Citation: 2008 TCC 606
Date: 20081106
Docket: 2008-654(EI)
2008-655(CPP)
BETWEEN:
ZAZAI ENTERPRISES INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Miller J.
[1]
Zazai Enterprises Inc.
appeals the Minister of National Revenue’s assessment of Canada Pension Plan
contributions, Employment Insurance premiums, penalties and interest assessed
as follows:
|
|
2004
|
2005
|
2006
|
|
CPP contributions
|
$2,467
|
$4,375
|
$4,344
|
|
EI premiums
|
1,137
|
1,272
|
2,065
|
|
Penalties
|
360
|
565
|
641
|
|
Unidentified penalties
|
400
|
400
|
0
|
|
Interest
|
484
|
330
|
204
|
|
Totals ($19,044)
|
$4,848
|
$6,942
|
$7,254
|
[2]
In the Reply to the
Notice of Appeal, the Minister confirmed the unidentified penalties related to
failure to file T4s.
[3]
Mr. Ed Sarmiento, agent
for the Appellant, argued at the beginning of the trial that the Minister’s
assessment be quashed on the basis of what I would call a procedural
irregularity. I ruled orally at that time as follows:
“This is a case in
which the Appellant, Zazai Enterprises Inc., has been assessed by the Minister
of National Revenue pursuant to CPP and EI legislation on the basis that
certain workers were engaged by the Appellant in pensionable and insurable
employment. As a preliminary matter, the Appellant’s agent has raised a
procedural irregularity, which the Appellant maintains should decide this case.
The issue is the application of section 26.1 of the CPP legislation
(section 90 of the EI legislation) which reads as follows:
26.1 (1) The Minister of Social Development, an
employer, an employee or a person claiming to be an employer or an employee
may request an officer of the Canada Revenue Agency authorized by the Minister
of National Revenue to make a ruling on any of the following questions:
(a)
whether an employment is pensionable;
(b)
how long an employment lasts, including the dates on which it begins and
ends;
(c)
what is the amount of any earnings from pensionable employment;
(d)
whether a contribution is payable;
(e)
what is the amount of a contribution that is payable; and
(f) who
is the employer of a person in pensionable employment.
(2) The Minister of Social
Development may request a ruling at any time, but a request by any other
person must be made before June 30 of the year after the year in respect of
which the question relates.
(3) The
authorized officer shall make the ruling within a reasonable time after
receiving the request.
(4) Unless
a ruling has been requested with respect to a person in pensionable employment,
(a) an amount deducted from the
remuneration of the person or paid by an employer as a contribution for
the person is deemed to have been deducted or paid in accordance with this Act;
or
(b)
an amount that has not been so deducted or paid is deemed not to have
been required to be deducted or paid in accordance with this Act.
The effect of these
provisions, as Mr. Sarmiento has pointed out, is to provide a procedure for the
determination of a number of issues; a procedure which includes a request
for a ruling by certain entities. In this case, no such entity made a
request, but the Minister of National Revenue made a decision in any event.
The Appellant contends that, as there has been no valid request for a
ruling, the presumption of the status quo arises. In effect, he argues
that subsection 26.1(4) operates to deem the amounts not deducted by the
Appellant not to have been required to be deducted.
Mr. Sarmiento
explained his theory of the reason for the procedural protocol. I have no
doubt there are good and sensible reasons for the procedure and for the
presumption. The stumbling block however facing the Appellant is section 27.3
of the CPP legislation which reads as follows:
27.3 Nothing
in sections 26.1 to 27.2 restricts the authority of the Minister to make a
decision under this Part on the Minister’s own initiative or to make an
assessment after the date mentioned in subsection 26.1(2).
This seems clear to
me to be an overriding provision that allows the Minister to reach a decision
or make an assessment without engaging the ruling request process. Mr.
Sarmiento suggests that section 27.3 of the CPP only comes into play if there
has been a valid ruling request. I disagree. I find that interpretation
could render these provisions meaningless. Further, if the Minister can make a
decision on such matters as who is the employer, and whether there is
pensionable or insurable employment, it would make no sense that the
presumption of the status quo set out in subsection 26.1(4) of the CPP legislation
remains determinative. That would take away the very authority that
section 27.3 of the CPP legislation bestows upon the Minister. I find the
wording of section 27.3 of the CPP and section 90 of the EI Act to be
very clear, and in this case, the Minister has exercised the authority to make
a decision and make an assessment regarding the workers and their relationship
with the Appellant. The Appellant objects and appeals that decision, but I find
it is a decision to be determined on the facts of the working relationship, not
on the basis of the interplay between provisions in the CPP and EI legislation.
