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Citation: 2005TCC743
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Date: 20051201
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Docket: 2004-1336(EI)
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BETWEEN:
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9079-6038 QUÉBEC INC.,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
[OFFICIAL
ENGLISH TRANSLATION]
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REASONS FOR JUDGMENT
Bédard J.
[1] This
is an appeal from decisions that the work done by the following workers for the
Appellant meets the requirements of a contract of service within the meaning of
paragraph 5(1)(a) of the Employment Insurance Act
("the Act"):
Patrice Blais, from October 1, 2002 to April 8, 2003,
Gino Gauthier, from June 18 to July 19, 2002,
Rémi Jean, from September 3 to October 31, 2002,
Nicolas Élie Rodrigue, from June 18 to July 23, 2002,
Stéphane Thiboutot, from August 5 to December 31, 2002,
André Tremblay, from June 18 to July 23, 2002,
Éric Tremblay, from October 8 to December 31, 2002,
("the promotional agents"),
Pierre-Luc Blackburn, from December 2 to December 23, 2002,
Benoît Gauthier, from January 1 to June 22, 2002,
("the representatives") and
Nathalie Gagnon, from June 17 to July 24, 2002,
("the team leader").
[2] In
order to explain his decisions, the Minister of National Revenue
("the Minister") relied on the following assumptions of fact,
which are set out in paragraph 5 of the Reply to the Notice of Appeal, and were
admitted to or denied by the Appellant, as stated in parentheses:
[TRANSLATION]
5. (a) The Appellant was incorporated on
July 9, 1999. (admitted)
(b) The Appellant operated a business
that sold and installed security systems. (admitted)
(c) The Appellant carried on
business under the name Maxxcom systèmes de sécurité. (admitted)
(d) The Appellant was an authorized
agent of ADT Canada. (admitted)
(e) The Appellant had its head
office in Sherbrooke and branch offices in Chicoutimi and St-Jean-sur-Richelieu. (admitted)
(f) The Appellant had customers in
these three municipalities and their environs. (denied)
(g) The Appellant gave its customers
an alarm system provided they signed a three-year service contract with ADT
Canada. (denied as worded)
(h) The
Appellant had a telemarketing department which solicited customers by phone. (admitted)
(i) In
addition, the Appellant had two categories of salespeople: promotional agents
and sales representatives. (admitted)
(j) The promotional agents went from door to
door in order to sell ADT Canada's services. (admitted)
(k) The representatives visited potential customers
that the telemarketing service had already identified. (denied as worded)
PATRICE BLAIS, GINO GAUTHIER, RÉMI JEAN,
NICOLAS ÉLIE RODRIGUE, STÉPHANE THIBOUTOT, ANDRÉ TREMBLAY AND
ÉRIC TREMBLAY
(l) Patrice Blais, Gino Gauthier,
Rémi Jean, Nicolas Élie Rodrigue, Stéphane Thiboutot, André Tremblay and
Éric Tremblay (the promotional agents) were hired by the Appellant as
promotional agents. (admitted)
(m) Each promotional agent signed a
work agreement with the Appellant. (admitted)
(n) The promotional agents were
grouped together in a team placed under a team leader. (denied as worded)
(o) They worked as a team. (denied
as worded)
(p) The Appellant motivated and
trained the promotional agents. (denied)
(q) The Appellant assigned each
promotional agent team territories to canvass (denied as worded)
(r) The promotional agents were not
free to choose the territory that they canvassed. (denied)
(s) The promotional agents travelled
together in a vehicle that belonged to the Appellant. (denied as worded)
(t) Each promotional agent had to
comply with the work schedule set by the team leader for the team members. (denied
as worded)
(u) The teams's work schedule was
generally Monday to Friday from 8 a.m. to 5 p.m. or from 1 p.m. to 8:30 p.m. (denied as worded)
(v) A promotional agent had to
notify his or her team leader in the event of an absence. (denied)
(w) The promotional agents' hours of
work were controlled by the Appellant because they travelled with the team
leader. (denied)
(x) The promotional agents had to
learn a presentation script prepared by the Appellant. (denied as worded)
(y) The promotional agents had to follow
the pricing established by ADT Canada. (admitted)
(z) The promotional agents had to
leave a placard on the lawn of the visited house in order to show their team
leader where they were. (admitted)
(aa) At the end of each day, the
promotional agents handed their team leader the contracts that were signed. (admitted)
(bb) The promotional agents were paid
solely by commission. (admitted)
(cc) The promotional agents received a
$100 commission per three-year service agreement and a 15% commission on
additional products sold. (admitted)
(dd) The promotional agents were paid
weekly by direct deposit. (admitted)
(ee) The Appellant transported the
promotional agents to the area where they were to canvass from door to door and
supplied them with ADT Canada contracts, flyers, placards, binders and vests. (denied)
(ff) The promotional agents had no
expenses to incur as part of their work. (denied)
(gg) The promotional agents bore no
financial risks. (denied)
(hh) The promotional agents had no sales
quota to meet, but they were dismissed if the Appellant considered their sales
insufficient. (denied as worded)
(ii) The Appellant paid the
requisite workers' compensation premiums to the CSST for the promotional agents.
