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Citation: 2003TCC267
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Date:20030416
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Dockets: 2002-4256(EI)
2002-4257(CPP)
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BETWEEN:
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DEWDNEY TRANSPORT GROUP LTD.,
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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
Little, J.
A. FACTS:
[1] The Appellant was incorporated
under the laws of the Province of British Columbia.
[2] The shares of the Appellant are
owned by Mr. Ned Jaswal.
[3] In 1996 the Appellant was the
successful bidder on a five-year contract with Canada Post in the
Maple Ridge area of British Columbia. The Appellant also obtained
a contract from Canada Post for the Mission area of British
Columbia. Each contract with Canada Post provided that the
Appellant was to pick up and deliver mail in areas designated by
the Post Office.
[4] Susan Dunn ("Dunn") was
hired by the Appellant to pick up and deliver mail pursuant to
the contract that the Appellant had entered into with Canada Post
in the Mission area.
[5] Dunn used a cargo van owned by the
Appellant to pick up and deliver mail.
[6] Dunn drove the cargo van for the
Appellant from July 17, 2000 to September 14, 2001 when she was
terminated because of complaints about her conduct.
[7] Dunn maintains that she was
advised by other drivers and ex-drivers of the Appellant that she
should be at the Mission Post Office at 8:30 - 9:00 a.m. from
Monday to Friday. Dunn also stated that specific instructions on
the pick up and delivery of mail were outlined on a list in the
van.
[8] Mr. Jaswal, the President of the
Appellant, maintained that Dunn was free to report to the Post
Office when she wished. Mr. Jaswal also said that he was unaware
of the instructions re the details on the time for picking up and
delivery of the mail for Canada Post.
[9] Dunn's relationship with the
Appellant was outlined in an Agreement dated July 18, 2000 (the
"Agreement") (Exhibit A-1).
[10] Dunn was paid at a rate of $8.50 per
hour.
[11] After Dunn was terminated by the
Appellant on September 14, 2001 she attempted to obtain benefits
under the Employment Insurance Act (the
"Act").
[12] In a decision issued on August 22nd,
2002, Mr. Scott Nightingale of the Canada Customs and Revenue
Agency stated as follows:
It has been decided that Susan Dunn's employment was
insurable and pensionable for the following reason(s): The
services provided by Susan Dunn were performed under a contract
of service. An employer/employee relationship was in effect.
The decision in this letter is issued under subsection 93(3)
of the Employment Insurance Act and subsection 27.2(3) of the
Canada Pension Plan and is based on paragraph 5(1)(a) of the
Employment Insurance Act and paragraph 6(1)(a) of the Canada
Pension Plan.
B. ISSUE:
[13] The issue is whether Dunn was employed
in insurable employment for the purpose of the Act and
whether Dunn was employed in pensionable employment for the
purposes of the Canada Pension Plan.
C. ANALYSIS:
[14] In order to determine if Dunn was an
employee of the Appellant I have referred to a number of Court
decisions.
[15] In Precision Gutters Ltd. v. Canada
(Minister of National Revenue), [2002] F.C.J. No. 771,
Mr. Justice Sexton, speaking for the Federal Court of Appeal said
at paragraphs 15 to 19:
15. ... The four criteria
of the four-in-one test are (1) the degree or absence of control
exercised by the employer; (2) ownership of the tools; (3)
chance of profit; (4) risk of loss (see Mirichandani v. Canada
(Minister of National Revenue) [2001] F.C.J. 269 and Wiebe
Door Services, supra at p. 5028).
16. The issue has been
dealt with more recently by the Supreme Court of Canada in
Sagaz Industries Canada v. 67112 Ontario Limited, [2001]
S.C.J. No. 61. In that case Mr. Justice Major, speaking for the
Court, reviewed the various tests for determining whether a
person is an employee or an independent contractor. He agreed
with MacGuigan J.A.'s statement of a four-in-one test as set
out in Wiebe Door, supra. Major J. said:
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47. Although there is no universal test to
determine whether a person is an employee or an independent
contractor, I agree with MacGuigan J.A. that a persuasive
approach to the issue is that taken by Cooke J. in
Market Investigations, supra. The
central question is whether the person who has been engaged
to perform the services is performing them as a person in
business on his own account. In making this
determination, the level of control the employer has over
the worker's activities will always be a
factor. However, other factors to consider
include whether the worker provides his or her own
equipment, whether the worker hires his or her own helpers,
the degree of financial risk taken by the worker, the
degree of responsibility for investment and management held
by the worker, and the worker's opportunity for profit
in the performance of his or her tasks.
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17. The passage relied
upon by Major J. in Market Investigations, Ltd. v. Minister of
Social Security, 9 [1968] 3 All E.R. 732 is as follows:
The observations of LORD WRIGHT, of DENNING L.J. and of the
judges of the Supreme Court in the U.S.A. suggest that the
fundamental test to be applied is this: "Is the person who
has engaged himself to perform these services performing
them as a person in business on his own account?" If the
answer to that question is "yes", then the contract is
a contract for services. If the answer is "no" then the
contract is a contract of service. No exhaustive list
has been compiled and perhaps no exhaustive list can be compiled
of considerations which are relevant in determining that
question, nor can strict rules be laid down as to the relative
weight which the various considerations should carry in
particular cases. The most that can be said is that control will
no doubt always have to be considered, although it can no longer
be regarded as the sole determining factor; and that factors,
which may be of importance, are such matters as whether the man
performing the services provides his own equipment, whether he
hires his own helpers, what degree of financial risk he takes,
what degree of responsibility for investment and management he
has, and whether and how far he has an opportunity of profiting
from sound management in the performance of his task. [Emphasis
added]
18. Thus Major J. has
indicated that the central question to be decided in cases such
as these is whether the person who has been engaged to perform
the services is performing them as a person in business on his
own account or is performing them in the capacity of an
employee. In order to make this determination the four
criteria set out in Wiebe Door are factors to be
considered.
19. While neither Major J.
in Sagaz nor MacGuigan J.A. in Wiebe Door
completely rejected the "integration test", they did
find that it could be difficult to apply.
[16] I will comment upon the four factors
set out by Mr. Justice MacGuigan in Wiebe Door Services Ltd.
v. M.N.R., 87 DTC 5025.
Control
While
Mr. Jaswal maintains that the Appellant did not control the
activities of Dunn I do not believe that this is correct. Dunn
was trained by ex-drivers of the Appellant and Dunn was, in
effect, told what to do by an official of Canada Post pursuant to
the contract that the Appellant had entered into with Canada
Post. I find in the evidence presented that Dunn was effectively
controlled by the Appellant either by employees of the Appellant
or by officials of Canada Post with whom the Appellant had
entered into a contract.
Ownership of Tools
The only "tool" in this situation was the cargo van
driven by Dunn and owned by the Appellant. Mr. Jaswal testified
that the Appellant paid for the fuel, repairs and insurance on
the van. It is clear in this situation that the Appellant owned
the tools that were used by Dunn.
Chance of Profit or Risk of Loss
Dunn
stated that she was paid by the hour and that she did not share
in any profits earned by the Appellant from the contract with
Canada Post.
Mr.
Jaswal suggested that by handling a large number of packages and
working longer hours Dunn would earn additional money.
In my opinion in this situation Dunn did not have any
opportunity to share in the profit or suffer a loss.
Conclusion
[17] Based on the above tests, I have
concluded that Dunn was an employee for the purpose of the
Employment Insurance Act and the Canada Pension
Plan.
[18] The appeal is dismissed, without
costs.
Signed at Vancouver, British Columbia, this 16th day of April
2003.
J.T.C.C.
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