Citation: 2011 TCC 99
Date: 20110217
Docket: 2010-848(EI)
BETWEEN:
JACQUES BERNIER,
Appellant,
and
MINISTER OF NATIONAL REVENUE,
Respondent.
and
Florence
Productions Inc.,
Intervenor,
and
Docket: 2010-992(EI)
JOSÉE MONGEAU,
Appellant,
and
MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Archambault, J.
[1]
Jacques
Bernier and Josée Mongeau have appealed from the determinations by the
Minister of National Revenue (Minister) that they were not engaged in
insurable employment under a contract of service (employment contract) with
their respective payors. In Mr. Bernier’s case, the payor is Florence
Productions Inc. (FPI) and the period in issue is from July 12,
2008, to August 16, 2008 (relevant Bernier period). FPI also filed a
notice of intervention. In Ms. Mongeau’s case, the payor is Les
Productions Kinesis inc. (PKI) and the period covered by the Minister’s
determination is from July 27, 2009, to July 31, 2009 (relevant Mongeau
period). PKI did not file a notice of intervention and no representative of
the company testified at the hearing.
[2]
The appeals
by Mr. Bernier and Ms. Mongeau were heard on common evidence because
the facts were common to the two appeals, in particular the fact that both of
their employment contracts were governed by a “Video Collective Agreement”, an
agreement between the Association des producteurs de films et de télévision du
Québec (APFTQ) and the Association des professionnel‑le‑s de la
vidéo du Québec (APVQ), represented by the Alliance québécoise des techniciens
de l’image et du son (AQTIS). Among other things, it provides for minimum
working conditions. Both appellants are video technicians, and more
specifically camera assistants who worked for film production or television
production companies.
[3]
Both
appellants contested the Minister’s determination and stated that they had been
employed under a contract of employment and had held insurable employment
during their relevant periods.
[4]
In making
his decision concerning Mr. Bernier, the Minister relied on the following
presumptions of fact, set out in paragraph 16 of the Reply to the Notice
of Appeal:
[Translation]
16. In making his determination, the Minister determined that
the appellant was not engaged in employment under a contract of service, based
on the following presumptions of fact:
(a)
the payor was incorporated
on February 4, 2008; (noted)
(b)
the payor’s majority
shareholder is Appartement 11 Productions Inc; (noted)
(c)
the majority shareholder of
Appartement 11 Productions Inc is Jonathan Finkelstein who is also a
director of the payor; (noted)
(d)
the payor operated a
television program production business; (admitted)
(e)
during the period in issue,
the payor was the producer of a creation by Jonathan Finkelstein for which Nathalie
Mayotte was the project manager and Lori Brau[n] was the production manager;
(admitted)
(f)
the appellant was retained
to replace Sébastien Cassou who was determined by CRA to be a self-employed
worker, a determination that Mr. Cassou did not appeal; (not known)
(g)
the appellant was retained
with the same conditions of employment as Mr. Cassou and for a fixed
term for a children’s television program project for which five episodes in
the series were filmed in the United States and others were filmed in British
Columbia and Quebec; (not known)
(h)
the appellant was
retained primarily as technical director and also as assistant cameraman; (denied)
(i)
that work assignment was
intended to enable the appellant to work full days; (not known)
(j)
there was a written contract
between the parties; (admitted)
(k)
as technical director, the appellant had to go to the filming site
before the crew to catalogue the scene, among other things, and he had to
supervise other workers; (denied)
(l)
as assistant cameraman, the appellant had to make sure the
equipment, cameras and short-wave radios, was available for the artistic
staff on the filming sites; (admitted)
(m)
the appellant was under
the supervision of the production manager; (admitted)
(n)
the payer gave the
appellant, like everyone involved in the project, including the managers, a
work schedule every day that showed the break times, and in particular the
various activities, hour by hour, to make sure that the work was done in
order, synchronizing filming and the work schedule; (admitted)
(o)
the appellant had to work
in a team so the project could be completed; (admitted)
(p)
the appellant’s pay was
decided by the payor; (denied)
(q)
for his technical director
work (denied), the pay was decided following negotiations between the parties;
(admitted)
(r)
for the assistant cameraman
pay, the payor adhered to the rate established by the Alliance québécoise des
techniciens de l’image et du son (AQTIS); (admitted)
(s)
the assistant cameraman
work is unionized (admitted), while the technical director work
is not; (denied)
(t)
although the payor was
required only to pay all benefits associated with the pay for the position of assistant
cameraman, it paid those benefits on the appellant’s entire pay. (denied)
[Emphasis
added.]
[5]
The facts
assumed by the Minister in making his determination in Ms. Mongeau’s case are
set out in paragraph 15 of the Amended Reply to the Notice of Appeal:
15.
In making his determination,
the Minister determined that the appellant was not engaged in employment under
a contract of service, based on the following presumptions of fact:
(a)
Les Productions Kinesis inc was
incorporated on August 14, 1997; (no evidence to the contrary)
(b)
the equal shareholders in
the payer are Stéphane Tanguay and Cédric Bourdeau; (no evidence to the
contrary)
(c)
the payer is a film
production company specializing in long and short feature films; (not known)
(d)
the payer’s place of
business is in Montréal; (not known; no evidence to the contrary)
(e)
the payer retained the
appellant as a camera assistant; (admitted)
(f)
there was a written
contract between the parties; (admitted)
(g)
the contract was signed on
July 27, 2009; (not known)
(h)
in the contract, the
payor guaranteed the appellant five days’ work; (admitted)
(i)
the appellant’s duties
included helping with photography (admitted) and assessing
lighting; (denied)
(j)
the appellant was assistant
to François Messier, lead cameraman, and followed his orders; (admitted)
(k)
the appellant had to work closely
with the production team to ensure the high quality of the film product while
keeping to the schedule established by the payor; (admitted)
(l)
the appellant had to
arrive on the set at the times set by the director or
producer, generally at the end of the work day for the next day; (admitted)
(m)
the appellant worked
variable hours during the period in issue; (admitted)
(n)
the appellant could leave
the set only when the producer gave the order; (admitted)
(o)
the appellant used the
payor’s equipment, except her clapper board; (admitted)
(p)
the appellant is a member
of the Alliance québécoise des techniciens de l’image et du son (AQTIS); (admitted)
(q)
the appellant was paid an
hourly rate of $25.25, 50% of which would be given to her if the production was
profitable, as AQTIS requires; (admitted)
(r)
source deductions were made
by the payor from the appellant’s pay, as specified in the contract and
required by AQTIS, amounting to 7.5% of her pay, as a contribution to the AQTIS
group RRSP, the AQTIS group insurance plan and her 2.5% union dues; (admitted)
(s)
the appellant reported the
income from the payor on her 2009 income tax return as income from
self-employment and claimed expenses against that income; (denied)
(t)
the payor did not control
how the appellant performed her duties; (denied)
(u)
the appellant was not
integrated into the payor’s business; (denied)
(v)
the services the appellant
performed were not limited to the services she offered the payor; (denied)
(w)
the relationship between the
appellant and the payor exhibited no continuity or loyalty. (denied)
[Emphasis
added.]
[6]
To describe
the role of AQTIS and certain practices in the video industry in Quebec, the
appellants called Frédéric Lussier‑Cardinal, an industrial relations
consultant who had been employed by AQTIS for several months, to testify. He
holds a diploma in industrial relations that was granted in 2010. He is also a
member of the Quebec Professional Order of Industrial Relations Consultants.
[7]
Mr. Lussier-Cardinal
described AQTIS as an association of freelances who work as image and sound
technicians. AQTIS’s purpose is to represent the interests of its members, for
example by negotiating and signing collective agreements. It comprises
126 categories of professionals or technicians and has about
3,000 members in good standing.
[8]
According
to Mr. Lussier-Cardinal, APFTQ is an association of 150 to
170 production firms, including FPI and PKI. The law applicable to the
video collective agreement is described in section 1.01 of the agreement:
a) This
agreement is made, in part, pursuant to the Act respecting the
professional status and conditions of engagement of performing,
recording and film artists (R.S.Q., c. S-32.1) (hereinafter the “Act”) further to the recognition granted to the APVQ
by the Commission de reconnaissance des associations d’artistes et des
associations de producteurs (hereinafter the “Commission”) by its decision of
July 12, 1993, for all positions recognized as those of artists on July 12,
1993, or by subsequent;
b)
With respect to positions not recognized by the Commission
as those of artists, this agreement is made pursuant to the Civil Code
of Quebec.
[Emphasis
added.]
[9]
A number of
provisions of the collective agreement describe the scope of the agreement. The
most relevant for the purposes of this case are sections 1.03 and 1.05:
1.03
This agreement pertains and applies
to all technicians, including those providing their services through a
corporation, hired by a producer for the production of an audiovisual work in
video or digital format for which the primary market is broadcast (live or
delayed) or theatrical release, for the following positions:
(a)
for drama productions
recorded in film style, the agreement applies to the positions listed in
Table 1 of Appendix D
(b)
for other productions,
the agreement applies to the positions listed in Table 2 of Appendix D
1.05 This agreement does not
apply to a producer’s permanent employees.
[Emphasis
added.]
[10]
And
section 1.09 of the agreement describes its purposes:
1.09
The purpose of this
collective agreement is to establish the minimum working conditions for
technicians holding any of the positions to which it applies, to promote
harmonious relations between the parties and to set out a procedure for
settling grievances.
[Emphasis
added.]
[11]
The minimum
working conditions laid out in the act include a minimum wage scale that is set
out at pages 73 to 75 of the agreement (Exhibit A-1). Mr. Lussier-Cardinal
also confirmed that AQTIS encourages its members to negotiate pay higher than
the minimum standards set out in the collective agreement.
[12]
The
collective agreement provides for individual written agreements to be signed by
a producer and a technician. Appendix A to the collective agreement
consists of an employment contract. The form shows the position, pay and
working conditions. The employment contract between Mr. Bernier and FPI
and the contract between Ms. Mongeau and PKI reflect that form. The
individual employment contract stipulates that the parties acknowledge that the
collective agreement is incorporated into the contract as if it were set out
therein in full (see Exhibits A‑3 and A‑6, and
Exhibit A‑1 page 51). The individual contract is generally signed by
the production manager and technician. It provides for the hourly pay rate, the
number of guaranteed days of work and the dates when the work is to be
performed, among other things. In the individual contract, the technician
authorizes the producer to deduct from each pay an amount equivalent to a specified
percentage of that pay, including vacation pay, joint RRSP contribution, APVQ
group insurance premiums and union dues.
[13]
That
provision of the individual contract complies with section 14.09 of the
collective agreement, which provides:
The producer agrees to withhold all source
deductions from the technician’s remuneration and to pay the vacation
indemnity in accordance with the applicable laws.
This section does not apply to
technicians providing their services through a corporation.
[Emphasis
added.]
[14]
One of the applicable
laws referred to by section 14.09 and cited by Mr. Lussier-Cardinal was
the Act to promote workforce skills development and recognition, R.S.Q.
c. D-8.3 (Skills Act).
[15]
It is worth
noting section 1, which describes the purpose of the Act:
1. The
purpose of this Act is to improve workforce qualifications and skills
through investment in training, concerted action between management, unions and
community partners and the education sector, the development of training modes
and the recognition of employed workers’ skills. …
[Emphasis
added.]
[16]
Section 3
of the Skills Act relates to employers:
Every employer whose total payroll for a calendar year
exceeds the amount fixed by regulation of the Government is required to
participate for that year in workforce skills development by allotting an
amount representing at least 1% of his total payroll to eligible
training expenditures.
[Emphasis
added.]
[17]
There are
regulations providing that only employers whose payroll is over $1 million
must contribute. Of the 150 or 170 members of APFTQ, some 50 production
firms are considered to be large firms, and according to Mr. Lussier-Cardinal,
a large majority of them contributes to funding the Regroupement pour la
formation en audiovisuel du Québec (RFAVQ), which was recognized in 2008
under the Skills Act. The president of the RFAVQ is a member of AQTIS and
the vice-president is a member of APFTQ.
[18]
According
to the interpretation of the individual employment contracts adopted by Mr. Lussier-Cardinal,
they create an employment relationship between the technicians and the
production firm. In support of that argument, he referred to Appendix B of the
video collective agreement, where there is a timesheet on which various
information the production firm’s accountants can use to calculate and pay the
technician is set out. In particular, it shows the time for starting work, the
time of meal breaks, traveling time, the type of recording and the total hours
worked and hours guaranteed. It also shows the 4% vacation pay, calculated on
total pay. However, I note that it also has the calculation for GST and QST, [Translation] “if applicable” (see
p. 50 of the video collective agreement).
