Citation: 2012 TCC 370
Date: 20121019
Dockets: 2012-1027(EI)
2012-1028(CPP)
BETWEEN:
ANA C. DEAN, o/a ANA’S CARE & HOME SUPPORT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
MILANI S. NIDOY,
Intervenor.
REASONS FOR JUDGMENT
Woods J.
[1]
Ana’s Care & Home Support is a
sole proprietorship operated by Ana Dean which provides in-facility and home
care services for seniors. It has been in business for approximately 19 years.
Ms. Dean enters into contracts with caregivers to supply services as required
by her clients. The caregivers are compensated at an hourly rate and Ms. Dean
charges a higher rate to the clients.
[2]
This appeal concerns a decision
made by the Minister of National Revenue under the Employment Insurance Act
and the Canada Pension Plan regarding five of the caregivers engaged by
Ms. Dean. At issue is the determination by the Minister that Milani Nidoy was
employed by Ms. Dean during the period from June 1, 2009 to October 31, 2009,
and that Virginia Sison, Eliadora Clores, Evangeline Abalos, and Charlene
Apalon Garzon were employed by Ms. Dean during the period from January 1, 2008
to October 31, 2009. Ms. Dean submits that these individuals were not employees
but independent contractors.
[3]
Ms. Nidoy filed a notice of
intervention to this proceeding.
[4]
The individuals whose engagement
is at issue will be referred to in these Reasons as the “Workers.”
Preliminary comments
[5]
Ms. Dean, who was represented at
the hearing by her son, testified on her own behalf. She also sought
to enter into evidence affidavits by two of the Workers to support that they
were independent contractors. I declined to enter these documents into
evidence. For evidence of this nature to have value, it is important that the
Workers be present at the hearing in order to be cross-examined. It is
unfortunate that they were not present.
[6]
Accordingly, the only viva voce
evidence in support of Ms. Dean is her own testimony which is self-interested.
I found that her evidence was at times quite self‑serving.
[7]
The Crown’s witnesses were Ms.
Nidoy and Ms. Abalos. They were credible witnesses, but I did have a concern
that their opinions as to the relationship with Ms. Dean may have been coloured
by an unfavourable view of her business practices.
[8]
Accordingly, I have viewed all of
the testimony with some caution.
Factual
background
[9]
I will begin by setting out the
factual assumptions made by the Minister, which is supported by the evidence
except to the extent referred to in the analysis below. The assumptions are
reproduced from the Crown’s Reply in the Canada Pension Plan appeal.
10. In determining that the Workers were employed in
pensionable employment with the Appellant during the Period, the Minister
relied on the following assumptions of fact:
a)
the Appellant was in the business of providing
in-home or in‑facility care and personal support services;
b)
the Appellant has been in business for
approximately 18 years;
c)
the Appellant did not use written contracts in
the course of engaging the Workers;
d)
the Appellant determined what days and hours of
work were required for the Workers;
e)
the Appellant was the contact person for the
clients in need of home-care;
f)
the clients receiving home-care services were
the Appellant’s clients;
g)
the Appellant determined the costs charged to
her clients for services provided by the Workers;
h)
the Appellant instructed the Workers on the
duties to be provided;
The Workers
i)
the Workers were paid on an hourly basis;
j)
the Workers were paid every two weeks, by
cheque;
k)
the Workers were required to complete time
sheets to record their hours worked;
l)
the Workers did not invoice the Appellant;
m)
the Workers were paid between $12.00 per hour
and $13.00 per hour;
n)
the Workers did not receive any benefits such as
overtime, vacation entitlement or vacation pay;
o)
the Workers did not charge the Appellant GST on
the services they provided;
p)
the Workers did not provided the tools or
equipment necessary to perform their services;
q)
the Workers did not incur expenses;
r)
the Workers did not hire their own helpers; and
s)
the Appellant put all workers on payroll
effective November 1, 2009.
