Citation: 2008TCC275
Date: 20080502
Docket: 2005-4340(EI)
2005-4341(CPP)
BETWEEN:
MARC JOLIN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
For the Appellant: The Appellant himself
Counsel for the
Respondent: Frederic Morand
REASONS FOR JUDGMENT
(Delivered
orally from the Bench on
June 12, 2007, in Hamilton, Ontario)
McArthur J.
[1] These are appeals from decisions of the
Minister of National Revenue under the Employment Insurance Act and the Canada
Pension Plan. The issue is whether Guylain Ledoux-Gravel (“Guylain”) was an
employee or independent contractor of the Appellant (“Marc”) for the period
January 1, 2003 to May 3, 2004. The hearing was conducted in French, in Hamilton, Ontario.
[2] At the outset, there were three somewhat
troubling issues that I will comment on. First, Marc's mother tongue is French,
although he has worked and is more at ease using English in southern Ontario as he has done since he was 15 years old. He is now 47.
His wife is unilingual English, and he had filed his Notice of Appeal and all
correspondence in English, and had asked for an English hearing. However, the Respondent
requested a French hearing because his witness, Guylain, is far more fluent in
French and would have required an English interpreter. Marc, who is easygoing,
and whose first language was French, went along with this format, and I believe
explained the proceedings to his wife during the periodic recesses. I believe
the Respondent should have requested an interpreter for Guylain rather than
requesting that the whole hearing be in French. It is Marc's appeal, not the Respondent's,
although I might add I felt privileged to hear it in both official languages.
[3] My second concern was that counsel for the Respondent
requested an adjournment of this hearing, because similar appeals had recently
been filed, with similar facts involving the same periods, and the Respondent wanted
all appeals to be heard at the same time. The request was denied, rightly. In
this regard, Marc stated in his objection that:
After three years of my life being taken by adjournments and
remanding of court dates, not to mention the stress and harassment from Revenue
Canada, I completely disagree
with an adjournment at this time and I'm anxious to have my side heard on June
the 11th, 2007.
Obviously, each appeal should be heard on its own
merits. The workers such as Guylain are all different and not cut from the same
pattern, and their circumstances must be heard and considered individually. Having
said this, hearing each appeal consecutively by the same judge would probably
be most practical.
[4] A third disturbing factor was that Guylain
testified that there were four months during the period in question that he did
not work for the Appellant, and that he always contended this to the Minister,
yet it was ignored.
[5] I was favourably impressed with all
witnesses. I should mention also that the a witness at the beginning of the
hearing, one of Marc's brothers who works in the same manner as Marc, gave some
background of a working contractor in the Hamilton area. Marc is a hardworking
construction tradesman with limited formal education, but has learned from the
school of hard knocks. He has little understanding of paragraph 5(1)(a)
of the Act and, of course, has never heard of the commonly referred-to
decisions of Wiebe Door Services Ltd. v. M.N.R. and 671122 Ontario Ltd. v. Sagaz Industries Canada Inc.
[6] Similarly, Guylain is a pleasant and
straightforward worker and at Marc’s invitation, came to Hamilton by bus from Rouyn Noranda at the age of 19, to work
and to earn more money. He had been working for three years in northwestern Quebec in restaurants, and doing home renovations, never
earning more than $7.00 per hour. He began with Marc at $10.00 per hour which
he stated was a huge increase.
[7] In these appeals, Guylain was supported by the Respondent,
and Marc felt somewhat isolated, in the sense that he had no similar assistance.
I believe Guylain knew the fundamental or legal differences between a contractor
and an employee. I found both witnesses basically honest. They both obviously
coloured their testimony to meet the present-day needs. When asked, Marc
described the difference between an employee and a contractor primarily as
whether or not the usual employee deductions were taken from the worker's
paycheque, which includes income tax, employment insurance premiums, Canada
Pension Plan contributions, Worker's Compensation premiums, etcetera. He further
stated that the whole construction industry in southern Ontario is based on all workers being contractors ‑ I
use that in the sense of independent contractors ‑ in circumstances as in
the present appeals, and that to find differently would upset the whole
industry.
[8] Assumptions of fact taken from the Reply to
the Notice of Appeal, with my comments, include the following. Items (a) to (g)
are accurate.
(a) The Appellant, operating as M & M
Carpentry, was a subcontractor operating a business involved in house framing
in the construction industry.
(b) Marc, as a subcontractor, was involved in
working for Penco as a contractor, constructing a 300-unit senior citizens'
home.
(c) The
worker was hired by the Appellant in August of 2002.
(d) The worker worked for the Appellant as a
carpenter/framer as well as doing various other construction tasks.
(e) The worker's duties included framing,
roofing, flooring, dry walling, bringing materials, equipment and supplies to
other workers.
(f) The worker worked on the construction
sites where the Appellant was a subcontractor to a general contractor.
(g) The worker had no experience when hired
and the Appellant helped him to perform his tasks through job training.
Item (g) is substantially accurate, although Guylain
had worked in house renovations in the past, and had some smaller tools.
(h) The Appellant established and controlled
the worker's schedule. He kept a precise log of the worker's hours.
Marc certainly kept a precise log and I will refer to
control later in these reasons.
(i) The worker worked for the Appellant on a
fulltime basis, usually 35 to 40 hours per week and sometimes more than 40
hours per week.
This was accurate for the period, except for the four
months where Guylain testified, and Marc agreed, that he did not work for Marc.
