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Citation: 2005TCC477
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Date: 20050826
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Docket: 2004-80(EI)
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BETWEEN:
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MÉLANIE JEAN,
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Appellant,
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and
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THE MINISTER OF
NATIONAL REVENUE,
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Respondent.
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AND
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Docket: 2004-107(EI)
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BETWEEN:
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STÉPHANE BACON,
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Appellant,
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and
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THE MINISTER OF
NATIONAL REVENUE,
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Respondent.
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REASONS FOR JUDGMENT
Tardif J.
[1] These are two
appeals from decisions by the Minister of National Revenue (“the Minister”)
concerning work performed by the appellants for the Association du hockey
amateur de Port‑Cartier. The appellant Stéphane Bacon allegedly
worked during the period of December 19, 1999 to
March 24, 2000, while the appellant Mélanie Jean allegedly
worked during the periods of December 10, 2000 to
March 17, 2001, December 2, 2001 to
March 16, 2002 and December 10, 2002 to
March 29, 2003.
[2] Since the payer
and the type of work done were the same in both cases, the parties agreed to
proceed on common evidence.
[3] The female
appellant was absent, as she had recently had a baby.
[4] The appellants’
agent made a number of admissions.
[5] In the Mélanie
Jean case, subparagraphs 6(a), (b), (c), (d), (e), (f), (g), (h), (i),
(k), (l), (n), (r) and (s) were admitted, while subparagraphs 6(j), (m),
(o), (p), (q), (t) and (u) were denied.
Mélanie Jean (2004-80(EI)):
[TRANSLATION]
(a) the payer is a non‑profit hockey organization; (admitted)
(b) for several years now, the payer has had a mandate from the town
of Port‑Cartier to
prepare and maintain two outdoor ice rinks in a town park and to supervise the
premises while the rinks are open; (admitted)
(c) the rinks and the adjacent change house were open seven days a
week from 1:00 to 4:00 p.m. and 6:00 to 9:00 p.m., for a total of
42 hours a week, except during periods when the temperature fell below ‑25 degrees Celsius;
(admitted)
(d) to carry out its mandate, the payer engaged one person every year
to perform the work; (admitted)
(e) during the periods at issue, the payer entrusted the appellant
with the task of preparing, maintaining and supervising both rinks;
(admitted)
(f) prior to the periods at issue, the payer had given this work to
Stéphane Bacon, the appellant’s spouse; (admitted)
(g) in 2000, Mr. Bacon asked the payer to give the work to his
spouse, assuring the payer that he would help her do it by personally taking
care of preparing and watering the ice; (admitted)
(h) the payer engaged the appellant pursuant to a verbal agreement;
(admitted)
(i) the appellant was responsible for making the ice at the start of
the season and then watering it once or twice a week, clearing snow off it,
opening the change house near the rinks and supervising the premises during
opening hours; (admitted)
(j) the payer did not control the appellant’s work; (denied)
(k) the payer did not keep track of the appellant’s hours of work and
was interested only in the final result, that is, having rinks that could be
used during their opening hours; (admitted)
(l) the payer provided the appellant with all the equipment she
needed; (admitted)
(m) since the work involved in preparing the ice (about two or three
weeks at the start of the season) and watering it was too difficult for the
appellant, Mr. Bacon did this work; (denied)
(n) during the first few weeks of the season, the payer paid the
appellant a wage of $12 an hour calculated on the basis of the number of hours
worked by Mr. Bacon; (admitted)
(o) during all the rest of the period at issue, the appellant received
fixed earnings of $530.40 gross per week, regardless of the hours actually
worked by her and Mr. Bacon; (denied)
(p) at the start of the season, Mr. Bacon could work 80 to
90 hours a week preparing the ice, and during the rest of the season he
watered the ice two or three times a week, which took from three to
six hours each time; (denied)
(q) the appellant or Mr. Bacon often hired friends or people who
used the rinks to help with this work; (denied)
(r) the payer always paid the appellant the same amount and was not
concerned whether she was getting help or not; if the appellant wanted help,
she had to pay the cost; (admitted)
(s) the appellant was paid by cheque every two weeks; (admitted)
(t) the appellant would have been paid for the term of the contract
even “if summer had come in January”; (denied)
(u) during the periods at issue, the appellant provided services to
the payer under a contract for services and not a contract of employment.
