employer.
Step 4: Hire an Employment Lawyer to Demand Severance
Bring your evidence to a Manitoba law firm. Your lawyer will draft a formal demand letter to your former employer, outlining how a judge at the Court of King’s Bench would likely view you as a dependent contractor and demanding a proper common law severance package.
How Much Does it Cost in Manitoba?
Many contractors hesitate to seek legal help because they assume fighting a corporation will drain their bank accounts. 💵
| Legal Route for Contractors | Estimated Cost (CAD) |
|---|---|
| Initial Case Assessment / Consultation | $300 – $500 |
| Lawyer Drafting Demand Letter | $500 – $1,500 |
| Wrongful Dismissal Lawsuit | 25% – 35% (Contingency Fee) |
| CRA Ruling on Status (Form CPT1) | Free (Federal government process) |
Because misclassification cases are common, a lawyer from our directory will often agree to work on a contingency basis, meaning you pay zero legal fees unless they successfully recover a settlement for you.
How Long Does the Process Take?
Reaching a settlement usually takes 4 to 8 weeks once your lawyer gets involved. 🕑 Most employers know when they have misclassified a worker and prefer to settle quietly out of court. However, if the company stubbornly refuses to pay and insists you were a true independent contractor, a lawsuit at the Court of King’s Bench can take 1 to 2 years to conclude.
Frequently Asked Questions (FAQ)
What exactly is a ‘dependent contractor’?
A dependent contractor is a middle-ground legal category in Canada. You might operate your own business and send invoices, but if you rely entirely on one company for your income and they exercise significant control over your work, you are “dependent.” The courts say dependent contractors are entitled to common law severance just like regular employees.
Does having an incorporated business ruin my claim?
No. Even if you created an INC. or LTD. company to bill your employer, a judge will look past the corporate structure. If the daily reality was that you worked exclusively for them like a normal employee, you can still be found to be a dependent contractor owed severance.
What if my contract specifically says ‘no severance will be paid’?
If the court determines you were legally an employee or a dependent contractor, then a clause stating “no severance” is usually void because it violates the minimum standards of the Manitoba Employment Standards Code. You cannot legally sign away your basic employment rights.
Can I go to the Employment Standards Branch instead of a lawyer?
You can file a claim with Employment Standards for free, and they will investigate if you were an employee. However, they can only award you the statutory minimum notice (a few weeks). A lawyer pursues your “common law” rights, which often results in months of severance pay.
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