Citation: 2010 TCC 340
Date: 20100621
Dockets: 2009-3135(CPP),
2009-3137(EI)
BETWEEN:
VIPAN K. BANSAL,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
ALBERTA
MOTOR ASSOCIATION,
Intervener.
REASONS FOR JUDGMENT
Bédard J.
[1]
These appeals are from
decisions by the Minister of National Revenue (the “Minister) under the Canada
Pension Plan (“CPP”) and the Employment Insurance Act (the “Act”)
that during the period from January 1, 2008 to October 21, 2008 (the
“Relevant Period”) the Appellant was not employed by the Alberta Motor
Association (the “Payor”) in pensionable and insurable employment.
[2]
The Payor carried on, inter
alia, a business of training and providing instruction to clients who
wanted to obtain vehicle operator’s licences. The Payor hired the Appellant as
a driving instructor.
[3]
The Appellant’s
position is that he was employed under a contract of service.
[4]
Each case in which the
question of whether a person is an employee or an independent contractor arises
must be dealt with on its own facts. The four components of the composite test
enunciated in Wiebe Door Services Ltd. v. M.N.R., 87 DTC 5025, and 671122 Ontario
Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983, must each
be assigned its appropriate weight in the circumstances of the case. Moreover,
the intention of the parties to the contract has in recent decisions of the
Federal Court of Appeal become a factor whose weight seems to vary from case to
case (Royal Winnipeg Ballet v. M.N.R., 2006 FCA 87; Wolf v.
Canada, [2002] 4 F.C. 396; City Water International Inc. v. Canada,
2006 FCA 350; National Capital Outaouais Ski Team v. M.N.R.,
2008 FCA 132).
[5]
The facts on which the
Minister relied to render his decisions in the EI case (2009‑3137(EI))
and in the CPP case (2009‑3135(CPP)) are set out in paragraph 5 of each
Reply to the Notice of Appeal as follows:
a.
the Payor operated as a membership based
association; (admitted)
b.
the Payor had clients who wanted to obtain motor
vehicle operator’s licences; (admitted)
c.
the Appellant was hired as a driving instructor;
(admitted)
d.
the Appellant’s duties included accepting or
rejecting students, contacting students, scheduling training, picking up
students, providing instruction and record keeping; (denied)
e.
the Appellant entered into a written contract
with the Payor which stated that the Appellant was a contractor and not an
employee; (admitted)
f.
the Appellant performed his services in his
vehicle; (denied)
g.
the Appellant had been under contract with the
Payor since 2006; (admitted)
h.
the Appellant earned a set fee of $26.00 per
hour; (admitted)
i.
the Appellant’s hourly fee was negotiable; (denied)
j.
the Appellant also received fees for new
bookings, student home pickups and a fuel subsidy; (admitted)
k.
the Appellant invoiced the Payor; (admitted)
l.
the Appellant did not receive any employee
benefits such as health, dental or vacation pay; (admitted)
m.
the Payor did not guarantee the Appellant a
minimum amount of pay; (admitted)
n.
the Payor’s hours of operation were from 8:00AM
to 5:00PM, Monday to Saturday; (admitted)
o.
the Appellant did not have a set schedule of
hours or days of work; (denied)
p.
the Appellant set his own schedule of hours and
days of work; (admitted)
q.
the Appellant could work anytime between 8:00AM
and 10:00PM, Monday to Sunday; (admitted)
r.
the Appellant did not have a set minimum number
of hours of work required; (admitted)
s.
the Appellant kept a record of his hours worked;
(admitted)
t.
the Payor did not direct the Appellant: (denied)
u.
the Payor did not supervise the Appellant; (denied)
v.
the Appellant set his own priorities and
deadlines; (denied)
w.
the Payor provided the Appellant with the names
of the students; (admitted)
x.
the Appellant contacted the students and
scheduled the road instruction; (admitted)
y.
the Appellant had the right to refuse work; (denied)
z.