(j) The worker worked under the direction and
direct supervision of the Appellant or his assistant.
For the most part,
that is accurate.
(k) The worker provided some hand tools and
the Appellant provided all major tools, equipment, materials.
Again, that is partly accurate. I was unable to
determine from the evidence that the Appellant provided major tools. He owned a
forklift but there was no evidence as to who drove it. Guylain did not provide
any materials, although he had most of his small-tool equipment. The following
two items are accurate:
(l) The worker received a salary based on an
hourly wage which was determined by the Appellant.
(m) The worker started out being paid $10.00
per hour for two months, then was increased to $12.00 to June 2003, then he
received $13.00, to approximately mid‑April 2004, at which time he was
increased to $14.00 per hour for his last two weeks.
(n) The worker was paid weekly by cheque.
In fact, Guylain was paid bi-weekly. The following two
items, I shall refer to later.
(o) The Appellant had the right to control the
worker and the accomplishment of his tasks and responsibilities.
(p) The path of the worker was fully
integrated in the operations of the Appellant.
[9] Guylain, through mutual friends, was invited
by Marc from Rouyn Noranda to work on construction in southern Ontario, in anticipation of earning more than $7.00 an hour. He
took a bus from Rouyn Noranda to Toronto in August 2002, stayed with a relative
overnight in Toronto, took an early-morning bus to Oakville where he was picked up by Marc and driven to the work
site. He began to work that same morning framing a 300-unit senior citizens'
residence. He had a few small tools and limited experience.
[10] Other workers with Marc and particularly
Marc's brother Paul, took Guylain under their wing and showed him the ropes. He
was well-received and learned quickly. He lived in Marc's home the first month
and then he found his own place when he was able to afford it. For over a year,
he travelled to the work site with another worker, Charles, leaving home at
7:00 a.m., returning after 5:00 p.m. each day. Over the months in 2002 and 2003,
he gained experience, bought his own tools and became more autonomous. He
described it “debrouillard”. Marc was pleased with his ability, as were his
fellow workers.
[11] Marc took on jobs from the main contractor,
Penco, an international construction company for at least from August 2002 to
May 2003. He explained that he would agree perhaps to frame and do other work
for an estimated figure, such as $20,000.00 or so, depending on the size of the
job, within a certain time period. He and his brothers would invite or hire
workers to participate in that contract, although clearly in Guylain's
instance, Marc and his brothers were the bosses. They told him where to work,
what to do, how to do it and paid him a fixed hourly wage every two weeks.
[12] With the Wiebe Door test in mind,
together with the Supreme Court of Canada decision in Sagaz, I will make
the following comments. Marc had control of Guylain, although this diminished
as the months turned into a year in August or September 2003. Marc got the work
for the first nine months through Penco and then through house building
contractors. He directed Guylain where to go. His brother Paul kept track of
Guylain's hours, paid him every two weeks and told him what to do. As Guylain
became more experienced, he could work on his own with his own small tools,
such as a hammer, skill saw, crow bar, screwdriver, measuring tape, etcetera. The
control test favours the Respondent. Further, the profit or loss test also
favours the Respondent. Guylain was paid a fixed wage for every hour he worked.
He was not paid for performance or off hours he did not work. The tools probably
favours Marc's position. With respect to integration, Guylain was part of a team, and did not
work as an individual independent contractor, particularly during the first
year, August 2002 to September or October, 2003, in association with Marc.
[13] As the Sagaz decision
indicates, an important question to ask in cases such as this one is “whose business was it?”. It certainly was not
Guylain's business. His English and finances were limited. He relied on Marc
and his brother or brothers. Also, “where are the two men now”? Marc continues
to work hard in the Hamilton area construction business. Because of his
uncertainty as to employee versus independent contractor status, he no longer
hires workers such as he did in the past and works on his own. This is rather
unfortunate. Guylain has returned to northwestern Quebec
for personal reasons, where he has received accounting training. I believe he
works in the mining business in Baie
Comeau, Quebec, and has his
own small business. There appears to be little or no animosity between Marc and
Guylain, to their credit.
[14] At the conclusion of the Respondent's
submissions, I stated that I would allow the appeal, but only to the extent
that Guylain was an employee of the Appellant from January 1, 2003 to October
31, 2003. He was not an employee from November 1, 2003 to May 3, 2004, for the
following reasons.
[15] He did not work for the Appellant from at
least December 2003 to February 28, 2004. There was evidence, I believe
from both parties, that he did not work for Marc for four months. For that
reason, and also considering that Guylain became more autonomous, I include the
month of November.
[16] I find further that when Guylain came back
to the Appellant in March 2004, he was more of an independent contractor. Unfortunately,
he had declared bankruptcy, and he travelled to the work site by bus and foot,
sometimes arriving at 11:00 in the morning, or sometimes not at all. This did
not seem to concern Marc who felt that Guylain could come and go as he pleased.
Further, at that time he had his own tools and worked without instruction,
although he had difficulty reading architectural plans and needed some
direction. He got paid for the hours he worked, without deduction. No more, no
less.
[17] In conclusion, the appeals are allowed to
reflect that the worker was engaged by the Appellant in insurable and
pensionable employment within the meaning of the Act and the Plan,
but only for the period January 1, 2003 to October 31, 2003, and was not in
insurable or pensionable employment for the period November 1, 2003 to May 3,
2004.
Signed at Ottawa, Canada, this 2nd day of May, 2008.
“C.H. McArthur”
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