[19]
The
deductions made under the applicable laws, as indicated by Mr. Lussier-Cardinal,
include the contribution that the production firms must pay under the Skills
Act.
[20]
In support
of his assertion that AQTIS considers the individual employment contracts to be
contracts of service and not contracts for services, he noted that AQTIS
intervened in the bankruptcy of the production Loft Story IV, a program
produced for the 2007 TQS season. AQTIS succeeded in having 115 of its
members (who did not provide their services through a corporation) considered
to be preferred creditors in the distribution of the bankrupt’s assets, as
employees, under paragraph 136(1)(d) of the Bankruptcy and
Insolvency Act, R.S.C. 1985, c. B‑3 (see Exhibit A‑2).
[21]
On
cross-examination, Mr. Lussier-Cardinal acknowledged that the individual
employment contracts did not stipulate that the pay was wages or that the
technicians were employees. The individual employment contract does not specify
the nature of the contract. It is referred to only as “employment contract”.
[22]
The
collective agreement
contains the following provisions for replacing technicians:
Replacement
6.18 Unless otherwise
indicated in the employment contract, technicians may not have another
technician replace them without the producer’s prior written authorization,
which shall be refused only with reasonable justification.
Authorization for replacement must be requested
at least seven (7) days before the scheduled workday.
Justified absence
6.19 A technician’s absence
during the term of contract is justified by serious reasons. The technician
must notify the producer at least twenty-four (24) hours in advance,
except for reasons of illness or circumstances unforeseeable or out of the
technician’s control, in which case the technician must notify the producer as
soon as possible, failing which the provisions of Paragraph c) of Section 6.17
shall apply.
[Emphasis added.]
Jacques
Bernier
[23]
As noted
earlier, Mr. Bernier and Ms. Mongeau each signed an individual
employment contract. However, for the purposes of these reasons, it is preferable
to deal with the facts relating to each case separately. The report on an
appeal prepared by the appeals officer sets out the relevant facts relating to
Mr. Bernier’s case (Exhibit A‑4):
Information obtained from the
worker, Jacques Bernier:
1.
The payer is the producer of
a children’s television show called “In the Real World.” The program was later
renamed “Real World.”
2.
There were several
persons in charge of the daily activities of the payer: Jonathan
Finkelstein, the head producer, Allan Joli-Coeur, Nathalie Mayotte and Lori
Braun.
3.
The worker was hired to
provide services as a technical director and assistant camera man.
4.
It was the payer that had
contacted the worker to offer him the position. The worker’s name appears on a list
of unionized employees. These lists are used as [sic] by potential
employers to recruit for certain positions.
5.
The worker has 30 years
of experience in the film industry.
6.
The worker was hired to
replace Sébastien Cassou who took time off after the birth of his child.
An insurability decision rendered for Sébastien Cassou found him to be an
independent worker. Mr. Cassou did not appeal the decision.
7.
The worker was hired under a
written, formal AQTIS (Alliance québecoise [sic] des techinciens [sic]
du [sic] l’image et du son) contract. The contract was signed in
Montréal, Québec. The contract was presented to the worker by Lori Braun. She
explained the terms and conditions to the worker. (TAB 1)
8.
The worker was hired for
a determined period of time. He was to provide services from July 12 to
August 16, 2008 for approximately 12 working days.
9.
The worker performed
services for the payer on location, in Québec, British Columbia and in the USA.
10.
The working schedule was
set by the payer. The worker received from the payer every morning an
instruction sheet which outlined the daily working plan and schedule.
11.
The worker’s daily
activities were supervised by the payer. Lori Braun, the director of production, was the worker’s
immediate supervisor.
12.
The worker had to fill
out time sheets on a weekly basis. These were handed in to Lori Braun. The
payer kept track of the worker’s hours because he was remunerated for his
overtime.
13.
The worker was remunerated
every two weeks by a check made out to his name.
14.
As per contract, he was paid
at the rate of 375 $ per day for a 12 hour workday. Any hours worked above
that were paid at the overtime rate.
15.
The rate of remuneration
used by [sic] determined by the artist’s union (AQTIS). The union
sets the minimum daily rate. It is possible to negotiate a higher
amount with the payer. The worker was receiving about 25$ more per day
than the going union rate.
16.
As per contract and union
regulations, the payer paid a portion of the union dues, medical insurance
and the worker’s RRSP contributions.
17.
Initially, the worker did not receive any compensation
for his vacations. However, following a decision by the Commission des norms
[sic] de travail, the payer paid the worker his 4% vacation
entitlement.
18.
As per contract, the payer
paid all of the worker’s travelling expenses. He was remunerated at a
special rate for his travelling days. In addition, the worker received a per
diem from the payer when travelling.
19.
The payer supplied all of
the tools and equipment required for the job.
20.
The only [sic] worker
provided his own tool belt and small tools, such as a screw driver, etc…
21.
The worker raised the
question of his status several times. He discussed the issue with Lori
Braun. He remembers how surprised everyone was when there were no deductions
made on the paychecks [sic].
22.
Lori Braun had told the
worker that his status could be modified to that of an employee if he accepted
a 15% cut in salary. The worker needed the money and did not accept the
cut.
23.
On another occasion, in
order to explain his status the worker was told by Ms. Mayotte who got the
information from the payer’s lawyer, that contracts under 14 weeks were
treated as independent contracts those longer than 14
weeks were treated as salaried contracts.
24.
The worker believes that
he was an employee because he was always treated as such by other payers
when providing the same service. He also feels that the fact that he signed
a union contract, that the payer set his schedule, provided the
tools for the jobs, supervised him and that he was remunerated as
per union rules for overtime, medical insurance, union dues and RRSP
contributions, made him an employee.
Information received from the payer’s
representative, Alan [sic]
Joli-Coeur:
25.
The payer’s representative confirmed
much of the information provided by the payer. He clarified some of the
facts:
26.
Jonathan Finkelstein is the
sole shareholder of the payer. He is also the creator of the program. Nathalie
Mayotte was the project producer and Lori Braun was the director of production.
27.
The worker was hired to
provide services as an independent. It is the payer’s policy to always
fully explain to all workers the type of contract they are signing and their
status. Lori Braun met with the worker. She presented the contract to him
and explained the status of independent. The payer has no doubt that the worker
with his numerous years of experience in the industry understood his status and
the contract that he was signing.
28.
It is an accepted
practice in the filming industry that those who are hired for “director”
positions are hired as independents and those that are hired as
executors, i.e. cameramen are hired as employees. In addition, participants
in short filming projects use mostly independent workers; long
television series usually hire employees. The worker was hired for a short
television project.
29.
The worker was referred to
the payer. He replaced Sébastien Cassou, who was initially hired for the
project. The terms of hiring were the same for both individuals.
30.
The worker was hired to
provide services primarily as a technical director and second as an
assistant cameraman. The assistant cameraman position was used as a “filler”
to allow the worker to do a full day’s work. The position of technical
director is not a unionized position; whereas that of the assistant
cameraman is. Had the worker been hired to work as an assistant
cameraman only, he would have been considered an employee.
31.
The payer gave the worker
an active AQTIS contract to sign because it outlined all of the conditions
set for the assistant cameraman position. The AQTIS does not have a contract
for the technical director because it is not a unionized position.
32.
The fact that the worker
signed a union contract should not be used as a determining factor to establish
the worker’s status. The worker’s situation was particular in that he was
hired to fill two positions. His primary duty was that of the technical
director and his secondary duty was that of the assistant cameraman.
Therefore, the fact that the primary position is that [sic] of an
independent nature should be considered when determining status rather than the
fact that a union contract was used.
33.
Everyone involved in the
project, including all director
[sic] and workers, received a daily “call sheet.” This is standard
practice in the industry. The call sheet outlines the daily schedule, breaks
and activities. This is done in order to ensure that the work is
carried out in an orderly, synchronized and timely manner.
34.
The daily schedule
was determined by the payer based on the required shooting time.
35.
The worker worked as part
of a team. The work done by the worker was supervised by the producer.
The worker as a technical director, in turn, supervised the work of other
individuals.
36.
The worker’s remunerated [sic]
was determined in the following manner: for his work as an assistant cameraman
the rate set by the AQTIS was used and the rate of pay for his was [sic]
as a technical director was negotiated. It was Nathalie Mayotte and Lori
Braun that negotiated the pay of technical director with the worker.
37.
Although the payer was
only required to pay all of the benefits as set by the AQTIS for the assistant
cameraman portion of remuneration only, the payer paid the benefits on the
entire amount paid to the worker.
38.
The payer’s representative,
who is the in-house legal advisor, never told anyone that a 14 week
criterion was used to determine the status of contracts. He never heard of
this.
39.
Although the payer’s
representative is unaware as to whether the worker was made an offer to accept
a 15% salary cut in order to become salaried, it is an offer that was
made to someone in the past.
40.
The worker had contested his
employment status with the Quebec Minister of Revenue. The decision was that
the position held by the worker was that of an independent.
41.
There exists a possibility
of filing a grievance with the AQTIS regarding any irregularities. The worker
who is well aware of this option did not choose to exercise it.
42.
The payer agreed to pay
the worker his 4% following the
Commission des norms [sic] de travail decision because the amount was
minimal and not worthwhile contesting. As well, the payer wanted closure
and was looking to put the issue behind him.
43.
The reality that the film
industry does not fall into the usual labour norms should be considered
when determining the worker’s status. The fact that the worker held a position
which consisted of two different job descriptions, the primary one being a non
unionized position and the fact that the worker accepted independent status
at the signature of the contract should be used as the determining factors
in deciding the worker’s status. The payer does not feel that [it] is fair that
the worker who benefited from a tax free full pay and enjoyed benefits paid on
the full amount, even though he was entitled for only a portion of the remuneration,
should now also be able to collect employment insurance premiums.
[Underlining
and boldface added.]
[24]
In his
testimony, Mr. Joli-Coeur described the various production stages for the
television series Real World. This was a one-hour reality television
series of 13 episodes. The production called for a lot of equipment,
including 18 cameras, and for 60 people to be on the set. For that reason,
the equipment had to be managed effectively. That is why it was decided to hire
a technical director for a period scheduled to last two months, from June 2008
to August 16, 2008. When Mr. Cassou left, he was replaced with Mr. Bernier.
The testimony given by Mr. Joli-Coeur and Mr. Bernier satisfied me
that Mr. Bernier was hired primarily as technical director, and he also
worked as a camera assistant when needed.
[25]
The reason
the pay for the two positions was combined and the employment standards and
working conditions set out in the video collective agreement were adopted was
to simplify the production accountant’s job, Mr. Joli-Coeur said. He explained
that Mr. Bernier had been paid at a higher rate because of his
responsibilities as technical director.
[26]
On
cross-examination by counsel for Mr. Bernier, Mr. Joli-Coeur acknowledged
that if a technician did not do what they should do, the delegated producer
would be responsible for telling them. He therefore admitted that a camera
assistant was subordinate to the producer. With respect to the duties of a
technical director, Mr. Joli-Coeur acknowledged that directives sent to Mr. Bernier
came from the delegated producer, Ms. Mayotte.
[27]
Mr. Joli-Coeur
explained that the preproduction period ran from September 2007 to
June 2008, and production ran from June to August 2008. The
production period is described as the filming period. He defined the
preproduction period as everything that happens before filming, and the
postproduction period as everything that happens after filming. During the
preproduction period, the synopsis and screenplay were written and the sites for
filming decided.
[28]
On the
first day of filming, there were 75 people on the set. Mr. Joli-Coeur
acknowledged that if the work was not completed at the end of the periods shown
on the “call sheets”, they had to be paid for overtime and the same applied if
meal breaks were delayed.
[29]
Mr. Joli-Coeur
explained that FPI employed four or five people on a permanent basis. To
produce film or television productions, they had to hire a director,
screenwriters and all the technicians needed to complete the project. All of
those people were considered to be freelances.
[30]
He
acknowledged that some technicians were considered to be employees if they
requested it and the budget allowed, and that the duties the technicians might
perform did not change.