I was not referred
to any case exactly on point. Mr. Sarmiento suggested the case of Care
Nursing Agency Ltd. v. Canada (Minister of National Revenue),
now under appeal to the Federal Court of Appeal may be of some assistance, and
perhaps I should defer my decision until that case has been heard. I have
read the Tax Court of Canada decision in that case: it does not deal with
the role of section 27.3 and I fail to see how an appeal of that decision could
have any bearing on this case.
This case is about
whether the workers were employees of the Appellant or were self-employed. I
need to hear the facts surrounding their work Mr. Sarmiento, and that is what
we should now turn to.”
[4]
Subsequent to my ruling on this
matter, the Federal Court of Appeal did hear the case of Care Nursing Agency
Ltd. v. The Minister of National Revenue,
and although the Tax Court of Canada decision did not refer to these provisions,
the Federal Court of Appeal decision did, as follows:
[2] The appellant argues that it was under no
obligation to make remittances of EI premiums or CPP contributions in respect
of any of the workers, except Ms. Sunshine Smith, because no rulings as
permitted by subsections 90(1) of the EI Act and 26.1(1) of the Plan
were obtained in respect of any of the workers other than Ms. Smith. Despite
the able arguments of counsel for the appellant, in our view, sections 94 of
the EI Act and 27.3 of the Plan permit the Minister to make
assessments under those acts in the absence of such rulings. Moreover, we are
not persuaded that the consequences of this interpretation are either
unreasonable or absurd. Accordingly, the Tax Court Judge correctly rejected
this argument.
Facts
[5]
The only evidence given
at trial was that of Mr. Zazai, the sole shareholder of the Appellant. It is
easiest to describe the facts by relating Mr. Zazai’s evidence to the
Minister’s assumptions in the Reply to the Notice of Appeal. The Minister
assumed:
(a) the Appellant operates a trucking
business;
(b) the Appellant’s sole shareholder
is Nasrullah Zazai;
(c) the
Appellant’s shareholder and Jamila Zazai are Directors of the corporation;
(d) the
Appellant’s shareholder controlled the day to day operations of the business
and made the major business decisions for the business;
(e) the Appellant
has an “Independent Contract Carrier Agreement” (the “Agreement”), dated
April 1, 2004, with Pizza Pizza Limited (the “Appellant’s client”) to
deliver food and other related supplies and products to their customers;
(f) the
Appellant’s client is a distributor and manufacturer of food and other related
supplies and products;
(g) the Appellant
had to adhere to the terms and conditions set out in the “Agreement”;
(h) the Worker,
Robert Wallis [sic], was hired as “Driver”, under a verbal agreement;
(i)
the Workers, Muhammad Riaz and Fawad Noori, were
hired as “Helpers”, under a verbal agreement;
(j) the Worker,
Robert Wallis [sic], was provided with a Helper by the Appellant;
(k) the Workers’
duties were to load, drive and deliver loads to different cities or municipalities
in Southern Ontario;
(l) the Workers
were required to report to the Appellant’s shareholder in person, or by phone
to receive delivery instructions;
(m) the Workers
were supervised by the Appellant’s shareholder;
(n) the Workers
were required to obtain the Appellant’s shareholder approval prior to taking
certain actions when there was a deviation from the delivery instructions as
the Appellant’s shareholder needed to advise and discuss the changes with the
customer;
(o) the Workers
were paid by cheque, to their personal names, on a weekly basis by the
Appellant;
(p) the Workers’
rate of pay was determined by the Appellant’s shareholder;
(q) the Workers’
did not receive vacation pay, paid vacation, bonuses or any benefits such as
medical, dental, life insurance;
(r) the Workers
had to advise the Appellant’s shareholder if they wanted some time off, at
least two weeks in advance;
(s) the Worker,
Robert Wollis, worked 3 days a week, Monday, Wednesday and Friday, from 2:00
a.m. to finish;
(t) the Worker,
Robert Wollis, hours of work were determined by the Appellant’s client and
recorded in his logbook;
(u) the Workers
were provided with the required tools and equipment such as leased trucks,
maps, landcarts, loadbars and security devices by the Appellant, at no cost to
the Workers;
(v)
the Appellant was responsible for all the
expenses related to the maintenance of the truck and equipment and related
insurance;
(w)
the Workers did not incur any expenses in
performing their duties;
(x)
the workers were required to follow the
Appellant’s client standard policy and operating procedures;
(y)
the Appellant was ultimately responsible for
resolving customer complaints;
(z)
the Appellant provided the guarantee on the work
performed by the Workers;
(aa)
the Workers were required to wear a company
uniform with the business logo;
(bb)
the Workers had to perform their services
personally;
(cc)
the Appellant had the right to terminate the
Workers’ services;
(dd)
the “Management fees” paid to Nasrullah Zazai
are contributory salary and wages;
(ee)
the amount of money received by Nasrullah Zazai
is considered as income from an office or employment;
(ff)
income from an office or employment is
considered as “Pensionable income” and Canada Pension Plan contributions have
to be deducted and remitted.
