Citation: 2008TCC135
Date: 20080404
Dockets: 2006-3373(CPP)
2006-3374(EI)
BETWEEN:
FREDERICTON COUNCIL FOR CHRISTIAN
MINISTRY ON CAMPUS,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Angers J.
[1] These appeals were
heard on common evidence. The Fredericton Council for Christian Ministry on Campus (the Council)
is appealing an assessment dated February 21, 2006 for Canada Pension Plan
(CPP) contributions and Employment Insurance (EI) premiums, plus applicable
interest, for the years 2002, 2003 and 2004. The assessment was confirmed by
the Minister of National Revenue on August 31, 2006. The Council was
assessed for its failure to remit CPP contributions and EI premiums with regard
to a contract entered into with Joanne Barr (the worker) to perform services as
a campus minister at the University of New Brunswick and St. Thomas University in Fredericton, New Brunswick.
[2] The Council is an
ecumenical ministry that provides pastoral care and direction to the student
body, faculty, and staff of both universities referred to above. The worker, a United Church minister, was
hired as a campus minister according to the contracts she entered into with the
Council. Her duties were described as follows:
·
To assist with and
initiate planning and goal setting for Campus Ministry
·
To maintain a
presence and be available at times and places agreed upon
·
To be available to
students for counselling
·
To assess the campus
situation on a continuing basis to identify needs and opportunities for service
·
To be aware and
supportive of the activities of Christian groups on campus
·
To work flexible
hours which will involve some evenings and weekends
·
To discuss and document
priorities and objectives with the Advisory Comm;
·
To refer students
when appropriate
·
To attend various
university functions, especially student oriented activities
·
To cooperate and
interact with the other Campus Ministers
·
To attend all
meetings of the Council, and to report to Council on a regular basis
·
To publicize Campus
Ministry and local student related church activities
·
To liaise with member
churches
·
To participate in
Student Service programs when invited and
·
To visit students residences,
the Student Union Building etc.
[3] The first contract
between the worker and the Council provides for a 20‑hour work week for a
period running from August 2001 to May 2002, with the possibility of
renegotiating the contract after the expiry date. The contract is dated
August 19, 2001. The worker’s remuneration was $400 per week, with no
deductions from this amount for CPP, EI or income tax. The contract stipulates
that the “Council is not responsible, and shall not remit any amounts, for
these statutory obligations”. It goes on to say, strangely enough, that the
worker is responsible for payment of all remittances which may be assessed with
respect to her receiving the weekly payment for her services. The contract
states as well that the Council does not provide any additional benefits such
as long-term disability, dental, medical or life insurance.
[4] The contract also
stipulates that the Liaison Committee is to meet with the worker from time to
time to discuss the duties of the position and the services she provides, and
that the worker is to provide a written summary of her services to the Liaison
Committee prior to each monthly meeting. The contract further stipulates that
the Liaison Committee is composed of members of the Council and will supervise
the terms of the contract and report to the Council as necessary.
[5] The second contract
was signed on August 20, 2002 and covered the period from August 1, 2002 to May
31, 2003. The remuneration was now approximately $646 per two weeks for the
same number of hours per week. The payment clause reads as follows:
The Council shall pay Reverend Barr
a salary prorated from an annual full-time (12 months at 40 hours per
week) salary of $33,600. Employee benefits will include only a pension
contribution of 8% of salary and a Housing Allowance of $500 per month during
the term of the contract. No employment deductions (EI or CPP) are made.
[6] The job description
remained the same except that the Liaison Committee had now been replaced with
the Personnel Committee, which was to meet with the worker from time to time to
discuss the duties of the position and the services she provided. The worker was
now to give a written summary of her services at each monthly Council meeting
instead of giving it to the Liaison Committee prior to the Council meeting. In
addition, the portion that said the “Council is not responsible, and shall not
remit any amounts, for [. . . ]statutory obligations” and the clause making the
worker responsible for payment of all remittances that might be assessed with
respect to her receiving the weekly payment for her services were both deleted.
