An anonymised composite: a departing agent argued they had really been an employee all along and was owed termination pay. The dependent-contractor doctrine, not the word on the contract, decided how close they came to being right.
At a glance
An agent had worked under a standard independent contractor agreement with the same Ontario brokerage for nine years, generating gross commission income of roughly $96,000 a year, filed each year on a T2125 as self-employment income. The brokerage terminated the agreement with two weeks’ notice, citing a restructuring, and treated the relationship as ending cleanly — the way an independent-contractor agreement is supposed to end.
The agent pushed back, arguing the label did not match the reality: nearly all of their production over nine years had run through this one brokerage, they used the brokerage’s CRM and lead-routing system, attended mandatory weekly office meetings, and had never negotiated a materially different commission split than the one imposed by the brokerage’s standard schedule. “The label on the contract is not what decides it.”
Nine years, $96,000 a year in gross commission, roughly consistent year over year, with no other brokerage relationship at any point in that period — those figures were never in dispute. What was in dispute was what they proved: nine years of exclusive, substantial economic reliance on one relationship is precisely the fact pattern the dependent-contractor doctrine exists to catch, whatever the contract called the arrangement.
The core test asks “whether the person is performing the services as a person in business on their own account,” weighing “control over how and when the work is done, who supplies the tools and equipment, the worker’s chance of profit and risk of loss, and how far the worker is integrated into your business” — and “no single factor decides it. The whole picture does.” But Ontario also recognises an intermediate status: a dependent contractor, defined as “a contractor who works substantially or exclusively for one client over a long period, and is economically dependent on it.” A dependent contractor is “entitled to reasonable notice of termination at common law — and ‘thirty days’ notice’ in your services agreement will not necessarily hold.” Nine years of near-exclusive reliance is exactly the shape of that doctrine, whatever the agreement itself called the relationship.
If a court or the ESA had instead found the agent to be a genuine employee — a further step past dependent-contractor status — the exposure would have run much wider than reasonable notice alone: unpaid overtime, vacation pay, public holiday pay, termination pay and interest under the ESA, plus both the employer and employee shares of CPP and EI that were never withheld, plus penalties and interest reaching back across some or all of the nine years, and a WSIB assessment for unpaid premiums across the same period. The brokerage’s independent-contractor paperwork protected it from that far larger exposure; it did not protect it from the narrower, but still real, dependent-contractor claim.
The tell was structural, visible years before the termination: an agent with no other brokerage relationship, using only the firm’s systems, attending mandatory meetings, for nearly a decade. None of that is unusual for a single loyal agent, which is exactly the trap — the pattern that reads as a strong, stable relationship from the inside is the same pattern that builds a dependent-contractor claim from the outside, and it accumulates slowly enough that no single year looks like the problem.
The brokerage’s employment counsel assessed the dependent-contractor exposure as real, though short of a full employee finding, and the parties settled on a payment equivalent to several months of the agent’s average commission income in exchange for a full release — more than the two weeks the written agreement specified, far less than a wrongful-dismissal claim would have sought had the agent been found a true employee. The brokerage also began offering agents the option of a shorter, non-exclusive referral arrangement for their first eighteen months, specifically to avoid building the same nine-year exclusivity pattern with newer agents going forward.
Related case files
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