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Citation:2003TCC443
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Date:20030716
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Docket: 2002-3080(EI)
2002-3081(CPP)
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BETWEEN:
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INSURERS' ADVISORY ORGANIZATION 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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REASONS FOR JUDGMENT
Porter, D.J.
[1] These appeals were heard on common
evidence by consent of the parties, on the 28th of
March 2003 at Calgary, Alberta.
[2] The Appellant has appealed from
the decisions of the Minister of National Revenue (hereinafter
called the "Minister") dated March 18, 2002, that the
employment with it of Kirk A. Aucoin (the "Worker") for
the period February 14, 2000 to February 14, 2001, was both
insurable and pensionable under the Employment Insurance
Act (the "EI Act") and the Canada Pension
Plan (the "CPP") respectively, for the
following reason:
...Kirk A. Aucoin was employed under a contract of service
(i.e. there was an employee/employer relationship between he and
Insurers' Advisory Organization Inc.).
The decisions were said to be issued pursuant to subsection
93(3) of the EI Act and subsection 27.2(3) of the
CPP and were based respectively on
paragraphs 5(1)(a) and 6(1)(a) thereof.
[3] The established facts reveal that
the Appellant operates a business which provides loss control
services, including physical risk surveys, engineering, actuarial
consulting, insurance rating, online computer services,
statistical, educational and related services. The Worker was
engaged to perform loss control surveys and property risk
evaluations pursuant to a form of agreement dated February 14,
2000, entitled "Independent Contractors Agreement -
Individual". Despite the title to that agreement, the
Minister has decided that in fact the Worker was an employee
working under a contract of service. The Appellant
maintains that he was an independent contractor working under a
contract for services. That is the issue before the
Court.
The Law
Contracts Of/For Service
[4] The manner in which the Court
should go about deciding whether any particular working
arrangement is a contract of service and thus an
employer/employee relationship or a contract for
services and thus an independent contractor relationship, has
long been guided by the words of MacGuigan, J. of the Federal
Court of Appeal in the case of Wiebe Door Services Ltd. v.
M.N.R., 87 DTC 5025. The reasoning in that case was
amplified and explained further in cases emanating from that
Court, namely in the cases of Moose Jaw Kinsmen Flying Fins
Inc. v. M.N.R., 88 DTC 6099, Charbonneau v.
Canada (M.N.R.), [1996] F.C.J. No. 1337, and
Vulcain Alarme Inc. v. The Minister of National Revenue
(1999) 249 N.R. 1, all of which provided useful guidance to a
trial Court in deciding these matters.
[5] The Supreme Court of Canada has
now revisited this issue in the case of 671122 Ontario Ltd. v.
Sagaz Industries Canada Inc., [2001] S.C.J. No. 61, 2001 SCC
59, 274 N.R. 366. The issue in that case arose in the
context of a vicarious liability situation. However, the Court
recognized that the same criteria applied in many other
situations, including employment legislation. Mr. Justice Major,
speaking for the Court, approved the approach taken by MacGuigan,
J. in the Wiebe Door case (above), where he had analyzed
Canadian, English and American authorities, and, in particular,
referred to the four tests, for making such a determination
enunciated by Lord Wright in City of Montreal v.
Montreal Locomotive Works Ltd., [1974] 1 D.L.R. 161 at
169-70. MacGuigan, J. concluded at page 5028 that:
Taken thus in context, Lord Wright's fourfold test
[control, ownership of tools, chance of profit, risk of loss] is
a general, indeed an overarching test, which involves
"examining the whole of the various elements which
constitute the relationship between the parties". In his own
use of the test to determine the character of the relationship in
the Montreal Locomotive Works case itself, Lord Wright
combines and integrates the four tests in order to seek out the
meaning of the whole transaction.
At page 5029 he said:
... I interpret Lord Wright's test not as the fourfold one
it is often described as being but rather as a four-in-one test,
with emphasis always retained on what Lord Wright, supra,
calls "the combined force of the whole scheme of
operations," even while the usefulness of the four
subordinate criteria is acknowledged. (emphasis mine)
At page 5030 he had this to say:
What must always remain of the essence is the search for the
total relationship of the parties...