(denied)
[6] In the Stéphane
Bacon case, subparagraphs 6(a), (b), (c), (d), (e), (f), (g), (i),
(j), (k), (l), (m), (n) and (p) were admitted, while subparagraphs (h),
(o), (q) and (r) were denied.
Stéphane Bacon (2004-107(EI)):
[TRANSLATION]
(a) the payer is a non‑profit hockey organization;
(admitted)
(b) for several years now, the payer has had a mandate from the town
of Port‑Cartier to
prepare and maintain two outdoor ice rinks and to supervise the premises while
the rinks are open; (admitted)
(c) the rinks were open seven days a week from 1:00 to 4:00 p.m.
and 6:00 to 9:00 p.m., or 42 hours a week, except during periods when
the temperature fell below ‑25 degrees Celsius; (admitted)
(d) to carry out its mandate from the town, the payer engaged one
person every year to perform the work; (admitted)
(e) during the period at issue, the payer hired the appellant to
carry out its mandate; (admitted)
(f) during the period at issue, the payer hired the appellant under a
verbal agreement for the third consecutive year; (admitted)
(g) the appellant was responsible for making the ice for the rinks
and then maintaining the rinks, watering them once or twice a week, cleaning
them and, during opening hours, opening the change house near the rinks and
supervising the premises; (admitted)
(h) the payer did not control the appellant’s work; (denied)
(i) the payer did not keep track of the appellant’s hours of work
and was interested only in the final result, that is, having rinks that could
be used during their opening hours; (admitted)
(j) the payer provided the appellant with all the equipment he
needed; (admitted)
(k) during the first few weeks he worked preparing the ice rinks, the
appellant could work more than 80 hours a week; (admitted)
(l) for the pay periods ending on December 25, 1999 and
January 1, 2000, he was paid for the number of hours he worked at the
rate of $10 an hour for the first 43 hours in the week and $15 an hour for
overtime; (admitted)
(m) for the pay period ending on January 8, 2000, the
appellant worked 82 hours, for all of which he was paid at the rate of $10
an hour; (admitted)
(n) during all the rest of the period at issue, the appellant
received fixed earnings of $459.89 a week regardless of the number of hours he
worked, and he received no overtime pay; (admitted)
(o) the appellant often hired friends or people who used the rinks to
help him with his work; (denied)
(p) the payer always paid the appellant the same amount and was not
concerned whether he was getting help or not; if the appellant wanted help, he
had to pay the cost; (admitted)
(q) the appellant would have been paid for the full term of the
contract even “if summer had come in January”; (denied)
(r) during the periods at issue, the appellant provided services to
the payer under a contract for services and not a contract of employment. (denied)
[7] The
evidence is based mainly on the testimony of Laurent Boucher, the
president of the Association du hockey amateur de Port‑Cartier. He
explained that his association had obtained from the municipality a contract
for the preparation, management and maintenance of the outdoor public ice rink
during all of the periods at issue.
[8] He stated that,
when the ice was being made at the start of the season, many more hours of work
were required, perhaps even twice as many.
[9] Once the ice was
properly set, the work basically involved maintaining it and ensuring that the
shelter for users of the rink was accessible.
[10] The maintenance
work involved watering the rink after it closed and removing the snow that
accumulated while people were skating or as a result of a snowfall.
[11] The cleaning work
was done using scrapers and a snowblower. After a very heavy snowfall, the
Association du hockey amateur de Port‑Cartier used a loader, at its own
expense, to remove the snow and speed up the cleaning process.
[12] The routine
maintenance work was done using a garden hose, shovels and a mechanical
snowblower.
[13] The appellants’
agent argued that the town of Port‑Cartier, the amateur hockey
association of which he was the president and the appellants had all been
honest and in good faith in these cases.
