L'Hirondelle-Wilson v. M.N.R., docket 97-11-CPP

Date: 19980612

Dockets: 97-483-UI; 97-30-CPP; 97-484-UI; 97-31-CPP; 97-463-UI; 97-28-CPP; 97-565-UI; 97-566-UI; 97-49-CPP; 97-50-CPP; 97-709-UI; 97-65-CPP; 97-382-UI; 97-20-CPP; 97-729-UI; 97-730-UI; 97-70-CPP; 97-71-CPP; 97-714-UI; 97-83-CPP; 97-772-UI; 97-82-CPP; 97-410-UI; 97-411-UI; 97-22-CPP; 97-23-CPP; 97-306-UI; 97-11-CPP; 97-567-UI; 97-731-UI; 97-51-CPP; 97-72-CPP;

BETWEEN:

JOHN OLSEN,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

MARY LYLE,

Intervenor,

AND

JOHN OLSEN,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

MARLENE FETH,

Intervenor,

AND

PATRICIA BLACK,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

AND

MARLENE BRODIE,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

AND

JANETTE L'HIRONDELLE-WILSON,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

AND

MARY LYLE,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

AND

CAROL R. MOTIUK,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

AND

KATHERINIE PROCTOR,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

AND

KATHERINE PROCTOR,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

RON HIEBERT, MANAGER OF

AGRICULTURAL EMPLOYMENT SERVICES,

Intervenor,

AND

MARLENE FETH,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

AND

DONNA LAW,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

JANETTE L'HIRONDELLE-WILSON,

Intervenor,

AND

DARLENE COWLE,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Rowe, D.J.T.C.C.

[1]            Counsel for the appellants and counsel for the respondent agreed all appeals, pursuant to the Unemployment Insurance Act (the "Act") and the Canada Pension Plan (the "Plan"), including those participated in by intervenors, would be consolidated for purposes of hearing on common evidence.

[2]            Prior to taking any evidence, and with consent of counsel for the respondent, the following exhibits were filed:

-                Exhibit A-1 - Appellant's Book of Documents - Book 1 - John Olsen

-                Exhibit A-2 - Appellant's Book of Documents - Book 2 - Marlene Brodie

-                Exhibit A-3 - Appellants' Book of Documents - Book 3 - Agriculture -Employment Services (AES) Handbook

-                Exhibit A-4 - Appellant's Book of Documents - Book 4 - Patricia Black

-                Exhibit A-5 - Appellant's Book of Documents - Book 5 - Mary Lyle

-                Exhibit A-6 - Appellant's Book of Documents - Book 6 - Kathy Proctor

-                Exhibit A-7 - Appellant's Book of Documents - Book 7 - Marlene Feth

-                Exhibit A-8 - Appellant's Book of Documents - Book 8 - Donna Law

-                Exhibit A-9 - Appellant's Book of Documents - Book 9 - AES Task Force Report