He also observed:
There is no escape for the trial judge, when confronted with
such a problem, from carefully weighing all the
factors...
[6] Mr. Justice MacGuigan also said
this:
Perhaps the best synthesis found in the authorities is that of
Cooke J. in Market Investigations, Ltd. v. Minister of Social
Security, [1968] 3 All E.R. 732, 738-9:
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 be taken,
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. The
application of the general test may be easier in a case where the
person who engages himself to perform the services does so in the
course of an already established business of his own; but this
factor is not decisive, and a person who engages himself to
perform services for another may well be an independent
contractor even though he has not entered into the contract in
the course of an existing business carried on by him.
[7] In the case of Kinsmen
Flying Fins Inc. case, above, the Federal Court of
Appeal said this:
... like MacGuigan J. we view the tests as being useful
subordinates in weighing all of the facts relating to the
operations of the Applicant. That is now the preferable and
proper approach for the very good reason that in a given case,
and this may well be one of them, one or more of the tests can
have little or no applicability. To formulate a decision
then, the overall evidence must be considered taking into account
those of the tests which may be applicable and giving to all the
evidence the weight which the circumstances may dictate.
[8] The nature of the tests referred
to by the Federal Court of Appeal can be summarized as:
a) The degree or absence
of control exercised by the alleged employer;
b) Ownership of tools;
c) Chance of profit;
d) Risk of loss.
In addition, the Court must consider the question of the
integration, if any, of the alleged employee's work into the
alleged employer's business.
[9] In the Sagaz decision
(above) Major, J. said this:
...control is not the only factor to consider in
determining if a worker is an employee or an independent
contractor...
[10] He dealt with the inadequacy of the
'control test' by again approving the words of MacGuigan, J. in
the Wiebe Door case (above) as follows:
...A principal inadequacy [with the control test] is its
apparent dependence on the exact terms in which the task in
question is contracted for: where the contract contains detailed
specifications and conditions, which would be the normal
expectation in a contract with an independent contractor, the
control may even be greater than where it is to be exercised by
direction on the job, as would be the normal expectation in a
contract with a servant, but a literal application of the test
might find the actual control to be less. In addition, the
test has broken down completely in relation to highly skilled and
professional workers, who possess skills far beyond the ability
of their employers to direct.
[11] He went on to say this:
In my opinion, there is no one conclusive test which can be
universally applied to determine whether a person is an employee
or an independent contractor. Lord Denning stated in
Stevenson Jordan, ...([1952] 1 The Times L.R. 101) that it
may be impossible to give a precise definition of the distinction
(p.111) and, similarly, Fleming observed that "no single test
seems to yield an invariably clear and acceptable answer to the
many variables of ever changing employment relations ..."
(p. 416). Further, I agree with MacGuigan J.A. in Wiebe
Door, at p. 563, citing Atiyah, ... (Vicarious Liability in
the Law of Torts. London: Butterworths, 1967), at p. 38,
that what must always occur is a search for the total
relationship of the parties:
[I]t is exceedingly doubtful whether the search for a formula in
the nature of a single test for identifying a contract of service
any longer serves a useful purpose.... The most that can
profitably be done is to examine all the possible factors which
have been referred to in these cases as bearing on the nature of
the relationship between the parties concerned. Clearly not
all of these factors will be relevant in all cases, or have the
same weight in all cases. Equally clearly no magic formula
can be propounded for determining which factors should, in any
given case, be treated as the determining ones.
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.
It bears repeating that the above factors constitute a
non-exhaustive list, and there is no set formula as to their
application. The relative weight of each will depend on the
particular facts and circumstances of the case.
[12] I also find guidance in the words of
Décary, J.A. in the Charbonneau case (above) when
speaking for the Federal Court of Appeal he said this:
The tests laid down by this Court ... 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 ... 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. ... The parts must give
way to the whole. (emphasis mine)
[13] I also refer to the words of
Létourneau, J.A. in the Vulcain Alarme case
(above), where he said this:
... These tests derived from case law are important, but
it should be remembered that they cannot be allowed to compromise
the ultimate purpose of the exercise, to establish in general the
relationship between the parties. This exercise involves
determining whether a relationship of subordination exists
between the parties such that the Court must conclude that there
was a contract of employment within the meaning of art. 2085 of
the Civil Code of Quebec, or whether instead there was
between them the degree of independence which characterises a
contract of enterprise or for services....