[7] The third contract
was signed on July 9, 2003 and covered the period from August 1, 2003 to
July 31, 2004. Its terms and conditions were the same as those of the
previous contracts except that the salary was now $662.30 per two weeks. The
worker received the housing allowance of $500 per month, but the pension
contribution by the Council was reduced to 7%. No deductions were to be made
other than the worker’s own contributions to the pension fund, and she was now
getting 4 weeks’ vacation.
[8] The final contract
is not signed; it very briefly indicates amounts for salary, housing allowance
and benefits, and provides for an allocation of money for conferences, books
and professional development. The contract covers the period from
August 1, 2004 to July 31, 2005. According to the evidence, the only
conference the worker attended was in the fall of 2006 or spring of 2007, which
is outside the period in issue. Some of the worker’s expenses were paid by the Council,
but very few.
[9] During the three
years in issue, the worker met with students, individually or in groups, and
with faculty. She was provided with an office by the university, which she
shared with other members of the clergy. It is admitted by the appellant that
the worker was not required to submit invoices to it for her wages, that she
was accountable to it for her activities and that she was required to perform
her services personally, as she could not hire a replacement.
[10] The Council’s board
of directors is composed of volunteers. Ronald Naugler testified on behalf
of the board. He was treasurer and a member of the Council when the worker was
hired. The worker was hired as an independent contractor because of the fact
that board members were volunteers and, more particularly, because the board
wanted to save money by not having to pay the employer’s CPP contributions and
EI premiums and other contributions that he did not elaborate on.
[11] According to Mr.
Naugler, no board member had any control over the worker nor did anyone
supervise her work. She was required to work her 20 hours per week. In the
earlier stages, there were no provisions for vacation time or sick leave nor
did she have to report to anyone other than to the Council at its monthly
meeting. She would report to it verbally or in writing. The Council did not
supply her with anything, as the university provided the office. She received
no training and was not given directions by the Council. Although
Mr. Naugler recognizes that the worker is a very experienced professional
and says that the board assumed that she would perform her duties accordingly,
he nevertheless acknowledges that things might have been different had she been
a young graduate. Despite the fact that the contracts refer to the position of campus
minister, Mr. Naugler says that the worker was hired more as a counsellor
than a minister.
[12] Mr. Naugler has
no recollection whether a personnel committee ever existed. The monthly
reporting was done to board members. The Council did not provide the worker
with any books, a telephone, a computer, or other work-related assistance, nor
do we know if she actually used, or had access to, any of these.
[13] The Council, during
the period at issue, had a full-time employee and, although he was not an
ordained minister, he provided services similar to the worker’s. They shared
the same office at the university and worked the same hours. The worker was
eventually hired as an employee after the Council was assessed for the unpaid
contributions and premiums.
[14] It can be assumed
from the evidence that the worker was able to perform other duties of her
Ministry, such as marriages and baptisms on her own time. The appeals officer
did receive a completed fact-finding questionnaire signed by Joanne Barr
that would support that assumption. A fact-finding questionnaire was also sent
to the Council. In the two questionnaires, the Council and the worker agree on
mostly everything. Among the points of disagreement, however, is question number
25 asking if they believe the worker to be a self-employed person or an
employee. The Council indicated its belief that she was self-employed, while
the worker indicated that she believed herself to be an employee. The worker
was not called as a witness by either party.
[15] The issue before
this Court is whether the worker was employed by the Council in insurable and
pensionable employment within the meaning of the Employment Insurance Act
and the Canada Pension Plan. In other words, was the worker employed by
the Council pursuant to a contract of service or as an independent contractor?
[16] In the recent
decision by this Court in Kilbride v. The Queen, 2007 TCC 663, Madam
Justice Campbell reviewed some of the latest decisions of the Federal Court of
Appeal and this Court on this issue and made a summary of those decisions that
is worth repeating in terms of the criteria to be considered in carrying out an
analysis of the said issue.
