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Home / Simons-Taxes /Personal and employment tax /Part E4 Employment income /Division E4.2 Office or employment /Determining employment status / E4.213 Mutuality of obligation—employment status effect
Commentary

E4.213 Mutuality of obligation—employment status effect

Personal and employment tax

The doctrine of mutuality of obligation has become an important test in determining employment status. The essence of the employment relationship is that the employer is under an obligation to provide work to the employee just as much as the employee is under an obligation to carry out that work. There has to be an 'irreducible minimum of mutual obligation necessary to create a contract of service'1. That irreducible minimum is that:

  1. Ìý

    •ÌýÌýÌýÌý the engager must be obliged to pay a wage or other remuneration, and

  2. Ìý

    •ÌýÌýÌýÌý that the worker must be obliged to provide his or her own work or skill

However, as the irreducible minimum can be present in either a contract of service or a contract for services, the presence of mutuality of obligation can not, by itself, determine if someone is an employee2. As the concept has developed in case law it is also apparent that there is no precision about the nature of the obligations and whether the absence of mutual obligation

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Web page updated on 17 Mar 2025 17:14