[14] I am further mindful that as a result
of the recent decisions of the Federal Court of Appeal in Wolf
v. Canada, 2002 DTC 6853 [2002] F.C.J. No. 375, and
Precision Gutters Ltd. v. Canada (Minister of National
Revenue-M.N.R.), [2002] F.C.J. No. 771, a considerable degree
of latitude seems now to have been allowed to creep into the
jurisprudence enabling consultants to be engaged in a manner in
which they are not deemed to be employees as they might formerly
been. I am particularly mindful of the words of Mr. Justice
Décary in the Wolf decision (above) where he
said:
In our day and age, when a worker decides to keep his freedom
to come in and out of a contract almost at will, when the hiring
person wants to have no liability towards a worker other than the
price of work and when the terms of the contract and its
performance reflect those intentions, the contract should
generally be characterised as a contract for services. If
specific factors have to be identified, I would name lack of job
security, disregard for employee-type benefits, freedom of choice
and mobility concerns. (my emphasis)
[15] Thus, it seems to this Court that the
pendulum has started to swing, so as to enable parties to govern
their affairs more easily in relation to consulting work and so
that they may more readily be able to categorize themselves,
without interference by the Courts or the Minister, as
independent contractors rather than employees working under
contracts of service.
[16] In conclusion, there is no set formula.
All these factors bear consideration and as Major, J. said in the
Sagaz case (above), the weight of each will depend upon
the particular facts and circumstances of the case. Many of
the tests can be quite neutral and can apply equally to both
types of situation. In such case, serious consideration has
to be given to the intent of the parties. Thus is the task of the
trial judge.
The Facts
[17] In the Replies to the Notices of
Appeal, signed on his behalf, the Minister was said to have
relied upon the following assumptions of fact (the Appellant's
agreement or disagreement I have placed in parenthesis):
(a) The Appellant is
a business which provides loss control services, including
physical risk surveys, engineering, actuarial consulting,
insurance rating, on-line computer services, statistical,
educational, and related services; (Agreed)
(b) the Worker was
hired by the Appellant to perform loss control surveys and
property risk evaluations for the Appellant; (Agreed)
(c) the Worker
reported to the Appellant's Calgary, Alberta office; (Agreed,
subject to the word "attending" being substituted for
"reported".)
(d) there was a
written agreement between the Worker and the Appellant (the
"agreement"); (Agreed)
(e) the agreement
detailed the services to be provided by the Worker to the
Appellant; (Agreed)
(f) based on
the agreement, the Worker was hired to perform the services for
the Appellant during a one year period; (Disagreed. The
Appellant says he was not hired - he did not work every day but
on a case by case basis.)
(g) the Worker was
paid by the Appellant, based on a fee schedule which was
determined by the Appellant; (Agreed)
(h) the Worker was
paid on a monthly basis, by the Appellant; (Disagreed. The
Appellant said he was paid upon submission of his invoices,
within 30 days thereof.)
(i) the Worker
was required to report to the Appellant on a regular basis;
(Disagreed)
(j) the Worker
was required to follow the Appellant's established
procedures, rules and directions; (Disagreed. Whilst there
were some established procedures, the Worker was not supervised
on a daily basis.)
(k) the Worker was
required to attend meetings scheduled by the Appellant;
(Disagreed)
(l) based on
the agreement, the Worker was restricted from performing similar
services, for any business that was in competition in any manner
whatsoever with the business of the Appellant or group of
companies; (Agreed)
(m) the Appellant provided
the Worker with a computer; (Agreed. It was provided by way of a
loan.)
(n) the Appellant
paid the costs of a liability insurance; (Agreed)
(o) the Worker was
required to perform the services personally for the Appellant.
(Disagreed.)
[18] Evidence was given on behalf of the
Appellant by Rene Cormier (Cormier), its Branch Manager in
Calgary, Liefur Bjornson, a loss prevention inspector under
contract to and working for the Appellant, and Kirk Aucoin
himself.
