Docket: 2008-557(EI)
BETWEEN:
IRA MARIA MESZAROS,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
MARLENE MCINTYRE,
Intervenor.
____________________________________________________________________
Appeal
heard on common evidence with the appeal of
Muriel Marlene McIntyre (2008-559(EI)), on August 14, 2008,
at Victoria, British Columbia
Before: The Honourable
Justice Campbell J. Miller
Appearances:
|
For the Appellant:
|
The
Appellant herself
|
|
Counsel for the Respondent:
|
Sara Fairbridge
|
|
For the
Intervenor:
|
The Intervenor herself
|
____________________________________________________________________
JUDGMENT
The appeal pursuant to subsection 103(1) of
the Employment Insurance Act is allowed and the ruling of the Minister
of National Revenue on the appeal made to him under section 91 of the Act
is vacated.
Signed at Ottawa, Canada, this 17th day of September 2008.
“Campbell J. Miller”
Docket: 2008-559(EI)
BETWEEN:
MURIEL MARLENE MCINTYRE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
IRA MESZAROS,
Intervenor.
____________________________________________________________________
Appeal heard on common evidence with the
appeal of
Ira Maria Meszaros (2008-557(EI)), on August 14, 2008,
at Victoria, British Columbia
Before: The Honourable Justice Campbell J.
Miller
Appearances:
|
For the
Appellant:
|
The Appellant herself
|
|
Counsel for the
Respondent:
|
Sara Fairbridge
|
|
For the
Intervenor:
|
The Intervenor herself
|
___________________________________________________________________
JUDGMENT
The appeal pursuant to subsection 103(1) of
the Employment Insurance Act is allowed and the ruling of the Minister
of National Revenue on the appeal made to him under section 91 of the Act
is vacated.
Signed at Ottawa, Canada, this 17th day of September 2008.
“Campbell J. Miller”
Citation: 2008 TCC 525
Date: 20080917
Docket: 2008-557(EI)
BETWEEN:
IRA MARIA MESZAROS,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
MARLENE MCINTYRE,
Intervenor.
Docket: 2008-559(EI)
AND BETWEEN:
MURIEL MARLENE MCINTYRE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
IRA MESZAROS
Intervenor.
REASONS FOR JUDGMENT
Miller J.
[1]
These are two
employment insurance appeals by Ira Maria Meszaros and Muriel Marlene McIntyre
in which they intervene in each other’s appeal. They are on the same
wavelength. They do not believe Ms. Meszaros’ work as a hairdresser, on
premises owned by Ms. McIntyre, for the period January 1, 2006 to June 30, 2007
constitutes insurable employment as provided by Regulation 6(d) of the Employment
Insurance Regulations.
That Regulation reads as follows:
6 Employment in any of the
following employments, unless it is excluded from insurable employment by any
provision of these Regulations, is included in insurable employment:
…
(d) employment of a
person in a barbering or hairdressing establishment, where the person
(i) provides any of the
services that are normally provided in such an establishment, and
(ii) is not the owner or operator of the
establishment;
[2]
This case hinges on
whether Ms. Meszaros was the operator of the establishment. If I find she was,
then her work is not included in insurable employment.
[3]
The Respondent agreed
that Ms. Meszaros was an independent contractor carrying on her own business
from Ms. McIntyre’s premises, but simply was not the “operator of the
establishment” and thus was caught by Regulation 6(d).
[4]
Ms. McIntyre was part
owner of her home. She lived on one floor, rented a suite out on another
and also had a four-chair hairdressing salon on the premises. Ms. McIntyre
operated this salon alone on Thursdays and Sundays, and occasionally on Tuesdays.
She rented the salon to Ms. Meszaros on Wednesdays, Fridays and Saturdays at a
charge of 25% of Ms. Meszaros’ earnings. Ms. McIntyre testified that she
felt this was fairer to someone building up her business than to charge a set
monthly rental rate. Ms. McIntyre equipped and furnished the salon, though she
gifted one of the four chairs in the salon to Ms. Meszaros. Ms. McIntyre
is winding down her hairdressing business and currently works only two days a
week.
[5]
Ms. McIntyre and Ms.
Meszaros never worked in the salon at the same time. When Ms. Meszaros worked
at the salon, she could have as many as three chairs going at once. On
Wednesdays, Fridays, and Saturdays, Ms. Meszaros used her own key to open and
close the premises, which has a separate entrance from the rest of the house.
[6]
Ms. Meszaros bore all
her own expenses for supplies, repairs, tools, etc. She increased her
clientele over time by word of mouth, advertising by flyer and with walk-in
business. It was up to her who she took on as a customer. She set her own
rates. Indeed, she was in charge and control of the salon on the days she
worked there.
[7]
Ms. McIntyre had a sign
for Hairways, Marlene & Co., indicating she added “& Co.” when Ms.
