Citation: 2007TCC443
Date: 20070802
Dockets: 2006-2450(EI)
2006-2680(CPP)
BETWEEN:
WOODCOCK YOUTH CENTRE LIMITED,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Sheridan, J.
[1] The Appellant, Woodcock Youth Centre Limited, is
appealing the decision of the Minister of National Revenue that during the
period September 5, 2004 to June 16, 2005, the worker, Leslie McCoy, was working
as an employee, rather than an independent contractor.
[2] The Minister’s
assessment was based on the assumptions of fact set out in paragraph 11 of the
Reply to the Notice of Appeal:
(a) the
Appellant operates a group home for boys funded by the Children's Aid Society;
(b) the
Appellant's sole shareholder is Aliza Woodcock;
(c) there
are two separate facilities, one known as Woodcock Youth Centre and
the other as Cedar Haven Youth Centre;
(d) the
Appellant engages the services on individuals known as "Group parents"
or "House parents" to provide 24 hour coverage at each facility;
(e) in
addition to the "House parents", the Appellant also utilizes the
services of a company known as "Connor Homes" to assist in
the operation of their group homes;
(f) the
Worker was hired as "Relief Worker", under a verbal agreement till February
2005 at which time a written agreement was signed;
(g) the
Worker was hired to personally complete duties as a supplement to those
performed by the "House parents";
(h) the
Worker performed her duties at different locations;
(i) the
Worker was paid at the rate of $10.00 per hour;
(j)
the Worker was paid by cheque to her personal name, on a monthly basis;
(k) the
Worker's rate of pay was determined by the Appellant's shareholder;
(l) the
Worker worked variable hours between 6:00 am to 11:00 pm as scheduled by
the Appellant;
(m) the
Worker's hours of work were recorded on timesheets;
(n) the
timesheets had to be approved by the "House parents" before submitting
them to the Appellant's shareholder;
(o) the
Worker was provided with training by Connor Homes;
(p) the
Worker was supervised by the "House parents" on duty at that time;
(q) the
Worker was required to contact the Appellant if she required time off, was
ill or requested a change in her scheduled shift;
(r) the
Worker was reimbursed by the Appellant, a mileage rate when using her
personal vehicle to drive residents to different locations;
(s) the
Worker was required to comply with the policies and procedures as established
by the Appellant;
(t) the
Worker had no investment into the Appellant's business;
(u) the
Worker had to provide her services personally;
(v) the
Worker was performing services exclusively for the Appellant;
(w) the
Appellant had the right to terminate the Worker's services.
[3] The Appellant
disputes many of the above assumptions as being either inaccurate or
incomplete. According to the Appellant, when all the facts are taken into
account, the evidence supports the finding that Ms. McCoy was working as an
independent contractor. I am satisfied that this is indeed the case.
[4] The four-fold
test for the determination of whether a worker is an employee or an independent
contractor was developed in Wiebe Door Services Ltd. v. The Minister of
National Revenue
and applied by the Supreme Court of Canada in 671121 Ontario Ltd. v. Sagaz
Industries Canada Inc.:
[47] Although there
is no universal test to determine whether a person is an employee or an
independent contractor, I agree with MacGuigan J.A. that a persuasive approach
to the issue is that taken by Cooke J. in Market Investigations, supra. The
central question is whether the person who has been engaged to perform the
services is performing them as a person in business on his own
account. In making this determination, the level of control the
employer has over the worker's activities will always be a
factor. However, other factors to consider include whether the
worker provides his or her own equipment, whether the worker hires his or her
own helpers, the degree of financial risk taken by the worker, the degree of
responsibility for investment and management held by the worker, and the
worker's opportunity for profit in the performance of his or her tasks.
[48] It bears
repeating that the above factors constitute a non-exhaustive list, and there is
no set formula as to their application. The relative weight of each
will depend on the particular facts and circumstances of the case.
[5] In addition to
the consideration of control, ownership of tools, chance of profit and risk of
loss and the degree of integration, the Court may also take into account the
intentions of the parties.
[6] The
jurisprudence of the common law is clear that no one factor has precedence;
rather, they are intended to provide a framework for analysis of the particular
facts of each case. I am not persuaded by the Respondent’s submission that the
outcome in these appeals ought to be the same as the decisions reached in a
series of appeals involving other Ontario youth residential facilities. While the circumstances in
those cases are similar to the present case, each payor-worker relationship has
its own particular factual context, a principle recognized by the judges in their
decisions. In each case, the Court specifically cited to the caution in Sagaz
that “[t]he relative weight of each [of the factors] will depend on the
particular facts and circumstances of the case”. While after a thorough review
of the evidence in respect of each worker’s situation, in most (but not all)
cases, the Court held that the workers were employees. The evidence before me,
however, does not support the same conclusion.
[7] Mr. Woodcock
testified on behalf of the Appellant. During the relevant period, he was
looking after regular operations and maintenance at the two facilities; Aliza
Woodcock, the sole shareholder of the Appellant, was responsible for the
financial aspects of the business. They both provided emergency backup to the
workers at the residential homes if they encountered problems dealing with the youth
in the residence.