[19] The salient terms of the contract read
as follows:
...AND WHEREAS IAO and Contractor wish to enter into a
relationship whereby, as an independent contractor, Contractor
will carry out physical risk surveys and evaluations of
properties and other risks for and on behalf of IAO on the terms
and conditions herein set forth:
...
Services to be Provided
1. As an
independent contractor, Contractor hereby agrees to carry out for
and on behalf of IAO, physical risk surveys and evaluations of
properties and other risks on a timely basis, and to provide IAO
with a written report of each survey or evaluation in a format
and of a quality satisfactory to IAO, upon the terms and in
accordance with the provisions of this Agreement and any
ancillary documents relating thereto.
...
Fees and Expenses
3. In
consideration for the services rendered by Contractor to IAO
under this Agreement, IAO shall pay Contractor according to the
schedule annexed to this Agreement as Schedule "A" (the
"Fee Schedule") and ... according to the terms of
paragraphs 4 and 5 hereof. The Fee Schedule may be amended
from time to time on the written agreement of IAO and
Contractor.
4. Contractor
shall be responsible for all expenses he incurs in carrying out
his obligations under this Agreement, including expenses relating
to equipment, supplies and travel, except as expressly provided
in (the "Fee Schedule").
5. Contractor
shall submit to IAO, at the end of each calendar month, an
invoice in writing for his claims to payment for services fully
rendered under the Fee Schedule. IAO shall make payment of
the amounts specified in such invoice subject to the terms of
this Agreement, within thirty (30) days after receipt of the
invoice by IAO.
Relationship of Contractor to IAO - Independent
Contractor
6. It is
expressly agreed that neither Contractor nor any of Contractor's
Representatives (as defined in paragraph 8) is an employee of IAO
for any purpose whatsoever, but is an independent contractor
operating a business separate from that of IAO. IAO is
interested only in the results obtained by Contractor, who shall
have control of the manner and means of performing under this
Agreement. IAO shall not have the right to require
Contractor to collect accounts, investigate customer complaints,
devote any fixed or minimum number of hours to his obligations
under this Agreement, bind IAO, or do anything else which would
jeopardize the relationship of independent contractor between IAO
and Contractor.
7. Contractor
does not have, nor shall he hold himself out as having any right,
power or authority to create any contract or obligation, either
express or implied on behalf, in the name of, or binding upon
IAO, or to pledge IAO's credit, or to extend credit in IAO's
name.
8. To perform
the services provided for in this Agreement, and subject to IAO's
prior written approval, contractor shall have the right to
appoint or otherwise designate suitable and desirable employees,
consultants, agents and representatives (hereinafter collectively
referred to as "Contractor's Representatives"),
provided that all such persons shall possess the expertise and
shall have received any training necessary to carry out the
duties assigned by Contractor. "IAO's prior written
approval" shall be restricted to IAO satisfying itself that
the Contractor's Representatives possess the necessary expertise
and are properly trained to carry out the aforesaid duties.
Contractor shall be solely responsible for Contractor's
Representatives and their acts, and Contractor's Representatives
shall be at Contractor's own risk, expense and supervision.
Contractor's Representatives shall not have any claim against IAO
for salaries, commissions, items of cost, or other forms of
compensation or reimbursement; and Contractor represents,
warrants and covenants that Contractor's Representatives shall be
subordinate to Contractor and subject to each and all of the
terms, provisions and conditions applying to Contractor
hereunder.
[20] Quite clearly, the agreement between
the parties purports to set itself up as an independent
contractor arrangement.
[21] Cormier said that he was responsible
for some 36 contractors used by the Appellant throughout the
three Western Provinces. His organization is approached by
insurance companies, municipalities, the Federal and Provincial
governments as well as insurance adjusters and private
corporations, to carry out independent risk analysis of all kinds
of equipment, property and undertakings. To do their fieldwork,
they engage these subcontractors of which the Worker was one.