(admitted)
(jj) The promotional agents could
not get someone to perform their duties for the Appellant in their place. (denied)
(kk) The promotional agents' work was
integrated into the Appellant's activities. (denied)
(ll) On or about August 29, 2002, the
Commission des normes du travail claimed $835.38 from the Appellant, consisting
of $802.25 in unpaid wages and $32.13 in vacation pay for promotional agent Nicolas
Élie Rodrigue. (admitted)
PIERRE-LUC BLACKBURN AND BENOÎT GAUTHIER
(mm) Pierre-Luc Blackburn and Benoît
Gauthier were hired by the Appellant as representatives. (admitted)
(nn) Benoît Gauthier spent 20% of his
time at work as a promotional agent and the rest of his time as a
representative. (admitted)
(oo) Each representative signed a work
agreement with the Appellant. (admitted)
(pp) The Appellant scheduled the
representatives' appointments with prospective customers. (denied as worded)
(qq) The representatives had to comply
with the appointment schedule set by the Appellant. (denied as worded)
(rr) The representatives were not
free to choose a territory. (denied)
(ss) The representatives' work
schedule was usually Monday to Friday from 1 p.m. to 9 p.m. (denied as worded)
(tt) The representatives' hours of
work were controlled by the number of appointments. (denied as worded)
(uu) The representatives had to follow
the pricing established by ADT Canada. (admitted)
(vv) The representatives submitted the
signed contracts to the Appellant as quickly as possible. (admitted)
(ww) The representatives had to contact
the Appellant every week in order to report. (denied as worded)
(xx) The representatives were paid
solely by commission. (admitted)
(yy) The representatives received a
$100 commission for each three-year service agreement and a 15% commission on
additional products sold. (admitted)
(zz) The representatives were paid
weekly by direct deposit. (admitted)
(aaa) The Appellant provided the
representatives with the ADT Canada contracts and the flyers, placards, binders
and vests. (denied as worded)
(bbb) The representatives generally
provided their own cars. (admitted)
(ccc) For a period of time, the
Appellant provided a vehicle and cell phone to representative Benoît Gauthier. (admitted)
(ddd) The Appellant paid the
representatives $20 in automobile expenses per contract signed. (admitted)
(eee) The representatives had no sales
quotas to meet but were dismissed if the Appellant considered their sales
insufficient. (denied as worded)
(fff) The Appellant paid the
requisite workers' compensation premiums to the CSST for the representatives. (admitted)
(ggg) The representatives could not get
someone to perform their duties for the Appellant in their place. (denied)
(hhh) The representatives' work was
integrated into the Appellant's activities. (denied)
NATHALIE GAGNON
(iii) Nathalie Gagnon was hired by
the Appellant as an administration specialist for the first two weeks, and was
then made a team leader. (admitted)
(jjj) As an administration specialist,
Nathalie Gagnon did office work for the Appellant and was in charge of hiring
and dismissing staff. (denied)
(kkk) She worked at the Chicoutimi office. (admitted)
(lll) Two weeks later, Lise-Anne
Boucher replaced Nathalie Gagnon as an administration specialist at the Chicoutimi office. (admitted)
(mmm)As a team leader, Nathalie Gagnon determined
the neighbourhood that her team's promotional agents would canvass each day,
drove the Payor's vehicle, and collected the signed contracts. (admitted)
(nnn) The Appellant and Nathalie Gagnon signed
a work contract. (admitted)
(ooo) As a team leader, Nathalie Gagnon
travelled with the promotional agents in a vehicle belonging to the Appellant. (admitted)
(ppp) As team leader, Nathalie Gagnon
had the same work schedule as the promotional agents on the team. (denied as
worded)
(qqq) As team leader, Nathalie Gagnon's
work schedule was generally Monday to Friday from noon to 8:30 p.m. (denied as worded)
(rrr) Nathalie Gagnon's hours of work
were controlled by the Appellant because she worked and travelled with the
promotional agent team. (denied)
(sss) At the end of each day, Nathalie
Gagnon submitted the signed contracts to Lise-Anne Boucher. (admitted)
(ttt) Nathalie Gagnon was paid solely