[31]
In his
testimony, Mr. Bernier confirmed that he had worked in audiovisual
production for about 30 years and that, generally speaking, production
firms made source deductions not only for his RRSP contribution but also for
income taxes owing to the tax authorities and Quebec Pension Plan (QPP) and
employment insurance premiums. He added that he drew employment insurance
benefits on a regular basis when he was eligible. He stated that sometimes he
was required to repay a portion of those benefits when his earnings had been
too high. He acknowledged, however, that there had been no source deductions
for QPP, employment insurance and income tax in the case of his contract with FPI.
[32]
Mr. Bernier
stated that during the production period the producer was the person who
decided the “where”, “when” and “how” of the work to be done. In particular,
the filming schedule was decided by the producer or the director, and Mr. Bernier
was not consulted. The schedule specified the period for performance of the
work and the breaks for meals in precise terms. He did acknowledge that as an
experienced technician he knew how to do his work. However, he was not the one
who decided where the cameras would be positioned during filming. He said that
his supervisor was the delegated producer in the first instance, followed by
the director and the floor manager. In his testimony, he confirmed his job
description, which he had given in paragraph 3 of his notice of appeal,
the respondent having admitted the accuracy of that paragraph:
[Translation]
3. The appellant works as a camera
assistant, and in the course of his work he performs the following duties,
in particular:
- Prepare the cameras.
- Install or change the lenses.
- Install and change the videotape, as needed.
- Change the batteries, as needed.
- Identify the videotapes.
- Transport the equipment.
- Identify takes with the clapper boards.
- Help in installing cameras.
-.Help to tighten the equipment.
- Check the time code regularly.
- Stick around on the set and help the camera
operators[.]
- Drive the equipment truck.
- Charge the batteries.
- Distribute a dozen or so cameras to the camera
assistants and camera operators.
- Transfer digital data to hard disks.
- Make sure that all the equipment is operating
properly.
- Be the “guy in camera truck”.
- Look after the walkie-talkies.
- Deal with minor technical problems.
- Make sure all the cameras are synchronized.
- When time permits, go onto the
set and perform camera assistant duties.
[Emphasis
added.]
[33]
Mr. Bernier
also stated that he had worked on between 20 and
30 employment contracts in 2008, primarily as a camera assistant.
[34]
If there
were delays in filming a television production, there were risks for the
producer, Mr. Bernier said, in particular in relation to the overtime it
had to pay. During the relevant period, Mr. Bernier was never replaced by
anyone else.
[35]
He also
confirmed that he had negotiated his pay. He had been offered $350 for
12 hours, when he had asked for $375. According to Mr. Bernier, his
financial security depends on his reputation and his right to receive
employment insurance benefits.
Josée
Mongeau
[36]
Ms. Mongeau
is a camera assistant, more of a second assistant than a first. She has worked
in that position for about 15 years. In 2009, she worked on between
15 and 20 contracts, each of which might be one day to three months long. She
stated that in the 15 years she has been working in this position, the
contract with PKI is the first in which she has not been recognized as an
employee. Generally speaking, she receives a record of employment at the end of
her employment contracts that follow the AQTIS form. In fact, she refuses
contracts that she describes as [Translation]
“by billing”. Those contracts are different from the ones signed on the AQTIS
form.
[37]
The report
on an appeal (Exhibit A‑7) was produced, setting out the facts
presented in the conversations the appeals officer had with Ms. Mongeau. The
report also related the conversations with a representative of PKI, Mr. Bourdeau.
Some of the facts are clearly stated in the Amended Reply to the Notice of
Appeal, a portion of which I reproduced supra. I will add only a few
excepts from the report that seem to me to be the most important ones:
[Translation]
...
Conversation
with Josée Mongeau
(the other party / the worker)
…
15. All of the work done by
Josée Mongeau as a camera assistant was performed on the various sets under
the supervision and control of the photography director, François Messier.
15.1 François Messier is
the lead camera operator, video production, and also handles lighting and
photography, in addition to giving Josée Mongeau her instructions as a
camera assistant.
16. Josée Mongeau’s work
consisted of helping with photography, estimating lighting, angles, and
so on.
17. When asked whether her work
was supervised or controlled, she replied: [Translation]
“All my instructions came from the photography director. I was to leave the
set only when we got the order from the producer. I was to go to the places and
at the times I was told. I had to fill out timesheets.
18. I considered myself
to be an employee and not a subcontractor. I had no expenses. I was paid by
the hour.”
18.1. I asked Josée Mongeau
to explain why she declares her income from Les Productions Kinesis Inc as
income from a business and why she deducts business expenses. She replied
that she had no choice because Les Productions Kinesis Inc did not want to give
her a T4 and Record of Employment so when she filed her income tax return she
had only one way to declare her fees, as income from a business, and so claim
her home office expenses (see Exhibit 7, attached to the record).
…
19. She explained that the
payer refused to issue a ROE, claiming that it would have cost it too much
to deduct EI at source.
20. When asked how she had got
this job, she replied: [Translation]
“An acquaintance told me they needed an assistant. I contacted them and they
had me sign a contract.” (Montréal, P.Q.)
...
21.1 The hours of work
are decided by the producer/director and he announces them generally after
the workday for the next day. The work schedule may be either in the morning or
in the evening, or even at night, depending on the director’s intentions for
filming.
22. The payer considers Josée
Mongeau to be a self-employed worker while she considers herself to be
an employee.
22.1 Josée Mongeau told me
that if the workers do not agree to the conditions of employment, they will not
have a contract, and that is why she agreed to her status being self-employed
even though she disagreed.
23. Both parties
acknowledge that there is a relationship of subordination between them.
Conversation with Cédric
Bourdeau of Les Productions Kinesis Inc (the appellant/the payor)
24. Cédric Bourdeau corroborated
what was said by Josée Mongeau in full, with the exception of the initial
intention, which was never that she be an employee of the company, it was that
she be self-employed/freelance.
25. The deductions shown
on her pay stub represent the mandatory deductions that the payor is required
to make for everyone who belongs to the “AQTIS” Union, as does Josée Mongeau (member
number 20715). The payor must deduct the cost of the licence, union dues,
group insurance and group RRSP. Those deductions do not in any way mean that Josée
Mongeau is an employee.
...
(VI) CONTRADICTIONS
The only contradiction between the parties
relates to their initial intention although Josée Mongeau was perfectly
aware of the payor’s intention, at the time of hiring, to consider her to be
self-employed/freelance.
[Emphasis added. Boldface by
the appeals officer.]
[38]
Contrary to
what occurred in Mr. Bernier’s case, the insurability officer had
determined that Ms. Mongeau’s work was insurable.
[39]
In her
testimony, Ms. Mongeau gave some clarifications, in particular regarding
the performance of her duties. She stated that she received instructions
concerning where to place the cameras and it was the director who decided what
scene to film and how clear to make the image.
[40]
She
confirmed her job description, as set out in paragraph 3 of her notice of
appeal, in which the respondent admitted the facts stated:
[Translation]
3. The appellant works as first
camera assistant, and in the course of her work she performs the following
duties, among others:
(a)
assembling of the camera
parts in the morning.
(b)
checking when filming starts
to get a clear image, unless otherwise informed.
(c)
maintaining the filming
equipment in the best condition possible.
(d)
assisting the photography
director for his ergonomic comfort by relieving him of the camera between takes
if filming with a shoulder mount camera, for example
(e)
making sure the camera is
secure when it is being moved.
(f)
storing the camera equipment
in the cases at the end of the day.
(g)
recharging the camera
batteries.
[41]
Ms. Mongeau
does not consider technician work to be creative work. Her work consists of
meeting the director’s needs. She says she receives instructions as production progresses,
because there are a lot of changes over the course of production: [Translation] “Minds get changed a lot”.
[42]
She
described the supervisors on the set as the producer in the first instance,
then the director, then the floor manager. Although the director is the conductor
in terms of creative activity, decisions regarding filming locations are often
made by the producer, and she explained that a director may often be fired
before production ends on a film.
[43]
Ms. Mongeau
said that she had refused contracts in the past because they did not want to
treat her like an employee. She also added that she had been able to be
considered to be an employee even in the case of a contract for which the form
provided in the collective agreement was not used.
[44]
She
acknowledged that she supplied a few small tools, like a screwdriver, scissors,
a pencil and chalk. Ms. Mongeau considered herself to be integrated into PKI’s
business, although she was not recognized as a regular employee of the
business. She also stated that she had not worked for any other producer during
the term of her contract with PKI.
[45]
The appeals
officer cited the precedents of 9041-6868 Québec Inc. v. Canada
(Minister of National Revenue), 2005 FCA 334 (CanLII) (Tambeau)
and Productions Petit Bonhomme Inc. v. Canada (M.N.R.), 2004 FCA 54,
(2004), 323 N.R. 356, [2004] F.C.J. No. 238 (QL). The appeals officer in
Mr. Bernier’s case cited only Tambeau.
Analysis
[46]
The issue
raised by these appeals is not novel. What must be determined is whether the
two appellants were engaged in insurable employment for the purposes of the Employment
Insurance Act (Act). The principles that the Court must apply to
dispose of this issue have been discussed repeatedly by the courts. In
argument, my decision in Beaucaire v. Canada, (M.N.R.)
2009 TCC 142, [2009] T.C.J. No. 207, 2009 6 C.T.C. 2347 (Eng.), was
submitted. In that case, I concluded that the worker was engaged under a
contract for services and not a contract of employment. Accordingly, he was not
engaged in insurable employment. I described the approach the Court must take
in cases of this nature as follows:
17 The issue is
whether Mr. Beaucaire held insurable employment for the purposes of the Act.
The relevant provision is paragraph 5(1)(a) of the Act, which states:
5(1) Subject to
subsection (2), insurable employment is:
(a) employment in Canada by one
or more employers, under any express or implied contract of service or
apprenticeship, written or oral, whether the earnings of the employed person
are received from the employer or some other person and whether the earnings
are calculated by time or by the piece, or partly by time and partly by the
piece, or otherwise;
[Emphasis added.]
18 This provision
defines insurable employment as employment under a contract of service (or, to
use a more modern term, a contract of employment). However, the Act does not
define this type of contract. The following is found at section 8.1 of the Interpretation
Act, regarding such a situation:
Property and
Civil Rights
8.1 Both the common law and the civil law are
equally authoritative and recognized sources of the law of property and civil
rights in Canada and, unless otherwise provided by law, if in interpreting
an enactment it is necessary to refer to a province’s rules, principles or
concepts forming part of the law of property and civil rights, reference must
be made to the rules, principles and concepts in force in the province at
the time the enactment is being applied.
[Emphasis added.]
19 The most relevant
provisions for determining whether there is a contract of employment in Quebec
and for distinguishing it from a contract for services are found at
articles 2085, 2086, 2098 and 2099 of the Civil Code of Québec (Civil
Code or C.C.Q.):
Contract of
employment
2085 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.
2086 A contract of employment is
for a fixed term or an indeterminate term.
Contract of enterprise or for
services
2098 A contract of enterprise or for
services 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.
2099 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.
[Emphasis added.]
20 When these Civil
Code provisions are analyzed, it is clear that there are three essential
conditions for a contract of employment to exist: (i) performance of work by
the employee; (ii) remuneration for that work paid by the employer; (iii) a
relationship of subordination. The clear distinction between a contract of
employment and a contract for services is the relationship of subordination, or
the employer’s power of direction or control over the worker.
21 In scholarly literature, authors
have considered the concept of a right of “direction or control” and its flip
side, the “relationship of subordination”. Robert P. Gagnon wrote the following:
[Translation]
(c) Subordination
90 — A distinguishing factor - The
most significant characteristic of an employment contract is the
employee’s subordination to the person for whom he or she works. This
is the element that distinguishes a contract of employment from other onerous
contracts in which work is performed for the benefit of another for a
price, e.g., a contract of enterprise or for services governed by articles 2098
et seq. C.C.Q. Thus, while article 2099 C.C.Q.. provides that the
contractor or provider of services remains “free to choose the means of
performing the contract” and that “no relationship of subordination exists
between the contractor or the provider of services and the client in respect of
such performance,” it is a characteristic of an employment contract, subject to
its terms, that the employee personally perform the agreed upon work under
the direction of the employer and within the framework established by the
employer.
...
