Citation: 2010 TCC 280
Date: 20100614
Docket: 2009-3652(EI)
BETWEEN:
ALAIN BERNIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
MICHAEL GOUGEON,
Intervener.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Angers J.
[1]
The
appellant is appealing the decision of the Minister of National Revenue (the
Minister) dated September 10, 2009, stating that the employment of
Michel Bokwala‑Ngilima and Michael Gougeon with
Alain Bernier (Entretien Ménager ADM enr.) during the period between
January 1, 2007, and December 31, 2008, was insurable
within the meaning of paragraph 5(1)(a) of the Employment
Insurance Act (the Act). Michael Gougeon is the only intervener in
this appeal.
[2]
It is
thus up to the appellant to demonstrate on the preponderance of the evidence
that the Minister's decision is unfounded in fact and in law.
[3]
The
appellant is the sole proprietor of a business, which he operates under the
name Entretien Ménager ADM enr. (the payer). The business has been in operation
since 1999. It provides cleaning services to restaurants and bars in the Québec
area. According to the payer, it established the negotiated rate with its
clients based on its own assessment of the work to be done. The price was not
negotiated based on the size of the establishment or the amount of work to be
done but rather based on [Translation]
"eyeballing", to use the payer's expression.
[4]
The
payer was paid monthly by its clients, and it provided mops, vacuum cleaners,
stepladders and all cleaning products.
[5]
In
order to perform the work, the payer employed workers including the two workers
involved in this appeal. The worker Bokwala‑Ngilima worked full time for
the appellant for 5 or 6 years and was assigned mainly to three establishments.
His task was to clean those three establishments, including the bathrooms, and
to vacuum. He worked Tuesday to Sunday from midnight to 7 or 8 a.m. and during
the holiday season. Sometimes he had to travel from one establishment to
another during his work shift. He was paid between $11 and $12 per hour.
[6]
The
same work conditions apply to the worker Michael Gougeon, who is the intervener
in this appeal. He was in the appellant's service part time for 3 or 4 years
and worked from midnight to 7 or 8 a.m. on Saturday and Sunday. He was paid
$13.50 per hour.
[7]
All
workers had to mark down their time of arrival and departure for each establishment
they went to on timesheets provided by the payer for that purpose. They were
paid every two weeks by cheque issued by the payer. It was admitted that they
all used tools and products provided by the payer to perform their tasks and
that none of them incurred expenses in carrying out their tasks in the payer's
service. The clients' complaints could be addressed to the workers, but the
payer assumed responsibility for them.
[8]
In its
testimony, the payer stated that it had signed more cleaning contracts than it
was able to fulfill. It stated that it therefore sub-contracted the two workers
to do the remainder of the work. According to the payer, the two workers were
in charge of their schedules and could have had others do their work. They were
also free to work the hours that suited them provided that the work was done
before the establishments in question opened. It maintains that it exercised no
control over the way they performed their work and that there were no
consequences or reprisals if they did not come to work.
[9]
In
cross-examination, the payer acknowledged that it established the rate of pay
and that it gave instructions concerning the work to be done. It was also on
the premises with the workers to do its part of the work.
[10]
The
only other witness was the intervener, Michael Gougeon. He maintains that he
had negotiated his pay of $13.50 per hour, that he worked the number of hours
he wanted and that it was to supplement his income. He does not consider that
he was under contract with the payer given that he did not pay employment
insurance premiums.
[11]
Sylvie
Munger is a complex case and technical review officer at the Ministère de
Revenu. She was assigned to analyze this case. She interviewed the payer and
the two workers, and the questionnaires used were filed in evidence. Among the
answers, she retained the fact that the payer provided training to the workers
and that they were paid for the time that it took up. It was the payer who
assigned tasks and set standards respecting quality, quantity and timelines
that had to be followed. The workers also answered that Mr. Bernier
supervised the work and made important decisions. The workers could not decide
not to come to work without first informing the payer and it was the payer who
found a replacement. The two workers and the payer answered yes to the
question of whether the payer was able to dismiss a worker.
[12]
The
following statutory provisions are relevant to the resolution of the instant
appeal:
Interpretation Act
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.
Civil Code of Québec
1425. The common intention of the parties rather
than adherence to the literal meaning of the words shall be sought in
interpreting a contract.
1426. In interpreting a contract, the nature of the
contract, the circumstances in which it was formed, the interpretation which
has already been given to it by the parties or which it may have received, and
usage, are all taken into account.
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.
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.
[13]
In a
recent decision of the Federal Court of Appeal, NCJ Educational Services Ltd.
v. Canada, [2009] F.C.J. No. 507, Justice Desjardins wrote about the
background to the concept of subordination found in the Civil Code of Québec
by referring to the author Robert Gagnon (Le droit du travail du Québec,
6th edition), and to the fact that, in the latest edition of his work, certain
indicia are added that make it possible to conduct an analysis similar to that
which applies in common law. The relevant passage reads as follows:
[Translation]
92 - Concept - Historically,
the civil law first developed a so-called strict or classical concept of
legal subordination that was used as a test for the application of the
principle of the civil liability of a principal for injury caused by the fault
of his agents and servants in the performance of their duties
(art. 1054 C.C.L.C.; art. 1463 C.C.Q.). This classical legal subordination
was characterized by the immediate control exercised by the employer over the
performance of the employee’s work in respect of its nature and the means of
performance. Gradually, it was
relaxed, giving rise to the concept of legal subordination in a broad sense.