by commission. (admitted)
(uuu) Nathalie Gagnon received a $150
commission if her team's promotional agents made 10 sales during the week. (admitted)
(vvv) If there were more than 10 sales,
she received an additional bonus. (admitted)
(www) She did not receive a commission if
there were fewer than 10 sales during the week. (admitted)
(xxx) Nathalie Gagnon was paid weekly by
direct deposit. (admitted)
(yyy) Nathalie Gagnon had no expenses to
incur as part of her work. (denied)
(zzz) The Appellant paid the necessary
workers' compensation premiums to the CSST for Nathalie Gagnon. (admitted)
(aaaa) Nathalie Gagnon could not get a
replacement to perform her duties for the Appellant. (denied)
(bbbb) Nathalie Gagnon's work was
integrated into the Appellant's activities. (denied)
Preliminary remarks
[3] Martin
Croteau, an appeals officer with the Canada Customs and Revenue Agency, was the
Respondent's only witness.
[4] The Appellant's witnesses were François Landreville, the
Appellant's president; Hélène Lemire, a Canada Pension Plan and Employment Insurance
interpretation officer in 2000 and 2001 who made a determination, on
March 13, 2001, that the employment of the Appellant's employees was
not insurable; and Luc Baril, a representative working for the Appellant
but who was one of its agents in 2002. It should be noted that
Mr. Baril was not covered by the Respondent's decisions in the case at
bar.
[5] Counsel for the
Respondent objected to Hélène Lemire's testimony from the outset, because Mr. Landreville
testified that he sent a letter to Ms. Lemire because he knew her, as she
was the person who had rendered a decision in 2001 regarding those of the
Appellant's workers who were not contemplated by the instant appeal and
involving periods not in issue here. I would immediately like to emphasize
that I did not take Ms. Lemire's testimony into account in my decision.
Firstly, the decision which she rendered, and which, of course, is not
binding on me, was about the workers not contemplated by the instant appeal and
pertained to periods not covered by the instant case. Secondly, her decision
was particularly uninformative because it was based entirely on information
that Ms. Lemire obtained from the Appellant, and thus, was obtained
without questioning and meeting the workers to whom her decision applied.
[6] The parties provided the Court with
certain decisions, including the decisions of this Court in Shaw
Communications Inc. v. Canada (Minister of National Revenue – M.N.R.),
2003 D.T.C. 1459, [2002] T.C.J. No. 314, affirmed by the Federal
Court of Appeal, 2003 D.T.C. 5707, [2003] F.C.J. No. 541, and Fatt v. Canada
(Minister of National Revenue – M.N.R.), [2001] T.C.J. No. 239, as
well as the decisions of the Federal Court of Appeal in Hennick v. Canada (Minister
of National Revenue – M.N.R.), 179 N.R. 315, [1995] F.C.J. No. 294,
Vulcain Alarme Inc. v. Canada (Minister of National Revenue – M.N.R.), 249 N.R. 1, [1999] F.C.J. No.
749, and Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553.
Analysis
The law
[7] When the courts must define concepts from Quebec private law to apply federal legislation such as
the Employment Insurance Act, they must follow the rule of
interpretation in section 8.1 of the Interpretation Act. To determine
the nature of a Quebec employment contract and distinguish it
from a contract for services, one must apply the relevant rules of the Civil
Code of Québec (the "Civil Code"), at least since June 1, 2001. These rules are not consistent with the rules
stated in decisions such as 671122 Ontario Ltd. v. Sagaz Industries Canada
Inc., [2001] S.C.R. 983 and Wiebe Door Services Ltd. v. M.N.R.,
[1986] 3 F.C. 553. Contrary to the situation with the common law, the
constituent elements of a contract of employment have been codified, and, since
the coming into force of articles 2085 and 2099 of the Civil Code on January 1,
1994, the courts no longer have the same latitude as the common law courts to
define what constitutes an employment contract. If it is necessary to rely on
previous court decisions to determine whether there was a contract of
employment, one must choose decisions with an approach that conforms to civil
law principles.