Applicable legal
principles
[10]
The general legal principles to be
applied were most recently set out by Sharlow J.A. in TBT Personnel Services
Inc. v The Queen, 2011 FCA 256, at para. 8 and 9:
[8] The leading case on the principles
to be applied in distinguishing a contract of service from a contract for
services is Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553
(C.A.). Wiebe Door was approved by Justice Major, writing for the
Supreme Court of Canada in 67112 Ontario Ltd. v. Sagaz Industries Canada
Inc., 2001 SCC 59, [2001] 2 S.C.R. 983. He summarized the relevant
principles as follows at paragraphs 47-48:
47. [...] The central
question is whether the person who has been engaged to perform the services is
performing them as a person in business on his own account. In making this
determination, the level of control the employer has over the worker's
activities will always be a factor. However, other factors to consider include
whether the worker provides his or her own equipment, whether the worker hires
his or her own helpers, the degree of financial risk taken by the worker, the
degree of responsibility for investment and management held by the worker, and
the worker's opportunity for profit in the performance of his or her tasks.
48. It bears repeating
that the above factors constitute a non-exhaustive list, and there is no set
formula as to their application. The relative weight of each will depend on the
particular facts and circumstances of the case.
[9] In Wolf v. Canada, 2002 FCA
96, [2002] 4 F.C. 396 (C.A.), and Royal Winnipeg Ballet v. Canada (Minister
of National Revenue - M.N.R.), 2006 FCA 87, [2007] 1 F.C.R. 35, this Court
added that where there is evidence that the parties had a common intention as
to the legal relationship between them, it is necessary to consider that
evidence, but it is also necessary to consider the Wiebe Door factors to
determine whether the facts are consistent with the parties’ expressed
intention.
[11]
The application of these general
principles to a particular case is largely a fact-driven exercise. However,
some principles have emerged from the cases which have been expertly summarized
by Hershfield J. in a case dealing with in-home nursing care: Direct Care
In-Home Health Services Inc. v The Queen, 2005 TCC 173. The relevant parts
are reproduced below.
Control
[11]
Analysis of this factor involves a determination of who controls the work and
how, when and where it is to be performed. If control over work once assigned
is found to reside with the worker, then this factor points in the direction of
a finding of independent contractor; if control over performance of the worker
is found to reside with the employer, then it points towards a finding of an
employer-employee relationship. However, in times of increased specialization
this test may be seen as less reliable, so more emphasis seems to be placed on
whether the service engaged is simply "results" oriented; i.e.
"here is a specific task - yoe are engaged to do it". In such case
there is no relationship of subordination which is a fundamental requirement of
an employee-employer relationship. Further, monitoring the results, which every
engagement of services may require, should not be confused with control or subordination
of a worker.
Tools
and Equipment
[13]
The question to be asked in relation to this factor is who, of the
employer or the worker, owns the assets or equipment that is necessary to
perform the work. This factor points to a finding of independent contractor if
it is the worker who controls the assets or equipment. Conversely, a finding of
employee is likely if it is the employer who controls them.
Risk
of Loss/Opportunity for Profit
[16]
This factor examines the worker's potential of profit or loss. An
independent contractor normally assumes the risk of loss and chance for profit
resulting from the performance of work, while in the case of an employee it is
the employer who bears that burden and has that opportunity.
Whose
Business Is It?
[22]
One ought not, however, fall into the trap of thinking that only
that which has the trappings of a "business" qualifies as such for
the purposes of this analysis. I refer to paragraph 13 of D & J Driveway:
... It is important to guard against a reflex
of thinking solely of a business corporation or an organized commercial
undertaking when one is dealing with work which is done or services which are
provided other than under a contract of employment. The examples of electrical,
plumbing or building contractors immediately spring to mind in such a context.
However, there is a whole range of services which are offered under a contract
for services. In fact, article 2098 of the Civil Code of Quebec was very
careful to place on an equal footing a "contract of enterprise" and a
"contract for services" and to describe as a "contractor"
the person who performs a contract of enterprise and a "provider of
services" the person who carries out a contract for services.
[23]
Although the Civil Code of Quebec does not apply in this
case, I nonetheless find the words of Letourneau J. instructive.[…]
Analysis
[12]
As a preliminary
comment, the Crown suggested that I make general inferences as to the
engagement of all five Workers based on the evidence presented by Ms. Dean, Ms.
Nidoy and Ms. Abalos. This is appropriate in this particular case.
[13]
I would also comment about
paragraph 10(s) of the Reply which indicates that Ms. Dean began to treat all
caregivers as employees effective November 1, 2009. This assumption does not
assist the Crown because Ms. Dean took this action only in response to the
position taken by the Canada Revenue Agency.
[14]
I now turn to the application of
the legal principles to the facts of this case. I will start with the factors
described in Wiebe Door.
