Citation: 2012 TCC 137
Date: 20120426
Dockets: 2011-593(CPP)
2011-597(EI)
BETWEEN:
WORLDWIDE SCHOOL SEARCH AND RELOCATION SERVICES INC.,
c.o.b. as EDUCATIONAL CONNECTIONS,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
The appellant,
Worldwide School Search and Relocation Services Inc. (“Worldwide”), appeals
from assessments made under the Employment Insurance Act and the Canada
Pension Plan with respect to work performed by Amelia Woo during 2008. The
question is whether Ms. Woo was engaged as an employee or independent
contractor while working as an educational assessor.
[2]
Worldwide’s business
involves testing and evaluating persons for potential learning disabilities.
The corporation is owned by Dr. Bill Ford and his spouse, Louise Ford.
[3]
Worldwide engages
assessors to assist with this work. They perform the tests and co-author the
evaluation reports with Dr. Ford. Typically, the assessors are trained
professionals having advanced degrees in this specialized area.
[4]
Assessors are engaged
by Worldwide under written contracts which provide that the assessors are
engaged as independent consultants. The arrangement is flexible, with no
obligation on Worldwide to provide work and no obligation on the consultants to
accept work except for two assignments per month. It is clear that the
assessors may work elsewhere and some do.
[5]
Ms. Woo was engaged as
an assessor in 2008 during a period that she was a post-graduate student in
this field. She was already familiar with many of the tests that she
administered, but she did not have any work experience. In this regard, Ms. Woo
had not yet completed her practicum which would have provided her with hands on
experience. Worldwide provides training on tests that assessors are not
familiar with.
[6]
Ms. Woo undertook the
engagement with Worldwide partly to learn from Dr. Ford and he undertook to act
as her mentor. She perceived the relationship to be as mentor and mentee.
Assessment
procedures
[7]
It is useful to set out
the steps that are undertaken in order to provide an assessment for a client.
[8]
The first step is that
Dr. Ford meets with the client for the purposes of obtaining background
information and making an arrangement for the assessment. He forms an initial
view as to the tests that are appropriate, but the assessor also has input into
the tests that are actually performed.
[9]
The office manager then
arranges an appointment for the tests to be performed by an assessor. The
manager contacts assessors based on matching clients to the specialities of the
assessors and on the manager’s knowledge of the assessors’ availability.
[10]
The tests are conducted
at Worldwide’s premises in controlled circumstances so that the test results are
valid. The tests generally take about six hours to complete, although the time
does vary depending on the circumstances. The assessor then completes the
scoring for the tests.
[11]
The test results are
then discussed between the assessor and Dr. Ford (and perhaps other assessors).
A diagnosis is agreed upon.
[12]
A report is then
prepared with the input of both Dr. Ford and the assessor. A first draft is
prepared by the assessor, and it is given to Dr. Ford for his review. Dr. Ford
may make changes to the report, or he may ask the assessor to make changes.
Ultimately the report is signed by Dr. Ford or the office manager on his
behalf. The report has a signing line for the assessor but the report is not
always signed by the assessor. Ms. Woo generally did not sign the reports.
Analysis
[13]
The legal principles to be applied
in a case such as this are well known. At their core, it is necessary to
determine whether Ms. Woo was in business for herself. The Wiebe Door
factors of control, chance of profit, risk of loss, and ownership of tools
should be among the factors considered. Further, if the parties have a mutual
intention that their relationship be one of independent contractor or
employment, this will be respected if the relationship is consistent with this
intent. (TBT Personnel Services Inc. v The Queen, 2011 FCA 256.)
[14]
An important
consideration in this case is whether Worldwide had the power to control the manner
in which Ms. Woo’s work was done.
[15]
I find that Worldwide
had only limited control. The reports given to clients are clearly a joint work
product of two professionals. Dr. Ford and Ms. Woo both contributed to the
report and the diagnosis, and the signature lines in the report represent to
clients that it is a joint report, regardless of whether Ms. Woo signed it or
not.
[16]
The respondent
forcefully submits that Worldwide had considerable power to control Ms. Woo’s
work. I think this misconceives the nature of the engagement.
[17]
Worldwide engages
professionals to perform tasks that they are trained to do. If the assessors were
merely under the control of Worldwide, this would conflict with their professional
responsibilities.
[18]
Further, the assessors
know that they are represented as being a joint author of the reports. They
have a professional responsibility to ensure that they agree with the
evaluation.
[19]
I readily accept that
Ms. Woo was in a learning phase in her career and that she deferred to Dr.
Ford’s opinions. This is the case with most professionals who are
inexperienced. However, the professional responsibility is still there.
[20]
Ms. Woo understandably
deferred to someone with more experience, but there is a difference between
deference and control. In my view, Ms. Woo misunderstood her role as a
professional if she thought that she was under the control of Dr. Ford.
[21]
Ms. Woo suggested that
her role in drafting reports was limited and that the wording of the reports
was largely provided by Dr. Ford. She also testified that she could not
write the reports at home.
[22]
According to the
testimony, Dr. Ford made precedents of reports available to assessors, which
reflected his preferred style. This should be viewed as suggestions rather than
dictating how the reports should be written. Further, it is the assessors that
did the testing. It makes no sense to say that Dr. Ford dictated how the
reports were to be written.
[23]
As for taking reports
home, this was a necessary restriction in light of the confidential nature of
the reports. The evidence indicated that assessors now are able to write
reports at home because the security features on computers have been enhanced.
[24]
The fact that the
arrangement was loose and that assessors were free to accept or decline work
assignments strongly supports the position that Ms. Woo was engaged as an
independent contractor. Quite simply, Ms. Woo was a professional hired on an
informal basis to do a specific job at a time of her choosing. The control
factor favours an independent contractor relationship.
[25]
As for tools, all the
tools used by assessors were provided by Worldwide. It provided sound proof test
rooms, the tests, computers and reference books. Some assessors also used tests
that they personally owned.
[26]
The respondent suggests
that the use of tools is an important factor in this case. I disagree.
[27]
There is no reason that
Worldwide could not engage independent contractors to come in and perform
assessing work for Worldwide’s clients using Worldwide’s equipment. Professionals
are often hired as independent contractors under similar conditions. Tools are
not a strong factor in this case.
[28]
As for profit and loss,
it is admitted that the consultants have some control over profit because of
the manner in which compensation was determined. They assessors were paid an
hourly rate based on the time taken to perform the tests. The profit could vary
depending on the assessor’s efficiency in writing reports.
[29]
The profit element in
my view is neutral, and is not a significant factor.
[30]
As for risk of loss, I
also think this is not a significant factor. The evidence on this point was
limited, and I am not satisfied that it was reliable. Although there may be a
risk from potential lawsuits, there was no evidence that assessors commonly
obtain liability insurance. I am not satisfied that the risk is perceived to be
significant.
[31]
Finally, I would
consider intention. Ms. Woo’s testimony on this point was not entirely clear.
The fact that she signed a written contract which evidenced an independent
consultant relationship, and the fact that she knew there would be no source
deductions, suggests that Ms. Woo knew and accepted that she was not an
employee.
[32]
Ms. Woo testified that
she did not understand the full significance of being an independent
consultant. It is unfortunate that Worldwide did not provide a more in depth
explanation to Ms. Woo, but the intention in my view supports an independent
contractor relationship.
[33]
In the result, I would
conclude that Ms. Woo was engaged by Worldwide as an independent contractor and
not as an employee during 2008. The appeal is allowed and the assessments are
vacated.
[34]
Each party shall bear
their own costs.
Signed at Ottawa,
Ontario this 26th day of April 2012.
“J. M. Woods”
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