[8] The Civil Code
contains distinct chapters governing the "contract of employment"
(articles 2085 to 2097) and the "contract of enterprise or for services"
(articles 2098 to 2129).
[9] Article 2085 states that a contract of
employment
. . . is a contract by which a person, the
employee, undertakes for a limited period to do work for remuneration,
according to the instructions and under the direction or control of another
person, the employer.
[10] Article 2098 states that a contract of enterprise
. . . is a contract by which a person, the
contractor or the provider of services, as the case may be, undertakes to carry
out physical or intellectual work for another person, the client or to provide
a service, for a price which the client binds himself to pay.
[11] Article 2099 follows, and states:
The contractor or the provider
of services is free to choose the means of performing the contract and no
relationship of subordination exists between the contractor or the provider of
services and the client in respect of such performance.
[12] It can be said that
the fundamental distinction between a contract for services and a contract of
employment is the absence, in the former case, of a relationship of
subordination between the provider of services and the client, and the
presence, in the latter case, of the right of the employer to direct and
control the employee. Thus, what must be determined in the case at bar is whether
there was a relationship of subordination between the Appellant and the workers.
[13] The Appellant has the burden of proving, on a balance of probabilities,
the facts in issue that establish its right to have the Minister's decision
vacated. It must prove the contract entered into by the parties and
establish their common intention with respect to its nature. If there is no
direct evidence of that intention, the Appellant may turn to indicia from the
contract and the Civil Code provisions that govern it. In the case at bar, if
the Appellant wishes to show that there was no employment contract, it will
have to prove that there was no relationship of subordination. In order to do
so, it may, if necessary, prove the existence of indicia of independence such
as those stated in Wiebe Door, supra, namely the ownership of
tools, the risk of loss and the chance of profit. However, in my opinion,
contrary to the common law approach, once a judge is satisfied that there was
no relationship of subordination, that is the end of the judge's analysis of
whether a contract for services existed. It is then unnecessary to consider the
relevance of the ownership of tools or the risk of loss or chance of profit,
since, under the Civil Code, the absence of a relationship of
subordination is the only essential element of a contract for services that
distinguishes it from a contract of employment. Elements such as the ownership
of tools, the risk of loss or the chance of profit are not essential elements of
a contract for services. However, the absence of a relationship of
subordination is an essential element. For both types of contract, one must
decide whether or not a relationship of subordination exists. Obviously, the
fact that the worker behaved like a contractor could be an indication that
there was no relationship of subordination.
[14] Ultimately, courts will usually have to make a
decision based on the facts shown by the evidence regarding the performance of
the contract, even if the intention expressed by the parties suggests the
contrary. If the evidence regarding the performance of the contract is not
conclusive, the Court can still make a decision based on the parties' intention
and their description of the contract, provided the evidence is probative with
respect to these questions. If that evidence is not conclusive either, the
appeal will be dismissed on the basis that there is insufficient evidence.
The promotional agents
Relationship of subordination
[15] Did the promotional agents work under the control or direction of the
Appellant, or, alternatively, did the Appellant have the ability or right to
direct or control them?
[16] It is certainly true that the work agreement between the Appellant and
the promotional agents unambiguously states that the agent understands that he or
she is an independent contractor. However, even though the parties to the
contract clearly manifested their intention in their written contract, I am not
required to consider this decisive. In order for it to be decisive, the
contract must also have been performed in a manner that is consistent with its
content. The fact that the parties stipulated that the work would be performed
by an independent contractor does not mean that there is no employer-employee
relationship. There is simply no question that I must verify whether the
contractual stipulation is consistent with reality. In my opinion, this
verification is essential, because it is too often in the parties' interests to
conceal the true nature of a contract. Indeed, too frequently, employers who
wish to reduce the tax burden associated with their payroll decide to treat
their employees like independent contractors. Often, employees do not negotiate
their contracts on a level playing field, and this leads to contracts that I would
describe as contracts of adhesion. Those employees generally need work urgently,
and sign the contract as submitted to them by their employer without any
negotiation whatsoever. This is why one must carefully verify whether the
contractual stipulation is consistent with the actual facts.