[3]            John Olsen testified he was the Manager of the Agriculture Employment Services Canada (AES) office in Camrose, Alberta between April 1, 1977 and June 30, 1995. He was also responsible for the management of an AES office in Wetaskiwin, Alberta during the same period. Olsen explained AES was formerly known as Canada Farm Labour Pool and he had begun working for that organization in January, 1977. There were 10 AES offices in Alberta and approximately 65 offices in Canada, almost all of which were closed by the Government of Canada on June 30, 1995. Olsen stated on April 21, 1995 he applied for a ruling - Exhibit A-1 - Tab 1 - whether or not he was an employee of Human Resources Development Canada (HRDC), engaged in insurable employment as a result of providing services to AES for the period January 1, 1994 to June 30, 1995. At Exhibit A-2 - Tabs 2 and 3, the respondent issued two letters, both dated October 26, 1995, advising, in each letter, that Revenue Canada had come to the conclusion his employment during the stated period was insurable pursuant to paragraph 3(1)(a) of the Act because he had provided services - to HRDC - under a contract of service. By letter of same date, the appellant, Olsen, was advised the Minister of National Revenue (the "Minister") had ruled, pursuant to paragraph 6(1)(a) of the Plan, that he was an employee of HRDC for purposes of the Plan from April 1, 1975 to June 30, 1995. Olsen testified that Mary Lyle, a member of his support staff in the Wetaskiwin office, applied for a ruling as to her status. On October 26, 1995, H.S. Lee, Director of Edmonton Tax Services Office, Revenue Canada - the same person who had issued the ruling on insurability to Olsen - decided in a letter - Exhibit A-1 - Tab 4 - that Mary Lyle was employed in insurable employment with John Olsen, as Manager of the AES office in Wetaskiwin during the period January 1 to June 30, 1995. The appellant, Olsen, stated he had hired Mary Lyle - for the Wetaskiwin office - and Marlene Feth - for the Camrose office - as a result of referrals from Canada Employment Centre (CEC) followed by separate interviews with each of them with him and a Board of Directors - composed of local farmers - acting in an advisory capacity. Olsen stated it was necessary to obtain approval of Michael Jansson, the Co-ordinator responsible for all of the AES offices in Alberta. Olsen referred to Exhibit A-1 - Tab-5 - a letter - dated October 26, 1995 issued by H.S. Lee of Revenue Canada - indicating Revenue Canada had decided Marlene Feth had been in insurable employment with John Olsen, as Manager of the AES office at Camrose, during the period June 15, 1979 to June 30, 1995 on the basis she had been performing services under a contract of service under the control of Olsen as the employer. Upon learning of this decision, Olsen stated he applied for a Determination of a Question - Exhibit A-1 - Tab 6 - on November 14, 1995 as it pertained to both Lyle and Feth. At the following Tab - 7- the Minister of National Revenue (the "Minister") issued a determination in which it was decided Mary Lyle was engaged under a contract of service with him and that he was her employer for purposes of the Act and the Plan during the period January 1 to June 30, 1995. At Exhibit A-1, Tab 8, a similar decision was made with respect to Marlene Feth for the same period. Olsen testified the working hours in the AES offices at Camrose and Wetaskiwin were from 8:00 a.m. to noon and 1:00 p.m. to 4:30 p.m. and that these hours were set by HRDC. The location of an AES office, in each instance, was next door to the Canada Employment Centre (CEC) or, as it was later known, Canada Employment and Immigration(CEIC). Olsen referred to a letter - Exhibit A-1 - Tab 21 - dated March 19, 1990 sent to him by Michael Jansson on the subject of hours of service and staff coverage, apparently as a result of complaints from the public about the accessibility of service at AES offices, especially during lunch hour. Olsen referred to a memo from Jansson - Exhibit A-1 - Tab 26 - dated May 29, 1995 which provided - in some detail - instructions on how to prepare for the permanent closing of the AES offices on June 30, 1995. Olsen stated the requirement for reporting, as it applied to him, was as set forth at Exhibit A-3 - Tab 8 - in a document entitled Handbook for Contractors. In that document, Olsen explained HRDC had provided the necessary forms including the ones he used to remit monthly statistical reports to Jansson, an example of which was at Exhibit A-1-Tab 17. Olsen referred - at Exhibit A-1 - Tab 14 - to a series of AES monthly financial reports sent by him to Employment and Immigration Canada in which he reported on various aspects of the operation of the Camrose office. He stated there were no fees charged to users of AES services and his remuneration - described as a fee - and salaries paid to workers in AES offices were set by HRDC and, at the bottom of the page on the monthly report form, there was a space provided entitled: Contribution Required. Olsen referred to a document at the back of Tab 9 of Exhibit A-1 - to illustrate that the funding for the AES Camrose office for the 1994 fiscal year had been set at a maximum of $101,961.20. This total included a salary for himself as Co-ordinator, salaries of office staff - including relevant premiums for unemployment insurance ("UI") and contributions to Canada Pension Plan ("CPP") - as well as certain other costs pertaining to leasing, telephone and office supplies. The salary ranges for himself and office staff were taken directly from the grid used for Canada Employment Centre workers. Olsen stated he had some input into other costs such as telephone or advertising but the budget which had been prepared by him was submitted to Michael Jansson for approval. The annual budget was divided into monthly amounts and each month a cheque would be sent to the local AES office, in his case, one for Camrose and one for Wetaskiwin. Returning to the matter of the space on the monthly form as it related to contributions being required, Olsen referred to Exhibit A-1 - Tab 14 - a financial report for the month of April, 1994 in which he needed the sum of $7,585.95 in order to cover operating costs. The sum set out in a space at the top left hand portion of the form relating to "Gross Fee" was the amount of his monthly salary. Olsen stated he had received $16,985.00 from HRDC which he deposited - Exhibit A-1 - Tab 15 - into an account at the local Treasury Branch but it was not sufficient to cover costs for that month and he had to request extra funds by setting out the details in his monthly report. Olsen explained that, on occasions when he had extra funds in his offices at the end of a fiscal year, Michael Jansson requested those funds be used to purchase office equipment for other AES offices in Alberta that had run out of funds and needed a copier or a fax machine. Olsen stated he provided the necessary funds to make the purchases for the Red Deer and Grande Prairie AES offices and those amounts were never returned to him. He stated HRDC insisted on inventory control which assigned identification numbers and required special tags to be attached to pieces of furniture and equipment. A copy of the inventory for the offices he managed was sent to HRDC. Each AES office in Camrose and Wetaskiwin had a separate account in a financial institution and two or three people working in those offices had signing authority. Olsen stated on April 26, 1995 he received a memo - Exhibit A-8 - Tab 11 - from Michael Jansson stating all the office furniture and equipment belonged to him as a consequence of a ruling issued by Revenue Canada that AES office managers were independent contractors. Olsen stated Mary Lyle received training at Canada Employment Centre located next door to the AES office and went to Edmonton for computer training on software provided by HRDC in order to be able to use a network which had been set up by HRDC. Olsen explained that, at some point, Canada Employment Centre had undergone a change of name and became part of HRDC. Olsen stated travel costs incurred by him or his staff could be claimed only at the rates allowed by the federal government as set out in the document dated October 19, 1988 at Exhibit A-3 - Tab 19 - governing that particular period. He stated Lyle and Feth - during slow periods - would leave their own AES office, and would "kind of volunteer" to work at the adjoining HRDC office. He indicated his co-ordinator, Michael Jansson, had told him it was expected he would cooperate in providing his staff to help out HRDC when needed. His salary was set in accordance with the maximum allowable rate permitted by Employment and Immigration Canada - as it was then known - pertaining to the 1986 fiscal year as contained in the document at Exhibit A-1 - Tab 10. A memorandum - Exhibit A-1 - Tab 24 - dated April 6, 1995 from Jansson to himself stated, "Do not worry about the shortages you anticipate in the budgets that you have submitted. I have been assured by Keith Shackleford they will be covered. I am preparing contracts that reflect the upward adjustments that you require". Olsen referred to a press release - not prepared by him - at Exhibit A-1 - Tab 22 - pertaining to the phase-out of all AES offices in Canada. Olsen explained that a diagram in Exhibit A-9 - page 14 - accurately set out the hierarchy and the reporting requirements as it affected the performance of his duties as manager of an AES office. He indicated he reported directly to Regional Headquarters (RHQ) of HRDC. He referred to an excerpt - Exhibit A-10 at page 17 - of minutes taken at an AES annual conference held in January, 1991 - during which there had been a discussion as to the status of AES office managers and whether these people were contractors able to act as "real contractors" or whether the bureaucratic approach would be taken where RHQ would set the guidelines and all the offices will "be in line". Olsen referred to the portion in the minutes where his co-ordinator, Michael Jansson pointed out to the meeting that he had a problem with the "gloves off" approach in that he would have no way of really establishing what the base budget of each office should be and that inequities in the system would be hard to address. Olsen stated in his view - after 21 years working for AES - it was apparent the "bureaucratic approach" had always been followed and his working conditions and the level of control exercised over him had not changed substantially during that period. He referred to a memo - Exhibit A-11 - dated March 10, 1992 which authorized him to purchase a fax machine for the office in Taber, Alberta and a photocopier for the Grande Prairie office. Olsen explained he had requested such permission because he was not able to make an expenditure in excess of $200.00 without approval from HRDC. Olsen commented the federal government was the only source of funding for his AES offices as there were no fees charged to farmers for labour placements. An invoice - Exhibit A-12 - dated 10/02/94 sent on the letterhead of Department of Communications pertaining to equipment and software in his Camrose office demonstrated all computers within the network were registered to Employment and Immigration Canada. He received a memorandum - Exhibit A-13 - dated November 10, 1981 - when AES was known as Canada Farm Labour Pool - and it required him to follow a policy designed to monitor the need for bilingual official language requirements in his area. Olsen stated he managed the Camrose AES office since 1977 and started the Wetaskiwin office in 1991. He was not paid in accordance with the number of placements done by either office but was informed of the amount available for his remuneration at the beginning of each fiscal year as established by federal government pay grids. He explained he did not object to providing extra funds to assist other AES offices as it was usually at the end of a year when he was confident he would be in a surplus position and he would issue a cheque - drawn on the AES account at either Camrose or Wetaskiwin - and send it directly to the supplier who would ship the fax or copier to the AES office requiring it.

[4]            In cross-examination, the appellant, John Olsen stated the author of the memorandum - Exhibit A-14 - was Reg Yandt, his counterpart in the Edmonton AES office. Olsen stated Michael Jansson was in charge of all AES offices in Alberta for several years but, since 1977, there had been three other co-ordinators prior to Jansson. He indicated different co-ordinators had different approaches and some were "hands-on" while others were "hands-off." He stated he had not been the person recording minutes of the meeting as excerpted in Exhibit A-10. He explained AES serviced the labour requirements in the agriculture sector while Canada Employment Centre dealt with all fields of employment. The agreement - Exhibit A-1 - Tab 9 - signed by Olsen, dated March 24, 1994, between himself and The Canada Employment and Immigration Commission covering the funding period April 1, 1994 to March 31, 1995 - was similar to previous agreements he had signed since beginning work with AES in 1977. He agreed he accepted the terms of the contract, including the matters set forth in Schedule A annexed thereto. However, Olsen pointed out the designated official at Revenue Canada, after reviewing the agreement, had issued a ruling dated October 26, 1995 - Exhibit A-1 - Tab 2 - in which it had been decided he had been engaged in insurable employment pursuant to a contract of service with HRDC for the period January 1, 1994 to June 30, 1995. He stated HRDC funded the AES offices on a month-by-month basis by issuing a cheque which was deposited into the account at the Treasury Branch at Camrose or Wetaskiwin. Wages, including his own, were paid out of those accounts and required two signatures on a cheque. The appropriate deductions for income tax, unemployment insurance and Canada Pension Plan were made by clerical staff, of which there was only one in Camrose and a secretary in the Wetaskiwin office. He stated he had received the handbook pertaining to policy in 1977.

[5]            In re-examination, Olsen stated he felt he never had any ability whatsoever to negotiate any terms of any contract he had been offered. The photocopier was provided by the CEC office and his AES office contributed between $200 and $1,000 per year in supplies for use by the CEC office.