[6]
Assumption (e) - The relevant provisions of the Agreement
read as follows:
1.1 Services.
The Carrier hereby agrees to supply the Vehicle with all necessary fully
bonded and properly licensed personnel as may be required from time to time,
during the term of this Agreement for the delivery of Supplies to
PPL customers as PPL may, in its sole discretion from time to time,
determine or direct.
…
2.1 Owner.
The Carrier warrants that he/she is the legal owner of the Vehicle or has a
good and valid lease for the Vehicle in accordance with Schedule “B”, and is
responsible for the full and complete payment of same, including any taxes, and
for the discharge of any and all encumbrances against the Vehicle, including
any liens for unpaid repair work on the Vehicle.
2.2 Properly
Equipped. The Carrier warrants that the Vehicle is properly equipped to
perform the Services, including, without limiting the generality of the
foregoing, where applicable to pull PPL’s trailers and that the Vehicle is at
all times road worthy and is equipped with operating refrigeration and meets
all safety standards set out in any application legislation and the regulations
thereunder.
2.3 Logos
and Condition of Vehicles. The Carrier shall ensure that the Vehicle shall
be orange and white and that it has displayed on its main panels, the logo
and colours as PPL may from time to time designate. PPL will be responsible for
the maintenance of the logo of PIZZA PIZZA. The Carrier shall ensure that the
Vehicle is in excellent condition, kept clean and in no way whatsoever
detrimental to the image and reputation of PPL. PPL may, at any time, examine
the Vehicle to ensure that the Vehicle conforms with PPL’s policies.
2.4 Maintenance. The Carrier shall at his/her own expense, maintain the Vehicle in
safe, reliable and clean operating condition at all times, as necessary not
only to comply with all laws relating to the operation of the Vehicle and safe
working conditions and PPL’s safety requirements.
2.5 Operation Costs. All costs and expenses of any kind whatsoever connected with
providing the Services, including but not limited to, all fuel, oil, salaries,
compensations, tolls and any other operating costs associated with the Vehicle
and with the fully bonded personnel so as to ensure the delivery of the
Supplies within PPL’s delivery requirements shall be paid solely by the
Carrier.
…
4.2 Negligence. The Carrier hereby agrees to indemnify and save harmless PPL of
and from all damages which may result from any accident to any employees of the
Carrier, or any accident to any person by reason of any negligence of any
employee of the Carrier, whether upon the premises of PPL or otherwise, such
indemnity to include any additional assessments which the Workmen’s Compensation
Board or equivalent may assess to PPL as a result of any accident involving the
Carrier or any employee of the Carrier. It is understood and agreed that PPL
shall not be called upon to contribute to the Workmen’s Compensation Board for
any employee of the Carrier delivering the products of PPL, but the same shall
be paid for by the Carrier and PPL indemnified therefore for the Carrier’s
failure to do so.
The Appellant was to be paid by Pizza Pizza
on the basis of how far the truck had to travel, how many drops had to be made
and how much weight was being carried. These payments would be made weekly.
[7]
Assumption (i) - Mr. Zazai claimed that the workers
wanted an independent contractor arrangement from the outset. They were to be
responsible for their own taxes. Mr. Zazai indicated they would be getting more
money from him as there would be no deductions.
[8]
Assumption (j) - Mr. Zazai claimed that Mr. Riaz and
Mr. Noori would agree between themselves who would work with whom and when.
[9]
Assumption (l) - Mr. Zazai testified that there was
no reporting as such. Mr. Wollis, as a professional driver, knew what to
do and where to go.