[17] I feel it important to restate that, if the
Appellant in the case at bar wishes to show that there was no employment
contract, it must prove, on a balance of probabilities, that there was no relationship
of subordination. I also feel it worth noting that, if the evidence discloses
elements that point both to autonomy and subordination, I must find that there
was an employment contract, because there can be no subordination in a contract
for services. This is what Picard J. held in Commission des normes du
travail v. 9002-8515 Québec Inc., REJB 2000‑18725 at paragraph
15 (item 5) (Que. S.C.), where he stated:
[TRANSLATION]
15 In order for a contract
of enterprise to exist, there must be no relationship of subordination. In the
case at bar, there are sufficient indicia of a relationship of authority.
[18] Were the promotional agents free to choose the "time and
place" of work? These are two of the indicia that must be examined in
cases such as this one, where it must be determined whether there was a
relationship of subordination between the promotional agents and the Appellant.
To state the question in another way, could the promotional agents freely
choose their territory and hours of work? Although the answer to this question
is not necessarily decisive in and of itself, the issue must nevertheless be
analyzed. It must also be examined and assessed having regard to a whole series
of factual indicia that will also be considered.
[19] The facts set out in the Reply to the Notice of Appeal with respect to the
time and place of the work, and on which the Respondent relied in determining
that the promotional agents were employed in insurable employment under a
contract of service, are as follows:
[TRANSLATION]
5. (o) They worked as
a team.
5. (q) The Appellant
assigned each promotional agent team territories to canvass.
5. (r) The
promotional agents were not free to choose the territory that they canvassed.
5. (s) The
promotional agents travelled together in a vehicle that belonged to the
Appellant.
5. (t) Each
promotional agent had to comply with the work schedule set by the team leader
for the team members.
5. (u) The teams's
work schedule was generally Monday to Friday from 8 a.m. to 5 p.m. or from 1 p.m. to 8:30 p.m.
5. (v) A promotional agent
had to notify his or her team leader in the event of an absence.
5. (w) The promotional
agents' hours of work were controlled by the Appellant because they travelled
with the team leader.
[20] The Appellant needed to demonstrate, on a balance of probabilities,
that these factual statements were inaccurate. The Appellant's evidence in this
regard essentially relied on the testimony of its president Mr. Landreville,
and on the testimony of Mr. Baril.
[21] Mr. Landreville's testimony can be summarized as follows:
(i) The promotional agents were free to choose their
territory, provided it was located within the sector that ADT had assigned to
them.
(ii) They were free to work as a team. They were also free
to travel in the Appellant's vehicle. Mr. Landreville's testimony on this point
is worth quoting:
[TRANSLATION]
Some travelled in a municipal bus.
Others travelled in their own vehicle. Normally what happened was that these
people were friends outside work as well, so they liked to work together
because it was more enjoyable to work as a team than to work alone.
(iii) The promotional agents were free to work at the times that
suited them. No
hours of work were imposed on them.
(iv) The Appellant did not
control its promotional agents' hours of work.
The agents did not notify their team leaders when they were going to be absent.
Mr. Landreville even added that several days sometimes elapsed before the
Appellant found out that a promotional agent had decided not to work anymore.
[22] Mr. Baril lent some support to Mr. Landreville's testimony on these
facts. It should be recalled that he was not one of the promotional agents
or sales representatives contemplated by the Respondent's decisions. However,
he testified that he was a sales representative with the Appellant at the time
of the hearing, and that he was one of its promotional agents in 2002.
[23] Mr. Landreville's testimony on these points struck me as being worthy
of little credence because it was implausible. If I am to believe the two
witnesses, anarchy reigned. There was no direction or control over the time or
place of work. The Appellant's management did not monitor the agents'
activities. The promotional agents randomly hit the ground within the
territory. I cannot imagine that an authorized ADT agent with a modicum of
intelligence, and therefore interested in having its territory covered by its promotional
agents in a rational manner, would give those agents total freedom of choice
over their territory and complete freedom to work on the days and at the times
that suited them, without being monitored in any way. In my humble opinion,
anarchy and profit-seeking do not go hand in hand. I can understand how
the Appellant could and had to be flexible in these regards, given the nature
of the work and the method of remuneration, but trying to have me to believe
that the Appellant issued no directives and did not monitor the time and place
of work is going too far. The Appellant
was free to call the agents as witnesses to support its assertions on these
points. It did not do so. The inference that I draw from this is that such
evidence would have been unfavourable to the Appellant. The Appellant
preferred to support its assertions with the testimony of Mr. Baril, who,
as we know, was still working for the Appellant.
