Citation: 2007TCC447
Date: 20070802
Dockets: 2006-947(CPP)
2006-948(EI)
BETWEEN:
UNISON TREATMENT HOMES FOR YOUTH,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Sheridan, J.
[1] The Appellant, Unison Treatment Homes for Youth, is
appealing the decision of the Minister of National Revenue which held that the
worker, Velma Snagg, was an employee, rather than an independent contractor,
during the period February 1, 2002 to May 5, 2005.
[2] The Minister’s
assessment was based on the assumptions of fact set out in paragraph 16 of the
Reply to the Notice of Appeal:
(a)
the Appellant is a “for profit” partnership involved with co-ordinating residential
group home care and support to take care of children that are under
protection of the Children’s Aid Societies (the “CAS”);
(b)
Juel Wadw, Oslyn Henry and Kathleen Jess equally own the partnership;
(c)
the partners controlled the day-to-day operations and made the major
business decisions;
(d)
the Appellant had to follow the directives issued by The Ministry and
CAS;
(e)
the Worker was hired as a “Support Worker” under a verbal agreement;
(f)
the Worker was responsible for the following:
-
provide care for youths in various programs
-
update file information, produce behaviour and incident reports
-
provide life skills training, safety, hygiene and take them on
recreational outings and appointments
-
assist foster parents with daily routines by delegating chores, making
dinner choices, giving rewards/consequences and dispensing medication
-
provide respite relief for foster care provider
-
may also provide one-on-one supervision/guidance for a high-needs child
(g)
the Worker performed her duties at the Appellant’s group homes and in
the community;
(h)
the Appellant provided the Worker with an office at the group home;
(i)
the Worker was paid $10 per hour for support work and $14.50 for special
needs support;
(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;
(l)
the Worker did not receive any vacation pay or leave;
(m)
the Appellant did provide a health plan for which they paid half to
foster parents and support workers;
(n)
the Appellant’s daily hours of operation are 24 hours a day, 7 days a
week;
(o)
the Worker’s hours of work varied based on program requirements and her
availability;
(p)
the Worker had to record her hours of work on a timesheet;
(q)
the following information was indicated on the timesheet:
-
timesheet is on the Appellant’s form and has a heading of
“relief/support hours worked for the Appellant”
-
she was paid an hourly rate for hours worked and a flat rate for
weekends
-
signed by worker and the foster parent
-
shows what she did, where she did it, when she did it and for whom she
did it and some descriptions of the activity
-
shows that she was paid for time during training session
-
shows relief hors (sic)
(r)
the Worker was provided with training, as per the Ministry standards on
a yearly basis for Non-violent Physical Crisis Intervention, First Aid and CPR
by the Appellant;
(s)
the Worker was required to report to the Appellant if a serious event
occurred which affected the children, the Ministry standards determined the
types of serious occurrences and time frames for the reporting;
(t)
the Worker did not incur any expenses in the performance of her duties;
(u)
the Worker was provided with a “Policies and Procedures manual” by the
Appellant and each year, she had to sign a form acknowledging that she read the
manual;
(v)
the Worker was also provided with guidelines, house rules and direction
when required;
(w)
the Worker was subject to multiple evaluations in a year;
(x)
the Worker had to log all daily information in a “Daily Log Book” for
each child;
(y)
the Worker and the Foster Parent decided if work had to be redone and
both covered the related costs;
(z)
the Appellant provided the liability insurance as required by the
Ministry Standards;
(aa)
the Worker, Foster Parent and CAS were all responsible for resolving
complaints;
(bb)
the Worker had to provide her services personally;
(cc)
the Worker had to advise the Appellant if she was sick and the Appellant
would be responsible for finding a replacement;
(dd)
the Worker worked exclusively for the Appellant during the period in
question;
(ee)
the Appellant had the right to terminate the Worker’s services.
[3] The only issue
in these appeals is whether the worker, Ms. Snagg, was engaged in pensionable
and insurable employment while performing her duties as a Support Worker at Unison
Treatment Homes for Youth. This determination turns on whether she was an
employee or an independent contractor. The test for this determination 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.
[4] 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.
[5] 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. The Appellant submits that it is not so much the facts that
are in dispute as their interpretation. According to the Appellant, some of the
assumptions are inaccurate because the information is incomplete. One of the
partners in the Appellant partnership, Kathleen Jess, and the worker, Ms.
