Policy 52 – Private Corporations

Established:​ April 2, 1974 

​Class:​ FS

The University of Waterloo has been asked to enter into business dealings with corporations incorporated by faculty or staff members or groups of faculty or staff members ("private corporations"), rather than with faculty or staff members personally.

The University is willing to deal with such private corporations. However it must always be kept in mind that such a relationship would usually be begun only as a convenience to the individual faculty or staff member. The University would naturally retain the right to refuse to enter into any arrangement which may be adverse to its interests.

However, it will deal with a private corporation upon request and whenever a faculty or staff member is entitled to receive money other than basic salary and/or administrative stipend from the University. For purposes of this policy, the basic salary is the salary related to the regular appointment and upon which salary scale adjustments and the University benefit programs are based.

A private corporation cannot be an employee of the University, but must be considered as an independent contractor in all cases. While the effects of such a position should be examined by the faculty or staff member involved or legal counsel, the University considers that an independent contractor is not entitled to participate in the University benefit programs, travel insurance programs, liability insurance coverage, or similar plans maintained on behalf of the University and its employees.

Where the University deals with a private corporation, the form of independent contractor agreement which is contained in Appendix A to this statement must be signed by the private corporation. Among other things, the matters covered by this agreement are:

1. There must be a legally valid contract of employment between the private corporation and the faculty or staff member or members which it purports to represent in any particular transaction. A duplicate executed copy of the employment contract must be given to the University and must contain, among other things, the clauses in the sample employment contract. (See Appendix B.)

2. Comprehensive general liability insurance must be carried by the private corporation in amounts of not less than one million dollars ($1,000,000) per occurrence. In addition, the faculty or staff member or members employed by the private corporation must carry adequate professional liability insurance containing such terms and for such amounts as the University from time to time deems advisable.

3. A list of the names of all persons hired or to be hired by the private corporation must be attached to the independent contractor agreement. Where any of such persons or any person to be supervised by the private corporation are employees of the University, their positions with the University must be shown on the list. Adequate provision must be made for payment of Worker’s Compensation by the private corporation to its employees and for the collection and remittance to the proper authorities of deductions for income taxes.

4. The University must be protected by the private corporation from any claims arising from its negligence or default or that of its directors, its shareholders, its agents or its employees.

5. The costs of the University related to the preparation, maintenance and enforcement of the documentation arising from the relationship between the University and the private corporation must be borne by the private corporation.

It is understood that existing arrangements which now involve private corporations must be documented in light of this policy statement. Each such situation will be considered on its own merits in line with the principles articulated above.

APPENDIX A

Independent Contractor Agreement

AGREEMENT made this _________ day of __________________, 20____

B E T W E E N:

- and -

- and -

AND WHEREAS the Corporation has been engaged by the University as an independent contractor to carry out certain terms of such agreement;

NOW THEREFORE in consideration of the mutual terms and covenants herein provided the parties hereto agree as follows:

1. The Corporation covenants that an employment agreement dated the ____ day of _____________, 20___ between the Corporation and (faculty or staff member) is a valid and binding legal obligation of the parties to the employment agreement and will remain in full force and unaltered throughout the term of this independent contractor agreement, subject only to such amendments either agreed upon in writing by the University or requested from time to time by the University.

2. The Corporation shall provide for payment of Workers' Compensation charges on behalf of its employees, and shall assume responsibility for making the necessary personal income tax deductions on behalf of its employees.

3. The Corporation indemnifies and saves harmless the University against any and all liability, loss, damages, costs or expense which the University may hereafter sustain, incur, suffer or be required to pay by reason of the wilful or negligent acts or omissions of the Corporation or its directors, shareholders, agents or employees, or by reason of any assessment, re-assessment or any other act of the Minister of National Revenue relating to the Corporation.

4. The Corporation shall maintain in force adequate comprehensive general liability insurance in amounts of not less than One Million Dollars ($1,000,000) per occurrence and to furnish to the University, upon request, adequate proof of such coverage.

5. The Corporation shall cause its directors, officers and employees to maintain in force adequate professional liability insurance in the forms and amounts satisfactory to the University and shall furnish to the University, upon request, adequate proof of such coverage.

6. The Corporation shall pay all costs in connection with the preparation, execution, and enforcement of this independent contractor agreement and the agreements attached as schedules (including the reasonable fees and out-of-pocket expenses of counsel to the University).

7. This independent contractor agreement shall enure to the benefit of and be binding upon the parties, their successors and assigns.

8. This independent contractor agreement shall be construed in accordance with the laws of Ontario and shall not be assigned in whole or in part by the Corporation without the prior written consent on the University.

IN WITNESS WHEREOF this independent contractor agreement has been duly executed by the parties by their duly authorized officers.

UNIVERSITY OF WATERLOO

Per:____________________
                                c/s
Per:____________________

(OUTSIDE PARTY)

Per:____________________
                               c/s
Per:____________________

(PRIVATE CORPORATION) LIMITED

Per:____________________
                                c/s)
Per:____________________

APPENDIX B

Extracts from Employment Contract

THIS AGREEMENT made this ______ day of __________________, 20____

B E T W E E N:

- and -

1. The Corporation hereby employs the Employee to perform such duties and exercise such powers as may be determined from time-to-time by the Board of Directors of the Corporation.  Without limiting the generality of the foregoing, the Employee agrees to perform all duties arising from any contracts entered into by the Corporation, to which University of Waterloo may be a party, and the terms of such contracts shall be binding upon the Employee as if they were terms and conditions of the employment agreement.
2. During the term of this agreement the Employee shall devote best efforts to advance the interests of the Employer and shall perform his duties to the best of his ability.
3. This agreement shall enure to the benefit of and be binding upon the Corporation, its successors and assigns.
4. This agreement shall not be assigned in whole or in part by the Employee without prior written consent of the Corporation.

IN WITNESS WHEREOF the Employee has set his hand and seal and the Corporation has executed this agreement under the hand of its dly authorized officers.