[10]
Assumption (m) - Mr. Zazai claimed he did not directly
supervise Mr. Wollis, though did indicate Mr. Wollis received instructions
from Pizza Pizza.
[11]
Assumption (n) - Mr. Zanai denied this assumption.
[12]
Assumption (p) - Mr. Zazai confirmed that he paid
his driver Mr. Wollis $250 a day and the other two workers, who primarily
loaded and unloaded the truck, $150 a day. According to Mr. Zazai, there was a
waiting list for drivers to get their own Pizza Pizza agreement.
[13]
Assumption (v) - The Appellant was also responsible
for the gas for the truck.
[14]
Assumption (y) - Mr. Zazai indicated there were no
complaints.
[15]
Assumption (bb) – Mr. Zazai denied this assumption as he
suggested Mr. Wollis could get another driver to fill in for him. My
impression was that there were several Pizza Pizza approved drivers who may
have had an informal arrangement to switch shifts, but there was no detailed
evidence whether Mr. Wollis ever did this, and if he did, who paid the
other driver. The lack of evidence on this crucial point causes me some real
concern. On balance, I have not been satisfied the Appellant has proven this
point.
Analysis
[16]
Notwithstanding my
ruling with respect to the application of sections 27.3 and 26.1 of the Canada
Pension Plan
(and the Employment Insurance Act
equivalent), Mr. Sarmiento again raised this matter and specifically the
application of subsection 26.1(4) of the CPP, not in the context of a
procedural irregularity, but that the assumption itself contained in subsection
26.1(4) of the CPP is a complete answer to the Government’s assessment.
The Appellant’s position appears to be an acknowledgment that the Minister may
have the authority to assess, but in so doing the Minister is stuck with the subsection
26.1(4) presumption. Mr. Sarmiento must be suggesting that the presumption
is irrebuttable. With respect, I believe Mr. Sarmiento is chasing
illusions.
[17]
Looking at these
provisions as a whole, the Minister is unrestricted in assessing as he did in
this case. To put the interpretation on subsection 26.1(4) that Mr. Sarmiento
seeks, would be to completely fetter the Minister’s authority; indeed, it would
render section 27.3 useless (a result that could not have been intended by the
legislators), as it would allow the Minister to assess but with no ability to
hold that non-payment was not in accordance with the Act. Excuse the
triple negative but the result is nothing to assess. I grant that the wording
of these provisions is not a clarion of clarity, but they must be interpreted
to make some sense. And the sense I make of them is that the lack of a
ruling request in no way handcuffs the Minister. This interpretation is supported
further by subsection 26.1(2) of the CPP which allows the Minister of
Human Resources and Development to request a ruling at any time;
all to say the Government can always overcome Mr. Sarmiento’s hurdle by simply
making the request. My view of this matter appears to be borne out by the
Federal Court of Appeal’s comments in Care Nursing Agency Ltd.
cited earlier.
[18]
The substantive issue,
as I indicated in my oral ruling, is whether the workers were in pensionable
and insurable employment. There is considerable jurisprudence on this issue,
starting with Wiebe Door Services Ltd. v. Minister of National Revenue, tweaked by the
Supreme Court of Canada in 671122 Ontario Ltd. v. Sagaz Industries Canada
Inc.
and further refined by the Federal Court of Appeal in more recent cases such as
Royal Winnipeg Ballet v. Minister of National Revenue.
[19]
In Sagaz, after
reviewing the traditional four factors cited in the Wiebe Door decision,
the Supreme Court of Canada commented:
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.
[20]
In the subsequent
decision of the Federal Court of Appeal in Royal Winnipeg Ballet, the
Federal Court of Appeal addressed the role of intention in grappling with the
distinction between employee and independent contractor. The Federal Court
of Appeal stated:
60 …The inescapable conclusion is that
the evidence of the parties’ understanding of their contract must always be
examined and given appropriate weight.
And further:
64 In these circumstances, it seems to
me wrong in principle to set aside, as worthy of no weight, the uncontradicted
evidence of the parties as to their common understanding of their legal
relationship, even if that evidence cannot be conclusive. The judge should have
considered the Wiebe Door factors in the light of this uncontradicted
evidence and asked himself whether, on balance, the facts were consistent with
the conclusion that the dancers were self-employed, as the parties understood
to be the case, or were more consistent with the conclusion that the dancers
were employees. Failing to take that approach led the judge to an incorrect
conclusion.