Meszaros came on board. She considers herself and Ms. Meszaros as equally
operating the salon and would change her sign to reflect that, if not for the
cost. As owner of the property, Ms. McIntyre is responsible for insurance and
property taxes. She also obtained approval from the town to carry on business
from her home.
[8]
It is clear that Ms.
Meszaros carried on her own business from the salon situated in premises owned
by Ms. McIntyre. As she was not engaged in a contract of service, she would not
normally be considered to be “employed” for purposes of determining whether she
had insurable employment. However, Regulation 6(d), cited earlier,
specifically addresses the situation of hairdressers, and stipulates in effect
that notwithstanding that they may be engaged in contracts for services
(i.e. independent contractors), they will still be found to be in
insurable employment where they provide services normally provided in a
hairdressing establishment, and they are not the owner or operator of the
establishment.
[9]
There is no question
Ms. Meszaros carried on hairdressing activities at the salon; there is also no
question she was not the owner of the salon – Ms. McIntyre was. The issue is
whether Ms. Meszaros was the operator of the establishment.
[10]
Respondent’s counsel
referred me to the Tax Court of Canada decision of E & S
Tresses Ltd. v. M.N.R.
in which Deputy Judge Porter dealt with the meaning of the term “establishment”
in considering the forerunner of Regulation 6(d) (Regulation 12(d)),
which only referred to the owner or proprietor of the establishment, and not
the “operator of the establishment”. Deputy Judge Porter concluded
that several workers carried on separate businesses, but from one
establishment, and therefore they did not own that establishment and
consequently, were caught by Regulation 12(d). Deputy Judge Porter also
stated that “they did not own nor have a lease of specific space”.
[11]
That is not the same
situation as before me. I find that Ms. Meszaros’ agreement with Ms. McIntyre
was a lease of specific space, and not just for a chair but for the entire
salon. The Respondent’s counsel argued that establishment means physical
premises and that the physical premises were operated by Ms. McIntyre, not Ms.
Meszaros. Yet, the indices relied upon to support this proposition were indices
of “ownership” (liability insurance and property taxes for example), not necessarily
indices of “operation”. Operation must mean something different from ownership
or there would be no need for the two concepts in Regulation 6(d).
If, for example, Ms. Meszaros rented a salon three days a week in a
shopping mall, and was the sole business being conducted from those premises on
those three days, would the mall owner be considered to be the operator of the
premises on those three days? No. The mall landlord presumably has not
furnished the premises as a salon, but would the answer be any different had
the landlord done so, and then looked for a hairdresser to “operate” the
premises. Is Ms. Meszaros precluded from “operating” the salon simply because
the owner, Ms. McIntyre, also happens to be a hairdresser, who “operates” the salon
two days a week, when Ms. Meszaros is not there. It is a fine line
distinction.
[12]
The Respondent contends
there can only be one operator of the establishment. I disagree. I believe the
wording of Regulation 6(d) is equally consistent with the concept that
there can only be one operator at any one time. If I strip away
indices of ownership, and ask what indices of “operator” does Ms. McIntyre
exercise on the days when Ms. Meszaros is in complete control of the salon, I
am left with none. Being an operator of an establishment suggests to me control
over the premises, upkeep, cleanliness, opening and closing and handling the
business activities carried on from the premises. These are responsibilities
that can shift, I suggest, from one operator to another, depending on the circumstances.
And in the circumstances before me, I find that is exactly what has
happened. As the sole and exclusive proprietorship being carried on from
the premises of the salon on Mondays, Wednesdays and Fridays, with all the
responsibilities that are entailed in connection with those premises, I
conclude Ms. Meszaros was the operator of the establishment on the days she
worked there, and that hers is not the type of employment contemplated as
insurable employment by Regulation 6(d). I therefore allow the appeals
and refer the matter back to the Minister of National Revenue on the basis
that Regulation 6(d) of the Employment Insurance Regulations does
not apply to constitute Ms. Meszaros’ work at the salon as insurable
employment.
Signed at Ottawa, Canada, this 17th day of September 2008.
“Campbell J. Miller”
CITATION: 2008 TCC 525
COURT FILE NO.: 2008-557(EI) and 2008-559(EI)
STYLE OF CAUSE: IRA MARIA MESZAROS AND M.N.R. AND MARLENE MCINTYRE
MURIEL
MARLENE MCINTYRE AND M.N.R. AND IRA MESZAROS
PLACE OF HEARING: Victoria, British Columbia
DATE OF HEARING: August 14, 2008
REASONS FOR JUDGMENT BY: The
Honourable Justice Campbell J. Miller
DATE OF JUDGMENT: September 17, 2008
APPEARANCES:
|
For the
Appellant:
|
The Appellant herself
|
|
Counsel for the
Respondent:
|
Sara Fairbridge
|
|
For the
Intervenor:
|
The Intervenor herself
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
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