The diversification and specialization of occupations and work techniques often
mean that the employer cannot realistically dictate regarding, or even directly
supervise, the performance of the work. Thus, subordination has come to be
equated with the power given a person, accordingly recognized as the employer,
of determining the work to be done, overseeing its performance and controlling
it. From the opposite perspective, an employee is a person who agrees to be
integrated into the operating environment of a business so that it may receive
benefit of his or her work. In practice, one looks for a number of indicia of supervision that may,
however, vary depending on the context: compulsory attendance at a workplace,
the fairly regular assignment of work, imposition of rules of conduct or
behaviour, requirement of activity reports, control over the quantity or
quality of the work done, ownership of tools, chance of profit, risk of loss
and so on. Work in the home does not preclude this sort of integration into the
business.
[14]
Justice
Létourneau of the Federal Court of Appeal cited the same passage in Grimard
v. Canada, [2009] F.C.J. No. 167, as Justice Décary did in Wolf v. The
Queen, [2002] 4 F.C. 396, and added the following at paragraphs 37 to 43:
This excerpt mentions the
notion of control over the performance of work, which is also part of the
common law criteria. The difference is that, 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: see D&J Driveway,
supra, at paragraph 16; and 9041-6868 Québec Inc. v. Canada (Minister of National Revenue), 2005 FCA 334.
However, we may also note in
the excerpt from Mr. Gagnon that, in order to reach the conclusion that
the legal concept of subordination or control is present in any work
relationship, there must be what the author calls [Translation] "indicia of supervision", which
have been called "points of reference" by our Court in Le Livreur
Plus Inc. v. MNR, 2004 FCA 68 at paragraph 18; and Charbonneau v. Canada
(Minister of National Revenue – M.N.R.), (1996), 207 N.R. 299, at paragraph
3.
For example, under Quebec civil law, integration of a worker within a business
is an indicator of supervision that is important or useful to find in order to
determine whether legal subordination exists. Is that not also a criterion or a
factor that is used in common law to define the legal nature of an existing
employment contract?
Likewise, as a general rule, it
is the employer and not the employee who makes the profits and incurs the
losses of the business. In addition, the employer is liable for the employee's
actions. Are these not practical indicators of supervision, indicating the
existence of legal subordination in Quebec civil law as
well as in common law?
Finally, is the criterion of
the ownership of work tools that is used by the common law not also an
indicator of supervision that would be useful to examine? Depending on the
circumstances, it may reveal the degree of an employee’s integration into the
business or his or her subordination to or dependence on it. It may help to
establish the existence of legal subordination. In a contract of employment,
more often than not, the employer supplies the employee with the tools required
to perform the work. However, it seems to me to be much more difficult to
conclude that there is integration into a business when the person performing
the work owns his or her own truck with his or her name advertised on the side
and containing some $200,000 worth of tools to perform the tasks that he or she
does and markets.
It goes without saying, in
both Quebec civil law and common law, that, when
examined in isolation, these indicia of supervision (criteria or points of
reference) are not necessarily determinative. For example, in Vulcain Alarme
Inc. v. Canada (Minister of National Revenue – M.N.R.), [1999] F.C.J. No.
749, (1999), 249 N.R. 1, the fact that the contractor had to use expensive
special detection equipment supplied by the client to check and gauge toxic
substance detectors was not considered to be sufficient in itself to transform
what was a contract for services into a contract of employment.
In short, in my opinion there is no antinomy between
the principles of Quebec civil law and the so-called common law
criteria used to characterize the legal nature of a work relationship between
two parties. In determining legal subordination, that is to say, the control
over work that is required under Quebec civil law for a contract of employment
to exist, a court does not err in taking into consideration as indicators of
supervision the other criteria used under the common law, that is to say, the
ownership of the tools, the chance of profit, the risk of loss, and integration
into the business.
[15]
This
being said, it must thus be determined whether the facts of the case will make
it possible for me to find that the two workers did work for remuneration
according to the instructions and under the direction or control of the
appellant, thus performing insurable employment within the meaning of the Act
under a contract of employment.
[16]
In
this case, there was work performed by the two workers for which they were
paid. In regard to the claim that there was no relationship of subordination,
or direction or control of the two workers, neither the evidence heard nor the
answers obtained during meetings support the appellant's claim.
[17]
The
workers first underwent training provided and paid for by the payer; their work
schedule met the payer's needs; and most of the time, they worked together in
the same location, at the same time and at the same client's establishment. In
my opinion, this is far from a contract for services. The workers also had to
keep track of their time using forms provided by the payer for that purpose.
Work hours were established, and each worker had to be at work during the hours
required to do his work. Based on the questionnaires, they were hired by the
payer, and it assigned them their tasks and supervised them. The important
decisions were made by the payer.
[18]
The
evidence showed that the payer provided the workers with all tools and products
necessary to carry out their work. The two workers did not assume any financial
responsibility, and therefore, they had no chance of profit or risk of loss.
[19]
In
light of all of the evidence, I find that in this case contracts of employment
within the meaning of the Act existed between the payer and Mr. Bokwala‑Ngilima
and Michael Gougeon during the period from January 1, 2007, to
December 31, 2008.
[20]
Accordingly,
the appeal is dismissed and the Minister's decision is confirmed.
Signed at Ottawa, Canada, this 14th day of June 2010.
"François Angers"
on this 14th day
of July 2010
Margarita
Gorbounova, Translator
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