Dockets: 2010-2938(CPP)
2010-2939(EI)
BETWEEN:
DOUGLAS NORMAN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
____________________________________________________________________
Appeal heard on April 13, 2011 at Edmonton, Alberta
By: The Honourable Justice Judith Woods
Appearances:
|
Agent for the Appellant:
|
Joan
Bone
|
|
Counsel for the Respondent:
|
Mary Softley
|
____________________________________________________________________
JUDGMENT
The appeal, with respect to decisions of the Minister of
National Revenue made under the Employment Insurance Act and the Canada
Pension Plan that Kevan Simms was engaged in insurable and pensionable
employment with the appellant during the period from June 1 to September 8,
2009, is allowed, and the decisions are vacated.
Each party shall bear their own costs.
Signed at Ottawa, Ontario this 19th
day of April 2011.
“J. M. Woods”
Citation: 2011 TCC 217
Date: 20110419
Dockets: 2010-2938(CPP)
2010-2939(EI)
BETWEEN:
DOUGLAS NORMAN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
In this appeal under the Employment
Insurance Act and the Canada Pension Plan, Douglas Norman is
challenging decisions of the Minister of National Revenue that Kevan Simms (the
“Worker”) was engaged by him as an employee. The appellant submits that the
Worker was an independent contractor.
[2]
The period at issue is from June 1
to September 8, 2009.
[3]
The legal principles to be applied
in a case such as this are well known. At their core, it is necessary to
determine whether the Worker was in business for himself. The factors from the
often cited Wiebe Door decision, control, chance of profit, risk of
loss, and ownership of tools, should be among the factors considered. Further,
if the parties have a mutual intention that their relationship be one of
independent contractor or employment, this will govern provided that the
relationship is consistent with this intent.
Analysis
[4]
The appellant operates a roofing
business as a sole proprietorship. The roofing jobs are done in teams of approximately
two to seven people. The Worker was in high school at the relevant time and
worked for the appellant during the summer.
[5]
The business is organized on the
basis that all members of the team are independent contractors. The appellant
testified that he wishes to avoid as much paperwork as possible. The team
members understand that they are responsible for obligations relating to income
tax, Canada Pension Plan and GST.
[6]
The business operations are
generally consistent with this intent. In particular:
(a)
The team members are not under any
commitment to work exclusively for the appellant or to work on any particular
job.
(b)
The work generally comes from a
small number of contractors that are well known to the appellant and the other
senior workers. The appellant selects the roofing jobs from among the requests
that he has.
(c)
A team approach is taken to the
performance of the jobs. The team members generally participate in the
decision-making on the job site.
(d)
Each worker receives an hourly
wage that varies depending on his experience. The team members then share
equally in the remaining net profit earned on each job.
(e)
The tools are purchased by the
appellant but are part of the expenses that are shared equally. The team
members are free to use these tools in other jobs.
[7]
It is clear in my view that most
team members are not engaged as employees. Their intent is very clear, and the working
conditions have been established to be consistent with it.
[8]
The question that remains is
whether the Worker is in a different category. The difficulty arises because
the Worker is young, inexperienced and had a low level job. Counsel for the
respondent suggests that the hallmarks of an independent contractor relationship
are not present because of this.
[9]
I would agree with the respondent
that the Worker was in a different position than the senior team members. He
was junior man on the team and his ability to participate in the general
decision-making was quite limited.
[10]
Although the Worker’s position was
different, he also was an independent contractor in my view. I will first
consider some of the assumptions made by the Minister. Many of the assumptions
were rebutted by the testimony of the Worker, who was the respondent’s own
witness.
[11]
The Minister assumed that the
appellant provided transportation for the Worker to the jobsites. Based on the
Worker’s testimony, I accept that this assumption has been rebutted.
[12]
Second, the Minister assumed that
the Worker was instructed as to his hours and days of work. The Worker
testified that he generally had freedom not to work on a particular job, except
where it was a large job. He also indicated that there would not be
consequences if he did not arrive at the jobsite at the start time that the
team had agreed upon. This assumption has also been rebutted.
[13]
Third, the Minister assumed that
the appellant instructed and supervised the Worker. The nature of the job
undertaken by the Worker did not require much supervision. His tasks were
narrowly defined – ripping off shingles and cleaning up the jobsite. The Worker
testified that he received general instructions at the beginning of the job but
after that there was no supervision. This assumption was also rebutted by the
respondent’s witness.
[14]
Fourth, the Minister assumed that
the Worker was paid a set hourly wage. The Worker testified that he had
received large bonuses, which increased his pay on average from his hourly rate
of $16 to over $21. The Worker was not aware of the precise calculations of the
bonus, but he knew that the bonus depended on what was earned on the particular
job. The assumption has been rebutted.
[15]
Fifth, the Minister assumed that
the Worker’s intent was employment. His testimony clearly indicated otherwise.
[16]
I asked the Worker whether he had
applied for employment insurance benefits in relation to his work for the
appellant. He testified that he had, but only because a case manager had urged
him to do so even though the Worker believed that he did not qualify.
[17]
Counsel for the respondent submits
that the appellant had the ability to control how the work was done given the
Worker’s lack of experience and that the profit element was not important
because the Worker had little influence over how much profit was earned.
[18]
These arguments have some merit,
but in my view it is putting the bar too high. The appellant operates a
long-established business which has been clearly organized to avoid entering
into employment relationships with team members. In my view, the appellant has
taken sufficient steps to enable the relationship with the Worker to be on the
same footing as the other team members.
[19]
The appeal will be allowed, and
the decisions of the Minister that Kevan Simms was engaged in insurable and
pensionable employment will be vacated. Each party shall bear their own costs.
Signed at Ottawa,
Ontario this 19th day of April 2011.
“J. M. Woods”
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