92 — Concept - Historically, the
civil law initially developed a “strict” or “classical” concept of legal
subordination that was used for the purpose of applying the principle that
a master is civilly liable for damage caused by his servant in the performance
of his duties (article 1054 C.C.L.C.; article 1463 C.C.Q.). This classical
legal subordination was characterized by the employer’s direct control over
the employee’s performance of the work, in terms of the work and the way it
was performed. This concept was gradually relaxed, giving rise to the concept
of legal subordination in the broad sense. The reason for this is that the
diversification and specialization of occupations and work methods often made
it unrealistic for an employer to be able to dictate or even directly supervise
the performance of the work. Consequently, subordination came to include the ability
of the person who became recognized as the employer to determine the
work to be performed, and to control and monitor the performance. Viewed
from the reverse perspective, an employee is a person who agrees to
integrate into the operational structure of a business so that the business can
benefit from the employee’s work. In practice, one looks for a certain
number of indicia of the ability to control (and these indicia can vary
depending on the context): mandatory presence at a workplace; a somewhat
regular assignment of work; the imposition of rules of conduct or behaviour; an
obligation to provide activity reports; control over the quantity or quality of
the services, etc. The fact that a person works at home does not mean that he
or she cannot be integrated into a business in this way.
[Emphasis added.]
22 Note that the distinguishing
feature of a contract of employment is not the employer’s actual exercise of
direction or control (the strict or classical concept) but the employer’s right
to do so (broad concept). In Gallant v. M.N.R., [1986] F.C.J.
No. 330 (QL), Pratte J.A. of the Federal Court of Appeal stated:
[Emphasis added.]
23 Mention should
also be made of the commentary of Quebec’s Minister of Justice on
article 2085 C.C.Q. accompanying the draft Civil Code, which I quoted at
page 2:26 of an article I wrote (my article) entitled “Contract of
Employment: Why Wiebe Door Services Ltd. Does Not Apply in Quebec and What
Should Replace It.”
[Translation]
This article restates the rule enacted by article 1665(a)
C.C.L.C. The definition contained in the new article establishes more clearly
the difference between a contract of employment and a contract for services or
contract of enterprise. The sometimes fine line between the two kinds of
contracts has caused difficulties both in the scholarly literature and in the
case law.
The definition indicates the essentially temporary nature
of a contract of employment, thus enshrining the first paragraph of
article 1667 C.C.L.C., and highlights the chief attribute of such a
contract: the relationship of subordination characterized by the employer’s
power of control, other than economic control, over the employee with respect
to both the purpose and the means employed. It does not matter whether such
control is in fact exercised by the person holding the power; it also is
unimportant whether the work is material or intellectual in nature.
[Emphasis
added.]
24 In Québec, unlike in the
common law, the main issue is whether there is a relationship of subordination,
or a power of control or direction. To determine whether a contract is a
contract of employment or a contract for services, a court has no choice but to
determine whether there is a relationship of subordination. This was the
approach taken by Létourneau J.A. of the Federal Court of Appeal in D & J Driveway,
in which he found that there was no contract of employment based on the
provisions of the Civil Code and, in particular, on his finding that there was
no relationship of subordination, which he described as “the essential feature
of the contract of employment.”
25 In addition to D & J Driveway,
I would note the decision of the Federal Court of Appeal in 9041-6868 Québec
Inc. v. Canada (Minister of National Revenue), [2005] F.C.J. No. 1720
(QL) 2005 FCA 334 (Tambeau). Décary J.A. wrote the following at
paragraphs 2 and 3:2
2 With respect to the nature of the contract, the judge’s
answer was correct, but, in my humble opinion, he arrived at it
incorrectly. He did not say anything about the provisions of the Civil
Code of Québec, and merely referred, at the end of his analysis of the
evidence, to the common law rules stated in Wiebe Door Services Ltd.
v. Canada (Minister of National Revenue), [1986] 3 FC 533 (FCA)
and 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001]
2 S.C.R. 983. I would hasten to point out that this mistake is nothing new
and can be explained by the vacillations in the case law, to which it is now
time to put an end.
3 When the Civil Code of Québec came into force in
1994, followed by the enactment of the Federal Law - Civil Law Harmonization
Act, No. 1, SC 2001, c. 4 by the Parliament of Canada and
the addition of section 8.1 to the Interpretation Act, R.S.C.,
c. I-21 by that Act, it restored the civil law of Quebec to its rightful
place in federal law, a place that the courts had sometimes had a tendency to
ignore. On this point, we need only read the decision of this Court in St-Hilaire
v. Canada, [2004] 4 FC 289 (FCA) and the article by Mr. Justice
Pierre Archambault of the Tax Court of Canada entitled “Why Wiebe Door
Services Ltd. Does Not Apply in Quebec and What Should Replace It”, recently
published in the Second Collection of Studies in Tax Law (2005) in the
collection entitled The Harmonization of Federal Legislation with Quebec
Civil Law and Canadian Bijuralism, to see that the concept of “contract
of service” in paragraph 5(1)(a) of the Employment Insurance Act
must be analyzed from the perspective of the civil law of Quebec when the
applicable provincial law is the law of Quebec.
[Emphasis added.]
____________
12 It must be noted that Pelletier and
Létourneau JJ. indicated they agreed with Décary J.'s decision. However, in a
subsequent decision, Combined Insurance Company of America v. M.N.R. and
Mélanie Drapeau, 2007 FCA 60, 2007 FCA 60, per Nadon J.,
accepted by Pelletier and Létourneau JJ., reference is again made to Wiebe
Door. However, there is no reference in Combined Insurance to Tambeau
nor is there any mention that the interpretation adopted by Décary J. was no
longer legally binding in Québec. The application for leave to appeal Combined
Insurance at the Supreme Court of Canada was dismissed on October 25, 2007.
Létourneau J. had the opportunity to re-address this issue in a recent case, Grimard
v. Her Majesty the Queen, 2009 FCA 47. At paragraph 37, he
stated: "…in Quebec civil law, the notion of control is more than a mere
criterion as it is in common law. It is an essential characteristic of a
contract of employment…" He then cited Tambeau in support of his
statement.
26 As mentioned above, there may be a fine line between a contract of
employment and a contract for services. It is important that as a starting
point, we consider how the parties themselves defined the nature of their
contractual relationship. Here, evidence of the parties’ intention is clear. ...
[47]
Moreover,
since counsel for the appellants quoted several excerpts from my article,
referred to in paragraph 3 of the decision of the Federal Court of Appeal
in Tambeau, I will cite extensive excerpts that, in my opinion, are
relevant to the search for a solution to the problem raised by these appeals.
[48]
At
paragraph 51 of his reasons in Grimard v. Canada, 2009 FCA 47, [2009] 4 F.C.R. 592, Justice Létourneau wrote:
51 Paragraphs
37 to 46 show that the judge looked for and analyzed indicia of either
supervision or unsupervised performance of the work. Contrary to what the
appellant alleged, it is interesting to note that, in this regard, the judge
examined the common law criteria.
52 For example, at paragraph 39, the judge noted that the CLP gave the
appellant “an office equipped with all the tools he needed to do his work”. In
other words, he inquired into the ownership of the work tools.
[Emphasis
added.]
[49]
When I
wrote my reasons in Grimard, I intentionally did not examine the common
law tests. The reason why I did not do that is that I was applying the approach
followed by the Supreme Court of Canada in several decisions in which it had
held that it was inappropriate to apply precedents from the English common law
and that the provisions of the civil law had to be interpreted based on its own
rules. I described the approach taken by the Supreme Court of Canada (and even
the Federal Court) at paragraph 4 of my article, and at paragraphs 57
et seq., as follows:
[4] Arguing that making this
distinction required strict reliance on the general law of Quebec, we wrote, at
page 301:
[Translation]
… This is another reason why the courts should be
receptive to the approach taken by Brossard J. in Dennis Sport Import.
We should, as he emphasized, “rely on the general law of Quebec”. Furthermore,
this approach, which would respect the integrity of Quebec civil law, is
consistent with the one recently confirmed by the Supreme Court of Canada in Rubis
v. Gray Rocks Inn Ltd. [[1982] 1 S.C.R. 452, at page 469] in
which Beetz J. cited the following statements of Mignault J. [in Desrosiers
v. The King (1920), 60 S.C.R. 105, at 126]:
... it is time to react against the habit, in
cases from the province of Quebec, of resorting to English common law
precedents on the ground that the Civil Code contains a rule which is in
accordance with a rule of English law. … The civil law is a complete
system in itself and must be interpreted in accordance with its own rules.
[Emphasis added.]
…
1.2.1. The
use of civil law precedents to interpret Civil Code provisions
[57] First, in terms of
principles, common law decisions should not be applied to interpret the civil
law of Quebec. In addition to the opinion of Mignault J., cited by
Beetz J. in Gray Rocks Inn Ltd. and mentioned in the introduction
to this article, there are the following comments of Mignault J. in Curley
v. Latreille (pages 176‑177):59
[Translation]
I would like to
make another comment because a number of honourable judges of the Court of
Appeal have, in my opinion, equated our law as it relates to the liability of
masters and employers with the English law, under whose influence it has
been decided that the master is responsible for the damage caused by his
servant “in the course of his employment”, a phrase that, in their opinion,
expresses the same idea as “dans l’exercice des fonctions auxquelles ces
derniers sont employés” or, to quote once more the English version of article
1054 C.C. “in the performance of the work for which they are employed”. And
having noted what was, in their opinion, an identity of meaning, the
learned judges cited some English decisions, and in particular the
decision of this Court in Halparin v. Bulling [(1914), 50 S.C.R.
471] which came from the province of Manitoba.
It can
sometimes be dangerous to go outside one legal system and to seek precedents in
another system on the grounds that the two systems have similar rules, except of
course in the case where one system borrows from the other a rule that was
previously unknown to it. But, although the rule is similar in both, it may
be that it was not understood or interpreted in the same way in each system,
and, since legal interpretation — I am speaking naturally of the interpretation
that is binding on us — is actually part of the law that it interprets, it
may very well happen that the two rules, despite an apparent similarity, are
not completely identical at all.
I will therefore not base the conclusions that I believe I should
adopt in this case on any precedent drawn from the English law, not even on
Halparin v. Bulling, but will rely solely on the wording of
article 1054 C.C. [Emphasis added.]
____________
59 (1920), 60 S.C.R. 131. In this case, it had to be decided whether a master
(employer) was liable for the damage caused by his servant (employee) [Translation] “in the performance of the
work for which [he was] employed”, under art. 1054 C.C.L.C. (now art.
1463 C.C.Q.).
[58] Brodeur J., although
dissenting, adopted the same approach as Mignault J., writing at page 173:
[Translation]
. . . The
comments that I have just made in this case and the spirit of the law in the
two systems show how dangerous it is to go outside one system and to seek in
another precedents that are sometimes based on rather poorly recognized and
sometimes opposing principles, even though the wording may appear almost
identical.
For my part, I prefer to base my conclusion on the decision of
the Cour de cassation, because it was rendered under legislation
that our codifiers stated they had adopted themselves. [Emphasis added.]
…
[60] Mignault J. returned to
the question of the use of common law judicial decisions in civil law in a
lecture to the students of McGill University published by the Canadian Bar
Association:60
And as to precedents where you seek to
establish a rule of law, do not go outside of decided cases or
authorities of our own jurisprudential system. Cases from Quebec often
come before the Supreme Court full of references taken from the common law. It
is perhaps easier to find these references on account of the English and
American encyclopaedias of law which are in very common use in our province,
and which are very convenient for handy reference. Remember however that the
civil law is a distinct and entirely self sufficing system, that its legal
literature is extremely rich and abundant, that monumental works of reference
like Fuzier-Herman, the repertories of Dalloz and Sirey and the Pandectes
Françaises are on the shelves of our libraries, and that, even where the
common law and the civil law have a similar rule, as in many cases of
mandate, suretyship and torts, to mention these only as typical of many others,
it can only lead to confusion to go outside of our system to seek
authorities in other systems of law where the rule in question may well be
a deduction from another rule which does not exist in our code. I feel very
strongly on this subject and I have lost no opportunity in my humble way since
I have had the honour of a seat on the bench of our highest appellate court, to
insist that each system of law be administered according to its own rules and
in conformity with its own precedents. [Emphasis added.]
____________
60 “The Authority of Decided
Cases” (1925), 3 Can. Bar R. 1, at 22-23. Another passage from this
article was cited by Beetz J. in National Bank of Canada (successor of the Canadian
National Bank) v. Soucisse, [1981] 2 S.C.R. 339, at 361.
