Thank you, Mr. Speaker. I have a return to an oral question asked of the Honourable John Pollard, chairman of the Financial Management Board, by Mr. Allooloo on March 30, 1995. It is regarding the legal opinion on contracting summer students.
Mr. Speaker, pursuant to its collective agreement with the Union of Northern Workers, the Government of the Northwest Territories is required to seek the views of the Union of Northern Workers before finalizing any plans to contract out work which would result in employees becoming redundant.
From a legal perspective, consulting with the union on contracting out is only one consideration related to employing summer students through outside agencies. Another matter of substance in this regard is whether the students would still be
deemed employees of the government, even if they were employed through a third party .
Notwithstanding the existence of a "contract for services," an independent contractor may be deemed to be an employee if an employer/employee relationship exists. If an individual is deemed to be an employee of the Government of the Northwest Territories, the provisions of the Public Service Act and the Union of Northern Workers Act would apply, and the government would have to pay wages agreed upon in the collective agreement.
There is no clear test that is used to determine if an individual is a contractor or an employee, although Revenue Canada provides guidelines and criteria to assist in this determination which are published in the government's financial administration manual and in the human resource manual. Contractors generally have control over how and when they do work, they use their own tools and equipment and they have an opportunity for profit or loss from the work. If summer students were hired to do government work in government premises, using government equipment, supervised by government employees, they would be deemed government employees.
There is also a principle of labour and employment law which provides that an employer may contract out work, if the contracts are made in good faith and for bona fide business purposes. If the government contracted work out solely to avoid the imposition of the terms of the collective agreement, this would clearly breach this principle. Thank you.