the Appellant was not required to report to the
Payor’s premises; (denied)
aa.
the Appellant did not provided [sic]
services at the Payor’s premises; (denied)
bb. the Payor provided the Appellant with an in-vehicle lesson guide; (admitted)
cc.
the Appellant chose his own method of teaching; (denied)
dd. the Appellant chose the routes for the lessons; (admitted)
ee.
the Appellant was able to hire his own helper
for administrative tasks; (admitted)
ff.
the Appellant did not require the Payor’s
approval for leave; (denied)
gg.
the Appellant provided the major tool which was
the vehicle; (admitted)
hh.
the Payor provided vehicle signage, mirrors, traffic
cones and an emergency brake; (admitted)
ii.
the Appellant paid for the installation and
removal of the emergency brake provided by the Payor; (admitted)
jj.
the Appellant incurred operating expenses
including vehicle expenses, liability insurance and a driver training
endorsement; (admitted)
kk. the Appellant’s vehicle expenses included insurance, maintenance and
fuel; (admitted)
ll.
the Appellant had a chance of profit and a risk
of loss; (denied)
mm.
the Payor’s intention was that the Appellant was
a contractor and not an employee; (admitted)
nn.
the Appellant had a GST number; (admitted)
oo. the Appellant charged the Payor GST; (admitted)
pp. the Appellant had operated his own taxi business since 1990; (admitted)
qq. the Appellant maintained his own business books and records; (admitted)
rr.
the Appellant declared business income and
business expenses on his 2006, 2007 and 2008 income tax returns, and (admitted)
ss.
the Appellant was in business for himself while performing
services for the Payor. (denied)
[6]
The Appellant and
Mr. Richard James Lang, the Payor’s manager, were the only two witnesses.
Appellant’s testimony
[7]
The Appellant first
talked about the Payor’s requirement that he works a minimum of 20 hours a
week. He added that his relationship with the Payor was terminated because in
2007 he began having health problems that prevented him from meeting the
20 hours requirement (the “20 hours requirement”). The Appellant went on
to reaffirm that his chances of profit and risk of loss were nil.
[8]
The Appellant added
that he was required by the Payor to attend meetings on the Payor’s premises
and to pick up clients, likewise at those premises.
[9]
The Appellant also
explained that, since he was not in a position of equality in bargaining with
the Payor, he signed the two contracts (Exhibits R‑2 and R‑3)
without negotiating. In other words, he said that people who wanted to work for
the Payor as driving instructors had to sign the Payor’s contract as is and
consequently had to accept the Payor’s legal characterization of that contract.
The Appellant added that he intended the relationship to be one of employment.
Finally, he testified that he still did not understand the meaning of some of
the provisions of the contracts.
[10]
The Appellant explained
as well that he was required by the Payor to attend a six‑week training
session before giving lessons to the Payor’s clients. He added that he could
not choose his own method of teaching since he had to comply with all of the
instructions contained in the Payor’s In-Vehicle Instructor’s Guide (the
“Guide”) (Exhibit R‑5). He also testified that four times a year the
Payor’s chief instructor rode along with him to verify that he was complying
with all the instructions contained in the Guide.
Mr. Lang’s testimony
[11]
Mr. Lang, whose
testimony seemed credible, first talked about the 20 hours requirement. He
simply said that there was no such requirement but that he suggested to all the
driving instructors (that were not employees) that they work at least
20 hours a week since their businesses could not be profitable if they
were not doing so.
[12]
Mr. Lang added
that the training session, the supervision by the chief instructor and most of
the instructions contained in the Guide were required under the Alberta transportation regulations.
[13]
Mr. Lang also
explained that the Payor had during the Relevant Period (and still has) a
certain number of driving instructors having employee status. He said that the
work performed by those employees was similar to that performed by the
Appellant. However, he explained that, contrary to the Appellant, those
employees bore no risk and had no chance of profit since they were performing
their services in the Payor’s cars and were not incurring operating expenses (including
vehicle expenses, liability insurance and a driver training endorsement). He
added that, unlike the Appellant, those employees did have a set schedule of
hours and days of work, could not refuse to work and were under constant
supervision.