[61] Finally, there is this comment by Addy J. in Olympia
and York, supra (para.16), at page 702:
. . . To seek by
way of common law jurisprudence to reach a solution to the present issue would
be to venture out on a perilous journey over rocky and tortuous roads,
fraught with pitfalls, which would lead to a mere cul-de-sac, if one were fortunate. [Emphasis added.]
[50]
I was
surprised to see, when I read the reasons for decision of the Federal Court of
Appeal in Grimard, that the taxpayer had argued that the judge should
have “recused himself to avoid being accused of bias” because he referred to
his article. The words of Justice Mignault, reproduced at paragraph 60 of
the excerpt from my article quoted supra, were written in
April 1921 and published in the Canadian Bar Review in January 1925
while he was a judge of the Supreme Court of Canada. The
argument made was particularly surprising in that Mr. Grimard was a doctor
who was working as an assessor with the Commission des lésions
professionnelles, an administrative tribunal in Quebec, so he was familiar with
the judicial world. Everything I wrote in my article I could have written in a
decision. That article gave me an opportunity to do a comprehensive, detailed
review of the entire issue raised by the application of section 5 of the
Act in Quebec. Moreover, [Translation]
“[t]here is a long and honourable tradition of judicial involvement in teaching
law, publishing legal textbooks and articles in law reviews, and giving
seminars or speeches about the law” (emphasis added), as
the Rt. Hon. Gérald Fauteux, former Chief Justice of the Supreme Court of
Canada, wrote in Le Livre du Magistrat (at p. 20), published by the
Canadian Judicial Council in 1980.
[51]
If judges
had to recuse themselves every time they adopted a legal interpretation of
legislation and laid out principles found in the case law, the Tax Court of
Canada could no longer function. The Court is frequently asked to dispose of
appeals that relate to the same kinds of problems. We need think only of appeals
relating to research and development, or to the scheme involving the sale of
charitable donation receipts, which has been the subject of much debate in this
Court and several appeals on that subject that have been heard by the same
judge.
[52]
As well,
judges must always come to issues with an open mind, without bias, and even
consider the possibility that they may have made a decision that was wrong in
fact and law. Judges are often dependent on the facts and arguments presented
to them. An excellent example may be found in the decision I recently gave in Bombardier,
2011 TCC 48, a case that raised the issue of the value, for the purpose of
computing the large corporation capital tax, of advances on contracts
recognized in the balance sheet. In Oerlikon Aérospatiale Inc. v. The Queen,
97 DTC 694, affirmed by the Federal Court of Appeal, 1999 CarswellNat 534,
99 DTC 5318 (Eng.), I had dismissed Oerlikon’s appeal, concluding that the
advances on contracts were advances for the purposes of the Income Tax Act,
including advances recognized in supplementary notes. In Bombardier I
concluded, based on expert evidence that was different from what had been presented
in Oerlikon, that only the advances shown in the body of the balance
sheet were advances for the purposes of the tax in question.
[53]
After
explaining, at paragraphs 75 et seq. of my article, why the rules
of evidence in effect in Quebec are applicable to cases that involve applying
section 5 of the Act, at paragraphs 82 et seq., I laid out the
various evidentiary methods, including proof by presumption of fact, that may
be used to establish that there is a relationship of subordination for the
purposes of determining whether there is a contract of employment. Only the
most important footnotes are reproduced:
2.1.2. Proof
by presumption of fact
[82] Article 2811 C.C.Q. states that “proof of a fact
or juridical act may be made by a writing, by testimony, by presumption,
by admission or by the production of material things”. There is no need to
examine here each of these five means of proof. It would, however, be
appropriate to analyse proof by presumption of fact89 since this
method of proof is of great use in establishing the existence of a contract of
employment. As will be seen below, proof of the contract itself, of the
juridical act, may be made by direct evidence, namely, by the production of the
document that records it or, failing that, by testimony as to what the parties
agreed upon when entering into the contract. Direct evidence of the work
performed by the employee and the salary paid by the employer can be provided
in the same way, that is, by a writing or by testimony. As for the
relationship of subordination, which is the other side of the power of
direction or control, direct proof can be provided if this power was exercised
or if it is provided for in the contract. In cases where it has been neither
exercised nor provided for, or was exercised only to a limited
extent, it is necessary to prove the existence of the “power” of direction or
control, that is, one must establish an unapparent or unknown fact,
which requires indirect or circumstantial evidence. This is what the
Civil Code calls evidence by presumption of fact. The same approach could be
required, furthermore, if the parties did not manifest in their agreement their
intention regarding the nature of the contract.
[83] Paraphrasing the wording of article 2846
C.C.Q., Professor Ducharme90 describes this method of proof as [Translation] “an intellectual
process by which the existence of an unknown fact is determined by induction
from the existence of known facts”. The following is the analysis provided
in Professor Ducharme’s work:91
____________
89 The rules are found in arts. 2846-49 C.C.Q.
90 Léo DUCHARME, Précis de la
preuve, 5th ed. (Montreal:
Wilson & Lafleur, 2001), at 159.
[Translation]
Para. I —
Analysis of the presumption of fact
599. If we
break down the process by which a judge proceeds from known facts to an unknown
fact, it is apparent that this induction involves three distinct stages.
First, the establishment of the known facts or the search for indicia; second,
the application of a principle serving to link the known facts to the fact
looked for; and lastly, the outcome of the induction, which is more or
less great certainty concerning the fact determined by induction. We shall
briefly analyse each stage.
A — The
search for indicia
600. Any
fact or act, provided it is validly established before the court, may
serve as an indication. No specific rule can therefore be formulated as to
the nature of facts that can serve as the basis for an induction, unless it be
that the facts must be serious, precise and concordant, as article 2849
C.C.Q. and well established case law provide.
601. What
is to be understood by this phrase? In our opinion, it simply means that the
known facts must be such that they make the existence of the fact that is to be
induced from them at least probable. If the known facts are as consistent
with the existence as with the non-existence of the fact, they cannot serve as
the basis for a presumption and it will then be said that they are not
sufficiently serious, precise and concordant. It must be noted that a mere
probability is sufficient and that it is not necessary for the presumption
to be so strong as to exclude any other possibility. We shall examine below
the problem of the admissibility of the means of proof that may be employed to
prove the indicia.
B — The
application of a principle
602. Indicia
in themselves prove nothing; their value rests on the interpretation that
they are given, and it is by means of a principle drawn from science,
psychology, physiology and so on that they may be interpreted.
603. The principle
of causality plays a very important role in presumptions. According to this
principle, we know that there is no effect without a cause; starting
from an effect, it is accordingly possible to go back to the cause that
produced it. Thus, in one particular case, the court presumed that some sheep
had been killed by stray dogs on the basis of the kind of injuries that had
been inflicted on them. In other cases, the principle of causality makes it
possible to see the cause of another event in a certain fact, to identify, for
example, as the cause
of a fire the pesticide vapours that had spread throughout a building a few
hours earlier. [Emphasis added.]
[84] Thus, it is through analysing and weighing a
set of factual indicia that a conclusion may be reached as to the existence or
the absence of facts that are not apparent or manifest, such as the
power of direction or control, or the intention of the parties regarding
the nature of the contract.
[54]
Here, the
parties did not describe the nature of the agreement clearly in their written
agreement. They simply described the agreement as an employment contract. They
did not specify whether it was a contract of employment or a contract for
services. It is therefore not surprising that the evidence concerning the
nature of their contractual relationship would be contradictory. Both
appellants insist that they always considered themselves to be employees when
they signed this kind of contract. Mr. Joli-Coeur states that the practice
in his production firm was to clearly inform their technicians if they were
engaged as self-employed workers.
[55]
We must
therefore rely on an analysis of their conduct to determine the true nature of
their contractual relationship. In any event, even if its nature was stated in
the written agreement, it would still be necessary to examine their conduct. I
wrote the following at paragraphs 97 et seq. of my article:
2.3. PROOF OF PERFORMANCE OF
A CONTRACT OF EMPLOYMENT
[97] Even if the contracting
parties have manifested their intention in their written or oral contract or if
their intention can be inferred from their conduct, this does not mean that the
courts will necessarily view it as determinative. As Décary J.A. indicated in Wolf, supra, performance
of the contract must be consistent with this intention. Thus, the fact that the
parties have called their contract a “contract for services” and have
stipulated both that the work will be done by an “independent contractor” and
that there is no employer-employee relationship does not necessarily make the
contract a contract for services. It could in fact be a contract of employment.
As article 1425 C.C.Q. states, one must look to the real common intention of
the parties rather than adhere to the literal meaning of the words used in the
contract. The courts must also verify whether the conduct of the parties is
consistent with the statutory requirements for contracts. According to Robert
P. Gagnon:108
[Translation]
91 — Factual
assessment — Subordination is verified by reference to the facts. In
that respect, the case law has always refused to simply accept the parties’
description of the contract:
In the contract, the distributor himself acknowledges that he is
working on his own account as an independent contractor. There is no need to
return to this point, since doing so would not alter the reality; furthermore, what
one claims to be is often what one is not. [Emphasis added.]
[98] In D
& J Driveway, Létourneau J.A. of the Federal Court of Appeal wrote:109
2 It should be noted
at the outset that the parties’ stipulation as to the nature of their
contractual relations is not necessarily conclusive and the Court which has
to consider this matter may arrive at a contrary conclusion based on the
evidence presented to it: Dynamex Canada Inc. v. Canada, [2003] 305 N.R. 295
(F.C.A.). However, that stipulation or an examination of the parties on the
point may prove to be a helpful tool in interpreting the nature of the contract
concluded between the participants. [Emphasis added.]
____________
108 Supra (note 31), at 66.
109 Supra (note 4). See also the
comments of Noël J.A. in Wolf
reproduced
above at para. 90. See also note 93.
[99] Judges may therefore
recharacterize the contract so that its name reflects reality. In France, the
recharacterization of a contract results from the application of the reality
principle.110 The Cour de cassation has adopted an
approach similar to the Canadian one:111
[Translation]
Whereas the existence of an employment relationship depends neither
on the expressed will of the parties nor on the name they have given to their
agreement but rather on the factual conditions in which the workers’ activity
is performed . . . .
____________
110 Verdier, Coeuret et Souriac, supra (note 49), at 315.
111 Cass.
soc., 19 December 2000, Bull. civ. 2000.V.337, no 437 (lessee of a taxi:
employee). See also Cass. soc., 23 April 1997, Bull. civ. 1997.V.103, no 142
(pastor of Adventist churches: referred back to the Court of Appeal).
[100] In my opinion,
this verification that the actual relationship and the parties’ description of
it are consistent is necessary when interpreting contracts of employment since
the parties may have an interest in disguising the true nature of the
contractual relationship between the payer and the worker. Experience shows, in
fact, that some employers, wanting to reduce their fiscal burden with respect
to their employees, sometimes decide to treat them as independent contractors.
This decision can be made either at the outset of the contractual relationship
or later on.112 Similarly,
some employees could have an interest in disguising their contract of
employment as a contract for services because the circumstances are such that
they do not foresee that they will need employment insurance benefits and they
want to eliminate their employee contributions to the employment insurance
program, or they desire more freedom to deduct certain expenses in computing
their income under the Income
Tax Act.113
[101] Since the EIA
generally authorizes the payment of employment insurance benefits only to
employees who lose their employment,114 the courts must be on the alert to unmask
false self-employed workers. The courts must also ensure that the employment
insurance fund, which is the source of these benefits, receives premiums from
everyone who is required to pay them, including false self-employed workers and
their employers.
____________
112 For
a study of the problems created by this phenomenon, see the discussion paper of
the Law Commission of Canada, Is Work Working? Work Laws that Do a Better Job,
December 2004, on line: http://www.lcc.gc.ca/pdf/work.pdf.
113 Subsection 8(2) of the Income Tax Act provides
that no deductions may be made other than those permitted by that Act. If a
worker is self-employed, he can generally deduct any current expense incurred
for the purpose of gaining or producing income from a business.
114 See
note 7.
[102] The
necessity of proving that the contract has been performed exists not only where
the parties have explicitly or implicitly manifested their intention to enter
into either a contract of employment or a contract for services, but in all
cases where proof of their intention is insufficient or lacking. Proof that the
contract has been performed involves the three essential components required in
order for there to be a contract of employment. In general, proof of the first
two elements (the work and the remuneration) will not be much of a problem
since these are physical facts that are relatively easy to establish. Proving
the existence of a legal relationship of subordination, namely the power of
direction or control that the employer exercised or could have exercised, is,
on the other hand, a very delicate task. It will be all the more so if the
employer has exercised little or no direction or control.
