Citation: 2006TCC34
Date: 20060130
Docket: 2004‑4362(EI)
BETWEEN:
MARIO POULIN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Savoie D.J.
[1] This appeal was
heard at Québec, Quebec, on November 22, 2005.
[2] It is an appeal
concerning the insurability of the Appellant's employment with Jean‑Yves Bernard,
the Payer, during the periods from June 21 to July 19, 2003, and
from July 27 to August 1, 2003.
[3] On October 20,
2004, the Minister of National Revenue (the "Minister") informed the
Appellant of his decision that the Appellant had not held insurable employment
during those periods.
[4] The Minister
determined that the Appellant had received no remuneration from the Payer
during the period from June 21 to July 19, 2003, and that he had
rendered no service to the Payer during the week from July 27 to
August 1, 2003.
[5] In rendering his
decision, the Minister relied on the following assumptions of fact:
[TRANSLATION]
(a) the Payer owned
a cottage on Lac St‑Joseph;
(b) the Appellant
was a friend of the Payer;
(c) the Appellant
had lost his job and needed 12 weeks to qualify for unemployment benefits;
(d) the Appellant
renovated his cottage with friends, who helped him on a volunteer basis;
(e) the Appellant
worked on the renovation of the Payer's cottage;
(f) the Appellant
asked the Payer for remuneration to assist him financially;
(g) the Appellant
received remuneration of $15 an hour for six weeks between May 9 and
June 20, 2003;
(h) on
April 7, 2004, in a signed declaration to HRDC, the Appellant stated that
"the employer paid me, in advance on June 14, 2003, $1,000 for the
work in the weeks of July 20 and 27, 2003; I worked one week and one
remained for me to work;"
(i) the Appellant
received no remuneration from the Payer during the weeks from June 21 to
July 19, 2003;
(j) the Appellant
rendered no services to the Payer during the week from July 27 to
August 1, 2003.
[6] The Appellant knew
nothing of the Minister's assumption of fact stated in subparagraph (a);
he denied those stated in subparagraphs (b) to (d) and (i); he admitted
those stated in subparagraphs (e), (g) and (h) and wanted to clarify those
stated in subparagraphs (f) and (j).
[7] The evidence showed
that the Appellant and the Payer met in March 2003. It was at that time that the
Appellant asked the Payer for work since he had lost his job and needed
12 weeks to qualify for unemployment benefits. At that time, the Payer had
decided to renovate his cottage, located at 2 Pointe des Bleuets, Lac St‑Joseph,
in order to make it habitable year-round. For that purpose, he had asked
friends to give him a hand. The friends came and helped the Payer with the
renovation of his cottage and worked on a volunteer basis as friends because,
during the summer, they took advantage of access to Lac St‑ Joseph from
the Payer's cottage. However, as regards the Appellant, who needed money, the
Payer decided to assist him financially. The Payer told the investigators that
he had decided to provide financial assistance to the Appellant strictly in
order to help him, as he had done on other occasions. The Payer revealed to the
investigators that he had paid the Appellant $15 an hour, as the latter had
asked him.
[8] The Payer gave the
Appellant a personal cheque for $1,000, but specified that that amount of money
was in no way related to the work the Appellant was doing at his cottage. He
added that although he had noted "work" on the cheque, that was
strictly as a reminder. According to the Payer, the $1,000 represented a loan
that he had granted the Appellant.
[9] It was established
that the Appellant told the investigators that the $1,000 amount instead
represented an advance that the Payer had made to him for future work, which
the Appellant purportedly did during the two-week construction industry holiday.
