A Contract of Service or a Contract for Service Between Terri and Jackson Mortgage Brokers

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A contract of service and a service contract are two distinct types of agreements that define a workers status in a company. A contract of service indicates an employer-employee relationship, while a service contract is preferred in the case of a self-employed individual (Canada Revenue Agency 7). Therefore, to understand whether Terri has a contract of service or a contract for service with Jackson Mortgage Brokers, the government-recommended testing might be performed, and the factors indicating a service contract should be reviewed.

During the test process, the companys Payroll Supervisor should perform a series of tests to understand whether Terri can be classified as the companys employee. Several tests, including a control test, entrepreneur test, and organization or integration test should be done to specify the type of employment relationship (Government of Alberta). A control test defines whether an employer directs an employee. Glenn Simpson, the Facilities Manager, discusses with Terri which work should be done each week, but he does not control or direct her or give as her employer would.

Another test aims to determine the owner of a business and the tools used. According to an entrepreneur test, Jackson Mortgage Brokers is an owner of the business, and it provides Terri with work equipment such as a riding lawnmower and a snowplow, but she also owns the small tools she uses in her work. This situation does not fully comply with the employer/ employee type of relationship, as Terri uses her equipment as well as the tools provided by the company. Finally, an organization or integration test helps to answer the question of whether a worker is an accessory or an integral part of an organization. As Terris responsibilities (i.e., lawn mowing, snow removal, and parking lot maintenance) are not crucial for the functioning of the mortgage brokers company, she might be viewed as an accessory.

Moreover, the factors which indicate that a service contract was used should be reviewed to ensure that the type of her contract is chosen correctly. As an independent contractor, a worker is paid a contract price when a report or accounting is submitted to a companys corresponding department. Since the Facilities Manager regularly submits Terris monthly invoices to Accounts Payable while Terri receives a flat amount, she might be considered a self-employed worker (Government of Alberta). The freedom to use discretion in unspecified areas is another feature of a contract for service which Terri uses by hiring part-time workers for assistance.

To sum up, it might be deduced that Terri does not have a contract of service with Jackson Mortgage Brokers, but instead, has a contract for service as a self-employed worker and independent contractor. The conclusion was achieved by performing the series of tests proposed by the Government of Alberta, followed by the analysis of factors in Terris relationship with the company in question.

Works Cited

Contract of Employment or Fee-For-Service Contract Directive. Government of Alberta, 2020. Web.

T4001 Employers Guide  Payroll Deductions and Remittances. Canada Revenue Agency, 2019. Web.

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