[24] In addition, the following facts were established by the testimony of
Mr. Croteau, whose credibility is not in doubt, and by his report, to which I accorded great
probative value even though it constitutes hearsay:
(i) All the agents questioned by Mr. Croteau worked as
a team and travelled with the other agents in the Appellant's vehicle, which
was driven by a team leader who supervised them.
(ii) All the agents questioned by Mr. Croteau worked Monday
to Friday, either from 8 a.m. to 5 p.m or from
11:30 a.m. to 9 p.m. Only Rémi Jean worked part-time for the
Appellant, because he worked part-time for another employer as well.
(iii) Certain agents sometimes worked Saturdays.
[25] In my opinion, the Appellant's control over the time and place of work
was indirect and subtle, if not insidious. The agents were unemployed.
They needed to work. For practically all the agents, this was their only
job. The Appellant did not reimburse any expenses. However, the agents
could get to the places that they would have to canvass for free in the
Appellant's vehicle. In fact, almost all the agents told Mr. Croteau
that they used this transportation method, which the Appellant made available
to them free of charge. In
my opinion, the Appellant thereby indirectly controlled the promotional agents'
work schedules because the agents travelled with their team leader in the
Appellant's vehicle. Indeed, given the particular facts of this case, the
promotional agents' freedom with respect to the "time and place" was
illusory at best. As Mogan J. of this Court noted in Shaw:
An individual who sells a single
product . . . provided by a single supplier . . . at a price
determined by the supplier, and is compensated 100% by commission may appear to
have significant freedom in choosing when and where to work. That freedom,
however, is more apparent than real when the individual relies on the
commission income to earn a living. . . . The need to earn a
living is a powerful incentive for self-discipline and a strong work ethic. . .
.
Based on this, I find that, in the case at bar, the Appellant controlled
the time and the place of the promotional agents' work — two important factors in determining whether
or not a relationship of subordination existed.
[26] Moreover, most of the promotional agents told Mr. Croteau that they worked as a team under their
team leader's supervision. The team leader's supervision was not demonstrated
solely by the team leader's decision as to the time and place of work; in
addition, the promotional agents also had to work in accordance with the rules
of conduct and behaviour imposed on them by the Appellant. Moreover,
certain workers stated as follows to Mr. Croteau:
(i) The team leaders did simulations to help the workers
learn sales techniques.
(ii) The promotional agents had a script to learn and had
to recite it to the customer in order to increase their chances of a sale. The
team leaders helped the agents when they had problems.
(iii) The promotional agents had to leave an ADT placard on
the lawn of the house that they were visiting so that their team leader would
know where they were.
(iv) At the end of each day, the promotional agents handed
the signed contracts to their team leader.
[27] Did the Appellant itself not acknowledge that the promotional agents
were employees when at least two of them, Mr. Tremblay and Mr. Rodrigue, signed
its departure form, in which the terms [TRANSLATION] "cessation of
employment", [TRANSLATION] "termination of employment" and [TRANSLATION]
"employment" are repeatedly used?
Mr. Landreville's testimony on this point during his cross-examination is
worth quoting:
[TRANSLATION]
Q. This is a departure form
signed by Maxxcom…
A. Yes.
Q. … and by the employee.
A. Yes. Nicolas Élie. Well,
he was one of the employees, perhaps more of a professional one, who met with
his team leader to tell him that he was leaving in order to start a new job. At
that time, where possible, a departure form was signed in order to avoid a
dispute.
[28] It is important to recall that the Appellant admitted to making the
requisite workers' compensation premiums to the CSST in respect of its promotional agents.
Would a business that considers its workers independent contractors generally
pay such premiums?
[29] Furthermore, I find that the following facts adduced in evidence
demonstrate very clearly that the agents' work was highly integrated into
the Appellant's activities. Not only are the following facts indicia of
subordination when considered individually, they also constitute, when
considered as a whole, what I would call the "integration into the
enterprise" indicia of subordination:
(i) Almost all the promotional agents worked only for the
Appellant during the periods in issue.