Control
[15]
In general, the arrangement
between Ms. Dean and each Worker was loose in the sense that there was no
guarantee of work by Ms. Dean, and no obligation on the part of the Workers to
accept a particular engagement. In addition, both the Workers and Ms. Dean
could terminate an arrangement at any time. The Workers could also do other
work, including providing other caregiving services.
[16]
As for the work schedule, I find
that Ms. Dean assigned shifts, but that the actual hours fluctuated somewhat depending
on the needs of the clients. This suggests that the Workers were expected to
work extra hours as required. I also find that, if a Worker was not available
for a shift, the Worker could find a replacement or she could contact Ms. Dean
to find one.
[17]
As for duties, Ms. Dean suggests that she was not
required to give direction to the Workers as they were all experienced
caregivers who knew what to do. It may have been the case that direction was
not often necessary, but this is not the test. What is relevant is whether Ms.
Dean had the ability to control, not whether it was actually exercised.
[18]
Common sense suggests that in this
type of work the client (or the person responsible for the client, such as
family or a trustee) has the ability to dictate the type of work to be done and
the manner in which it is done. Since the Workers contracted with Ms. Dean, and
not with the clients, any directions given by clients amounted to control
exercised by Ms. Dean.
[19]
I would also note that Ms. Dean
also continued to be involved with the clients. She would visit on a regular
basis and pick up the Workers’ timesheets. Through this contact, she would be
able to monitor the caregivers’ work.
[20]
On balance, the control factor
points more towards an employment relationship. The fact that there was no
obligation for Ms. Dean to offer work or for the Workers to accept work is a
contrary factor, but it is of less importance in this case because the evidence
suggests that the assignments, once accepted, tended to be long term arrangements.
[21]
I would comment in particular
about Ms. Nidoy’s engagement because it had unique elements. Ms. Nidoy provided
services for an individual who required 24 hour care. Ms. Nidoy had this
relationship before Ms. Dean was engaged and Ms. Nidoy was one of three
individuals who were named by the client, while she was able, to be her
caregivers.
[22]
Ms. Dean subsequently became
involved because the retirement home required the involvement of an agency. In
addition, a trustee had at this point responsibility for the client’s care and
the trustee wished to deal with Ms. Dean. Ms. Nidoy had very little contact
with Ms. Dean and her work hours were determined by one of the other two
caregivers.
[23]
The fact that Ms. Dean dealt with
a trustee who had responsibility for the client’s care tips the scales towards
Ms. Dean having the ability to control the manner in which Ms. Nidoy’s
work was done. As for the work schedule being determined by another caregiver,
this should be viewed as a delegation by Ms. Dean. The control factor points
to an employment relationship.
[24]
Ms. Dean described the arrangement
as a bridge between the trustee and the three caregivers which she did as a
favour. This does not change the fact that the contractual arrangement was with
Ms. Dean and not the caregivers. It is the contractual arrangement that defines
the relationship.
Tools and equipment
[25]
This factor is neutral. The
Workers had to pay for their own transportation to and from work but this would
be expected of both employees and independent contractors for this type of
assignment. There was minimal equipment required and it was provided by the
client.
Risk of loss/Opportunity
for profit
[26]
Based on the evidence that was
led, I would assign this as a relatively neutral factor. The Workers were paid
on an hourly basis, and were not promised regular work. These types of
arrangements are common in both employment and independent contractor
relationships.
Intention
[27]
The application of the facts to
the Wiebe Door factors leads to the conclusion that the Workers were
engaged as employees. Given this finding, it is not necessary to consider the
intention of the parties.
[28]
In any event, the evidence
suggests that there was no common intention between the parties. There is
little evidence that the Workers put their mind to the nature of the
relationship or that Ms. Dean discussed it with them. The Workers who testified
were not sophisticated in business matters and they may not have understood
that Ms. Dean was treating them as independent contractors by not taking source
deductions. Intention is not a relevant factor in this case.
[29]
In the result, the
appeal with respect to the decision that Virginia Sison, Eliadora Clores,
Evangeline Abalos, Charlene Apalon Garzon and Milani Nidoy were engaged in
insurable and pensionable employment during the periods set out above is dismissed,
and the decision is confirmed. Each party shall bear their own costs.
Signed at Ottawa, Ontario this 19th day of October 2012.
“J. Woods”
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