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Citation: 2004TCC819
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Date: 20041221
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Docket: 2003-230(EI)
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BETWEEN:
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SOMEXPO INC.,
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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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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
D.J.
[1] This appeal was heard at
Montréal, Quebec, on November 26, 2004.
[2] This is an appeal on the
insurability of the employment of Nicole Laliberté
(the Worker) while working for the Appellant during the period in
question, from March 1 to 24, 2001, within the meaning of the
Employment Insurance Act.
[3] On November 26, 2002, the Minister
of National Revenue (the "Minister") informed the Appellant of
the decision that the Worker's employment was insurable because
she held employment under a contract of service and there existed
an employer-employee relationship between the Appellant and the
Worker. The Appellant was also informed that the number of
insurable hours was 11,181.
[4] The Minister's decision was based
on the following assumptions of fact:
(a) The Appellant
operates a promotion, sales, survey, and market research
business. (admitted)
(b) The Appellant
hired the Worker to conduct surveys of grocery store
customers. (admitted)
(c) The Worker asked
the grocery store customers to answer questions and recorded
their answers and comments. (admitted)
(d) The Worker also
did promotion and sales at various kiosks, the boat show, and the
home show. (admitted)
(e) When the Worker
did sales, she had to work at locations specified by the
Appellant. (admitted)
(f) The
Appellant contacted the Worker and informed her of the type of
work to be done and where it was to be carried out.
(denied)
(g) The Appellant
signed an agreement with the Worker at the beginning of each
contract with her. (denied)
(h) The Worker was
supervised by a representative of the Appellant; they
communicated using walkie-talkies. (denied)
(i) The
Appellant gave the Worker basic training and a briefing at the
start of the contract. (denied)
(j) The Worker
had to prepare and submit daily reports on her activities to the
Appellant; occasionally, a report was required only at the end of
the mandate, depending on the nature of the work to be
done. (denied)
(k) The Worker was
paid an hourly wage, plus a commission when she sold items for
the Appellant. (denied)
(l) The hourly
rate varied with each mandate. (denied)
(m) During the period in
question, the Worker worked for the Appellant at the following
locations: (admitted)
Charcuterie
Noël
3 days
Home
Show
5 days
IGA
Leblanc
2 days
Boat
Show
2 days
(n) The Appellant
does not know the actual number of hours worked by the
Worker. (admitted)
(o) During the
period in question, the Worker received $771.50 from the
Appellant. (admitted)
(p) As at January 1,
2001, minimum wage was $6.90. (admitted)
[5] The Appellant stated that the
Worker worked when and where she wanted. According to the
Appellant, she was presented with a contract, which she would
accept or refuse. The Appellant denied signing an agreement with
the Worker at the start of each contract.
[6] The Appellant stated that the
walkie-talkie was a communication tool, not a work tool.
[7] Furthermore, the Appellant stated
that the Worker received general instructions only, not basic
training and a briefing.
[8] The Appellant also wanted to
clarify that the report required from the Worker was merely her
invoice.
[9] The Worker's pay was set at an
hourly rate or on a commission basis, depending on what had been
negotiated between the parties.
[10] Claudine Boulanger, witness for the
Appellant, stated that the walkie-talkie was provided
by the client at the Appellant's expense and that the work
location was also provided. According to Ms. Boulanger, the
Appellant proposed and the Worker was free to accept or refuse.
This applied to the work location, wage, etc. According to this
witness, the schedule was flexible and subject to the Worker's
availability.
[11] Exhibit I-1 (list of documents) filed
at the hearing contains a series of documents outlining the
Worker's employment conditions. This Court will return to this
exhibit later in these Reasons.
[12] The evidence has shown that all of
these documents constitute an agreement between the parties, even
though most of the documents are not signed.
[13] The Worker stated that she had been
hired by the Appellant, who proposed that she do promotion or
conduct surveys on the Appellant's behalf at an hourly rate of $8
to $12, depending on the client approached. The Worker maintains
that she never negotiated the conditions set out in the
"Directives pour le personnel de sondage" [survey staff
instructions] (Exhibit I-1, tab i), which outline a specific
schedule, the hours of work, the length of breaks, a set wage,
and concrete instructions on where the Worker had to be and how
she was to conduct the survey. She added that if ever she were
absent, she had to notify either Ms. Théberge or Ms.