(ii) The Appellant provided them with all the supplies,
equipment and other items necessary to do their work. Specifically, the flyers,
placards, contracts, binders, vests and polo shirts were all supplied to them.
(iii) They did not personally have a travelling salesperson
permit that allowed them to do door-to-door sales. In the case at bar, they did
this under the Appellant's travelling salesperson permit.
(iv) The customers who were served were not the promotional agents'
customers, but, rather, ADT's or the Appellant's customers.
(v) The agents could not negotiate the terms and conditions
of the contracts of sale. The Appellant set the prices of the products to be
sold and the agents could sell only the Appellant's products.
(vi) Almost all the agents worked as a team.
(vii) Almost all of them used the transportation method that
the Appellant made available to them. They travelled together to the
door-to-door canvassing location in the Appellant's vehicle, which was driven
by a team leader.
(viii) The agents attended information and motivation meetings
(known by their French abbreviation "RIM").
[30] In his oral argument, counsel for the Appellant submitted that the
following facts show that the agents were not under the Appellant's direction
or control:
(i) The promotional agents did not carry out their duties
at the Appellant's place of business. I do not see how this is relevant in any
way, given the nature of the work that they did: they had to sell the
Appellant's or ADT's products door-to-door in the territories designated by the
Appellant.
(ii) The promotional agents did not have the benefit of any
of the Appellant's services. They did not use the Appellant's secretarial
services, telephones, fax machines or computers. Once again, given the
nature of their work, I do not see how this is relevant in any way. They simply
did not need the tools referred to by counsel for the Appellant. Moreover, the
evidence very clearly established that the promotional agents used what tools
of the Appellant they needed: the Appellant's vehicle, its travelling
salesperson permit, and its promotional materials (placards, clothing, flyers
and binders).
(iii) The promotional agents sold alarm systems that were
manufactured by ADT, not by the Appellant. I simply do not see how this fact is
relevant in the instant case.
(iv) The promotional agents were not paid for the training
that they got from the Appellant. Even though I am of the opinion that this
fact is usually an indicia of independence, not subordination, I note that it
does not, in itself, mean that it is more likely that a contract for services
existed, since most of the other facts adduced in evidence favour the existence
of a contract of employment.
(v) The customers were ADT's,
not the Appellant's. Once again, I do not see how this fact is relevant in the
case at bar. By making this submission, counsel for the Appellant is at least
admitting that the customers were not the promotional agents' customers. If
they had been, this could have been an interesting indicia of independence to
consider.
(vi) The promotional agents could get someone to replace
them, or get someone else to perform their duties. Assuming that they even had
this freedom, which would be an indicia of independence, I am of the opinion
that it was more of an illusion than a reality. In fact, did the evidence not
disclose that the agents never took advantage of this purported freedom?
The team leader
[31] The team leader was essentially a promotional agent with additional
duties: he had to drive the promotional agents in a vehicle owned by the Appellant
to the neighbourhoods where they would have to canvass from door to door, and
he collected the signed contracts at the end of the day and handed them to the
Appellant's management. He was also the leader at the information and
motivation meetings, whose purpose was to inform and motivate the promotional agents.
[32] In my opinion, the team leader is clearly an employee of the
Appellant, not only for the reasons set out in my analysis concerning the
promotional agents, but also, quite simply, because the relationship of
subordination between the team leader and the Appellant's management in this
specific instance is more direct due to the additional duties referred to above
(obligation to report, to transport the promotional agents and to assist them) and
the use of an additional work tool of the Appellant's, namely its automobile.
The representatives
[33] It should be recalled that the Appellant
recruited its customers in two different ways. It sent promotional agents, who
criss-crossed the areas where it did business, to enlist customers by going
from door to door. The Appellant also had a telemarketing department that
scheduled appointments with interested customers so that representatives could
meet with them and sign contracts in person. It should be emphasized from
the outset that it was admitted that the representatives used their own cars
for their work and that the Appellant did not reimburse any expenses incurred
by the representatives in the performance of their duties. However, it was
admitted that the Appellant paid the representatives $20 for automobile
expenses per contract signed.
[34] Were the representatives free to choose the time and place of work?
These are two indicia that must be considered in cases such as this, where
it must be determined whether there was a relationship of subordination between
the representatives and the Appellant. In other words, could the
representatives freely choose the territory in which they carried out their
activities, and work at the times that suited them?