Snagg, testified on behalf of the Appellant. Ms. Snagg was excluded from the
Court while Ms. Jess gave her evidence. Ms. Jess was cross-examined extensively
and unshaken in her evidence which was, for the most part, corroborated by that
of Ms. Snagg. I found both witnesses to be straightforward in the presentation
of their testimony and their evidence credible.
[6] No witnesses
were called for the Respondent.
[7] The Respondent takes
the position that the evidence supports the finding that Ms. Snagg was an
employee and accordingly, that her work was pensionable and insurable. Counsel
for the Respondent urged the Court to follow the decisions of this Court in
three cases dealing with other Ontario youth treatment facilities. Certainly the approach
taken by the Court in those cases is the correct one: the decisions were the
result of a close review of the evidence of the relationship between each
worker and the payor. Applying the same tactic in the present case, however, leads
me to conclude that Ms. Snagg was providing her services as a “Support Worker”
as an independent contractor.
[8] The Respondent’s
position is that Ms. Snagg was under the “control” of the Appellant, not least because
she was required to comply with the Unison policy and procedures manual and other directives such
as the “House Rules”
and “Things to Remember”.
This argument, however, fails to take into account the effect of one of the
Minister’s own assumptions, that “the Appellant had to follow the directives
issued by the Ministry [of Community and Social Services] and the [Children’s
Aid Societies], CAS”.
The practices set out in the manual were a reflection of the statutory
obligations imposed on those responsible for the children placed in care by the
Government of Ontario. The penalty for non-compliance with these requirements
was the non-renewal of the Appellant’s annual licence. As well as establishing
the standards required for the proper care of the children, the purpose of the
above documents was to avoid such an outcome by ensuring that the Foster
Parents and the Support Workers were aware of and complying with these
externally imposed requirements. The policy and procedures manual and the
“Things to Remember” were particularly directed at safety issues. I accept the
Appellant’s evidence that the “House Rules” were directed primarily at the
children. They were posted in the bedroom area, for their easy reference and to
avoid having them on public view in the main areas of the home. They were
intended to remind the youth in care of their commitment, upon entering Unison,
to conform to certain expected behaviours. (As I understand it, the Ministry’s
philosophy for treating the children seems to have been premised on getting
“buy-in” from the youth themselves by setting goals, regularly assessing whether
such goals had been attained and modifying the goals accordingly.) In the
circumstances, these documents are different in nature from the standard employer-employee
directives that govern an employment relationship.
[9] The same is true
for the data recording that workers were required to perform. The Ministry and
CAS required the keeping of a daily activities log for the children; any
“serious occurrences” (such things as death, suicide, abduction, running away)
had to be documented in accordance with special Ministry-imposed procedures.
All records had to be maintained in a complete and timely fashion. The
recording of such information was done by the Support Worker for the child(ren)
in her care; the recorded data could later be entered by any of the Support
Workers. This reporting was not for the purpose of evaluating Ms. Snagg’s
performance, but rather for ensuring a complete file for each child being
treated. The Appellant did not typically conduct performance evaluations of the
Support Workers and none were done for Ms. Snagg, in particular.
[10] Ms. Snagg was not
“supervised” in the performance of her tasks. Indeed, the very nature of the
work of caring for children with behavioural, psychological or other problems
required that the Support Worker be able to think on her feet and use good
judgment in resolving problems as they occurred. Ms. Snagg seems to have been
possessed of such skills. As she said at the hearing, she had her own ideas and
she implemented them. The partners of the Appellant, including Ms. Jess, were
not normally at the five Unison homes more than once a month. The Foster Parent
in charge of each home was being relieved by the assistance of Support Workers
like Ms. Snagg. Thus, in normal circumstances, Ms. Snagg was effectively on her
own.