Boulanger who supervised and selected her replacement. Exhibit
I-1, tab D, contains the contract of employment, signed by the
parties, in which the Worker confirms that she is aware of the
"politiques maison" [in-house policies] (Exhibit
I-1, tab E). This document outlines the professional conduct
required by the Appellant and to which the Worker agreed to
adhere. Through this document, she also acknowledges that she has
completed the self-employed worker form and understands its
scope. The Worker testified that she had always been a salaried
worker. She said she understands the difference between a
self-employed worker and a salaried worker but does not know why
she decided to sign the document. The Worker added that she
conducted surveys for the Appellant and that to do this work, she
was provided with tools: the walkie-talkie, pencils, and
the questionnaire prepared by the Appellant. She also did
promotion for the Escale Nautique at the Montréal boat
show using the promotion model reproduced at tab F of Exhibit
I-1. Her work schedule for this promotion is reproduced on the
second page of tab F. Tab G, Exhibit I-1, contains a two-page
document entitled "Étude de Produit" [product
description], which explains the product, that the Worker has to
review in order to promote the product. Tab I, Exhibit I-1,
contains a document entitled "Directives pour le personnel de
sondage" [survey staff instructions]. According to the
Worker, she never negotiated its content with the Appellant, as
the Appellant claims.
[14] The Worker testified that she had not
negotiated her wage, which was set at $8 to $12 an hour,
depending on the client (contract). She stated at the hearing
that on one occasion, she received $10 from the Appellant,
instead of the agreed $12, because she had not finished. She
confirmed that she had the right to accept or refuse contracts.
In reference to tab I of Exhibit I-1, the Worker stated that the
schedule, length of breaks, instructions, etc. were determined by
the Appellant and were non-negotiable.
[15] The Worker stated during the hearing
that it is possible that she was told she would be a
self-employed worker.
[16] The Act defines the concept of
insurable employment. In that regard, I now reproduce paragraph
5(1)(a) of the Act:
INSURABLE EMPLOYMENT
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;
However, application of the Act in specific cases is subject
to case law, which has defined the criteria. These were decided
in Wiebe Door Services Ltd. v. Canada(Minister
of National Revenue - M.N.R.), [1986] 3 F.C. 553:
Case law has established a series of tests to determine whether a
contract is one of service or for the provision of services.
While not exhaustive the following are four tests most commonly
referred to:
(a) The degree
or absence of control, exercised by the alleged employer.
(b) Ownership of
tools.
(c) Chance of profit
and risks of loss.
(d) Integration of
the alleged employee's work into the alleged employer's
business.
[17] In Charbonneau v. Canada (Minister
of National Revenue - M.N.R.), [1996] F.C.J. No. 1337, the
Federal Court of Appeal, having reviewed Wiebe
Door, supra, specified the scope of these criteria
and explained their use in the following passage:
The tests laid down by this Court in Wiebe Door Services
Ltd. v. M.N.R. - on the one hand, the degree of control, the
ownership of the tools of work, the chance of profit and risk of
loss, and on the other, integration - are not the ingredients of
a magic formula. They are guidelines which it will generally be
useful to consider, but not to the point of jeopardizing the
ultimate objective of the exercise, which is to determine the
overall relationship between the parties. The issue is
always, once it has been determined that there is a genuine
contract, whether there is a relationship of subordination
between the parties such that there is a contract of employment
[...] or, whether there is not, rather, such a degree of
autonomy that there is a contract of enterprise or for services
[...]. In other words, we must not pay so much
attention to the trees that we lose sight of the forest - a
particularly apt image in this case.
[...]
Control
[18] The evidence shows that the Worker was
supervised. Furthermore, the Appellant found a replacement for
her, as needed. The work schedule was determined by the Appellant
in terms of the dates, times, and locations of work. The document
prepared by the Appellant, "Politiques maison Somexpo
Inc." [in-house policies, Somexpo Inc.] (Exhibit I-1,
tab E), reproduced below, clearly defines the actual relationship
between the parties.
[TRANSLATION]
IN-HOUSE POLICIES
SOMEXPO INC.
CALL BACK: Mandates are awarded on a first come, first
served basis. We allow 24 hours for call backs, after which we
will no longer consider your candidacy for the mandate, unless
otherwise specified.