[6]            Donna Law testified she is an appellant in these proceedings and resides in Grande Prairie, Alberta where she had been Manager of the AES office for the period September 1, 1993 to June 30, 1995, the last date the office was open. Earlier, during the period from June, 1988 to the end of August, 1993, she had been the Assistant-Manager of the office. On September 21, 1993 she applied - Exhibit A-8 - Tab 1 - for a ruling as to the insurability of her employment with AES. On February 17, 1994, she received a ruling - Exhibit A-8 - Tab 2 - issued by H.S. Lee, Revenue Canada, stating she had been employed in insurable employment with Government of Canada, Human Resources Development and Labour, Agricultural Employment Services since September 1, 1993 pursuant to paragraph 3(1)(a) of the Act and was also in pensionable employment with said employer by virtue of paragraph 6(1)(a) of the Plan. The ruling added - in paragraph 3 - "It will remain in force until there is a significant change in the facts" (the shelf-life, apparently of such a ruling or opinion is 16 months). The appellant, Donna Law stated she had wanted to obtain a ruling on her status in the event her contract to serve as Manager of the local office was not extended. She indicated she had obtained a ruling on insurability for purposes of UI and CPP when she had been an Assistant-Manager and it had been decided she was an employee of the Manager, Nancy Aikman between 1988 and 1993. She sent applications - Exhibit A-8 - Tabs 8 and 9, both dated January 8, 1996 requesting a determination whether she was required to make payment of the employer's contribution for CPP and the premium for UI in respect of a worker in the Grande Prairie AES office, Janette L'Hirondelle-Wilson and she received a decision - Exhibit A-8 - Tab 10 - that she was so required to make the relevant contributions because the worker was employed under a contract of service to her, making her the employer. She spoke to Michael Jansson, the provincial AES co-ordinator, about this situation and she stated he "took a strip off me for what I had done in requesting a ruling". Following this discussion, Law said she sent Jansson an e-mail - Exhibit A-15 - dated February 28, 1994 explaining the reason for having requested the ruling as to her status. She stated she had taken courses offered by HRDC together with HRDC employees and all participants had been reimbursed for travel costs at rates set by the federal government. There were silver-coloured tabs placed on physical assets within her office and a photocopier purchased locally was added to that inventory. Until she received the memo - Exhibit A-8 - Tab 11 - dated April 26, 1995 to the effect she owned the office furniture and equipment, she had never had any reason to assume the office inventory belonged to her. In April, 1995 the office equipment consisted of two computers, desks, a photocopier, tables and chairs, filing cabinets, telephones and office supplies. Each year, in September, upon signing a renewal contract wherein she agreed to provide her services as Manager of the Grande Prairie AES office, she did not feel there was any opportunity to negotiate any terms. In October, 1993 she signed a lease agreement which Michael Jansson had wanted her to execute prior to her renewing her contract a month earlier but she had refused. The lease was for a one-year term and the administration fee of $750 was paid to Public Works Canada. Law stated Jansson had informed her she had to sign her annual contract and two people from HRDC attended at her office with the contract already prepared for her signature. As for the requirement to retain records of inventory in the AES office, Law referred to an e-mail - Exhibit A-16 - dated May 23, 1991 from Michael Jansson requesting she provide inventory numbers on various items in her office. She received a certificate - Exhibit A-17 - dated June 21, 1993, issued by the course trainers on a form bearing the logo of the Government of Canada certifying she had participated in VALUING OUR DIVERSITY training. She stated the only ruling she had ever requested and received was the one at Exhibit A-8 - Tab 2, referred to earlier, stating she was an employee of Government of Canada, HRDC and had been so employed in insurable and pensionable employment since September 1, 1993.

[7]            In cross-examination, Donna Law, agreed she had not attempted to negotiate any terms in her annual contract and had followed guidelines regarding hours of operation pertaining to the AES office.

[8]            Janette Adam testified she is an appellant in the within matter, having filed an appeal under her maiden name, L'Hirondelle-Wilson. She stated she worked at the AES office in Grande Prairie between June, 1993 and June, 1995. While working there, she explained the AES staff used the CEC coffee-room, copier, washroom, held weekly meetings with CEC staff and took courses together with CEC employees. She received a Certificate of Participation - Exhibit A-18 - after having taken one course in December, 1993. In order to participate in the training, she did not pay any fee personally nor was any payment required to be made by her AES office. The AES office had access to the CEC office and received and sent mail through the courier system established by the federal government.

[9]            In cross-examination, Adam stated the AES office had a separate entrance, apart from the one used by CEC.

[10]          Carol Motiuk testified she is an office administrator residing in Vegreville, Alberta and worked in the AES office there when David Kucherawy was her supervisor. She stated the nearest CEC office was in Edmonton and every two weeks a CEC employee came to Vegreville for purposes of conducting CEC business. In the interim, Motiuk stated she received requests for information and applications for social insurance numbers or UI benefits which, although some of them might have been farm labourers, had no connection to her regular duties or to the function of the AES office. There was no charge to CEC for providing this service and, when giving assistance to someone while completing a particular form, she explained she often contacted UI officials in Edmonton for advice. The necessary forms covering a variety of subject matters were provided by HRDC personnel and, because there were two people in the AES office, she was able to "help out" HRDC in the manner described.

[11]          Counsel for the respondent did not cross-examine.

[12]          David Kucherawy testified he is the Mayor of Vegreville and - not surprisingly - also lives there. He was the Manager of the AES office in Vegreville between March, 1985 and June 30, 1995. He stated he had been offered the position by letter - Exhibit A-19 - dated February 25, 1985. He accepted the position and signed a one-year contract effective April 1, 1985. At the time he took over managing the office, there was furniture, equipment and a staff member. He did not pay the previous manager for any of the physical assets in the office. When he received the e-mail - Exhibit A-8 - Tab 11 - stating he owned the assets of the office - it came as news to him. In his opinion, the control exercised over him in his capacity as manager of the AES office was consistent throughout his tenure.

[13]          In cross-examination, Kucherawy stated his AES office had to provide service to a large area and there was a local advisory board established.