18 In the recent decision of Lang v. The Queen, [2007]
T.C.J. No. 365, Chief Justice Bowman provided a comprehensive examination
of the most recent decisions in this area and in the end summarized his
conclusions from these series of cases at paragraph 34:
(a) The four-in-one test in Wiebe Door as confirmed by Sagaz
is a significant factor in all cases including cases arising in Quebec.
(b) The four-in-one test in Wiebe Door has, in the Federal
Court of Appeal, been reduced to representing “useful guidelines” “relevant and
helpful in ascertaining the intent of the parties”. This is true both in Quebec
and the common law provinces.
(c) Integration as a test is for all practical purposes dead.
Judges who try to apply it do so at their peril.
(d) Intent is a test that cannot be ignored but its weight is as
yet undetermined. It varies from case to case from being predominant to being a
tie-breaker. It has not been considered by the Supreme Court of Canada. If it
is considered by the Supreme Court of Canada the dissenting judgment of Evans
J.A. in Royal Winnipeg Ballet will have to be taken into account.
(e) Trial judges who ignore intent stand a very good chance of
being overruled in the Federal Court of Appeal. (But see Gagnon where
intent was not considered at trial but was ascertained by the Federal Court of
Appeal by reference to the Wiebe Door tests that were applied by the
trial judge. Compare this to Royal Winnipeg Ballet, City Water
and Wolf.
19 In Royal
Winnipeg Ballet, as in this case, there was no written contract but both
parties were clear that they intended the relationship to be one of independent
contractor. Justice Sharlow, J.A. at paragraphs 63-64 concluded that it was
necessary to consider the Wiebe Door factors in light of the parties
common understanding of their legal relationships:
What is unusual in this case is that
there is no written agreement that purports to characterize the legal
relationship between the dancers and the RWB, but at the same time there is no
dispute between the parties as to what they believe that relationship to be.
The evidence is that the RWB, the CAEA and the dancers all believed that the
dancers were self‑employed, and that they acted accordingly. The dispute
as to the legal relationship between the dancers and the RWB arises because a
third party (the Minister), who has a legitimate interest in a correct
determination of that legal relationship, wishes to assert that the evidence of
the parties as to their common understanding should be disregarded because it
is not consistent with the objective facts.
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.
20 In concurring
reasons, Justice Desjardins stated at paragraph 72:
As demonstrated
by Sharlow J.A., if the intention of the parties is uncontested, save by third
parties, as in the case at bar, the common-law judge has nevertheless the
responsibility to “look to see” if the terms used and the surrounding
circumstances are compatible with what the parties say their contract is.
21 In Combined
Insurance Company of America v. M.N.R., [2007] F.C.J. No. 124,
Nadon, J.A. after reviewing recent case law, including Royal Winnipeg Ballet,
stated at paragraph 35:
In my view,
the following principles emerge from these decisions:
1.
The relevant facts, including the parties’ intent regarding the nature of their contractual relationship, must be looked at in the
light of the factors in Wiebe Door, supra, and in the light of any
factor which may prove to be relevant in the particular circumstances of the
case;
2.
There is no predetermined way of applying the
relevant factors and their importance will depend on the circumstances and the
particular facts of the case.
Although as a general rule the control test is of special importance,
the tests developed in Wiebe Door and Sagaz, supra, will
nevertheless be useful in determining the real nature of the contract.
22 All of
these cases are close. It is clear that no single test is determinative. Each
case requires a balancing of factors specific to that case coupled with a good
dose of common sense.
23 Following these
cases, I am bound to give consideration to the intent of the parties in this
appeal and to determine the weight it is to be assigned in the circumstances.
However, it is also clear from the recent case law that intention alone is not
a conclusive factor and that the Wiebe Door factors must be considered
to determine whether the parties conducted their work relationship in a manner
that reflected their stated intention.
24 The four
criteria of the four-in-one test of Wiebe Door are:
(1) degree
of control;
(2) ownership
of tools;
(3) chance
of profit; and
(4) risk
of loss.
[17] In this instance, it
is clear that the parties are not on the same wavelength as to their intentions
when they entered into these contracts for the three years under appeal. Their
respective answers to question number 25 concerning their belief as to the
worker’s employment status are contradictory. The worker believed she was an
employee while the Council believed that the worker was a self-employed person.