[14] The honesty and
good faith of the parties is not in question here. Unfortunately, honesty, good
faith and candour cannot in themselves shape or define the nature of a contract
of employment or contract of service.
[15] To determine
whether a contract of service exists, only the facts, the method, the terms and
conditions and the context in which the work was performed must be examined.
[16] Under the Employment
Insurance Act, a contract of service must meet three very essential
conditions: performance of work, earnings and the existence of a relationship
of subordination between the worker and the payer.
[17] Here, the
respondent determined that the appellants had performed the work under a
contract for services. The difference between the two contracts is very
difficult to establish or observe in some situations. Everything lies in the
relationship of subordination, which is characterized by the power of control
exercised by the payer over the person who performs the work.
[18] The appellants’
agent submitted several times and in variety of ways that the association of
which he was the president had indeed exercised this power of control over the
appellants in the performance of the work.
[19] In particular, he
stated that he had checked the quality of their work by ensuring that the ice
was in good condition. He had made sure that the rink’s opening hours
established by the association were respected and that the rink was cleared
promptly after it snowed.
[20] When there were
heavy snowfalls, the association hired a contractor who operated a power
shovel, commonly known as a loader.
[21] Mr. Boucher also
stated that, when his association received complaints from people who used the
rink, he spoke to the appellants to remedy the situation quickly.
[22] The tools needed
to perform the work, such as shovels, scrapers and a snowblower, were provided
by the association. When the ice was being prepared at the start of the season,
the work was remunerated based on the number of hours worked. There were many
such hours, about 80 a week for two weeks.
[23] Once
the ice was properly set, the work basically involved maintaining the rink by
removing the snow that accumulated during skating or snowfalls and watering the
surface.
[24] During
periods of very extreme cold, the appellants could refrain from working after
obtaining the approval of a representative of the amateur hockey association.
[25] The president of
the association, who acted as the appellants’ agent, denied that the appellants
would have been paid for the entire winter season even if the summer heat had
started in January. He clearly stated that the association could terminate its
agreement with the appellants at any time.
[26] Surprisingly, the
appellants’ agent acknowledged the possibility that the appellants’ work was
done under a contract for services and not a contract of service.
[27] However, he
insisted that he did not understand why the appellants’ work had been subject
to a review with retroactive consequences that had a disastrous impact on their
financial situation because of the claims for overpayments.
[28] According to
Mr. Boucher, he always wanted everything to be done by the book in the
association of which he was the president. He stated and repeated emphatically
that, if it turned out, for reasons totally beyond their control, that the
appellants were not entitled to employment insurance even though they had
believed in good faith that they were, they should not be required to repay the
very large amounts they had received.
[29] Mr. Boucher
also stated that, in the wake of this case, the town of Port‑Cartier had
completely changed its policy on ice rink preparation and maintenance.
[30] Jean Vézina, the
appeals officer responsible for the appellants’ file, explained the work he had
done to reach the conclusion under appeal.
[31] In
particular, he reviewed the investigative work done by the insurance officer
who had made the first ruling. As part of his work, Mr. Vézina also
contacted the appellants, who confirmed the accuracy of the facts gathered by
the officer during the investigation, which are set out in the statutory
declaration. Finally, Mr. Vézina contacted the treasurer of the amateur
hockey association, France Bédard.
[32] Mention was made
of the fact that the appellants had obtained help from third parties in
performing their work. This is an element that must be assessed in the specific
context of an ice rink, since skaters, who are anxious to be able to use the
rink, often take part in the cleanup work. This is a widespread practice that
must be separated from the facts considered in the analysis seeking to
characterize the legal nature of a work agreement.
[33] Most of
Mr. Vézina’s testimony had to do with the female appellant’s case, in
which certain basic facts were very different from those in her spouse’s case.
I am referring in particular to the admission by the female appellant and
Ms. Bédard that the work was so physically demanding that the female
appellant absolutely could not do it alone.