However, at the hearing, the Appellant stated that he had not worked for the
Payer during the construction industry holiday. The Payer moreover stated that
he would never have allowed anyone to work at his cottage in his absence and
that no one had done work at his cottage during the construction industry
holiday, that is to say the last two weeks of July 2003. The Appellant told the
investigators that he had decided on his own work schedule and that he had
worked eight hours a day from Monday to Friday for a 40- to 42‑hour
work week. However, the Payer told the investigators that the Appellant had had
no work schedule to meet; he showed up when he wanted, either during the week
or on the weekend, and he helped during the day or in the evening. The Payer
also denied the Appellant's statements that he had never been on the site. The
Payer declared, among other things: "As far as I'm concerned, it's totally
false that I didn't work; on the contrary, I was the one who told him what to
do. I paid Mario Poulin simply to help him out. I had helped him
financially on other occasions. A number of people helped me on a volunteer
basis, and only Mario was paid because of his financial difficulties. The
cheque stubs were prepared at Mario's request, but I didn't make any
remittances or issue a record of employment because I considered that I was
helping him. He was the only one paid. No payroll was kept, since the Appellant
was not considered an employee. Mario Poulin merely lent me a hand, like
all his other friends. He raked the earth, repaired the porch, etc. He had no
work schedule to meet; Mario Poulin showed up when he wanted."
[10] It should be noted
that the Payer, Jean‑Yves Bernard, proved to be a very recalcitrant
witness. First, he did not appear at the hearing on July 26, 2005, and it
was with considerable reluctance, considering his unconvincing reasons, that
the Court granted the postponement requested by his counsel. Furthermore, he
did not appear at the hearing of November 22, 2005, and this Court had to
issue an arrest warrant to bring him before it.
[11] Jean‑Yves Bernard
began his testimony by saying that his memory was failing him. He stated in his
testimony that the Appellant had come to help him on a volunteer basis, then he
changed his mind and said that he had indeed paid the Appellant for his work.
In his testimony, he said that he and the Appellant were good friends, but that
they had broken off relations as a result of this matter now before the Court,
but that he had signed the letter of December 8, 2004, (Exhibit A‑1)
at the Appellant's request. In that letter, Mr. Bernard stated that the
Appellant had been employed by him from June 21 to July 19 and from
July 27 to August 1, 2003.
[12] As to the wages he
had purportedly paid the Appellant, the hourly rate and the pay period, he was
unable to determine them. He then said that he had paid the Appellant using his
company's cheques.
[13] However, the
investigators' report casts doubt on a number of the Payer's statements, as
well as those of the Appellant.
[14] Furthermore, in
their statements, the Payer and the Appellant often contradicted their own
statutory declarations and the information provided to the investigators.
[15] At the hearing, the
Appellant identified the Payer as an acquaintance. That statement runs counter
to the information gathered by the investigators that the Appellant and the
Payer were friends. That is what the Payer, Mario Naud, the Payer's
accountant, and Dominique Picard, a friend of the Payer, stated. The
Appellant never explained why, if he was merely an "acquaintance" of
the Payer, the latter would have chosen to remunerate him to the exclusion of
the others. It should also be noted that the Appellant denied that he had been
the only person remunerated, which runs counter to the evidence as a whole.
[16] In his testimony,
the Appellant contradicted his statutory declaration that he had worked for the
Payer during the construction industry holiday period. He also admitted that,
having repaid the Payer half of the $1,000 loan that the latter had granted him
with one week's work, he still had not worked the other week to repay him the
rest of the loan.
[17] The Appellant
obtained the letter of December 8, 2004, (Exhibit A‑1) from the
Payer in circumstances that, on the evidence, suggest that this was the result
of a reconciliation between two friends. The evidence as a whole, both oral and
documentary, is not consistent with the information that this exhibit reveals.
The only other documents filed in support of the Appellant's claim are a
photocopy of a cheque dated July 14, 2003, issued to the Appellant by the
Payer (Exhibit I‑2); a record of wages dated July 15, 2003
(Exhibit I‑4); and a photocopy of a bank statement (Exhibit I‑5).
[18] The Appellant's
record of wages (Exhibit I‑4) for May and June 2003, that is to
June 20, 2003, was not signed by the Payer. Furthermore, that record is
irrelevant to the instant case since it purports to confirm the Appellant's
wages during a period outside the periods in issue.
[19] The bank statement
(Exhibit I‑5) was filed in support of the Appellant's statement that
he had worked and had been remunerated by the Payer during the period of June
to July 2003. According to the Appellant, that exhibit shows the deposits to
his account that can only be attributable for his work for the Payer since the
latter was his only employer at the time.
