Clayton began working for Sleep Eze , located in Newmarket, Ontario, in 1980 as

Question

Clayton began working for Sleep Eze, located in Newmarket, Ontario, in 1980 as a customer service manager. In 1995, Sleep Eze had Clayton and all other salespeople enter into a series of one-year agreements that stated that they could be terminated on 60 day’s notice. Three years later, in 1998, the company insisted that Clayton incorporate, and from that point on, the agreements were between Sleep Eze and Clayton’s incorporation. The agreements defined Clayton, and later his corporation as an “independent marketing consultant” and expressly stated that the relationship was not an employment relationship, but rather an independent contractor – principal relationship. Clayton paid for his own office space and remitted his own income taxes and workers’ compensation premiums. At the same time, Sleep-Eze set prices, territory, and promotional methods and Clayton was limited to servicing Sleep-Eze exclusively. In 2003, Sleep-Eze terminated the agreement with 60 days’ notice. Clayton sued for wrongful dismissal damages, alleging that he was an employee.

i. What arguments could Clayton make to support his position that he was an employee?

ii. What arguments could Sleep Eze make to support its position that Clayton was an independent contractor?

iii. Which side do you think would be successful?

Explanation / Answer

1. Clayton thought that he is working for the firm as an employee and he is the representative of the firm. For this only he is performing the additional activities like preparing promotional activities for the firm, he is taking care of promotion of the brand in the market sincerely. And the relationship is going from the long times, he assumes that it still continues. But the business scenario been changed and the time comes to an end.

2. Sleep Eze treated and made an agreement with Clayton like agencyship. Clayton is the agent of Sleep Eze, promotes the welbeing of this firm, for this only they made an agreement. As per the agreement, Clayton is an agent to this firm and works as per the guideliness of the firm. The payment also on the basis of performance of Clayton, but not like an employee payment mode. As the relationship between these two is Principal and agency relationship, the firm given a notice of 60 days to terminate the agreement between these two.

3. I go with the openion of Sleep Eze only. Because they made an agreeement with this firm as principa agency relationship, and they are doing busienss based on these conditions only. Now, if Clayton announced that he is like employee and having some additional rights lilke employee only, it wont works. Hence, i can say that Sleep Eze win this appeal.

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