[14]          Michael Jansson testified he resides in Edmonton, Alberta and is working as a consultant. Between December, 1987 and June 30, 1995, he stated he had been employed by HRDC to provide functional guidance to AES offices within Alberta in order to ensure a consistent level of service was being provided. He stated the wages of the AES managers and support staff were established by committee. He identified a letter - Exhibit A-20 - dated February 6, 1989 he had written to Nancy Aikman, Manager of the AES office in Grande Prairie, in which he enclosed a copy of the 1989 staff wage grid. At the third line of the letter he wrote: I have not included a printed grid for AES contractors because NHQ has not yet indicated the ceiling figures to us. Jansson explained the level of pay for the contractors was based on volume at the national level and that it "would have been frowned upon had a contractor exceeded the figure" set as a ceiling for paying support staff in an AES office. His reasoning was that he wanted to prevent "individual office peculiarities" and wanted a universal system for AES staff similar to the pay grids for employees of the federal government. The AES policy emanated from the National Headquarters of HRDC and there was no separate or distinct headquarters for AES. Jansson identified a document - Exhibit A-21 - dated February 20, 1991 - as a statement of AES operating principles and it also contained direction regarding pay scales of an office worker who was to be classified and paid in accordance with the federal government grid for a CR-3 or, if the volume of the office was greater, a CR-4. Jansson stated when he began working for HRDC there was a tedious process by which inventory in each AES office was detailed and verified. He questioned HRDC officials about this method and over the years the requirement was not adhered to strictly but the furniture and equipment had been owned by the federal government. Later, he understood it came to belong to the managers who were regarded as independent contractors and it was also thought it was not worth undertaking the process of retrieving all of the assets from each AES office and then proceeding to dispose of them in accordance with government procedure. He agreed the procedure governing changes to office inventory as set forth in his letter - Exhibit A-4 - Tab 22 - was in effect in 1988. He was the author of the letter - Exhibit A-4 - Tab 21 - dated October 23, 1990, directed to the manager of the AES office at Lethbridge, in which he advised he had been instructed by the Chief of Regional Materiel Management - employed by HRDC - to have all wooden furniture in AES offices replaced with modular steel. Jansson agreed it was - in effect - a directive issued by HRDC. Jansson was referred to his letter - Exhibit A-4 - Tab 18 - dated February 1, 1991 in which he revised earlier instructions given to the manager of the Lethbridge AES office as to the manner in which computer equipment located in that office was to be entered into the C.E.I.C.(as it was then known) inventory. He agreed the instructions included the requirement to label and prepare input documentation for each monitor, keyboard, printer and CPU. Jansson was referred to two documents - Exhibit A-22 dated May 13, 1993 and Exhibit A-23 - dated January 10, 1995 and March 31, 1992 - Employment and Immigration Canada forms used to record equipment and furniture - and he agreed there were computer components and a printer and copier listed thereon which were located in AES offices but those particular pieces of paper may not have crossed his desk. Jansson stated he believed the decision to permit AES Managers to retain the office equipment and furniture was based on economic reasons and not in relation to any issue whether those people were independent contractors. In Exhibit A-8 - Tab 11 - Jansson's letter dated April 26, 1995 concerning the decision to allow managers to retain the physical assets - he had referred to a Revenue Canada ruling which he explained was the one issued in relation to Nancy Aikman of the Grande Prairie office. Following the issuance of the ruling, there was an inclination to ensure there could be some "distance" between AES personnel and HRDC including the requirement AES managers lease space in the same building as the CEC office and there were also changes to inventory methods due to economic reasons. Jansson agreed various offices had metal office equipment which was new in 1991 and also had updated computers, facsimile machines and photocopiers. Jansson recalled sending an e-mail - Exhibit A-24 - dated December 10, 1991 - to Nancy Aikman requesting that, despite the ruling from Revenue Canada as to her employment status with HRDC, she not remit any UI premiums or other payments and that she refrain from initiating any communication with Revenue Canada without prior approval of CEIC Regional Office. Jansson had referred - in the e-mail - to Revenue Canada's interpretation of her employment status by stating, "Needless to say RC has dropped quite a bomb". Jansson stated he spoke to the Revenue Canada official in Edmonton who had been responsible for the ruling and in the discussion Jansson referred to the complexity of the matter and the national implications of the decision. Despite his intercession, Revenue Canada did not change the ruling and he ensured extra funds were forwarded to the AES Grande Prairie office so that Nancy Aikman could remit the appropriate premiums and contributions to Revenue Canada, in respect to her own employment status as an employee in her role as Manager. Jansson stated the individual AES managers had no ability to negotiate salaries because they were set by reference to a public service grid applicable to employees of the Government of Canada. Jansson identified an e-mail - Exhibit A-25 - dated September 27, 1993 - sent to all "AES Contractors" explaining he would be sending leases with Public Works Canada in respect to office space occupied by each AES office and pointed out there would be a $750.00 administration fee payable which would be paid by the local AES office and then reimbursed by HRDC in a forthcoming cheque, provided the particular office could demonstrate need for that amount to be re-paid. Jansson stated the new policy with regard to leasing came into effect only for lease renewals done by HRDC after September 27, 1993. Jansson stated HRDC insisted each AES Manager - or contractor - obtain a GST number by completing the appropriate registration with Revenue Canada. He agreed the Managers had no choice but to follow the directive. He identified a letter - Exhibit A-26 - dated December 17, 1990 written by him on the subject of GST which was described therein as a "confusing issue". In that letter he had written - with appropriate emphasis - All AES offices must be registered. This instruction was repeated despite the fact Revenue Canada had refused various attempts by local AES offices to register for GST on the basis it was the business of the applicant manager. In the event a local AES office was successful in registering and obtaining a GST number, then - by memo dated April 29, 1991 - Exhibit A-4 - Tab 10 - the payment of an amount by way of one-time set-up payment issued by the federal government was subject to deduction - by HRDC - from future funding paid monthly to that particular AES office. On May 22, 1991 he directed a letter - Exhibit A-4 - Tab 11 - to the AES Lethbridge office enclosing instructions on preparing the appropriate GST forms as well as a GST calculation form. On March 19, 1990 Jansson had sent a letter - Exhibit A-4-Tab 6 - to the AES Lethbridge office concerning the matter of complaints having been received from the public concerning the office hours and telephone answering methods of the AES office. His letter set out in detail the policy to be followed in matters concerning hours of service, lunch hours, length of daily service, posting of hours and use of telephone answering devices. Jansson explained it was expeditious for AES offices to follow the same procedures and hours of business as the CEC offices as they were usually next door to each other in the same building. Jansson stated he thought a similar letter had been sent by him to all AES offices. Jansson commented that, in his opinion, the approach of HRDC, as it concerned AES offices, was "quite involved". In carrying out his function at HRDC, he stated he felt pressure "from above" to ensure there was consistency of practice and reporting within the AES system, recognizing there were some differences due to the size of the office and volume of work in a particular area. He agreed a local AES office manager could not spend money which appeared to be surplus to requirements at the close of a fiscal year and, instead, was required to remit that money to suppliers of equipment for shipment to other AES offices that were short of funds. There was no method of recognizing loans between AES offices and an expenditure by John Olsen or Donna Law in their capacity as a local AES manager would be reflected in the accounting records for his or her office even though the actual equipment represented by such payment would be physically located in Grande Prairie or Red Deer. Jansson explained he foresaw a problem if AES personnel and CEC employees working - basically - in the same office were paid in accordance with different schedules or grids and, as a result, there was a concerted effort to tie the pay of support staff to public service classifications. Jansson stated all tools necessary for the managers to perform their duties had been provided by the federal government and deadlines, policy, priorities pertaining to delivery of services within the AES program were imposed by him. The necessary computer program was operated by the Regional Informatics Branch - a creation of the federal government - and AES staff received training on that system in Edmonton and all expenses in connection with attendance for that purpose were paid, even if a local operating budget had to be amended and more money supplied by HRDC in a forthcoming monthly cheque to cover those costs. A letter - Exhibit A-4 - Tab 8 - dated October 23, 1990 - sent by him to the AES Lethbridge office had provided details of a forthcoming computer course in which he indicated staff attending the instructional seminar would be paid salary and travelling expenses. Jansson stated he understood Reg Yandt, Manager of the AES Edmonton office had threatened to fire Marlene Brodie and he became involved in the dispute and suggested she take some time off and she did so. He also told Mr. Yandt to pay her one month salary on the basis she had performed the duties of an Acting-manager during a particular period.

[15]          Counsel for the respondent did not cross-examine.

[16]          In response to a question from the Bench, Jansson stated the issue of who owned the "tools" in each AES office became a big issue following the ruling by Revenue Canada concerning Nancy Aikman and that this event figured prominently during discussions on the matter of ownership of the furniture and equipment.

