Citation: 2007TCC320
Date: 20070615
Docket: 2006-1463(EI)
2006-1468(CPP)
BETWEEN:
BRENDA THOMPSON O/A SWEEPING BEAUTIES,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
(Delivered
orally from the Bench at
Kelowna, British Columbia on February 7, 2007)
Beaubier, J.
[1] These appeals were
heard at Kelowna,
British
Columbia
on February 7, 2007. The Appellant testified and called Mona Gair, formerly
Mona Bevz. The Respondent’s counsel called Colleen Smith, Jillian Prouty and
the Canada Revenue Agency’s appeals officer on the files, Tony Lung.
[2] The period in issue
is from July 11, 2003 to March 11, 2005. The particulars in appeal are set out
in paragraphs 6 to 13 of the Reply to the Notice of Appeal 2006-1463(EI). They
read:
6. By Notices of
Assessment dated September 29, 2005 and September 30, 2005, (the
“Assessments”), the Respondent assessed the Appellant with respect to
employment insurance premiums (the “Premiums”) in the amount of $4,420.98 and
$3,023.84, plus applicable penalty and interest for the 2004 and 2005 taxation
years (the “Period”) respectively.
7. The Premiums
are payable by the Appellant under the Employment Insurance Act, S.C.
1996 c.23 (the “Act”) in connection with services performed by Smith and other
individuals listed in Schedule A (collectively the “Workers”) providing
services to the Appellant in respect of whose remuneration the Appellant failed
to make required remittances to the Receiver General for Canada.
8. The Appellant
appealed the Assessments by letter dated October 11, 2005.
9. In response to
the Appellant’s appeal of the ruling under section 91 of the Employment
Insurance Act, S.C. 1996 c.23 (the “Act”), the Minister determined that
Smith was employed by the Appellant in insurable employment during the period
from July 11, 2003 to March 11, 2005.
10. In response to
the Appellant’s appeal for reconsideration of the Assessments pursuant to
section 92 of the Act, the Minister confirmed the Assessments with
respect to the Workers.
11. In determining
that Smith was employed in insurable employment with the Appellant and in
assessing and confirming the Assessments with respect to the Workers, the
Minister relied on the following assumptions of fact:
a) the Appellant’s
business provided housecleaning and light commercial cleaning services;
b) the Appellant
maintained a shop/office located at 722-650 Duncan Avenue West, Penticton, British Columbia;
c) the Appellant
hired the Workers to provide the various cleaning services offered by the
business;
d) the Appellant
had written agreements (the “Agreements”) in place with the Workers
outlining all aspects of the work;
e) the Workers’
duties included going to clients’ homes to clean bathrooms, kitchens, dust,
vacuum, mop make beds, do laundry, sweep, and clean windows;
f) the Workers
were required to complete the Appellant’s certification program prior to
performing services for the Appellant;
g) either the
Appellant or an experienced worker provided training to new recruits;
h) the Appellant
provided the Workers with a binder which included a policy manual, weekly
schedule and a [sic] instructions on how to clean;
i) the Workers
were responsible for the first $50.00 cost in the event of damage to a client’s
property;
j) the Workers were
required to have criminal background checks done at their own expense before
providing services to the Appellant;
k) the Appellant
required all Workers to be bonded before they were allowed to provide their
services;
l) the Workers
were paid based on an hourly rate ranging from $10.00 per hour for new recruits
up to $12.00 per hour after several years of experience;
m) the Workers did
not receive vacation leave or vacation pay;
n) the Appellant
determined the Workers’ schedules;
o) the Workers
were not required to work a certain number of hours in a given period;
p) the Workers
were required to provide their own transportation;
q) the Workers
were required to pay a $100.00 deposit to the Appellant for a cleaning kit
which consisted of a duster, mop, broom, buckets and spray bottles;
r) the Appellant
provided vacuum cleaners for the Workers;
s) the Appellant provided
the cleaning solutions and rags used by the Workers;
t) the Appellant
provided invoice books for the Workers;
u) the Appellant
required the Workers to drop off their binders, vacuum cleaners and dirty rags
every Friday;
v) the Appellant
held bi-weekly team meetings;
w) the Workers were
required to provide their services personally; and
x) the Appellant
provided the guarantee on the services provided by the Workers.
[3] All of the
assumptions in paragraph 11 were proven to be true in the course of the
hearing.
[4] Despite the form of
“contractor” contract signed by the workers and using the tests set out in Wiebe
Door Services Ltd. v. M.N.R. [1986] 3 F.C. 553 the Court finds:
1. Control – the
Appellant hired the workers, trained them and gave them a manual of her
procedures as to how to clean a house or any other premises; inspected them and
their work and the hours they worked from time to time and corrected them. She
obtained the customers and assigned the workers to the customers and did not
permit the workers to deal with the customers. The workers signed a non-compete
agreement with the Appellant. For a cleaning business such as this, essentially
a home cleaning business, the control was exceptional and appears to have
resulted in excellent work for a high-end customer market.
2. Tools – the tools
were owned by the Appellant.
3. Chance of Profit/Risk
of Loss – was entirely the Appellant’s. She had the customers and it was
her business. The workers worked, were assigned and were paid by the hour.
Everything the workers did was on the orders of the Appellant, including how to
do the work and exactly what work to do. If in doubt, they phoned the Appellant
who directed them.
4. Integration – the
workers were completely integrated into the Appellant’s business. Only one ever
obtained a substitute worker or helper and she was reprimanded for that by the
Appellant.
[5] Thus, the workers
were not in business for themselves. The contracts they signed were simply a
form. The entire arrangement that they worked under for the Appellant was one
of employer/employee. The only business was the Appellant’s.
[6] The Appellant
relied in part on a previous ruling which found that Mona Bevz was in a
non-employee relationship with the Appellant. However, that was for an earlier
time period and a different worker. The Appellant herself pointed out that as
she increased her business she developed new ideas and procedures. Frankly, all
of the evidence is that she runs an excellent business which provides excellent
service. One worker testified that she had cleaned before she worked for the
Appellant, but she did not know how to make a premises “shine” until the
Appellant showed her how. Another still uses the Appellant’s methods in her own
home.
[7] As a result, this
Court, like the workers themselves, has a great deal of respect for this
excellent business woman, but the appeals must be dismissed.
Signed at Kelowna,
British Columbia this 8th
day of June 2007.
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