[35] The facts set out in the Reply to the Notice of Appeal with respect to
the time and place of work and on which the Respondent relied in determining
that the representatives were employed in insurable employment under a contract
of service are as follows:
[TRANSLATION]
(pp) The Appellant scheduled the
representatives' appointments with prospective customers. (denied as worded)
(qq) The representatives had to comply
with the appointment schedule set by the Appellant. (denied as worded)
(rr) The representatives were not
free to choose a territory. (denied)
(ss) The representatives' work
schedule was usually Monday to Friday from 1 p.m. to 9 p.m. (denied as worded)
(tt) The representatives' hours of
work were controlled by the number of appointments. (denied as worded)
[36] The Appellant's evidence in this regard essentially rested on
Mr. Landreville's testimony, which can be summarized as follows: the
meetings with customers were scheduled by the Appellant, but were based on the
representatives' availability (which was made know to the Appellant's
telemarketing department in advance) and the representatives were free to work
at the times that suited them.
[37] In addition, during a telephone interview on
January 26, 2004, Pierre Blackburn told Mr. Croteau that he had
to work 36 hours a week, Monday to Friday, from 1 p.m. to 9 p.m.
[38] Thus, there are two conflicting versions of the facts on this point.
In light of the little credibility that I have accorded to Mr. Landreville's
testimony in general, I accept the version of the facts given to Mr.
Croteau on this point, even though it constitutes hearsay. Mr. Landreville
was free to have the representatives affected by the decisions testify in order
to support his assertions on this point. He did not do so. The inference
that I draw from this is that this evidence would have been unfavourable to
him. I can understand why the Appellant was sometimes flexible with respect to
the representatives' work schedules, given the nature of the representatives'
work and the method by which they were remunerated, and given that it was
difficult for the Appellant to recruit representatives. However, it is my
opinion that the Appellant controlled the time and place of the
representatives' work by scheduling appointments with prospective customers
within a work schedule that was determined by the Appellant and was not, as
Mr. Landreville submitted, based on the representatives' availability.
[39] I am also of the opinion that the following facts adduced in evidence
demonstrate very clearly that the sales representatives' work was highly
integrated into the Appellant's activities, a fact that is, in and of itself,
an indicia of the relationship of subordination between the Appellant and its
representatives:
(i) The Appellant supplied all the materials necessary for
them to perform their work.
(ii) The representatives did not personally have a
travelling salesperson's permit that allowed them to do door-to-door sales. In
this instance, they used the Appellant's travelling salesperson's permit for
this purpose.
(iii) The customers were not the representatives' customers,
but rather, the Appellant's or ADT's customers.
(iv) The representatives could not negotiate the terms and
conditions of the contracts of sale. The Appellant set the prices of the
products to be sold and the representatives could sell only the Appellant's
products.
(v) The representatives' work, as mentioned earlier, was
very closely tied to the Appellant's telemarketing department, which scheduled
the representatives' appointments with prospective customers during the hours
that the representatives had to work.
[40] It should also be noted that Mr. Blackburn told Mr. Croteau that
his work was supervised by Jean Landreville, the Appellant's sales director in Sherbrooke. Moreover, Mr. Blackburn had to contact the
Appellant's sales director every
week to report on his activities during that period. In my opinion, this
obligation to report is another indicia of the relationship of subordination
between the Appellant and its representatives.
[41] I feel it important to repeat that the Appellant admitted that it paid
the requisite workers' compensation premiums to the CSST in respect of its
representatives. Would a business that considers the workers that provide
it with services independent contractors normally pay such premiums?
[42] The representatives were not paid for the training that they received from
the Appellant. The representatives used their own cars in the performance of
their duties, and the Appellant did not reimburse any expenses incurred by the
representatives as part of their work. However, it was admitted that the
Appellant paid the representatives $20 for automobile expenses per contract
signed. Even though I am of the opinion that these two facts are usually
indicia of independence, not subordination, I note that they do not, in
themselves, mean that it is more likely that a contract for services existed,
since most of the other facts adduced in evidence favour the existence of a
contract of employment.
[43] For these reasons, the appeal is dismissed.
Signed at Ottawa, Canada, this 1st day of December 2005.
Bédard
J.
Translation certified true
on this 1st day of May 2008.
Brian McCordick,
Translator
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