[8] It was Mr.
Woodcock who met with Ms. McCoy after she submitted her resume for a Relief
Worker position. I accept his evidence that he explained among other things the
nature of the work, the requirements imposed on such youth residences by the Ontario
government and the amount the Appellant was prepared to pay to its workers. I
am satisfied that Ms. McCoy understood the terms offered and that they reached
an oral agreement that she would provide her services as a Relief Worker as a
self-employed independent contractor on the terms discussed. A few weeks later,
she signed an agreement to this effect.
On cross-examination Ms. McCoy admitted this had been her understanding;
indeed, she had filed her income tax returns for the period as a self-employed
person. She had had past experience working both as an employee and as a
self-employed person and understood the difference between the two. During the
period in question, she was also working as a self-employed consultant on a
local festival project.
[9] Ms. McCoy was
free to accept or reject shifts at the residences. She admitted there were no
negative repercussions if she turned down work. The fact that she had to inform
Mr. Woodcock of her intentions in any particular week had to do with scheduling
practicalities and as such, is not indicative of the Appellant’s control over
her. Her evidence was consistent with Mr. Woodcock’s that during the period,
she apportioned her time among the Appellant’s facilities, the festival
project, providing childcare for her daughter and personal time. While, as it
happened, she worked “exclusively”
for the Appellant during this time, she could have worked for other youth
residences had she chosen to do so.
[10] The Respondent
took the position that because Ms. McCoy had to comply with the Appellant’s
policy and procedures manual, she was under the Appellant’s control. I do not
accept this interpretation of the facts. The training required and the
practices set out in the manual echoed the statutory obligations imposed on
those responsible for the children placed in care by the Government of Ontario.
Thus, to the extent each was involved with the children’s care, Mr. Woodcock,
the House Parents and the Relief Workers were all equally obliged to comply
with these externally imposed requirements. The same was true for the
limitations on Ms. McCoy’s ability to ask others to perform her work for her:
she was free to do so as long as the replacement worker had the Ministry-required
qualifications for such work (just as a lawyer can assign a file to another
provincially licenced member of the bar, but would not be entitled to assign it
to a lay person). The reality is, however, that there is little financial
incentive for the hiring of a replacement worker (as that concept is typically
understood) for work that is remunerated at the rate of $10 per hour.
[11] The children in
the residences suffered from a range of behavioural, psychological and other problems
and required close supervision and attention. Ms. McCoy’s duties included
helping with meal preparation, hygiene, schoolwork, activities and chores in
the residence. She was not assigned a particular child or task. Her role was to
assess the situation at hand and do what, in her estimation, was needed. She
was expected to make decisions on her own, with backup available in emergency
situations. Her duties also included completing the various reports required by
the provincial ministry. In these circumstances, I am unable to conclude that
Ms. McCoy was under the Appellant’s control in the way an employee normally
would be.
[12] The Respondent
also argued that because Ms. McCoy was required to complete timesheets showing
her hours worked and to have them “approved”
by the House Parent, she was under the Appellant’s control. In my view, the
timesheets were the equivalent of an invoice. Again, regard must be had to the
reality of the situation. The Appellant produced blank standard form time sheets;
the Relief Workers completed them during their shifts at the residences, with
the on-site House Parent verifying their accuracy. In this way, there was an
efficient, inexpensive and reliable process for the Appellant’s payment of Ms.
McCoy’s services. The Appellant also reimbursed Ms. McCoy for mileage if she
had used her own car to take the children on excursions in the community.
[13] The Respondent
submitted that because Ms. McCoy had no investment in the Appellant’s business,
she was an employee. This one factor, however, is not sufficient to tip the
scales away from a finding that Ms. McCoy was an independent contractor.
[14] The question
“whose business was it?” must be answered from the perspective of the worker. In answering this query,
the reality of today’s precarious workplace demands that such considerations be
taken into account:
120
In our day and age, when a worker decides to keep his freedom to come in and
out of a contract almost at will, when the hiring person wants to have no liability
towards a worker other than the price of work and when the terms of the
contract and its performance reflect those intentions, the contract should
generally be characterised as a contract for services. If specific
factors have to be identified, I would name lack of job security, disregard for
employee-type benefits, freedom of choice and mobility concerns.
[15] In my view, the
tests in the case law are deliberately meant to be flexible to accommodate the
ever-changing nature of the workplace and the specific facts of each
payor-worker relationship. Which factors are applicable and what weight must be
given to each will depend on the context at hand.
[16] Taken as a whole,
the evidence satisfies me that Ms. McCoy was providing her services as a Relief
Worker during the relevant period as a self-employed independent contractor.
Accordingly, the appeal is allowed, without costs, and the decision of the
Minister of National Revenue is vacated on the basis that Ms. McCoy was not
engaged in pensionable or insurable employment for the period September 5, 2004
to June 16, 2005.
Signed at Ottawa, Canada, this 2nd
day of August, 2007.
“G.A. Sheridan”
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