[56]
The
following is the process I describe at paragraphs 103 et seq. of my
article, to determine the true nature of a contractual relationship between a
payor and a worker, and in particular to determine whether there is a
relationship of subordination:
2.3.1. Direct evidence of the power
of direction or control
[103] The best
evidence will be direct evidence of facts
establishing that the work was really performed under the payer’s direction and
control. Such evidence can be provided by documents or testimony revealing
the specific instructions given to the worker not only with regard to the
work to be performed (the “what”),115 but also concerning the manner
in which it is to be done (the “how”),116 the place where it is to
be done (the “where”), and the time at and within which it must be done (the
“when”). To these facts can be added those showing that the payer supervised
the work,117 inter
alia by requiring the worker to report on a
regular basis, by regularly completing evaluations of his work, by
meeting with the worker to communicate to him the results of the evaluations
and, perhaps, by disciplining him.118 Taking such evidence as a
whole, it could be relatively easy to conclude that a relationship of
subordination exists.
[104] As an example
of work in which the worker is given many instructions on the “what”, the
“how”, the “where” and the “when” and in which personal performance of the work
by the worker (the “who”) matters, actors in a theatre troupe or a movie
production company spring to mind. As a general rule, their work is done under
the direction and control of a director. Since a contract of employment may
be for a fixed term and is in that case [Translation]
“essentially temporary”, there is no reason why the employment cannot last for
just a few weeks119 (2086 C.C.Q.).
____________
115 Services
Barbara-Rourke Adaptation Réadaptation c. Québec (Sous-ministre du Revenu), [2002] J.Q. no.
470 (QL) (C.A. Qué.), at paras. 10, 44-48 (persons responsible for the delivery
of foster home services (in the residence of a third person) recruited by a
rehabilitation centre for persons with an intellectual disability: employees); Guérette c. Lapierre, [2003] J.Q. no.
4952 (QL) (S.C. Qué.), at paras. 25-26 (construction of a balcony at the
payer’s cottage by a retired worker: employee).
116 In
my opinion, when a payer imposes the methods or means of performing a job on a
worker, he is directing that worker. The proof that the payer has acted in this
way constitutes direct evidence of the exercise of the power of direction and
is not merely evidence by indicia. It should however be noted that the line
between direct evidence and indirect or circumstantial evidence may be tenuous.
To the extent that the direct evidence of the facts is not considered
sufficiently probative (e.g., because of the limited number of instructions),
these facts might be treated as indicia to be considered with the other indicia
described below.
For examples from the case law
of assessing the power of control exercised over the “how”, see: Sauvé, supra (note 4), at paras. 19, 22; Les
Entreprises Gérald Petit, supra (note 101), at para. 21; Neblina
Spa Enr., supra (note 95), at paras. 5, 14, 16; Services
de santé Marleen Tassé, supra (note 31), at paras. 12, 16, 24, 25, 30,
50, 70-74; Québec
(Commission des normes du travail) c. Desrochers, 2001 IIJCan 8641 (C.Q.), at paras. 23-26 (work in a
shoe repair shop: employee); Dr Denis Paquette, supra (note 99), at paras. 6, 33 (nos. 6-8), 36,
49-52.
117 Services Barbara-Rourke, supra (note 115), at para. 44; Les Entreprises Gérald Petit, supra (note 101), at paras. 10, 15, 21;
Importations Jacsim, supra (note 100), at para. 22; Guérette, supra (note 115), at para. 25; Services de santé Marleen Tassé inc., supra (note 31), at paras. 12, 20-22,
27-29, 73, 87; Seitz, supra (note 98), at paras. 15, 22, 25,
45, 62..
118 Immeubles
Terrabelle,
supra (note 31), at
1309, 1310; Neblina Spa
Enr.,
supra (note 95), at
para. 14; Ménard, supra (note 98), at para. 8; Importations Jacsim, supra (note 100), at para. 22; Services de santé Marleen Tassé inc., supra (note 31), at paras. 12,
27-29, 73, 83; 9088-8454
Québec,
supra (note 96), at
para. 26; Dr Denis Paquette, supra (note 99), at para. 33 (no.
16); Ellefsen Lebel Inc. c.
Bolduc,
[1997] A.Q. no 505 (QL) (C.Q.), at para. 19 (work involving market research and
analysis and soliciting clients for a “head-hunting” firm: employee); Seitz, supra (note 98), at paras. 15, 22,
62; Québec (Commission des
normes du travail) c. 9044-6337 Québec inc. (f.a.s. Les Autos Fleurimont), [1999] J.Q. no
6008 (QL) (C.Q.), at para. 18 (used-car salesman paid exclusively by
commission: provider of services); Beauport (Ville), supra (note 31), at para. 48; IMS of Canada, supra (note 101), at paras. 9, 11;
Cass. soc., no 196, supra (note 106); Dupuis c. Pro Vie Assurances, [2004] J.Q. no
9123 (QL) (C.S. Qué.), at para. 58 (seller of two kinds of insurance: provider
of services).
119 According
to Pélissier, Supiot and Jeammaud, supra (note 50), at 197, para. 129, [Translation] “the duration [can be] prolonged or very
brief”. (See the passages reproduced below in para. 109 of this article.)
Moreover, according to these authors, the work covered by the contract of
employment may be artistic in nature (p. 181, para. 120) and be performed by
an artist (p. 183, para. 121b)) or even by a film director (p. 200, para.
132).
The legal status of actors as
employees or providers of services has generated much controversy in Canada and
has led to many approaches being made to the Canadian tax authorities. See
Interpretation Bulletin IT-525R and Canada Tax Service (Carswell), commentary
on section 9, under the heading “Artists and Writers”.
Furthermore,
in Productions Petit Bonhomme Inc. v.
Canada (M.N.R.), 2004 FCA
54, (2004), 323 N.R. 356, [2004] F.C.J. No. 238 (QL), the Federal Court of
Appeal found that the Tax Court had not committed any palpable error in
concluding that technicians working on the production of television shows
in Quebec were self-employed workers. It must however be noted that
it was the principles from Wiebe Door and Sagaz that were applied by the Tax Court judge in this case. One may wonder, then,
whether the result would have been the same if that judge had applied the
relationship of subordination test (direction or control) as the sole test, in
accordance with the Civil Code provisions.
[105] Direct evidence
that the employer exercised a power of direction could also consist of evidence
showing that the payer has trained the worker, unless the training involved
only information on the products to be sold.120 The imposition of
rules of conduct or behaviour is also direct evidence, unless the rules
correspond to standards that apply regardless of the worker’s status, including
legal standards.121
____________
120 Sarrazin
v. Canada (M.N.R.), [1997] T.C.J. No. 320 (QL), at paras. 10, 13
(chicken catchers in producers’ poultry buildings: providers of services); Services Barbara-Rourke, supra (note 115), at para. 44; Yunes c. Garland Canada Inc., [2004] J.Q. no
8434 (QL) (S.C. Qué.), at para. 17 (door-to-door salesperson: provider of
services); Services de
santé Marleen Tassé, supra
(note
31), at paras. 30, 74, 87; Desrochers, supra (note 116), at paras. 24-26.
121 Charbonneau, supra (note 4), at paras. 7, 11; Dr Denis Paquette, supra (note 99), at para. 33 (no
8); Services de santé
Marleen Tassé, supra (note 31), at
paras. 16, 25, 63; Neblina
Spa Enr.,
supra (note 95), at
paras. 5, 14, 16; Ménard, supra (note 98), at para. 8.
2.3.2. Circumstantial evidence of
the power of direction or control (indicia of subordination)
[106] It must be
pointed out that the distinguishing feature of a contract of employment is not
that the employer actually exercised direction or control but that the employer
had the power to exercise direction or control. Where the employer has not
regularly exercised his power of direction or control, it is not easy to prove
the existence of the “power”. It is not surprising, then, that in order to
solve this problem the common law courts have opted to apply tests other than
the control test. However, in Quebec, the courts do not have such
leeway. They have to find that a relationship of subordination is either
present or absent before they can characterize an agreement as a contract
of employment or a contract for services. It is thus necessary to resort to
proof by presumption of fact, namely, indirect or circumstantial evidence.
[107] In selecting and weighing
indicia, one must be mindful of the actual provisions of the Civil Code that
distinguish a contract of employment from a contract for services. What must be
asked is whether a fact of a circumstantial
nature renders the existence of a power of direction or control probable, or whether, on the contrary, it renders probable the
worker’s independence in carrying out the contract. The following is merely
a very partial list of indicia and it can be modified or added to. The
usefulness, relevance and probative value (facts that are “serious, precise and
concordant”) of these indicia and of those that may be added thereto must be
assessed according to the particular circumstances of each case.
[108] Before proposing or
commenting on indicia that might be useful, it would be appropriate to point
out those described by legal scholars. Let us begin with those suggested by
Robert P. Gagnon, at paragraph 92 of his above-cited
work:
[Translation]
. . . In practice, the presence of a number of indicia of
supervision will be sought. These can vary depending on the context: mandatory
presence at a workplace, more or less regular assignment of work,
imposition of rules of conduct or behaviour, reporting requirement,
control over the quantity or quality of the work, and so on. The fact that the
work is done at home does not preclude integration into the business. [Emphasis
added.]
[109] In addition, there
are the indicia described in French legal writings:122
2. The indicia
To identify the elements whose presence conditions the
characterization, judges resort to indicia. These are drawn from the
provisions of the contract, but even more so from the “factual conditions in
which the workers’ activity is carried on” and which are, basically, the means
adopted or accepted for the performance of the contract. The conduct of the
parties, their relationship, the time and place of the activity, the
fact that the person in question works alone or with the help of
others and the ownership of the equipment and raw materials are
examined, as, of course, are the existence or absence of direction or
control by the beneficiary of the work and the existence of remuneration and
the mode thereof. A contract of employment exists when a bundle of indicia points toward this characterization, but the absence of one of the
indicia does not exclude such characterization. The
reasons for decision in some Cour de cassation cases
provide a very good illustration of this method.
____________
122 Pélissier, Supiot and Jeammaud, supra (note 50), at 193, 196 ff. (N.B.
The footnotes are mine; those of the authors have been omitted.)
...
128 The work location123 ◊ The employee usually
performs the work on the premises of the employer or of the employer’s
business, at the workstation to which he is assigned. The geographical
imperative will thus constitute one indication of subordination.
____________
123 For
examples of decisions of the Cour de cassation, see: Cass. soc., 20 June 1995, Bull. civ.
1995.I.186, no 268 (professor updating a work for a publisher: provider of
services) and Cass. soc., no 196, supra (note 106).
Thus, it has
been held that the following were employees: an agent who receives
clients in an office made available to him by the employer; a company doctor
required to be on the company’s premises; the operator of a booth set up in a
location assigned to her by the employer, who has at all times the power to
deny her access thereto and who pays a fee for the use of that location; a
teacher giving lessons in his students’ homes or in an educational institution;
and a measurer working in part on company premises.
Where the
nature of the worker’s activity is such that it is performed outside the
payer’s premises, indicia of subordination would include the fact that a
newspaper vendor is required to follow the route assigned to him, that a
professional athlete must heed the call to go to the place of a competition,
that a demonstrator placing orders for household items or cosmetic products
participates in the business by attending meetings that are organized and
taking part in training courses, and provides after-sales service.
However, employee
status was denied to: a newspaper vendor at liberty to choose his sector of
activity, a collection agent working on his own premises, and a law professor
having no obligation to be on the premises of the publishing company for which
he works.
Determination of the place of work is obviously not conclusive in
itself. Because of the nature of his activity, a
self-employed worker may have to do his work on the premises of the person who
is his client, as with an accountant or a consulting engineer, or at the
location where the client has organized an event, as in the case of a
conference interpreter..
The development of teleworking, the practice of putting workers on
call (obligation to stay home and be at the employer’s disposal) and the
practice of work on demand are weakening the traditional significance of the
place of work.
129 The work schedule124 ◊ The fact that the worker performs
the work over time is inherent in the nature of this successive contract. It
matters not whether the employment is for a fixed term or not, or whether it is
of extended or very brief duration, although regular collaboration over a
fairly lengthy period may in itself be an indication of subordination.