[17]          Marlene Brodie testified she is an appellant and worked in the AES Edmonton office from March 17, 1980 until May 26, 1995. Her supervisor was Reg Yandt and he was the person who interviewed her for the position after she had applied as a result of seeing an advertisement in the Edmonton Journal. At that time, the AES co-ordinator was Harry Boutillier. Brodie requested a ruling from Revenue Canada as to her employment status and, on October 26, 1995, was informed by letter - Exhibit A-2 -Tab 1 - that H.S. Lee at Revenue Canada had decided she was engaged in insurable employment with D. Reginald Yandt, Co-ordinator operating Agricultural Employment Services - Edmonton from January 1, 1995 to May 26, 1995 since she was performing services under a contract of service within the meaning of paragraph 3(1)(a) of the Act. Brodie stated her hours of work at AES were the same as those at the CEC office next door and there was a sign in the office posting the office hours. She referred to a photocopy - Exhibit A-27 - of two photographs - taken at the entrance to, and the interior of, her AES office - of signs - in both official languages - depicting the flag of Canada and the heading Employment and Immigration Canada, below which, on one sign - in larger print - it read: Agricultural Employment Services. The other sign - also bearing the logo of the federal government - set out the hours of operation together with other information pertinent to persons attending that office. She stated during the 15 years she worked in the AES office her hours of work never differed from those of the employees in the adjoining CEC office. She stated HRDC determined which reports were to be filed and her AES office had been used as a pilot office for new AGRESS software and that this new program contained reports which had to be completed by her at the beginning of each month. All the furniture and equipment was owned by HRDC and she took training in client service and received a Training and Development Report in a form bearing the letterhead of Employment and Immigration Canada which had been signed by the Manager of that office. She referred to a letter - Exhibit A-2 - Tab 16-- from Employment and Immigration Canada Edmonton office - dated February 28, 1992 - advising she had been selected to attend a Client Service Training course held over a 4-day period in Edmonton. She stated her manager of the AES office had not known about the course or her selection until he read the copy of the letter which had been sent to him. Brodie stated she had become involved in a dispute with her manager, Reg Yandt, because she had spoken to Michael Jansson and, in response, he had sent her a letter - marked personal and confidential - to the office. The letter contained a copy of a wage grid and Reg Yandt demanded she advise him of the contents of the envelope. Brodie stated she replied it was a wage grid which seemed to infuriate Yandt and he made remarks about her possible dismissal. After that conversation, Brodie stated she called Michael Jansson who told her, "Don't worry - he can't fire you - you've done nothing wrong". She decided to apply for leave without pay and used Employment and Immigration Canada forms to do so (Exhibit A-2 -Tabs 12,13,14.). She explained she had worked as an Acting-Manager of the AES Edmonton office and Michael Jansson had straightened out her pay status so she received additional funds for having acted in that capacity. As Assistant-Manager, she was entitled to receive a higher rate of pay than her usual CR-4 rating on the public service grid. She referred to the pay grid - Exhibit A-2 - Tab 9 - indicating an AES office assistant was entitled to earn the sum of $25,881.00 per annum which was the exact amount paid to a CR-4 pursuant to the grid affecting public service employees shown in Exhibit A-2 - Tab 10. After 1991, her salary - in the sum of $30,721.00 - was higher than the CR-4 salary on the grid and was protected at that level until the CR-4 position received that sum or a higher amount. When it was apparent the AES office was going to be closed permanently as of June 30, 1995 Brodie stated she prepared a notice - Exhibit A-2 - Tab 17 - and it had been placed on the door to their office advising of the closure due to lack of funding. She stated Michael Jansson sent her an e-mail instructing her to remove the sign.

[18]          In cross-examination, Marlene Brodie stated Reg Yandt had been the Manager of the AES office when she began working there on May 15, 1985. She stated Michael Jansson had instructed her to open the AES office notwithstanding the impending closure even though Reg Yandt had put up the sign and the folding door separating their office from the HRDC office had been closed.

[19]          Mary Lyle testified she is an appellant and worked in the AES office at Wetaskiwin from April, 1975 until June 30, 1995. John Olsen was her supervisor throughout. She considered she had worked for HRDC as the direction came from that source in the person of Michael Jansson. She maintained a disbursement ledger of which an extract - Exhibit A-28 - indicated that on March 31, 1993 her office had purchased a printer from London Drugs in Red Deer to be delivered to the AES Red Deer office. Another extract - Exhibit A-30 - from the ledger indicated that in 1991 and 1992 her AES Wetaskiwin office had taken surplus funds from their operating budget and used it to purchase a copier for the Grande Prairie office - at a cost of $1,034.53 - and a fax machine for the Lethbridge office at a cost of $823.89. She stated supplies were purchased from her AES office budget and then used by the CEC office next door. In the 20-year period she was employed in the AES office, the degree of control exercised over her and the office remained the same throughout.

[20]          Counsel for the respondent did not cross-examine.

[21]          Katherine Proctor testified she is an appellant and worked in the AES Red Deer office under the supervision of Ron Hiebert. She stated she recorded minutes - Exhibit A-6 - Tab 13 - of the 1991 Alberta/N.W.T. Regional Annual Meeting and that she used a tape recorder and also transcribed her own handwritten notes taken during the discussions. She recalled the Camrose AES office purchasing a photocopier for her office and stated, in January, 1994, her office was still completing inventory control sheets and returning them to HRDC in Edmonton. Her office used business forms which were provided by that office and her own Performance Review - Exhibit A-33 - for the 1988 year was completed on a form provided by Employment and Immigration Canada which indicated it was to be used as an "appraisal report for all employees".

[22]          In cross-examination, Proctor agreed Ron Hiebert gave her day-to-day directions pertaining to her duties in the AES office.

[23]          Patricia Black testified she is an appellant and currently resides in Lethbridge where she is the sole proprietor of an agency which deals with employment placements in the agricultural sector. She served as the Acting Manager of the Lethbridge AES office between November 1, 1994 and November 30, 1995. She had previously worked as the Assistant-Manager since January 1985 and before that as a bookkeeper since 1975. Prior to that she had been employed by the Province of Alberta which had operated a program similar to that delivered by AES. She referred to a letter - Exhibit A-4 - Tab 2 - dated April 24, 1975 sent by W. M. Bayda of Alberta Agriculture to the Personnel Office advising the operation of the Agricultural Manpower Office in Lethbridge - where she worked - was going to be turned over to the federal government, effective May 1, 1975. She stated any purchase in excess of $200 had to be approved by Michael Jansson and an e-mail message - Exhibit A-4 - Tab 13 - from Jansson made it clear there had been no change in the budgeting system as at October 25, 1991 which would permit individual AES offices to make arrangements directly with suppliers for the purchase of office equipment. She recalled being informed by Jansson that the wooden furniture had to be discarded and replaced by steel units which then arrived in bad condition. She had retained the wooden furniture in storage which they used until replacement steel items were provided. Her office requested permission from Jansson to purchase computers in Lethbridge so they would be able to obtain service locally but he informed them that was not possible as bulk purchases had already been made by HRDC. During her 20 years at AES, the working hours were always the same as the CEC office. Upon becoming AES Lethbridge Manager of that office, she did not pay the previous manager for any of the assets. She stated she had never considered she was the owner of any of the assets in the office until being so advised by Jansson near the end of her time with AES. She stated her office was not permitted to turn away bad employer clients or unreliable workers without proper references.

[24]          In cross-examination, Patricia Black stated she has commenced operating her own employment business on March 1, 1996.

[25]          Counsel for the appellants submitted the Minister had ruled that the appellants John Olsen and Donna Law were engaged in insurable employment with Human Resources Development Canada as a consequence of performing a managerial function as the individuals in charge of their respective AES offices at Camrose/Wetaskiwin and Grande Prairie. He pointed out the previous manager at Grande Prairie, Nancy Aikman, had received a ruling that she was an employee of HRDC engaged in insurable employment pursuant to a contract of service. Counsel submitted there can only be one master and it was illogical, thereafter, for the Minister to have determined that Mary Lyle and Marlene Feth were employees of John Olsen while they carried out duties in the AES offices in Wetaskiwin and Camrose pursuant to supervision exercised by him as an employee of HRDC. Counsel reviewed the evidence and pointed out numerous examples of control having been exercised by Michael Jansson at HRDC, the person in charge of all AES offices in Alberta, and submitted the evidence clearly revealed all of the appellants were employees of HRDC at times material.