TRAINING: Basic training is required per block, in
addition to a briefing per client mandate. Training is never
paid, unless otherwise specified.
LATENESS: Any lateness must be reported by phone and
included in the sales or activity report. Lateness demonstrates a
lack of professionalism and is very poorly regarded. PLEASE
ARRIVE EARLY.
ABSENCE: Notify us as soon as possible so that we can
attempt to find a replacement. All absences must be justified by
a valid reason.
COMPETITION: Although you are permitted to work on
contract for another employer, Somexpo does not authorize you to
work for a competitor in sales and research. You are also
prohibited from directly or indirectly soliciting Somexpo clients
for employability reasons without prior authorization.
FEES: Fees are payable fifteen business days after the
end of the mandate. Rates vary depending on mandates and
blocks.
SALES OR ACTIVITY REPORTS: Reports must be duly
completed and signed at the end of each day or mandate, depending
on the specifics of each block. If you do not have a sales or
activity report, contact us immediately (838-7240).
SUBMISSION:
exhibition = daily, to supervisor
survey = day after mandate, by special mail (provided)
or directly to office
perfume = day after mandate, by fax (838-7290) or
regular mail
research = next day, to our offices
The time spent completing and submitting the reports is not
part of the time included in the mandate and recognized by the
client but remains an integral part of your mandate (unless
otherwise specified).
TO BE INCLUDED IN REPORT: name, date, mandate, hours worked,
lateness, breaks, meal times, and any other details,
irregularities, comments, or remarks.
ANY DELAY IN SENDING US THE REPORTS will delay payment of your
fees by an additional 3 weeks.
CODE OF CONDUCT: Compliance with dress code -
Meticulous appearance - Well spoken - Team spirit - Diplomacy -
Courtesy - Flexibility - Dynamism - Positive Attitude -
Professionalism - Punctuality - Attendance - Sense of
responsibility - Pride in achievement
OUR MOTTO: WHEN THE CLIENT IS HAPPY, EVERYBODY
WINS!
WELCOME TO SOMEXPO INC.
[19] Upon reading this excerpt, one would be
hard-pressed to imagine that an independent contractor would
agree to work under such conditions, i.e., training requirements,
notification of lateness, requirement to arrive early, not
permitted to work for a competitor, reports, code of conduct,
including a dress code, physical appearance, punctuality,
attendance, courtesy, etc.
[20] The questionnaires used by the workers
were prepared by the Appellant and had to be followed to the
letter.
[21] The facts in this case, analyzed in
view of this criterion, support the concept of insurable
employment, beyond any doubt.
Ownership of tools
[22] Other than her vehicle, the Worker used
the tools provided by the Appellant, including the work location,
facilities, walkie-talkie (occasionally), pencils, etc. The
Worker did not provide any tools and did not incur any expenses
for the Appellant.
[23] Based on this criterion, the evidence
also shows that the Worker was not working in her own
business.
Chance of profit and risk of loss
[24] It was determined that the Worker was
paid a commission one time only. She did not incur any risk in
providing services for the Appellant and at no time did she
invest any money in the Appellant's business.
Integration
[25] In terms of who owns the business for
which the Worker is working, the indisputable conclusion is that
it is the Appellant's business. Therefore, the work done by the
Worker was fully integrated into the Appellant's business.
[26] First Choice Communications Inc.
v. Canada(Minister of National Revenue -
M.N.R.), [2003] T.C.J. No. 618, examined a situation very
similar to the case at hand:
...Communications hired Adeoye for $10 per hour to conduct
telephone surveys for a client. Adeoye signed an agreement
whereby she would work as an independent contractor and submit
invoices. She was provided with space and a telephone. She was
given a telephone script and a list of numbers to call. She had
to make a minimum number of calls each day. There were bonuses
available for superior performance. Adeoye was only hired to work
for a few weeks.
Appeals dismissed.
...Exhibit A-1 - in which both parties had agreed she would
provide her services on the basis she was an independent
contractor. The hourly rate was $10 ...each worker was expected
to complete 300 calls per working day, ...The client - CHQM -
provided Communications with a script for workers to follow when
making a call but they were not supervised or instructed
otherwise how to carry out their tasks. ...No workers were
required to incur any work-related expenses. ...At the outset,
applicants were informed the work would not last more than three
weeks.
