Question

Angela has an annual contract with Stenbach Service Centre to provide property maintenance services; this includes lawn care, snow removal and parking lot maintenance. Angela spends, on average, 20 hours per week working at the company’s premises and is paid a flat amount monthly. She hires part-time workers, when necessary, to assist her. Angela does not have any other clients. Angela uses her own small tools; however the company supplies and maintains a riding lawn mower and a snow plow for her use. Her contact at the company is Chris Moore, the Facilities Manager, who meets with her every Monday to discuss the work to be done that week. Chris approves Angela’s monthly invoices and submits them to Accounts Payable. Does Angela have a contract of service or a contract for service with Stenbach Service Centre As the company’s Payroll Supervisor, explain to Chris the process and factors you used to make your decision.  

Answer 1

Facts of the Case: Angela has an annual contract with Stenbach Service to provide property maintenance services; this includes lawn care, snow removal, and parking lot maintenance. Angela spends, on average, 20 hours per week working at the company's premises and is paid a flat amount monthly. She hires part-time workers, when necessary, to assist her.

Meaning of 'Contract of Service' & 'Contract for Service': The law makes a distinction between a contract of service and a contract for service. Basically, a contract of service applies to an employee-employer relationship, while a contract for service applies in the case of an independent sub-contractor. This distinction is most important as the protection of employment legislation does not apply to independent subcontractors – with the exception of the Safety Health & Welfare At Work Act 2005 and the Equality Act 2004.

A contract of service creates an employer-employee relationship. For example, a contract executed between a company and its employees or between you and your driver. On the other hand, a contract for services is a contract between two independent parties (often called independent contractors) for rendering services of any nature. For example, a contract between company A and company B for the supply of manpower or the relationship between a rider in a uber cab and an uber driver.

Conclusion: Based on the above facts and related provision of law, it is clear that Angela has a 'Contract for Services'. Merely she works for an average of 20 hours per week and that she does not have any other clients does not make in 'Contract of Service'. Stenbach Service Centre is paying Angela fixed sum of money based on an annual contract and Angela sometimes hires part-time workers to assist her show that she is independent of Stenbach Service Centre.