In order to determine whose vicarious liability it is, the relationship of being an employee or an independent contractor must be clarified first. Which including various forms of employment legislation, the assessment of income and business taxes, whether a dismissal is reasonably handled and if the contractual rights are properly applied.
According the “master’s tort theory”, the acts of employees are the acts of the employer in law as what the employees do is considered under the authority of the employer. So the employer is totally responsible for whatever his employees do. Another theory named “servant’s tort theory” also indicates that the employer should be liable for the acts of his employees since the employer is the superior and in charge. But it does not make any sense for an employer to take responsibilities for acts of an independent contractor, who is in business on his own.
So the central question is that whether the person who performed the services is doing so as a person in business on his own account or under the relationship of an employment. To determine, we need to consider at least 3 major factors: direction and control, the extent of integration and mutual dependency and the operation process of business (such as ownership of tools, whether hire his own helpers, the degree of financial risk taken by the worker, the worker’s opportunity for profit, the degree of responsibility for investment and management held by the worker).
1. Direction and control.
A significant question is that how much control Sagaz had over AIM? In the case related to Canadian Tire, the information given indicates that Sagaz and AIM are two different separated legal entities. AIM paid for its own expenses incurred in business, like commissions and travel expenses. The head office of AIM is located in New York, and Sagaz’s is located in Florida, which is the evidence that they are not together. Sagaz just had a contract with AIM, stating that AIM would provide services to maintain the goodwill of Canadian Tire, and some terms relates to price and conditions as well. But how to provide the service is on AIM’s decision. Sagaz is not controlling AIM ‘s activities, AIM could serve other companies at the same time.
2. Integration
Another important question need to be answered to make a determination of the relationship is that if the worker or the services he performed integral to the employer’s business. In the case of Dynamic industries, during the period of appeal, Mr. Martindale provided construction service for SIIL and which made him a part of the business, like an employee, while when we look at the monopolization of Mr. Martindale during that period, he did not only provided services to SIIL, he also served many other enterprises apart from SIIL. So Mr. Martindale does business with various entities as an independent contractor, not an employee of anyone.
3. The operation process of business.
This category includes a lot.
In terms of responsibility for investment and management, in the case relates to Sagaz, after signing the contract, it was AIM and Landow