[21]
It is interesting to
note how these more recent comments with respect to intention are being argued
at trial. In Mr. Sarmiento’s Notice of Appeal he stated:
10(b) In “Royal Winnipeg Ballet versus MNR”
(2006 FCA 87) the Federal Court broke away
from the traditional judicial thinking. Majority of the judges held that the
parties’ intentions were paramount in determining whether a worker was engaged
as an employee or independent contractor for the purpose of EI and CPP
remittance obligations. The traditional “4‑in-1” tests of degree of
control, ownership of equipment, financial risks of profit or loss and
integration were outweighed by the existing agreement on the parties working
relationship.
(c) The above FCA
decisions have clearly placed due importance on Taxpayer Right to Freedom of
Contract.
(d) The Federal
Court has ruled in the above decisions that the agreed working relationship
between the parties is of paramount importance and outweigh the traditional
“4-in-1” tests. Without evidence of “sham” in the stated working relationship,
such agreement must be respected in law by third parties. The CRA auditor
evidence is based on conjecture and not “sham”.
[22]
This approach appears
to ignore Justice Sharlow’s comment in paragraph 61 of Royal Winnipeg Ballet
where she stated:
61 I emphasize, again, that this does
not mean that the parties’ declaration as to the legal character of their
contract is determinative. Nor does it mean that the parties’ statements as to
what they intended to do must result in a finding that their intention has been
realized. To paraphrase Desjardins J.A. (from paragraph 71 of the lead judgment
in Wolf), if it is established that the terms of the contract,
considered in the appropriate factual context, do not reflect the legal
relationship that the parties profess to have intended, then their stated
intention will be disregarded.
[23]
Starting then with the
issue of intention, what evidence do I have of the Appellant’s and the workers’
intention vis-à-vis the legal relationship they had entered into. Firstly,
there is no written agreement to which I can refer. Secondly, there is no
oral evidence of any of the third party workers. The only evidence is that of
Mr. Zazai, who said that an independent contractor relationship was what the
workers wanted. He later clarified that answer by indicating the workers would
get more money from him as they would be looking after their own deductions. So
this raises the question that often lurks in the weeds – was there an intention
to be an independent contractor and all that entails, or was there an intention
to simply not have source deductions taken from their pay? How does one truly
determine the intention, especially where evidence is presented from just one
side of the contract? Are workers really expected to understand all the
elements of the employee versus independent contractor relationship, so they
can state with absolute certainty that in law they are one or the other? Or,
not meaning to be unfair, do workers really intend the result of such a
legal relationship, without perhaps a full appreciation of the distinguishing
factors? Until the factor of stated intention had been elevated by the Federal
Court of Appeal to a factor to be given some considerable weight, I was of the
view that intention as to the legal relationship can best be determined by how
the parties acted, not simply by what they said was their intention or
understanding of the legal relationship.
[24]
In this case, the
evidence of intention of both sides to create an independent contractor
relationship is not strong. I have Mr. Zazai’s evidence only, and that evidence
itself casts some doubt on whether the intention went to the legal relationship
itself or to the desired effect of the legal relationship (i.e., no
withholdings). All to say, I shall review the factors in the light of the
relatively weak evidence that workers intended to be self-employed. Is this
borne out by a review of the following factors: control, ownership of
tools equipment, risk of loss, chance of profit, hiring of helpers, degree of
responsibility for investment and management.
[25]
There are three levels
of worker at issue here. First, Mr. Zazai himself had an agreement with his
company: this is only an issue in the context of the Canada Pension
Plan. Second, Mr. Wollis had a contract to drive for the Appellant.
Third, Messrs, Riaz and Noori were contracted as helpers to load and
unload.
[26]
Firstly, with respect
to Mr. Zazai himself. The question of employee versus independent contractor is
only an issue in the context of the CPP legislation as it pertains to
the management fees received by Mr. Zazai. He performed the function of both a
driver and the manager of the Appellant. It was indeed his company. It is
awkward, at best, to apply the traditional factors when the moving force of the
employer is the worker himself. How does the element of control play a role for
example? Mr. Zazai gave little evidence of what he did, or how he performed his
managerial duties. There was no written agreement. It was up to Mr. Zazai what
his company would pay him. There was no discussion of any tools used by
Mr. Zazai in delivering his managerial duties. The only element that has
any bearing on determining his legal relationship in his company is the chance
of profit and risk of loss. While Mr. Zazai could, on behalf of the company,
set the management fee, the chance of profit or risk of loss was not at the
individual level but at the corporate level. Mr. Zazai’s fortunes did not rise
or fall based on any individual business he was carrying on: they rose or fell
based on the success of the company. Somewhat circuitously that success depends
on Mr. Zazai’s efforts, but those efforts I find were not expended as an
individual in the business of providing management services. They were expended
as part of the company’s business. I heard no evidence to suggest Mr.
