Salmon v. Sonnet Insurance Company

What This Case Is Really About

A guy gets hurt in a car accident. Everyone agrees he deserves income replacement benefits. The only fight? Whether he gets $400/week (the employee rate) or $185/week (the self-employed rate). That's a $215/week difference — over five years, we're talking six figures. So yeah, the label "employee vs. contractor" is doing a lot of heavy lifting here.

1. The Main Issue

Lejaun Salmon got into a car accident on October 12, 2020. He was previously designated as catastrophically impaired — meaning this was serious. He applied for Income Replacement Benefits (IRBs) under Ontario's auto insurance system (the SABS — Statutory Accident Benefits Schedule).

Here's the thing: nobody was arguing about whether he deserved IRBs. Both sides agreed he did. The entire fight was about how much per week he should get, and that boiled down to one question:

Was Lejaun an employee or self-employed at the time of the accident?

Under the Schedule, employees can get up to $400/week. Self-employed folks max out at $185/week. Same injury, same person, wildly different cheque — all based on a classification question.

2. What the Insurer (Sonnet) Was Arguing

Sonnet's position boiled down to: "This guy was a contractor, not an employee. Pay him accordingly."

Their arguments:

The name on his paycheque didn't match the company he worked at. He worked at Skyway Canada but got paid by a numbered company through an employment agency (First Choice Employment Solutions). Sonnet basically said: different name on the cheque = different relationship = contractor.
No source deductions were taken off his pay. No income tax, no WSIB premiums — the classic hallmarks of being on payroll were missing. Sonnet argued this proved he wasn't a real employee.
He wasn't "managed" like an employee. Sonnet tried to paint the picture that he was operating independently, like a contractor would.

In short, Sonnet looked at the paperwork (or lack thereof) and said: "If it doesn't look like employment on paper, it isn't employment."

3. What Lejaun (the Applicant) Was Arguing

Lejaun's side said: "Forget the paperwork glitches — look at what actually happened every single day."

His arguments:

He showed up where Skyway told him to show up, when they told him to show up. His hours, breaks, duties, and location were all set by Skyway. That's not contractor life — that's employee life.
He wore a company uniform. Skyway provided it. Skyway required it. You don't hand a contractor a uniform and a name badge.
Tools and materials were supplied by Skyway. He didn't bring his own equipment. He used theirs.
He was supervised daily by a Skyway yard foreman named Ibrahim Muzamil.
He got overtime pay when he exceeded 44 hours a week — a very employee thing.
He never invoiced anyone. He never charged HST. He had no business of his own. He didn't have employees. He was a labourer showing up to do a job someone else controlled.
The missing deductions were the agency's mistake, not his choice. The employment agency (First Choice) didn't know he had a social insurance number, so they never set up deductions. The agency's own rep, Corey Flynn, got on the stand and said — essentially — "Yeah, that was our bad."

Lejaun also pointed to the Supreme Court of Canada's decision in Sagaz, which says there's no single magic test for employment vs. self-employment. You have to look at the total relationship. And when you do that here, every indicator points to "employee."

4. What Happened in the End

Lejaun won. Decisively.

Vice-Chair Neil Levine found that Lejaun was an employee for IRB purposes and is entitled to $400/week from October 20, 2020, ongoing, plus interest on all overdue payments.

Here's how he dismantled Sonnet's arguments one by one:

On the "different name on the cheque" argument: The adjudicator basically said lots of businesses pay employees through numbered companies or third-party payroll entities. A name mismatch on a cheque doesn't transform an employee into a contractor.
On the "no source deductions" argument: The employment agency's own representative testified under oath that this was a mistake. He said if he'd known Lejaun had a SIN, deductions would have been taken. The adjudicator also noted there were no invoices, no HST charged — the absence of deductions pointed to an administrative error, not a business relationship.
On the "not managed as an employee" argument: Three witnesses — Lejaun himself, the agency rep (Flynn), and Skyway's own yard foreman (Muzamil) — all confirmed he was supervised and managed daily. The adjudicator found the "he wasn't managed" claim simply didn't hold up against the actual testimony.

Flynn also dropped a key admission: the distinction between "casual" and "permanent" labour his agency supplied to Skyway was artificial — all workers were treated as employees regardless.

The adjudicator applied the Sagaz "total relationship" test and found that on a balance of probabilities, every meaningful indicator pointed to employment: controlled hours, supervised work, company uniform, company tools, no business of his own, no invoicing, overtime pay. The paperwork gaps were the agency's errors, not evidence of self-employment.

Why This Matters

This case is a clean reminder that substance beats form. An insurer can't point to administrative screw-ups by a third-party employment agency and use them to reclassify someone as self-employed — cutting their benefits by more than half in the process.

For anyone working in IRB calculations, the takeaway is straightforward: when the employment-vs.-self-employment question comes up, the Tribunal is going to look at the Sagaz factors and the day-to-day reality of the work, not just whether the right boxes got checked on payroll. Missing deductions, weird cheque names, and agency middlemen don't override the actual working relationship.

And for insurers thinking about running the "technically a contractor" play — this case shows how that argument falls apart when three witnesses line up and describe a textbook employment relationship, and the agency's own rep apologizes on the stand for the paperwork error you're relying on.

$400/week. Interest. Case closed.