The Role of Intention in Distinguishing Employees from Independent Contractors

In a rather sudden shift in the case law, the Federal Court of Appeal has directed that the common intention of the parties should play a role in distinguishing employees from independent contractors in tax cases. A review of the case law shows that there are many unanswered questions about the appropriate role of intention, and that intention may not play a major role in characterization decisions. The author argues that there is no justification for considering intention and that there are many reasons why intention should not be considered. However, if the courts continue to consider intention to be relevant to the distinction between employees and independent contractors, the author maintains that they should make their reasons clear to legitimize intention as a relevant consideration and provide direction for subsequent cases.