[26]          Counsel for the respondent advised the Court there had also been a ruling issued by an official at Revenue Canada that Ron Hiebert, the Manager of the AES Red Deer office, had been engaged in insurable employment with HRDC pursuant to a contract of service. In addition, the ruling issued in respect of Donna Law had not undergone any challenge and was binding for the period relevant to the appeal of Janette Adams - formerly L'Hirondelle-Wilson. The particular ruling had decided Donna Law was an employee of HRDC and counsel agreed it would not be possible under the circumstances disclosed by the evidence for Adams to have been an employee of Law - or for Law to have been her employer - when Adams was working in the same AES office carrying out duties in accordance within the mandate of the AES program. Counsel conceded a Revenue Canada official had ruled John Olsen was engaged in insurable employment with HRDC from January 1, 1994 to June 30, 1995 - the maximum period permitted to be covered in such a ruling - although Olsen's request had been with respect to the entire period of his employment beginning on April 1, 1975. Counsel also agreed there had been an opinion given by H.S. Lee, Director of Edmonton Tax Services Office, Revenue Canada, Edmonton - as set forth in the letter dated October 26, 1995 - that Olsen had been employed in pensionable employment with HRDC pursuant to the provisions of the Canada Pension Plan during the period April 1, 1975 to June 30, 1995.

[27]          The evidence revealed the entire course of conduct of HRDC pertaining to the appellants, assisted (unwittingly, one presumes) by mutually exclusive findings having been issued by Revenue Canada at various times, was - to put it as gently as possible - bizarre. The testimony and the documentary evidence disclosed a certain Monty-Pythonesque flavour to have permeated the entire matter and it was evident, despite all apparent symptoms to the contrary, certain persons within one agency of the federal government persisted in clinging to the belief the Managers were independent contractors employing, on their own account, office staff working in the local AES office. Like the obdurate owner of the pet shop in the Monty Python skit, they simply refused to accept the parrot was not napping or meditating but was, in reality, extremely dead. The entire scenario, as it unfolded, proved once again that hidden agendas - if undertaken at all - should remain hidden, as otherwise there is no point in expending all that effort unless one has adopted posturing and illusion as a vocation.

[28]          With some trepidation, I shall attempt to sort out the matter. John Olsen's appeal - 97-483(UI) - was from a determination, dated January 14, 1997, made by the Minister, in which the Minister decided Olsen had been the employer of Mary Lyle - a worker in the AES Wetaskiwin office - and that she had been engaged in insurable and pensionable employment with him during the period January 1, 1995 to June 30, 1995. The request for such determination had been submitted by John Olsen. The required UI premiums and CPP contributions had been remitted, as required, on a timely basis each month as a result of having been included in the funding emanating from HRDC under the category in the budget entitled: Mandatory Employment Related Costs in order that AES offices could continue to operate in accordance with their mandate.

[29]          John Olsen also appealed - 97-484(UI) - from a determination issued by the Minister dated January 14, 1997 - in response to a request from Olsen - in which it was decided Olsen was the employer of Marlene Feth, an employee in the AES Camrose office and that he was required to make employer remittances of UI premiums and contributions to CPP even though these had always been remitted in respect of Feth in accordance with long-standing practice. Marlene Feth filed a Notice of Intervention to this appeal.

[30]          Mary Lyle appealed - 97-382(UI) - from the determination issued to her at the same time as the one sent to John Olsen on the basis she was a person affected by it. As she stated in her Notice of Appeal:

"I was not an employee of John Olsen and was never engaged under a contract of service with John Olsen. I believe I was an employee of Human Resources Development Canada for 20 years."

[31]          Although she received all the UI benefits to which she was entitled and the appropriate contributions had been made on her behalf to the CPP, Mary Lyle requested the Court find her employer to have been HRDC because it is not possible, in law, for Olsen to have been her employer at a time when, as her supervisor, he was an employee of HRDC.

[32]          Marlene Feth filed two appeals - 97-410(UI) and 97-411(UI) - from determinations - both dated January 14, 1997 - issued by the Minister which decided that, as an AES employee in the Camrose office under the direct supervision of the Manager, John Olsen, she was an employee of John Olsen - and not HRDC - despite the ruling which declared Olsen to have been an employee of HRDC while serving as her Manager and being in charge of the offices in Camrose and Wetaskiwin. Marlene Feth sought a finding from this Court which would recognize that her employer, at all times material to her appeals, was not Olsen but was HRDC. The question she asked to be determined was not whether Olsen was her employer. Rather, she queried how she could be regarded as an employee of Olsen when her actual employer was HRDC. For some reason, the Minister issued two identical determinations in response to a question not asked in the first place.

[33]          Donna Law appealed - 97-306(UI) - from the determination issued by the Minister on January 15, 1997 which held she had been the employer of Janette L'Hirondelle-Wilson (Adam) during the period January 1 to June 16, 1995 by reason of L'Hirondelle-Wilson having worked in the AES office under a contract of service. In the Reply to the Notice of Appeal - at paragraph 1(c) - the respondent admitted the appellant, Law, was an employee of HRDC, presumably on the basis of the ruling dated February 17, 1994 issued by H.S. Lee of Revenue Canada that Law was in insurable and pensionable employment with "Government of Canada, Human Resources Development and Labour, Agricultural Employment Services" as a result of providing services as Manager of the AES Grande Prairie office.

[34]          Janette Adam - formerly L'Hirondelle-Wilson - appealed -97-709(UI) - from a determination dated January 15, 1997 which decided she had been an employee of Donna Law - and not HRDC - while working in the AES Grande Prairie office.

[35]          Marlene Brodie appealed - 97-565(UI) and 97-566(UI) from determinations of the Minister - both dated January 10, 1997 deciding she had been engaged in insurable and pensionable employment with D. Reginald Yandt, her supervisor at the AES Edmonton office during the period January 1 to May 26, 1995 and that Yandt, as her employer, was required to make the necessary remittances on her behalf. There was no evidence before me as to what, if any, ruling had been issued with respect to the status of Yandt as it applied to his relationship with HRDC. Further, I have no understanding, at all, why two identical determinations were issued to the same person requiring her to file two separate appeals.

[36]          Carol Motiuk discovered it was necessary to launch two appeals - 97-729(UI) and 97-730(UI) - each one from a separate determination dated January 10, 1997 - deciding she had been engaged in insurable and pensionable employment with David Kucherawy, her employer, while working in the AES Vegreville office during the period January 1 to June 30, 1995. Again, there was nothing before me to explain the need for two identical determinations to have been issued simultaneously.

[37]          Katherine Proctor appealed - 97-714(UI) and 97-772(UI) - from determinations issued by the Minister on January 22, 1997 wherein it was decided she was not engaged in insurable and pensionable employment with HRDC and HRDC was not, therefore, required to remit payments on her behalf for premiums or contributions. Proctor was aware her supervisor, Ron Hiebert, was the subject of a ruling from Revenue Canada to the effect he was an employee of HRDC while performing his duties as Manager of the AES Red Deer office. In her view, she was also an employee of HRDC and never had a contract of service with Ron Hiebert. Ron Hiebert filed a Notice of Intervention with respect to appeal 97-772(UI).