[14]
Finally, Mr. Lang stated
that the gross income of the Payor’s driving instructors having independent
contractor status varied during the Relevant Period from $10,000 to $100,000.
[15]
The evidence also
revealed that often, during the years 2006, 2007 and 2008, the Appellant did
not work 20 hours a week (see Exhibit R‑4). I would point out
that the contracts (Exhibits R‑2 and R‑3) do not contain a
requirement to work 20 hours.
Analysis and conclusion
[16]
I wish to begin with a
few observations concerning the intention factor. First of all, if the intent
of the parties is to be a determinative factor or a tie‑breaking factor, the
intent must be shared by both parties. In other words, if there is no meeting
of the minds and the parties are not ad idem, intent cannot be a factor.
My second observation is that, where the intention of the parties cannot be
ascertained (which is the case here), it is quite proper, indeed necessary, to
look at all the facts to see what legal relationship they reflect. In that
regard, the four components of the composite test enunciated in Wiebe Door
are relevant and helpful in ascertaining the intent of the parties to the
contract and the legal nature of the contract.
[17]
Turning now to the
facts, what factors suggest that the Appellant was in business on his own
account?
Tools
i.
He provided his own
car.
Risk of loss
ii.
He had liability
exposing him to a risk of loss.
iii.
The Appellant had
vehicle expenses, including insurance, maintenance and fuel.
iv.
The Appellant also
incurred operating expenses such as liability insurance and a driver training
endorsement.
v.
The Appellant also paid
for the installation and removal of the emergency brake provided by the Payor.
Chance of profit
vi.
The more hours (over
20) the Appellant worked the greater were his chances of profit, which was not
the case for the driving instructors having employee status since they were
limited in the number of hours they could work.
Control
vii.
The Appellant did not
have a set schedule of hours or days of work. It seems to me that the
Appellant’s testimony regarding the 20 hours requirement was not very
credible (see paragraphs 11 and 15 of these reasons). The Appellant's
testimony that non‑compliance with the 20 hours requirement would
trigger the termination of the contract was not any more so since in the years
2006, 2007 and 2008 he often did not meet this requirement and yet the contract
was not terminated.
viii.
He could chose the
routes for the lessons.
ix.
He could work for
anyone else (except as a driving instructor) during the Relevant Period.
Behaviour as an
entrepreneur
x.
He behaved like an
independent contractor in that he invoiced the Payor, charged the Payor GST,
maintained his own books and records, and reported business income and business
expenses on his 2006, 2007 and 2008 income tax returns.
[18]
Now let us look at the factors
suggesting that the worker was an employee.
Tools
i.
The Payor provided
vehicle signage, mirrors, traffic cones and an emergency brake.
Control
ii.
The Payor provided the
Appellant with a guide and the Appellant had to comply with all the
instructions therein regarding the method of teaching.
iii.
The Appellant could not
have someone replace him.
[19]
Here we have an
Appellant who, if I accept his testimony, was an employee (even though he
behaved for a number of years like an independent contractor), and yet he performed
his services in his own vehicle, paid for the installation and removal of the
emergency brake provided by the Payor, incurred operating expenses, including
vehicle expenses (insurance, maintenance and fuel), paid for liability
insurance and a driver training endorsement, effectively had exposure to all kinds
of liability, did not have a set schedule of hours or days of work and could,
in a way, set his own deadlines and priorities. I cannot find in these
circumstances that the existence of some degree of control by the Payor over
the Appellant outweighs the overall view that the Appellant was in business on
his own account.
[20]
For these reasons, the
appeals are dismissed.
Signed at Ottawa, Canada, this 21st
day of June 2010.
“Paul Bédard”
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