The worker did not testify, but, notwithstanding their respective answers to
question number 25, the Council’s position that their intention was that the
worker be self-employed does not appear to be supported by the terms of the
three signed contracts. The first contract that was signed between the parties
is the only one that shies away from a possible employer-employee relationship.
It does indicate, though, that if the Council is ever assessed for deductions
not remitted, the worker is to be responsible for the remittances. In other
words, if the contract is held to be something other than a contract for
services, the worker is to compensate the Council. Now if there was a clear intention
to create a contract for services, why was there a need for such a clause? As
for the second contract, it contains a clause referring to employee benefits
consisting of a pension contribution of 8% of salary and a housing allowance.
That, in my opinion, is indicative of the parties, having had in mind the
existence of an employer-employee relationship. Yet the same contract calls for
no EI and CPP deductions. The third contract reduces the pension contribution
to 7%, maintains the housing allowance, but adds a four-week vacation period.
These conditions are also indicative of the parties, having had in mind the
existence of an employer-employee relationship.
[18] The uncertainties in
the terms of the three signed contracts raise questions as to the actual
intention of the Council as regards whether the worker was hired as an employee
or as an independent contractor. It is as if the actual and only real intent
was to simply find a way to avoid paying the employer’s share of CPP contributions
and EI premiums. In all other respects, the arrangement appears to present the
characteristics of an employer-employee relationship as the worker was treated
as an employee under most of the terms of the contracts.
Control
[19] On the issue of
control, the Council stipulated in the first contract that the worker was to
meet with the Liaison Committee from time to time to discuss the duties of the
position and the services she provided. The Liaison Committee was to supervise compliance
with the terms of that contract and report to the Council. Under the second and
third contracts, the worker had to meet with the Personnel Committee for the
same reasons, and was to give a written summary of her services at each monthly
Council meeting.
[20] Given that the worker
here is a professional providing services as a counsellor, the degree of
supervision and control is somewhat less than in other circumstances. That does
not preclude, though, the creation and existence of an employer-employee
relationship. In our fact situation, I find that the Council retained
sufficient control over the worker to make it possible to find in favour of an
employer-employee relationship. The worker’s responsibilities, as described in
the contracts, allowed of a degree of control consistent with that exercised by
an employer. The worker had to work flexible hours (including evenings and weekends), attend certain functions,
attend meetings of the Council and report to Council, among other things. The
worker was subject to a certain degree of supervision. Although this factor is not
highly conclusive, I find that there was a degree of control sufficient to
support a finding that an employer-employee relationship existed.
Ownership of Tools
[21] The worker’s stock-in-trade
was basically her education and experience. That in itself is not a conclusive
factor, for it admits of her being either an employee or an independent
contractor. The physical tools such as the office, telephones and computers
were provided by the university to the Council in order for it to provide
services under its contract. The worker did not need to provide these things
herself. This factor would accordingly favour an employer-employee
relationship.
Chance of Profit/Risk of Loss
[22] In this fact
situation, the worker was at no risk of loss nor was she in a position to make
a profit. She was paid for a 20-hour work week at a set rate and, under the
second and third contracts, received what are described as employee benefits.
The worker was to be reimbursed for her expenses if she attended a conference.
These factors suggest that the worker was an employee.
Integration
[23] On the issue of
integration, it is fair to say that the Council’s main objective is to provide
pastoral care and direction to the students, faculty, and staff of both
universities, and that the worker’s involvement is part of the attainment of
that objective. One must also remember that integration is rarely a determining
factor. It is submitted by the appellant that the worker is on a yearly contract
and thus unable to be fully integrated. Be that as it may, integration remains
a very difficult factor to consider.
[24] I therefore conclude
on the whole of the evidence that the worker was employed by the Council in
insurable and pensionable employment. The appeals are therefore dismissed.
Signed at Edmundston, New Brunswick, this 4th day of April 2008.
“François Angers”
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