[38]          Patricia Black appealed - 97-463(UI) - from a determination issued by the Minister on January 17, 1997 whereby the Minister decided she was not engaged in insurable and pensionable employment with HRDC during the period January 1 to November 30, 1995 and that HRDC, not being her employer, had no obligation to remit any premiums or contributions related to her employment in the AES Lethbridge office. In her Notice of Appeal there was a letter attached - stated to be part of her appeal - in which she had pointed out to the Chief of Appeals, Revenue Canada, that her supervisor, the Manager of the AES Lethbridge office had been ruled to be an employee of HRDC and that Black believed she was also an employee of HRDC, receiving directions and instruction from Michael Jansson of the HRDC Edmonton office in the same manner as her immediate supervisor, J. Francis McArthur.

[39]          Darlene Cowle appealed - 97-567(UI) and 97-731(UI) from determinations issued by the Minister on January 10, 1997 wherein the Minister - in one determination - decided she had been an employee of David Kucherawy, the Manager of the AES Vegreville office where she had worked during the period January 1 to June 30, 1995. In another determination of same date, the Minister determined that HRDC was not her employer because she had not been engaged under a contract of service. Cowle did not testify but in her Notice of Appeal she sought recognition that her employer had been HRDC and not Kucherawy. As she clearly stated in her notice:

"To me, this decision makes no sense at all to anyone who worked in our offices, or who knew anything at all about how our offices operated."

[40]          The position of the respondent in those instances where workers were determined to be employees of their AES office manager is based on certain assumptions of fact which, subject to factual variations demanded by context, are basically the same in each Reply to Notice of Appeal and, for purposes of illustration, I have used the Reply filed in the appeal of Katherine Proctor (97-714(UI) as follows:

"(a)          in 1974 an agricultural program was set up in each province under Canada Manpower and Immigration, which is now called HRDC;

(b)            this program was originally called the Canada Farm Labour Pool, and in 1986 its name was changed to AES;

(c)            the mandate of AES was to provide agricultural farm labour placement in Canada;

(d)            there were about 10 AES offices set up in Alberta, and about 65 across Canada;

(e)            HRDC hired persons to manage each AES office, (the "Managers");

(f)             each AES office had one Manager and one or more support staff;

(g)            Ron Hiebert was hired as the manager for the Red Deer office;

(h)            the Appellant was hired as an administrative assistant;

(i)             agreements were entered into between HRDC and each Manager where, inter alia,

(i)             all employees of the Manager employed in the AES office were to be hired by the Manager;

(ii)            the hiring of employees was the sole responsibility of the Manager;

(iii)           funding was provided by HRDC based on budgets prepared by each Manager;

(j)             each year the Manager signed a new agreement containing a schedule of the proposed funding from HRDC;

(k)            the funding for the AES offices was provided by HRDC;

(l)             a bank account was opened for each office which was usually under the name of the location of the AES, for example, "Red Deer AES";

(m)           the Managers had control of the money for wages, unemployment insurance ("UI") premiums and Canada Pension Plan ("CPP) contributions;

(n)            deductions for UI premiums and CPP contributions were made by the Managers;

(o)            AES was not a legal entity;

(p)            there is no written contract of employment, either between Ron Hiebert and the Appellant or between HRDC and the Appellant;

(q)            the Appellant was supervised in her day-to-day activities by Ron Hiebert;

(r)             the Appellant was employed under a contract of service;

(s)            the Appellant was not hired under the Public Service Employment Act;

(t)             in Alberta, Saskatchewan and Manitoba most of the AES programs were terminated on June 30, 1995."

[41]          In Wiebe Door Services Ltd. v. M.N.R., 87 DTC 5025, the Federal Court of Appeal approved subjecting the evidence to the following tests, with the admonition that the tests be regarded as a four-in-one test with emphasis on the combined force of the whole scheme of operations. The tests are:

                1. The Control Test

                2. Ownership of Tools

                3. Chance of Profit or Risk of Loss

                4. The Integration Test

[42]          It is obvious from all of the evidence - oral and documentary - that HRDC, an agency and/or department of the Government of Canada, exercised a high degree of control over the Managers and staff of each AES office. It boggles the mind how an AES Manager can be ruled to be an employee of HRDC while carrying out instructions from HRDC - the sole source of funding doled out monthly - in accordance with policy governed by HRDC memoranda, guidelines, pay grids, operating manuals, media guidelines, expense allowances, directives regarding hours of operation and use of forms, selections for training and a mass of picayune detail - all under the unrelenting supervision of the ubiquitous Michael Jansson - while subordinates of that Manager working in the same office carrying out the same function are not employed by HRDC but are determined by the Minister to be employees - of an employee! Jansson, a dynamic, intelligent, hard-working executive, employed by HRDC to co-ordinate all AES offices in Alberta, was the master of the e-mail ukase, the modern edict-like communication designed to grind off the rough edges in each AES office so that all 10 operations would have the character of pudding or oatmeal with consistent texture, flavour and appearance. That way, one never had to worry about losing the recipe, even if Jansson were called to serve the people of Canada in some other position. The AES offices followed the same hours of operation as HRDC, used HRDC equipment, and the Managers and support staff were paid in accordance with a pay grid used for HRDC employees and other federal government workers. Jansson stated in his testimony that AES and HRDC people worked side-by-side, attended the same training courses and seminars, utilized the same computer network and it would have been unseemly - and potentially troublesome - for AES workers to be paid more or less than their counterpart across the hall at HRDC, especially if they shared the same coffee room. Each office used forms provided and approved by HRDC and had no control over any expenditures in excess of $200.00 without the approval of Jansson nor could they retain excess funds at the end of an operating year. Instead, they had to use those funds - at the direction of Jansson - to buy equipment for other AES offices who had run out of money. As the evidence disclosed in the situation involving Marlene Brodie and her Manager, Reg Yandt - when they were involved in a dispute - it became apparent she had no reason to fear losing her position in the AES office unless Michael Jansson from HRDC approved it, which he did not. It was also obvious that Jansson arranged for Brodie to take some time away from the office without any consequence to her continued employment and he also provided the funding for her pay to be based on her role as Acting-Manager of the AES Edmonton office for the period of about 6 weeks when she had functioned in that role.

[43]          All the tools and equipment necessary for any appellant - working as support staff in an AES office - were owned by the Government of Canada, through HRDC or some other governmental department or agency. The individual managers did not own any of the tools or equipment and, as recently as January, 1994, were still completing inventory reports on assets located in a particular office and forwarding them to Regional Headquarters of HRDC in Edmonton. The attempt to pass off ownership of the office equipment and furniture to each local AES Manager was, to use an expression recently popularized by our nation's youth, lame - extremely lame. The unilateral foisting - via e-mail - of some relatively new and expensive assets on unsuspecting Managers was nothing more than the execution of some egregiously puerile policy concocted to permit an end-run around the rulings of Revenue Canada which had declared various AES Managers to have been employees of HRDC. Notwithstanding the pleas of Jansson that such rulings had grave implications on a national scale, there was no revision forthcoming from the Revenue Canada officials responsible for their issue. Soldiering bravely on, HRDC sought to have these people assume indicia of independent contractors and for the employees under their direct supervision in each AES office to be employees of that particular contractor and not HRDC. The reason for this smokescreen undoubtedly lay in wanting to avoid any fall-out that could result upon closing out all of the AES offices across Canada and the termination of mandated programs, effective - for the most part - June 30, 1995. If various workers - some with up to 20 years experience - could be seen as employees - not of HRDC - but of the local person designated and hired by HRDC as the Manager - then various programs potentially applicable to laid-off federal government workers would not apply. Although the issue of whether or not the appellants are entitled to some form of financial relief is grist for another mill, it does explain - to some extent - the more patently nonsensical aspects of this affair. As for those persons within HRDC, or some related agency or department, who cooked up the independent contractor theory, and then strove mightily to weave some corroborative similitude to support this fancy, this was not their finest hour.