[20] The Minister
disputes that statement by the Appellant and the content of his exhibit on the
following grounds:
(1) the exhibit is
virtually illegible;
(2) the account
holder is not identified;
(3) there is no
account number;
(4) no banking
institution is identified;
(5) the last entry is
dated July 4;
(6) the year is not
identified;
(7) certain entries
have been erased;
(8) it
looks like a number of clippings that have been superimposed on one another.
Where are the documents that these entries, cheques, deposit slips and so on
come from? None of that was filed.
[21] It was established
that the Appellant and other friends of the Payer went to lend the Payer a hand
during renovation work on his cottage. Unlike the other workers, the Appellant
received some compensation for his work. The Appellant had requested assistance
from the Payer because he had lost his job and still needed 12 weeks to
qualify for employment insurance benefits. The Payer decided to help him. He
provided him with work and paid him, even though he was considered a volunteer.
The Payer also lent him $1,000. According to the evidence, the Appellant
undertook to repay the loan through work. He still has not done so. However,
the Employment Insurance Act (the "Act") provides that a week
of work is insurable only if it is worked and paid.
[22] Upon his
investigation, the Minister concluded that there had been no contract of
employment between the Payer and the Appellant and that there had instead been
an exchange of services between two friends. The Minister further determined
that there instead had been an arrangement between the parties to enable the
Appellant to qualify for employment insurance benefits.
[23] The issue is whether
the Appellant held insurable employment for the purposes of the Act. The
relevant provision is paragraph 5(1)(a) of the Act, which reads as
follows:
5. (1) Subject
to subsection (2), insurable employment is
(a) employment in Canada by one or more employers, under any
express or implied contract of service or apprenticeship, written or
oral, whether the earnings of the employed person are received from the
employer or some other person and whether the earnings are calculated by time
or by the piece, or partly by time and partly by the piece, or otherwise; (My
emphasis)
[24] The section cited
above contains the definition of an insurable contract. Insurable employment is
held under a contract of employment. However, the Act does not define what
constitutes such a contract.
[25] A contract of
employment is a civil law concept found in the Civil Code of Quebec
("Civil Code"). The nature of such a contract should therefore be
determined in accordance with the relevant provisions of that Code.
[26] It is appropriate to
cite the relevant provisions of the Civil Code that will be used to determine
the existence of a contract of employment in Quebec in order to distinguish it
from a contract of enterprise or for services:
Contract of employment
2085. A contract of employment is a contract
by which a person, the employee, undertakes for a limited period to do work for
remuneration, according to the instructions and under the direction or
control of another person, the employer.
2086. A contract of employment is for a fixed term
or an indeterminate term.
Contract of enterprise or
for services
2098. A contract of enterprise or for
services is a contract by which a person, the contractor or the provider of
services, as the case may be, undertakes to carry out physical or intellectual
work for another person, the client or to provide a service, for a price
which the client binds himself to pay.
2099. The contractor or the provider of
services is free to choose the means of performing the contract and no
relationship of subordination exists between the contractor or the provider of
services and the client in respect of such performance. (My emphasis)
[27] The Civil Code
provisions cited above establish three essential conditions for a contract of
employment: (1) the performance of work by the employee;
(2) remuneration for that work by the employer; and (3) a
relationship of subordination. What significantly distinguishes a contract for services
from a contract of employment is the existence of a relationship of
subordination, that is to say the fact that the employer has a power of
direction or control over the worker.
[28] The onus was on the
Appellant to prove that the Minister's assumptions were false. He failed to do
so.
[29] The facts adduced by
the Appellant do not have the necessary characteristics to meet the definition
of paragraph 5(1)(a) of the Act or the notion of a contract of
employment as defined in the Civil Code.
[30] This Court sees no
basis for interfering in the decision rendered by the Minister.
[31] The appeal is
dismissed and the decision by the Minister is confirmed.
Signed at Grand‑Barachois, New
Brunswick, this 30th day of January 2006.
"S.J. Savoie"
Translation certified true
on this 24th day of July 2006.
Monica F. Chamberlain, Reviser
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