[34] Moreover,
subparagraph (g) of the Reply to the Notice of Appeal in
Mélanie Jean’s case was admitted. It reads as follows:
[TRANSLATION]
(g) in 2000, Mr. Bacon asked the payer to give the work to his spouse,
assuring the payer that he would help her do it by personally taking care of
preparing and watering the ice; (admitted)
[35] Subparagraph (r)
was also admitted. It reads as follows:
[TRANSLATION]
(r) the payer always paid the appellant the same amount and was not
concerned whether she was getting help or not; if the appellant wanted help,
she had to pay the cost; (admitted)
[36] There
are enough decisive elements to find that the determination in
Mélanie Jean’s case was correct. Moreover, all the facts gathered during
the investigation, the admissions and the evidence adduced are consistent.
[37] Stéphane Bacon
explained that he had requested that the contract of employment be in his
spouse’s name because otherwise he would not have been able to accept the
responsibility offered to him by the amateur hockey association.
[38] Why such a
requirement? It was because he had started working as a longshoreman and the
time he had available was quite limited as a result.
[39] Having obtained
well‑paid, insurable employment, he had wanted to find insurable
employment for his spouse. To ensure that she got the contract, he guaranteed
that she would perform it properly, and the amateur hockey association accepted
the conditions he proposed.
[40] The association’s
ultimate objective was to be assured that the work would be done properly by
reliable, responsible persons. Mr. Bacon, the spouse of the appellant
Mélanie Jean, provided such a guarantee, which was particularly fitting
since he had previously done the same work to the association’s satisfaction.
[41] There is no doubt
that the person in charge of performing the work was Stéphane Bacon, not
Mélanie Jean, although admittedly she did work and was involved in the
effective management and maintenance of the outdoor rink.
[42] The person
actually responsible for performing the work was Stéphane Bacon, who had
done the work in the past to the great satisfaction of the amateur hockey
association, which, for this reason, did not hesitate to agree to the new
conditions proposed by Mr. Bacon.
[43] What about
Mr. Bacon’s work during the period of December 19, 1999 to
March 24, 2000? This work met the conditions for a contract of
service, namely work, earnings and a relationship of subordination.
[44] Since the
work done was exactly the same, the respondent quickly concluded that there was
a contract for services in both cases. However, although the work and the
expectations were the same, there was a very basic, determinative distinction,
since the work in the two cases was done under very different terms and
conditions. In other words, Mélanie Jean worked, as it were, for or on
behalf of her spouse, thus preventing the formation of a genuine contract of
service.
[45] When the appellant
Stéphane Bacon’s availability became so limited that he could no longer do the
work, the parties agreed to change the agreement. Until that time, the
association had been completely satisfied with the work done by
Stéphane Bacon, who had always acted reliably and responsibly.
[46] Since
Mr. Bacon guaranteed that his spouse would do the work properly, the
association agreed, as it were, to change the work agreement on the basis that
the intuitu personae relationship would be maintained by the
guarantee provided by him.
[47] For the first
period at issue, the work done by the male appellant met the requirements for a
genuine contract of service. The fact that he may have occasionally sought
assistance and rewarded those who helped him do the work does not change the
nature of the contract. It must be understood that this work is very
distinctive. When young people or even adults are waiting for the ice to be
ready, it is normal and common for everyone to join in to speed up the process
so they can use the rink more quickly.
[48] For all these
reasons, Stéphane Bacon’s appeal is allowed and the Minister’s decision
dated September 25, 2003 is varied on the ground that Mr. Bacon
held employment under a genuine contract of service from
December 19, 1999 to March 24, 2000.
[49] Mélanie Jean’s
appeal is dismissed, and the Minister’s decision is confirmed on the ground
that, from December 10, 2000 to March 17, 2001,
December 2, 2001 to March 16, 2002 and
December 10, 2002 to March 29, 2003, the work was performed
under a contract for services, the contractor being her spouse.
[50] With
regard to the request that the overpayments be cancelled, I have neither the
authority nor the jurisdiction to do so. However, I assume that the debtor’s
ability to pay must undoubtedly be taken into account when such a claim is
made.
Signed at Ottawa, Canada, this 26th day of August 2005.
Tardif J.
Translation certified
true
on this 7th day of
October 2005.
Audra Poirier, Translator
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