[11] The
Respondent assumed that Ms. Snagg’s rate of pay was imposed by the Appellant. I
accept the evidence of Ms. Jess and Ms. Snagg, however, that each worker
negotiated her own payment levels. Ms. Snagg seems to have established herself
as a skilled worker: she accepted difficult children on a “one-to-one” basis, a
duty for which the Ministry (not the Appellant) provided a higher rate ($14 per
hour) than regular childcare ($10 per hour). She also negotiated a higher flat
rate for taking the children on excursions. She was free to accept or reject
any assignment without repercussion. On a related note, Ms. Snagg was able to
enhance her earnings by taking on, without extra pay, the task of doing the
scheduling for four of the five group homes in Windsor. This was a deliberate
strategy which gave her “first dibs” on as many shifts as she chose to take as
well as on shifts that paid at a higher rate. Further, she sometimes used her
own money to buy treats for the children to build a “rapport” with them, thus
making herself more in demand. This is akin to the building of goodwill that is
routinely employed by those in business for themselves (and regularly claimed
as a business expense). Though as counsel for the Respondent quite rightly
pointed out, Ms. Snagg had not “invested” any money in the Appellant’s
business. I am satisfied, however, that in the particular context of this case she
had a certain chance of profit. She also had a risk of loss. The Appellant did
not provide her with workplace liability insurance coverage. She had no job
security, no vacation pay, no sick leave. As Décary, J.A. pointed out in Lawrence
Wolf v. Her Majesty the Queen,
these are the realities of the “risk”
in today’s workplace:
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.
[12] The Ministry
required that only Support Workers with training in CPR, First Aid and
Non-Violent Crisis Intervention could work at youth treatment homes. Accordingly,
the Appellant had to ensure that its Support Workers possessed such skills. For
those without them, the Appellant provided training without charge; if the
Support Workers billed for the time they spent training, the Appellant paid the
invoice. The Support Workers who already had the appropriate certification, or
who wished to obtain it elsewhere did not have to take the training offered by
the Appellant. Thus the training offered by the Appellant was not specific to
its own operation but rather to Ministry requirements. Ms. Snagg took her
training through the Appellant; there is no evidence as to whether she invoiced
the Appellant for her training time.
[13] The Respondent
argued that the fact that Ms. Snagg had to complete and submit time sheets is indicative
of her employee status. In my view, however, the timesheets were the equivalent
of invoices. Had they not been completed and submitted to the Appellant, Ms.
Snagg would not have been paid. Indeed, she testified that she had once missed
the 15th of the month billing deadline and had not been paid within
that period. The timesheets, like invoices, included details of the tasks
performed, the number of hours worked, and so on. The need for such information
was succinctly explained by Ms. Jess: she wanted to know what she was paying
for. On cross-examination, Ms. Snagg explained the details provided regarding
an unusually long shift where a child had been suspended from school requiring
her to spend the entire day with him rather than just the normal after-school
period. How is this different from the detailed invoice of a lawyer or
accountant justifying the amount billed by listing each service performed and
the time taken to provide it? In these circumstances, no one would argue that
the lawyer or the accountant was the client’s “employee”.
[14] Ms. Snagg was
free to work at other youth treatment centres, although because she had devised
a way to get all the shifts she needed at Unison, she chose not to. If she were
not available for her shifts at Unison, she was entitled to find a replacement,
provided that the replacement worker had the Ministry-required certification.
Thus, within that subset of individuals, Ms. Snagg could (and on occasion, did)
find others to perform her duties. She made her own arrangements with such
persons for their payment, either paying them directly or having the
replacement invoice the Foster Parent or the Appellant. In any case, there is
little financial incentive for the hiring of a replacement worker, as that
concept is normally understood, for work that is remunerated at the rate of
$10-14 per hour.
[15] As mentioned
above, not all of the factors in the Wiebe Door test will be applicable
in every context. In the present case, the matter of “tools” is not
particularly pertinent to the discussion. Counsel for the Respondent submitted
with some vigour that the homes and their contents including the computer used
by Ms. Snagg for data entry were tools that were furnished exclusively by the
Appellant. While I agree that they were provided by the Appellant, in my view
they were equally necessary for the Appellant’s business of providing care at
the Ministry standard for the troubled youth in residence. I agree with the
agent for the Appellant, Ms. Crowley, that it is important to remember whose
business we are talking about. This determination must be made from the
worker’s perspective. In the present case, Ms. Snagg was in the business of
providing her services as a Support Worker to homes like those established and
run by the Appellant. Like many consultants these days, the only “tools” she
required were her own skills and judgment.
[16] At the time of
the hearing of these appeals, Ms. Snagg remained in her position as a Support
Worker at Unison. She testified on behalf of the Appellant. From this it may be
inferred that she viewed herself as an independent contractor. Certainly that
is the basis upon which Ms. Jess dealt with this valued worker.
[17] Taken as a whole,
the evidence satisfies me that Ms. Snagg was providing her services as a
Support 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. Snagg was
not engaged in pensionable or insurable employment for the period February 1,
2002 to May 5, 2005.
Signed at Ottawa, Canada, this 2nd
day of August, 2007.
“G.A. Sheridan”
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