Dockets: 2010-1478(CPP)
2010-1882(EI)
BETWEEN:
SCARBOROUGH CENTRE FOR HEALTHY COMMUNITIES
(FORMERLY WEST HILL COMMUNITY SERVICES),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
STEVEN HIRSHFELD,
Intervenor.
____________________________________________________________________
Appeal heard on December 16, 2010 at Toronto, Ontario
By: The Honourable Justice Judith Woods
Appearances:
|
Counsel for the Appellant:
|
David
A. Whitten
|
|
Counsel for the Respondent:
|
Jasmeen Mann
Laurent Bartleman
|
|
For the
Intervenor:
|
The Intervenor himself
|
____________________________________________________________________
JUDGMENT
The appeal with respect to decisions of the Minister of
National Revenue made under the Canada Pension Plan and the Employment
Insurance Act that Dr. Steven Hirshfeld was engaged by the appellant in pensionable
and insurable employment for the period from January 1, 2005 to December 31,
2007 is allowed, and the decisions are vacated. All parties shall bear their
own costs.
The Registry is directed to change the style of cause to
conform with the above.
Signed at Toronto, Ontario this 26th day of January 2011.
“J. M. Woods”
Citation: 2011 TCC 45
Date: 20110126
Dockets: 2010-1478(CPP)
2010-1882(EI)
BETWEEN:
SCARBOROUGH CENTRE FOR HEALTHY COMMUNITIES
(FORMERLY WEST HILL COMMUNITY SERVICES),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
STEVEN HIRSHFELD,
Intervenor.
REASONS FOR JUDGMENT
Woods J.
[1]
The appellant, Scarborough Centre
for Healthy Communities (the “Centre”), operates a non-profit health and social
service agency. The intervenor, Dr. Steven Hirshfeld, has practiced medicine at
the Centre on a part-time basis for about 13 years and continues to work there.
[2]
The appeal is in respect of
decisions made under the Employment Insurance Act and the Canada
Pension Plan that Dr. Hirshfeld was an employee of the Centre for the
period from January 1, 2005 to December 31, 2007.
[3]
The appellant submits that Dr.
Hirshfeld was not an employee during this period but was engaged as an
independent contractor.
[4]
Testimony at the hearing was
provided by Carol Klupsch, the clinical director of the Centre, Shannon Duggan,
a human resources specialist at the Centre, and Dr. Hirshfeld.
Background
[5]
Dr. Hirshfeld is a family
practitioner who has worked at the Centre one day a week for many years. His
involvement with the Centre pre-dates almost everyone else at the Centre, including
the other witnesses.
[6]
Dr. Hirshfeld also conducts his
own private practice at another location three days a week.
[7]
Dr. Hirshfeld’s first involvement
at the Centre was in 1997 when he agreed to fill in for doctors who were away.
A couple of years later, the Centre asked if Dr. Hirshfeld wanted to work on a
regular basis on Mondays because another doctor had cut back his work hours.
[8]
Dr. Hirshfeld agreed to this
arrangement and, for the most part, he has been working on this basis since
that time. Generally, he works seven hours each Monday, although there have
been exceptions.
[9]
The patients that Dr. Hirshfeld
sees at the clinic are patients of the clinic and not Dr. Hirshfeld’s own
patients. He does not treat the clinic’s patients at his own private practice
unless the patient decides to leave the clinic.
[10]
During the period that the
Minister’s decisions relate to, the Centre had a policy regarding the
engagement of physicians. In general, some doctors were engaged as employees
but this did not apply to physicians who worked as few hours as Dr. Hirshfeld
did. Employed physicians were paid a salary and received benefits. Doctors
considered to be independent, including Dr. Hirshfeld, were paid an hourly
rate, generally without benefits.
Analysis
[11]
The
applicable principles in a case such as this are well known. The hallmark of
being an independent contractor is that the person is in business for herself.
The intention of the parties is very relevant, but it is not determinative. The
applicable test was described by the Federal Court of Appeal in Royal
Winnipeg Ballet v. MNR, 2006 FCA 87, 2006 DTC 6323 in the following manner:
64 In these circumstances, it seems to me
wrong in principle to set aside, as worthy of no weight, the uncontradicted
evidence of the parties as to their common understanding of their legal
relationship, even if that evidence cannot be conclusive. The judge should have
considered the Wiebe
Door factors in the
light of this uncontradicted evidence and asked himself whether, on balance,
the facts were consistent with the conclusion that the dancers were
self-employed, as the parties understood to be the case, or were more
consistent with the conclusion that the dancers were employees. Failing to take
that approach led the judge to an incorrect conclusion.
[12]
I will first consider the parties
understanding of their legal relationship.
[13]
As mentioned earlier, Dr.
Hirshfeld started working at the Centre in 1997 as a replacement for doctors
who were away. At the time, he signed an acknowledgement that he was engaged as
an independent contractor and that no source deductions would be made.
[14]
I accept Dr. Hirshfeld’s
recollection that this arrangement changed after a couple of years when he
began to work Mondays on an indefinite basis.
[15]
Dr. Hirshfeld testified that the
Monday engagement was initially treated as employment, but that the Centre
changed its policy and no longer made source deductions. It is not clear when
this occurred, but source deductions have not been made for many years.
[16]
I also accept Dr. Hirshfeld’s
testimony that the Centre informed him that the change of status was
insignificant. The fact that the Centre viewed the status as an inconsequential
matter seems to be confirmed by the written acknowledgement of status that Dr.
Hirshfeld signed. The acknowledgement appears to be a form letter prepared by
the appellant in which the acknowledgement is described as a formality.
[17]
This background is relevant but
the essential question is what the parties’ intentions were during the period at
issue, from 2005 to 2007. I find that the Centre clearly intended an
independent contractor relationship. As for Dr. Hirshfeld’s intention, I find
that he did not like being considered an independent contractor, but that he
chose not to say anything to the Centre during the many years that this
arrangement continued. In the circumstances, I would conclude that both parties
accepted that Dr. Hirshfeld would be engaged as an independent contractor.
[18]
That is not the end of the matter,
however. It remains to be determined if the relationship was consistent with
this arrangement.
[19]
I would first comment that the
nature of the work performed by Dr. Hirshfeld was very similar to that
performed by employed physicians, except that Dr. Hirshfeld only worked one day
a week. On the other hand, I accept the appellant’s submission that Dr.
Hirshfeld was not subject to the same level of control as the employed
physicians. He was not present for many of the staff meetings and it is
reasonable to conclude from the evidence as a whole that employed physicians
were expected to take more direction from the organization generally. On
balance, I have concluded that the relationship was consistent with independent
contractor status.
[20]
In reaching this conclusion, I
would comment that I did not find persuasive the appellant’s argument that Dr.
Hirshfeld was free to work when he wanted, and that he was generally not subject
to the Centre’s policies. This may be the Centre’s understanding of the
relationship, but it is not relevant unless this understanding was communicated
to Dr. Hirshfeld. I find that it was not.
[21]
Nevertheless, I find that employed
physicians had a closer connection to the Centre, and were subject to more
control. In the circumstances, I conclude that the independent contractor arrangement
that was in place for many years should be accepted.
[22]
The appeal is allowed, and the
decisions of the Minister that Dr. Hirshfeld was engaged in insurable and pensionable employment during the period from January 1, 2005 to December 31, 2007
are vacated.
[23]
All parties shall bear their own
costs.
Signed at Toronto,
Ontario this 26th day of January 2011.
“J. M. Woods”
Email this Content