____________
124 Cass. soc., no 268, supra (note 123); Cass. soc. no 196, supra (note 106).
Subordination will be concretely manifested by the worker’s
obligation to remain available to the employer in accordance with the
schedule established by the employer. Thus, the following will be
considered employees: a newspaper vendor required to start delivering to
subscribers at a fixed time, a doctor providing medical services for a
business and required by his contract to be there at fixed times, and a
teacher subject to schedules. Where the work is not performed
continuously on a regular schedule, subordination may result from the
obligation to answer any call from the person to whom the performance of
that work is owed.
On the other hand, it has been held that the following were not
bound by a contract of employment: a newspaper vendor not required to
follow any schedule, a market porter working at hours of his own choosing, an
“adviser” who does not have to adhere to a schedule in contacting his
connections for the benefit of a business.
When a worker is required to go to an assigned location and follow
an imposed schedule, a judge will readily find that
there is “legal subordination” and consequently a contract of
employment. The act of submission is significant in itself, and the obligation
to be at a location at fixed times appears to be a condition of the employer’s
effective exercise of his power of direction and control. New trends in
duration of work (individualized schedules, part-time and intermittent work,
variability of work schedules during the year) do not appear to be of a
nature that would lessen the significance of these indicia.
130 Personal and exclusive performance of work ◊ A contract of employment obligates
the employee to perform his work personally, and he cannot substitute another
person for himself, especially an employee whom he in turn has hired.
The direct or indirect imposition of a
requirement for personal performance of the work points strongly toward
characterization as a contract of employment. However, a contractor using
workers recruited by him who work under his direction and his exclusive
responsibility is not bound by a contract of employment between him and the
beneficiary of his activity..
The problem has
arisen in particular in the area of sales, and the legislator has settled the
issue for some by explicitly imposing characterization as a contract of
employment. On the other hand, the Cour de cassation has refused to
characterize as an employee of the firm a general agent who is
in charge of employee subagents paid by him and working for him and who
therefore uses work done by others for his personal gain. This is also true of
a surgeon who is free to decide on his activities and operates in a clinic with
nurses hired, paid and supervised solely by him.
In addition, by
renouncing for a time his freedom with respect to his work and by agreeing
to reserve his services for a single employer, an employee manifests his
submission to the employer’s authority. This may be the case for an
accountant, or for a professional athlete who promises not to run or to
play for another sports group or club. Where no such undertaking has been
given, recognition as an employee has been refused to a street vendor
free to sell other newspapers and to the organizer of training sessions who
does this work for several organizations.
While exclusivity usually leads to the presumption that there is a
relationship of subordination, the converse is not true: non-exclusive activity, exercised for a number of employers
or a clientele, is not necessarily inconsistent with the status of employee.
To work under a contract of employment and at the same time practise
independently as a professional is possible, as is, of course, the
simultaneous performance of a number of employment contracts (part-time, in
principle, in order to comply with duration of work regulations) with different
employers. Multiple employment or the simultaneous carrying on by one person of
a number of different professional activities is spreading. This type of
arrangement should not be viewed as blameworthy and is prohibited only
exceptionally.
131 The
provision of equipment, raw materials or products ◊
The employer normally provides the employee with the tools and materials
required to do his work. Thereby is asserted the dependency, in a capitalist
economy, of the worker on an employer who holds the means of production.
With respect to subordination, the authority of the beneficiary
of the work becomes less clear when the equipment belongs to a worker who uses
it as he sees fit, because the worker then ceases to be a pure lessor of
services. Accordingly, the courts have refused to recognize as employees
a contractor using his own tools and cement mixer, a pile-driving contractor
who retains control over the operation of his machines, a representative who
owns a warehouse and transportation equipment and delivers a company’s products
to retailers, and a tradesman advancing various supplies. The following are,
however, bound by a contract of employment: the operator of a booth
selling at the prices indicated merchandise exclusively furnished by the
employer and returning unsold items, or masons who are provided with mortar.
The same kind of circumstance, together with other indicia, favours employee
status for doctors in private medical establishments who use the facilities of
those establishments.
In the case of
some couriers or truckers who own their own vehicles, it is a priori likely
that they will not be found to work under a contract of employment. The
parties may, however, on occasion, because of various conditions governing the
performance of their activity, benefit from the provisions of the Labour Code
by virtue of article L. 781-1 C. trav.
132 Direction and control of the work125 ◊ This factor is determinative. The courts have found the
following to be employees: a mason working clandestinely for an owner who
gives him instructions; a deep-sea diver prospecting the ocean floor in
return for remuneration and who sends in reports, despite the freedom given by
the remoteness of the place in which he works and the technical nature of his
work; a technical and commercial manager of an agricultural
estate, having specific, limited and controlled duties; the manager
of a commercial service receiving specific instructions; the operator of
a booth receiving specific and compulsory instructions concerning the sale of
publications, who is permitted to show no initiative and is subjected to
inspection twice a day; a real estate agent reporting on his activities,
receiving criticism and instructions; a film director hired by the producer,
subordinate to the latter despite having a measure of artistic freedom; a
soccer player submitting to the discipline of his club; an accountant
receiving instructions and actual orders by memoranda; a trucker given
“self-employed” status by his employer on whom he nonetheless continues to be
dependent; a representative of a subsidiary, subject by contract to the orders
and directives of the parent company.
____________
125 It
must be pointed out that the French Civil Code does not define contract of
employment. In France, as was true in Quebec before 1994, there are
only contrats
de louage d’ouvrage (contracts
of lease and hire of work), which include contracts of employment and contracts
for services. The distinction between the two was decided by legal scholars
and the case law. Since the Quebec legislator has adopted as the test for
determining the existence of a relationship of subordination the power of
direction or control, proof of the exercise of this power constitutes direct
evidence of the relationship of subordination. This would not be, strictly
speaking, a mere indication of a relationship of subordination, as is the
case in France. French judges, unlike Canadian judges sitting in Quebec, could
have the necessary leeway to modify the notion of relationship of subordination.
Analysis of the case law accordingly makes clear the importance,
among the various indicia of subordination, of the integration of the worker in an
organized service,
even if, in fact, it is now only an indication
and not a possible and sufficient mode of subordination. Thus, a private teacher
who works on the premises according to an assigned schedule, teaching
subjects according to a fixed program and required to follow the
institution’s directives concerning, among other things, attendance
records and report cards, is an employee, despite his irreducible
intellectual independence. Similarly, the distributor of a free advertising
weekly will be considered an employee in particular because he works for
someone else in the context of an organized service, and a doctor’s integration
into the “context of an organized service” in a hospital or clinic contributes
to making him an employee. A lawyer, who may be an employee since the Law of 1
December 1990, has employee status when he does not have or cannot develop his
own client base.
It does not matter if the worker carries on his professional
activities outside the payer’s premises if he is integrated into the context of
an organized service in the business, nor does it
matter if he is involved in the business only as a term employee while enjoying
the freedom that comes with doing research.
The decisive factor appears to be control of the activity, which is manifested, for instance, in the reporting requirement.
This requirement is a particularly useful and significant indication in view of
modern forms of management by “agreements on objectives”, which give workers
considerable independence in return for the requirement to report on the use
they make of that independence, and which, far from eliminating subordination,
give it a new face.
On the other hand, it is because they enjoy complete freedom in
organizing their work that the following are not bound by a contract of
employment: a tradesman working unsupervised on a work site; a conference
interpreter in the absence of subordination and genuine integration into an
organized service; the organizer of training sessions acting like the head of a
business; a doctor in a mining benefit society who freely determines
his hours for consultation and visits and organizes his work as he sees fit;
a person who, although a member of an association (SOS Médecins), is not
subordinated to it, but works for his own gain. Likewise, an insurance adjuster
who assesses cars damaged in accidents, a technical adviser enjoying total
freedom of action, an academic conducting seminars, who does not have to
report on his activities and has not benefited in any way from the company
structures, and a sports referee escape any form of subordination because their
work is not controlled. The lack of genuine direction and control makes it
doubtful that contracts between companies called “sociétés de portage salarial” and the consultants they take in and “manage” but do not in any
way direct constitute contracts of employment, despite the appearance created.
... [Emphasis added.]
Application to the facts of the appeals
[57]
As we have
seen, the question of law to be decided is clear. In order to determine whether
Mr. Bernier and Ms. Mongeau held insurable employment during the
relevant periods, the question is whether the services they performed were
performed under a contract of service (contract of employment). Section 5
of the Act does not give a definition of a contract of that nature, and
accordingly, under section 8.1 of the Interpretation Act and the Civil
Code of Québec, it must be determined whether there was a relationship of
subordination between them and their respective payors or whether, on the
contrary, they were free to choose the means of performing the services. Once
the right question in issue has been stated, it is easier to answer it. Because
the employment contract does not determine the nature of the contract and the
parties’ testimony was contradictory on this point, we must look to the
parties’ conduct to resolve the issue.
[58]
In my
opinion, both the direct evidence and the proof by presumption of fact clearly
establish that there was a relationship of subordination between the parties to
the contracts in this case. In many appeals heard by this Court, there is often
little direct evidence. The appeals before the Court in this case are the exception,
as was the appeal in Financière Banque Nationale Inc. v. Minister of
National Revenue and Carlo Massicolli, 2008 TCC 624.
[59]
Here, there
is considerable direct evidence showing that the work was performed under the
direction or control of the employers. Moreover, some of that evidence derives
from the reports on an appeal (reports) prepared by the appeals officers
who made the determinations in the two cases. The facts stated in those reports
largely corresponded to the facts proved by the evidence presented at the
hearing.
[60]
I find it
difficult to understand how both appeals officers could have concluded that
there was no contract of employment in these two cases. The most flagrant case
is Ms. Mongeau’s. In his report setting out the explanation given by Ms. Mongeau,
the officer stated, at paragraph 23: [Translation]
“The two parties acknowledged that there was a relationship of subordination
between them.” That is confirmed by paragraph 24, in which the officer
stated that the payor’s representative corroborated Ms. Mongeau’s
statements in their entirety, with the exception of her statement regarding the
initial intention.
[61]
Among the
facts assumed by the Minister in making his determination, paragraph 15(j)
of the Amended Reply to the Notice of Appeal in Ms. Mongeau’s case states
that she followed instructions from the lead cameraman, François Mercier. Paragraph (k)
states that she had to work closely with the production team while keeping to
the schedule established by the payor. According to paragraph (l), Ms. Mongeau
had to arrive on the set at the times set by the director or producer.
Paragraph (n) states that Ms. Mongeau could leave the set only when
the producer gave the order.
[62]
In paragraph 15
of his report, the officer wrote that Ms. Mongeau performed her work [Translation] “under the supervision and
control of the photography director”. In paragraph 15.1, he reiterated
that the lead cameraman gave instructions to Ms. Mongeau. Paragraph 17
states: [Translation] “When asked
whether her work was supervised or controlled, she replied: ‘All my
instructions came from the photography director. I was to leave the set only
when we got the order from the producer. I was to go to the places and at the
times I was told. I had to fill out timesheets.’” In paragraph 21.1, the
appeals officer stated: [Translation]
“[H]ours of work are decided by the producer/director. … The work schedule may
be either in the morning or in the evening, or even at night, depending on the
director’s intentions for filming.”
[63]
Having
obtained confirmation from the parties that there was a relationship of
subordination between Ms. Mongeau and PKI, and having noted that their
statements in that regard were consistent with the facts relating to the
performance of the work, the appeals officer had no choice, in my opinion, but
to conclude that there was a contract of employment, and thus that there was
insurable employment. However, astoundingly, he wrote the following on the
final page of his report, to justify his conclusion to the contrary:
[Translation]
Here, this is really teamwork the goal of
which is a high-quality film production, within a certain timeframe, in
which each participant makes sure that their work is done at the right time under
the control of the producer and without each one necessarily being told
how to do it.
This is all done in an atmosphere of
collaboration among professionals. The workers in this case, therefore, have a
status that is more in the nature of self-employed worker.
For all these reasons, it would be difficult,
and even impossible for me to satisfy any tribunal that Josée
Mongeau was not a self-employed worker and that there was no business
relationship between the two parties.
[Emphasis
added.]