...Via the Internet, she became aware of the appellant's
advertisement in which interested parties were invited to
telephone a certain number. ...During the day, the workers
received two 15-minute breaks and one 30-minute break - when
announced by Chantal - who also recorded the time of Adeoye's
arrival and departure and the number of hours worked. ... Exhibit
R-3 - printed on Communications' letterhead, setting out the
code of conduct to be observed by workers. In said sheet, Adeoye
pointed to a section dealing with dress codes - including a
description of what constituted proper and/or inappropriate
business wear ...
[27] In view of this situation, Rowe D.J. of
this Court deemed that the Worker's employment was insurable.
[28] After outlining his reasons, Rowe D.J.,
supra, referred to this relevant excerpt from Minister
of National Revenue v. Emily Standing, [1992] F.C.J. No.
890:
...There is no foundation in the case law for the proposition
that such a relationship may exist merely because the parties
choose to describe it to be so regardless of the surrounding
circumstances when weighed in the light of the Wiebe Door test
...
[29] Another similar situation was reported
in Crop Inc. v. Canada(Minister of National
Revenue - M.N.R.), [2002] T.C.J. No. 333:
[...]
The appellant's chief clients are government agencies,
banks and telecommunications companies.
[...]
The appellant asks its surveyors to conduct surveys between
1:00 p.m. and 9:00 p.m. from Monday to Friday, between 9:00 a.m.
and 5:00 p.m. on Saturday and between 12:30 p.m. and 5:00 p.m. on
Sunday.
[...]
The worker's job could be summarized as follows: she would
leave a questionnaire at the doors determined by the appellant
together with her telephone number and that of the appellant; she
would call back after a week and, when the questionnaire had been
completed, she would retrieve it and mail it to the appellant by
express mail or deliver it if the deadline so required.
[...]
The worker had to return all of the completed questionnaires
to the appellant; one sheet indicated the hours she had worked
and another sheet showed how many kilometres she had driven in
the course of her work.
[...]
The worker had to perform the work given to her by the
appellant by herself; she had an identification card identifying
her with the appellant.
[...]
The worker was compensated at $10.50/hour; [...]
[30] In this case, as in First Choice
Communications Inc., supra, Watson D.J. of this Court
rendered a decision recognizing the Worker's insurable
employment.
[31] Tardif J. of this Court reached the
same conclusion in another similar case, Martin v.
Canada(Minister of National Revenue- M.N.R.),
[1999] T.C.J. No. 224:
[...]
During the period in issue, the appellant was employed by the
payer to promote the credit card issued by The Bay.
The appellant supplied only a pencil and "liquid
paper", while the payer supplied the forms to be completed
by the customers and the store supplied a work table and bonus
gifts.
[...]
Following a brief training period, the solicitors were
scheduled and placed in various stores to begin solicitation
efforts with a view to having credit cards issued for the store
where they worked. [...]
[...]
We are not dealing here with self-employed workers or independent
contractors, in particular for the following reasons:
- the payer or its representative directed the
soliciting and decided in which store it was to be done;
- a work schedule setting the number of days
and number of hours had to be met;
- the solicitors, including the appellant, had to comply
with a code of conduct with regard to the persons solicited;
- the quality of the work done was reviewed daily and
subject to remarks and comments which the solicitors had to take
into account or risk losing their jobs.
In performing his work, the appellant had to dress well and
use appropriate language.
[...]
The solicitors or credits hosts supplied none of what they
needed to perform the work. They could of course increase their
income through dynamism and enthusiasm in doing their work, but
incurred no loss if their performance was disappointing. They did
not operate their own businesses, but were an essential component
of the business which paid them solely on a commission basis.
[32] The Appellant had the onus of proving,
on a balance of evidence, that the Minister's presumptions were
false. It did not do so.
[33] After analyzing the evidence in light
of the legislation and case law, specifically the above-cited
cases from this Court, this Court must conclude, as did judges
Tardif, Watson, and Rowe, in identical situations, that the
Worker, during the period in question, held insurable employment
and that her insurable hours total 11,181.
[34] Consequently, the appeal is dismissed
and the decision of the Minister is confirmed.
Signed at Grand-Barachois, New Brunswick, this 21st
day of December 2004.
Savoie D.J.
Translation certified true
on this 22nd day of March 2005.
Colette Dupuis-Beaulne, Translator
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