Groupe-Conseil Tremdel Inc. v. M.N.R., docket 97-357-UI

Date: 19980211

Docket: 97-357-UI

BETWEEN:

GROUPE-CONSEIL TREMDEL INC.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Charron, D.J.T.C.C.

[1] This appeal was heard at Montréal, Quebec, on January 8, 1998, to determine whether the employment of Chantal Aylwin (the worker) from September 11, 1995, to May 31, 1996, while she was working for the appellant was insurable within the meaning of the Unemployment Insurance Act (“the Act”).

[2] By letter dated November 29, 1996, the respondent informed the appellant that the employment in question was insurable because there was an employer-employee relationship between it and the worker, and that the insurable earnings amounted to $20,250.

Statement of facts

[3] The facts on which the respondent relied in making his determination are set out as follows in paragraph 5 of the Reply to the Notice of Appeal:

[TRANSLATION]

(a) The appellant, which was incorporated in 1992, is a business that provides consulting-engineer services (drawing up plans and specifications). (admitted)

(b) Roger Denicourt and Louis Tremblay are equal shareholders in the appellant’s business. (admitted)

(c) During the period at issue, the shareholders and the worker were the only people working for the appellant. (denied as worded)

(d) At the end of the summer of 1995, the appellant obtained a contract to supervise road repair work in the municipality of Sainte-Agathe-Sud. (admitted)

(e) Since both of the appellant’s shareholders were busy on other assignments, the appellant hired the worker, an engineer temporarily out of work, to handle the supervision contract. (denied as worded)

(f) During the period at issue, the worker worked on the following three contracts: (admitted)

- Municipality of Sainte-Agathe-Sud (road reconstruction)

- Pulp and Paper Research Institute (factory)

- Municipality of Saint-Bruno (road reconstruction)

(g) As part of her work, the worker performed the following duties: she had to monitor the progress of the work, make site reports, look after certificates for payment with businesses and answer clients’ questions. (admitted)

(h) The worker did most of her work on site and part of it at home. (admitted)

(i) The worker worked variable hours spread over four to six days a week. (admitted)

(j) The worker went to the appellant’s office every week to meet with one of the shareholders, look at plans and hand in her site supervision reports. (admitted)

(k) In the fall of 1995, the worker’s work was supervised by Roger Denicourt and subsequently it was supervised by Louis Tremblay. (denied as worded)

(l) During the last six weeks of the period at issue, the worker worked in the appellant’s offices doing various jobs for the two shareholders (offers of service, project schedules and project drawings). (no knowledge)

(m) The appellant was accountable to its clients for the work done by the worker. (admitted)

(n) The worker was paid a fixed weekly amount, including the cost of using her car, that was determined at the beginning of each contract obtained by the appellant. (denied)

(o) During the period at issue, the worker received 11 paycheques from the appellant amounting to $20,250. (denied as worded)

(p) During the period at issue, there was a genuine express or implied contract of service or apprenticeship, written or oral, between the appellant and the worker. (denied)

[4] The appellant admitted the truth of all the subparagraphs of paragraph 5 of the Reply to the Notice of Appeal except those it denied or said it had no knowledge of, as indicated in parentheses at the end of each subparagraph.

Testimony of Louis Tremblay

[5] Mr. Tremblay, the appellant’s president and a private consultant, said that he hired Chantal Aylwin, an engineer, on subcontract to do some work on the following projects in her area of expertise: (1) repairs to chemin Brunet in Sainte-Agathe-Sud; (2) effluent study by the Pulp and Paper Research Institute (Paprican); (3) repairs to boulevard de Boucherville in Saint-Bruno-de-Montarville.

[6] The first contract was for the supervision of the work for a lump sum of $700 a week, including expenses (Exhibit A-1).

[7] The second contract encompassed the following activities: gathering data, reviewing plans, identifying discharge points, on-site verification and validation, theoretical assessment of discharges, preparing a brief report, estimating costs, preparing a report and presentation to the client, all of which was for a lump sum of $7,000, including expenses (Exhibit A-2).

[8] The final contract required specifications to be prepared and costs to be estimated for a lump sum of $4,750, including expenses (Exhibit A-3).

[9] Because of the worker’s knowledge and experience, the appellant never had to tell her what to do.

[10] The appellant is not disputing the respondent’s determination for the period from April 8 to May 31, 1996. However, the appellant never intended to hire the worker under a contract of service, since it did not have a large enough volume of work. When necessary, the appellant used the services of a secretary from Plante et Associés, a neighbouring office. The worker could work either at home or at the office, as she wished, since she could use her own computer, or the office computer or Plante et Associés’ surveying tools. The appellant’s office was in premises made available to it free of charge by Plante et Associés.

Testimony of Chantal Aylwin

[11] The worker, an engineer by profession, corroborated Louis Tremblay’s testimony. She added that she was paid by cheque every two or three weeks but did not make out any invoices. Mr. Tremblay trusted her and did not require that she be supervised. She kept the appellant informed of how the contracts she was supervising were progressing. She was not paid during the Christmas and New Year’s holidays, had no business cards, used Plante et Associés’ tools and her own computer, and considered the appellant to be her client.

Analysis of the facts in relation to the law

[12] It must now be determined whether the worker’s activity falls within the concept of insurable employment, that is, whether there was a contract of service as contemplated by paragraph 3(1)(a) of the Unemployment Insurance Act.

[13] The courts have developed four essential tests for identifying a contract of service. The leading case in this area is City of Montreal v. Montreal Locomotive Works Ltd., [1947] 1 D.L.R. 161. The tests are as follows: (1) control; (2) ownership of the tools; (3) chance of profit and risk of loss; and (4) degree of integration — this last test was added by the Federal Court of Appeal in Wiebe Door Services Ltd. v. M.N.R. This list is not exhaustive, however.

[14] What remains from the evidence showed that the worker’s work was performed under the appellant’s supervision, but there was no relationship of subordination between them. Ownership of the tools is not relevant. She was paid a lump sum given to her in instalments. Finally, the worker was not integrated into the business that made use of her services. I therefore find that she was a self-employed person carrying out a contract for services from September 11, 1995, to April 8, 1996.

[15] The appeal is therefore allowed for the period from September 11, 1995, to April 8, 1996, and the Minister’s determination is varied accordingly.

Signed at Ottawa, Canada, this 11th day of February 1998.

       

D.J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 16th day of November 1998.

Kathryn Barnard, Revisor