[44]          There was no opportunity for any chance of profit or risk of loss for any appellant who was a Manager or for any worker in an AES office. The funding was all from HRDC and the local office was not permitted to charge any placement fee to any putative employer of agricultural labourers seeking work. As mentioned earlier, any excess funds were utilized to purchase equipment for other AES offices and could not be retained. Even during the futile attempt to have each AES Manager register as a business for purposes of GST, the payment for the initial GST set up which would flow from the federal government was going to be deducted - one way or another - from the annual funding set by HRDC for a particular office. Workers were paid in accordance with the pay grid used for public service employees. In the event an office ran short of funds as a result of an expenditure approved by Jansson, then sufficient funds were always forthcoming from HRDC in the next month or so to make up that shortfall.

[45]          As for the integration test, in the case of David T. McDonald Co. Ltd. v. M.N.R., 92 DTC 1917, Mogan, T.C.C.J. was considering whether an individual was an employee of a corporation or if his relationship was that of an independent contractor. At page 1922, the Honourable Judge Mogan stated:

"In Wiebe Door, MacGuigan, J. cited with approval at page 5030 the Market Investigations case in which the question is asked: "Is the person who has engaged himself to perform these services performing them as a person in business on his own account?" To answer that question, one must consider whether the person has the capacity to engage in the particular business on his own account. If he has experience, knowledge and goodwill in the business, it is easier to conclude that he has the capacity to engage in the business on his own account and that he is not simply an incorporated employee. This is particularly true when the person has no prior employment connection with the party who benefits from his services. But if he has no experience, knowledge or goodwill in the business and offers only personal skills not related to the business, it is more difficult to conclude that he has the capacity to engage in the business on his own account; and it would probably be more reasonable to regard him as an employee of the party who benefits from his services."

[46]          The AES offices administered a program created by the federal government which had existed - in one form or another - since 1974. The local Manager was nothing more than a person who carried out day-to-day management of that office in delivering service to the public in accordance with policy set by HRDC in Edmonton.        

[47]          What the parties thought their relationship was will not change the facts. In the case of The Minister of National Revenue v. Emily Standing 147 N.R. 238, Stone J.A. at pages 239 and 240 stated:

"There is no foundation in the case law for the proposition that such a relationship may exist merely because the parties choose to describe it to be so regardless of the surrounding circumstances when weighed in the light of the Wiebe Door test."

[48]          There was an agreement - Exhibit A-1 - Tab 9 - between John Olsen and The Canada Employment and Immigration Commission, Employment and Immigration Canada pertaining to the period April 1, 1994 to March 31, 1995, coinciding with the fiscal year of the Government of Canada. It appears as though the various persons serving as Managers signed - each year - a contract which probably contained the same clause as the one at paragraph 9.04 of the one referred to above which reads:

"It is understood and agreed that the operation of the AES office is the sole and absolute responsibility of the COORDINATOR and neither the COORDINATOR or any other person employed in the AES office is engaged by this agreement as an employee, servant or agent of the COMMISSION."

[49]          It is apparent this document or any of the similar contracts applicable to other Managers did not impress the officers of Revenue Canada who issued rulings in which HRDC was held to be the employer of said Managers. The language in the contract purports to support the view the Commission is entering into a business arrangement with a local entrepreneur who had applied for federal government funding for the purposes of operating an agricultural labour employment bureau. The reality of it was something quite different. Any sense of entity-to-entity equality in bargaining power or freedom to choose methods of operation or to turn a profit, as it existed between an AES manager and the federal government carrying out the AES program through HRDC - as executed by Michael Jansson - would have to be measured in the context of an elephant stomping around the farmyard with the chickens, trumpeting, "Every man for himself". The agreement with Olsen - although more elegantly drawn - was no more effective in characterizing his true status or those of the employees in the AES offices working under his direct supervision than the typical scrap of paper one sees during appeals under the Unemployment Insurance Act when some employer has made his worker affix his signature to this type of purported contract:

"When I am doing work for Bob, I agree he don't have to send in them deductions because I am an independent contractor."

[50]          Prior to hearing any evidence in the within appeals, counsel for the respondent had made an application before me that the appeals be adjourned pending legal action which could be taken by the appellants in another forum having jurisdiction to grant the appropriate relief - by declaration or otherwise - in recognition of their service, as employees, to the Government of Canada through HRDC or its Commission. Counsel's position was that every appellant had received everything to which they had been entitled in terms of available UI benefits payable as a result of their termination of employment on or before June 30, 1995, the effective date for most appellants. I ruled against the motion and denied the adjournment for reasons delivered from the Bench. The relevant portion of section 70 of the Act, relating to the right of a person to appeal to the Tax Court of Canada reads as follows:

"(1) The Commission or a person affected by a determination by, or a decision on an appeal to, the Minister under section 61 may, within ninety days after the determination or decision is communicated to him, ...appeal from the determination or decision..."

[51]          The appellants' position is that they are all affected by the determination of the Minister because it was made without regard to the facts and was a conclusion which constituted an error in law, namely that they were not employees of Human Resources Development Canada operating the Agricultural Employment Services program through the agency of the Canada Employment and Immigration Commission, the same body referred to in section 70 of the Act. I will re-state, in part, some of the reasons I gave at the time for refusing the adjournment, having declined to accept the proposition that because the appellants could obtain no further financial benefit under the Act by virtue of the determinations being varied, their appeals, even if successful, should be regarded as moot. The jurisdiction of the Tax Court of Canada in these matters is found in sub-section 70(2) of the Act, the relevant portion of which states:

"On an appeal under this section, the Tax Court of Canada may reverse, affirm or vary the determination ..."

[52]          The jurisprudence is clear that the Tax Court cannot send back a determination to the Minister for a re-determination (Tignish Auto Parts Inc. v. M.N.R., 185 N.R. 73). It seems to me, however, that John Olsen has the right to request this Court vary the determination so that it accords with the facts. He does not want to be seen as the employer of Mary Lyle and/or Marlene Feth, especially when he was an employee of HRDC in the same office, acting as their supervisor. He does not want to accept any decision which places him - as a matter of law - into the category of independent contractor vis-à-vis Lyle and/or Feth as though he were carrying on his own business instead of serving - for 20 years - the Government of Canada, as an employee, through its variously named and re-named and re-structured arms or agencies all mandated to provide employment services to persons involved in the agricultural sector of the national economy. As for the various persons serving as support staff in AES offices, I fail to see why they should be forced to accept - without complaint - a decision which states they were employees - not of HRDC - but of their local Manager. The fact they may wish to use a finding to the contrary for other purposes or to frame it - suitable for hanging - and display it on the living room wall is of no concern to me. It is for these reasons that I held - and continue to hold - the appellants are entitled to appeal the determinations issued by the Minister.

[53]          It is clear the workers in the AES offices, at all times material, were employees of HRDC in the same way that their Managers were employees of HRDC. The evidence established such an employer-employee relationship existed and no amount of camouflage can disguise the true nature of that relationship.

[54]          All of the appeals are allowed and, in each instance, the determination is varied to delete the employer named therein and to substitute, as employer, the Government of Canada, Human Resources Development Canada, directly or through the agency of Canada Employment and Immigration Commission by whatever name it was known at a time relevant to the period of employment which was the subject matter of the particular determination. If it is necessary for me to do this on a line-by-line basis for each appeal, I will do so upon application of either Counsel but it seems to me the Minister should be capable of undertaking the necessary variation to the particular determination(s) affecting each appellant - in accordance with this reasons - without further assistance.

Signed at Sidney, British Columbia, this 12th day of June 1998.

"D.W. Rowe"

D.J.T.C.C.