[64]
The officer
in the Bernier case wrote, in paragraph 10 of her report: “The worker
received from the payer every morning an instruction sheet which outlined the
daily working plan and schedule.” In paragraph 11, she said: “The worker’s
daily activities were supervised by the payer.” According to paragraph 12
of the report: “The worker had to fill out time sheets on a weekly basis”. In
paragraph 25, the appeals officer wrote that the payer confirmed “much of
the information” provided by the payer’s representative. Also, in
paragraph 35 of the report, the payer’s representative confirmed: “The
work done by the worker was supervised by the producer.”
[65]
There is no
black and white statement, as in Ms. Mongeau’s case, that there was a
relationship of subordination between Mr. Bernier and FPI, but the appeals
officer could have written that. After setting out the facts referred to above,
the officer in the Bernier case stated conclusions that are as astounding as
those stated by the officer in the Mongeau case
Relationship of subordination:
In this particular situation it is important to
consider the uniqueness of the film industry when examining the
relationship of subordination.
While it is true that the payer set the daily
schedule, it is important to note that is a common practice on
shooting locations. The worker did not perform his duties in isolation. He
was part of a team. As such his activities had to be synchronized with the
rest of the crew. As pointed out by the payer’s representative, the purpose of
the “call sheet” was to ensure an orderly working day. I should not be
looked at as a measure of control.
The nature of the work performed by the worker was such that he
could not be unsupervised or undirected. All workers, regardless of their
status, have to follow the lead and instructions of the producers and
project directors. The final product represented a collaborative guided effort.
It cannot be said that the worker could not contribute his expertise as a
technical director who acted as an independent contractor just because he
followed the lead of the producers and directors.
An analysis of the three essential elements:
performance of work, remuneration and relationship of subordination,
leads us to conclude that there did not exist between the parties a
contract of service as defined by article 2085 of the Civil Code of
Quebec. Therefore, we can conclude that for the period under review the
worker was not employed in insurable employment pursuant to paragraph 5(1)(a)
of the Employment Insurance Act.
[Emphasis
added.]
[66]
Given these
conclusions, which are as illogical as they are astounding, the saying quoted
by my former colleague, Judge Mogan, in Sanford v. Canada, [2000]
T.C.J. No. 801 (QL), [2001] 1 C.T.C. 2273 (Eng.), comes to mind:
17 An
old cliché comes to mind. If a two-legged creature with feathers waddles
like a duck, quacks like a duck, and looks like a duck, it must be a duck.
[67]
In Dynamex
Canada Corp. v. M.N.R., [2010] 3 C.T.C. 2233, at paragraph 31, I quoted a decision of the
California Court of Appeal that adopted the same saying to describe the trial
court’s reasoning in relation to the work done by FedEx employees. I think it
is very applicable in this case as well. If a technical director and a camera
assistant perform services under the direction or control of a payer, and there
is also a relationship of subordination between them and the payer, the
contract between them must be a contract of employment, under article 2085 C.C.Q.
[68]
According
to the testimony of the two appellants and Mr. Joli-Coeur, both appellants
were supervised by their respective payers, whether the production director,
the director or the floor manager, and in Ms. Mongeau’s case, her
cameraman. Both appellants received instructions concerning the job they had to
do (the “what”), the place where they were to perform services (the “where”)
and the schedule they had to follow (the “when”), as the “call sheets” that
were distributed every day during the production period in fact show. Ms. Mongeau
confirmed that she was not entitled to leave the set until she had received
permission from the director. I am satisfied that the same was true for Mr. Bernier,
at least when he was working as a camera assistant. Neither appellant could
take time off without serious reasons, and, in that case they had to inform the
producer. The times when they could have meals were decided by their directors.
Both appellants were subject to a degree of control that is not generally found
in many other businesses. Examples are part-time teachers or teachers working
as tutors, who were held in NCJ Educational Services Limited v. Canada (M.N.R.),
2009 FCA 131 to be employees, or the case of Mr. Grimard (referred to supra),
a specialist physician whose job consisted of working as an assessor with the
Commission des lésions professionnelles.
[69]
In addition
to the direct evidence of the right of direction and control exercised by the
two payers in these cases, there is the evidence by presumption of fact, that
is, the circumstantial evidence. This includes the fact that the workers were
not entitled to have someone replace them, other than with the payer’s
permission. There are also the indicia of supervision described by the late
Robert P. Gagnon: mandatory presence at a workplace, regular assignment of
work, reporting requirement. The fact that most of the tools needed for the
production were supplied by the production firms supports the hypothesis that
the payer exercised a right of direction or control over the workers. The fact
that the workers supplied small tools, such as a screwdriver, scissors, chalk
and a clapper board, is not a good indication that they were free to choose the
means of performing the contract. The fact that both workers had to work as
part of a team to perform the work is, in my view, an excellent indication of
supervision, and eliminates, or at least significantly reduces, the possibility
that the technical director (Mr. Bernier) and the camera assistant (Ms. Mongeau)
were free to choose the means of performing the work. On the contrary: the fact
that a worker works as part of a filming team implies inherent subordination,
and accordingly shows that the worker is required to perform services under the
direction or control of the payer.
[70]
As
precedents, the appeals officer in the Mongeau case cited the decisions in Tambeau
and Productions Petit Bonhomme Inc. The officer in the Bernier case
cited only Tambeau. In my opinion, the officers committed an error of
law in applying the relevant rules. The fact that although the first officer
acknowledged that the hallmark of a contract of service is not the fact that
control is actually exercised but the fact that the payer has the power to
exercise it, he then said that the members of the technical team did their work
under the control of the producer even though the producer did not necessarily
tell each of them “how” to do it, is extremely surprising and supports my
conclusion. The fact that the evidence as to the “how” is weak or scarce does
not mean that the payer was not entitled to give instructions as to the “how”.
In fact, when Ms. Mongeau was questions about this, she said that she
received instructions as to “how” to arrange the camera, and that the director
might change his mind several times. Moreover, I have no doubt that if the
producer had seen Ms. Mongeau moving the camera in a dangerous way that
might have damaged it, he would not have hesitated to tell her how to move it.
That piece of equipment was not supplied by Ms. Mongeau.
[71]
One
possible explanation for the officer’s conclusion that Ms. Mongeau’s
conduct was more like the conduct of self-employed workers is that he felt
bound by the decision of the Federal Court of Appeal in Productions Petit
Bonhomme Inc. As noted earlier, that decision was made before the decision
in Tambeau, in which Justice Décary, Justices Pelletier and
Létourneau concurring, concluded that there were vacillations in the case law,
“to which it is now time to put an end” (paragraph 2 of the decision). In
my opinion, not only the direct evidence, but also the evidence by presumption
of fact (circumstantial evidence), clearly establishes that there was a
relationship of subordination between the appellants and their respective
payers.
[72]
Another
possible explanation for the decisions made by the two appeals officers is the
longstanding controversy in Canada as to how artists, actors and technicians
are treated in the audiovisual industry. In fact, special legislation such as
the PSA has had to be enacted to protect these people, who were denied employee
status. That Act is intended to give “artists”, as defined in that Act, the
right to join an association similar to a union to defend and promote their
economic, social, moral and professional interests, including by negotiating a
group agreement (sections 24 and 27 PSA). For the purposes of the PSA,
sections 6 and 12 define artists as including persons who regularly bind
themselves to one or several producers by way of contracts pertaining to
specified performances. The Act does not provide that the general law
provisions of the Civil Code are not applicable to those persons. Like the
provisions of the Act respecting labour standards, R.S.Q., c. N‑1.1
and the Labour Code, R.S.Q., c. C‑27, the provisions of the
PSA are not relevant for the purposes of applying section 5 of the Act.
Those statutes are intended to give workers greater protection by providing
them with more generous employment standards and allowing them to join together
to better defend their economic interests. They are not meant to strip
“artists” of their right to be considered as “employees” for the purposes of
the Civil Code and make them ineligible for the employment insurance
benefits offered by the Act.
[73]
Although it
was not cited in the reports to justify the conclusion reached by the two
appeals officers, there is another hypothesis that might explain their
decisions: that the appellants are audiovisual technicians whose employment
contracts are often short-term. Ms. Mongeau said that this might be from
one day to three months. Her contract with PKI lasted only five days. But when
we read the relevant provisions of the Civil Code, we see, in
article 2086, that an employment is for a fixed term or an indeterminate
term. Accordingly, there is no reason why a contract signed by the appellants cannot
be short-term. As is willingly acknowledged in the legal literature: [Translation] “the duration [of an
employment contract can be] prolonged or very brief”. As
well, there is no rule in the Civil Code that states that if a contract of
employment is for a term of less than 14 weeks or six days it becomes a
contract for services.
[74]
Nonetheless,
I would like to point out that if the direct evidence of a relationship of
subordination is inadequate, the length of a contract may then be
circumstantial evidence. The longer the contract, the more it might be thought
that it is a contract of employment. The shorter a contract, the more it might
be thought that it could be a contract for services. A short term could suggest
that the worker is not subject to the direction or control of the payer.
However, that would not be one of the indicia of the existence or absence of a
relationship of subordination. The presence of a particular indication is not
conclusive evidence. As Professor Ducharme said in the passage quoted supra:
[Translation] “Indicia in themselves
prove nothing”. For example, if a taxi driver was required to be present to
transport one of the production team members, or a star, during filming, brief
presence on the set might be an indication of self-employment, while ongoing
presence during filming on the set might be an indication of subordination.
[75]
Moreover,
persons who perform audiovisual technician duties, including technical director
duties, are subject to the same general law rules as other workers. There is
nothing in the Civil Code to exclude the work performed by actors and
audiovisual technicians from employment contracts. There is no distinction
based on the nature of the work to be performed. Accordingly, as we saw in the
literature cited supra, a film director and an artist may be considered
to be employees, just as may be a sports professional (such as a hockey or
soccer player). It is self-evident that a technical director working on a film
production may also be considered to be an employee if there is a relationship
of subordination, even if he is not able to join a union.
[76]
We must
therefore ask what the reason is for the attitude that leads to a desire to
treat people in the film, theatre or dance industry as if they were different
from workers in other industries? Why not treat them like other workers, since
the Civil Code makes no distinction? I think the answer given by the Privy
Council 81 years ago, on October 18, 1929, in the famous decision in Edwards
v. A.G. for Canada, [1930] A.C. 124, at page 138, is
applicable here. In that decision, the Privy Council, which held that women
were “persons” and could therefore be appointed to the Senate, made this
comment: “The word ‘person’ as above mentioned, may include members of both
sexes, and to those who ask why the word should include females the obvious
answer is why should it not?” [Emphasis added.] Here, Mr. Bernier testified
that his work was supervised by the production manager and that he might
receive his instructions either from her or from the director or the floor
manager. Why could a technical director not be treated like any director of a
department in a manufacturing company, and be considered to be an employee?
[77]
If Mr. Bernier
and Ms. Mongeau had performed exactly the same services, the first as
technical director and the second as camera assistant, in the same
circumstances, except as full-time employees of a Crown corporation such as the
Canadian Broadcasting Corporation, no one would have thought that these two
workers were self-employed workers. Would the fact that they agree to work
under fixed-term contracts, for brief periods, mean that they were no longer
considered to be employees? If a relationship of subordination exists, as is
the case here, why would these two people not enjoy the protection of the Act,
given the precarious nature of their work? If there is one type of employment
contract that deserves the protection of employment insurance, certainly it is
the employment of these workers, who work in a context governed by the business
model adopted for producing television series or film productions.
[78]
In light of
Mr. Joli-Coeur’s testimony, it is somewhat revealing to note that FPI was
prepared to consider the camera assistants to be employees if its budget
allowed. The determination of the nature of a contract does not depend on a
budget existing; it depends on specific conditions being met, including, in
this instance, the existence of a relationship of subordination. When that
relationship of subordination exists and the other two necessary conditions for
there to be a contract of employment are met, that contract exists. As set out
in article 2099 of the Civil Code, the existence of relationship of
subordination prevents there from being a contract of enterprise or for
services. Again, whether there is a contract of employment has nothing to do
with the length of the work or the nature of the work performed.
[79]
For all
these reasons, the appeals by Mr. Bernier and Ms. Mongeau are allowed
and the determinations by the Minister are varied as follows: Jacques Bernier
was engaged in insurable employment during the relevant Bernier period and Ms. Mongeau
was engaged in insurable employment during the relevant Mongeau period.
Signed
at Ottawa, Canada, this 17th day of February 2011.
“Pierre Archambault”
Translation certified true
On this 31sth day of May 2011
Monica F.
Chamberlain, Reviser
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