Zazai contemplated two businesses being carried on by him, one personally and
one through the corporation. He established his company to conduct the
business. I find he has not proven he was performing management services as a
person in business on his own account.
[27]
Turning now to the
driver Mr. Wollis, what factors suggest he was in business on his own account?
Control
- he was not under any direct
supervision of Mr. Zazai;
- he was a professional driver
who knew what to do; and
- he could work for anyone else.
Chance of Profit/Risk of Loss
- by taking other’s shifts he
could increase his revenue.
[28]
What factors suggest
Mr. Wollis was an employee of the Appellant?
Control
- he was required to
wear a Pizza Pizza uniform;
- he took the shifts
assigned by Mr. Zazai;
- Mr. Zazai looked
after all expenses such as gas, insurance, etc.; and
- he took
instructions from Pizza Pizza.
Chance of
Profit/Risk of Loss
- Mr. Zazai set the
daily rate: there was no room for increased profit; and
- Mr. Wollis had no
expenses or liability exposing him to risk.
Tools/Equipment
- the major piece of
equipment, the truck, was leased by the Appellant, not Mr. Wollis.
Responsibility
for Investment and Management
- Mr. Wollis had no
such responsibility.
[29]
While the Supreme Court
of Canada was clear that the control factor is always significant, the relevant
strength of each factor can vary depending on the nature of the work. Here, I
am faced with a truck driver, who, if I accept Mr. Zazai’s testimony,
wants to be treated as an independent contractor, yet brings to his “truck
driving business” no truck: he is not responsible for insurance on the truck,
he pays no gas, effectively has no exposure to liability. He shows up for work
to drive the Appellant’s truck, and he does so in a uniform the Appellant is
required by contract with Pizza Pizza to have its drivers wear. I cannot find
in these circumstances that some lack of control by the Appellant in
supervising how Mr. Wollis might drive the truck outweighs the overall
view that Mr. Wollis is not in business on his own account. Had the Appellant
been able to prove that Mr. Wollis indeed hired other drivers to drive the
Appellant’s truck, that may still have been insufficient evidence to tip the
balance to an independent contractor relationship. The Income Tax Act
recognizes in subparagraph 8(1)(i)(ii) that an employee can pay for
substitute help and, if such is required by the employment contract, the
employee can get a deduction for the payment of salary to the substitute. All
to say, in this case, a substitute in and of itself would not be conclusive of
an independent contractor relationship.
[30]
With respect to the
workers who loaded and unloaded the trucks, I heard very little evidence from
Mr. Zazai as to their working relationship, other than they received $150 per
day and had some flexibility as to who would work for which driver. These
workers were manual labourers: no equipment was required, they had no
chance of increasing profits, they ran no risk of loss; they simply showed up
when Mr. Zazai or Mr. Wollis had a shift to drive for Pizza Pizza and helped
load and unload. Apart from some flexibility in scheduling there were no
elements to suggest either of these helpers were in business on their own
account.
[31]
Weighing factors in the
employee versus independent contractor issue is not an exact science. I find it
helpful to step back to look at the overall situation, considering all the
factors that the jurisprudence suggests we consider. Taking the global
approach, my assessment is that these individuals were employees. I have come
to the realization, however, that the reason the Courts have grappled with this
distinction is because it takes very little to flip from one side to the other.
The more evidence the Court can hear about the working relationship the better
equipped it is to draw the distinction. Regrettably, the Appellant’s agent
concentrated more on the technical argument of the interplay between sections
in the legislation, rather than exploring in greater detail the nature of the
work provided by the workers and the real relationship that existed. The
Appellant has been unable to demolish the Government’s assumptions which lead
to the inescapable conclusion that these workers were employees,
notwithstanding an intention not to have withholdings taken from their pay. The
appeals are dismissed.
Signed at Ottawa, Canada, this 6th day of November 2008.
“Campbell J. Miller”
Email this Content