Each subcontractor, he said was offered assignments on a fairly
regular basis and they could accept or reject an assignment as
they saw fit. If they took an assignment, they had to complete it
within a specified time, as the Appellant in turn had commitments
to its clients. Today, he said, assignments were offered
electronically. In the day of the Worker the contracts came in,
and were put into mailboxes for the subcontractors at the office,
where they picked and chose them as they saw fit.
[22] Cormier said that they carried out
quality control reviews of reports prepared by subcontractors,
that is they checked them over to make sure they were properly
prepared before passing them onto the clients.
[23] Cormier said the Worker could then set
for himself the amount of time he worked, when he took mealtimes,
rest periods, vacations, etc. If he was ill, he reported to
nobody.
[24] Compensation was regulated by the fee
schedule attached to the initial contract. The Worker invoiced
the Appellant once per month and was paid within a month of the
date of the invoice.
[25] Long distance phone calls made by the
Worker were reimbursed to him, and he was provided with business
cards indicating he represented the Appellant organization when
he went to client premises. The Appellant also provided liability
insurance and paid out of pocket expenses for the Worker to
attend training sessions or meetings put on by the company.
[26] The Worker, he said, was required to
pay his own car expenses, gas, telephone, computer and stationery
items. Inspection report forms were provided by the Appellant for
use by the Worker. In addition, the Appellant loaned to the
Worker a lap top computer which was not for use except for
company business.
[27] Cormier said the subcontractors could
contract out their services to others, but the Appellant wished
to ensure that these others were properly qualified to do the
work. It seems to me that this never did occur with the Worker
and probably would not occur as anybody qualified would probably
have worked for the Appellant directly. To that extent, clause 8
of the contract seemed somewhat hollow. Nonetheless, the legal
right to do so existed. He said some contractors did hire other
people to do measurements and the like.
[28] He said many of the subcontractors also
did work in other situations, which were not in competition with
the Appellant, and prohibited under the contract. He gave
examples of one contractor working for the Workers' Compensation
Board, one doing work directly for some underwriters certifying
five fire trucks, and another one who sold travel trailers.
[29] With respect to company meetings,
Cormier said the Worker was not required to attend meetings. He
was offered training sessions and was free to attend or not as he
saw fit. Some of those sessions would provide the Worker with
updated information needed by the clients, so there was a strong
need to attend.
[30] Cormier maintained that the Appellant
did not provide equipment to the contractors. He explained that
the reason he loaned a lap top computer to the Worker, was
because the latter's own computer had broken down and he had
asked if he could borrow one, short term, for three months.
[31] The contractors needed to have digital
cameras when the Appellant changed its procedures for reporting
to its clients. It made the cameras available to the contractors
at a group price of $600.00 and the Worker purchased his from the
Appellant.
[32] When the Appellant changed its fee
schedule with its contractors, the Worker elected not to continue
on with them and terminated his contract.
[33] It is apparent that the contractors
filed their reports over the internet with the Appellant using
software equipment issued to them by the company and a special
access password.
[34] When initially engaged, a
representative of the Appellant would go out with a new worker to
make sure they undertook what was required of them.
[35] Liefur Bjornson was a most impressive
witness and a man who had been in the business for many years. He
was a man of great experience in this field. He did quality
control review of the work of other inspectors. He had been
working as a subcontractor since 1991. His work was assigned to
him by the office and if he felt he could not or did not want to
do it, he turned it back in.
[36] He would contact the broker in question
to get the name of the client and arrange his own appointments
through that broker. He described how he went about his
inspections and reports and felt he was his own supervisor. He
felt absolutely responsible for his own work. His data entries
were originally done either by using employees at the Appellant's
office or outside workers. He said that by the year 2000
everybody had to have their own computers and file their work
that way. He would submit his reports along with his invoices.
The work had to be done in a timely fashion and he said he made
money by actually working as much as he wanted. He incurred
expenses in paying for his own auto, computer and office
supplies.
[37] He confirmed that there was no
requirement to attend company meetings and that the inspectors
were simply invited to an annual meeting and to training
sessions.
[38] He was confident that he was an
independent contractor and that the Appellant was his client,
whom he represented in doing inspections.
[39] I placed a great deal of faith in the
evidence of this witness. He seemed to me to be extremely
credible.
[40] Lastly, the Worker himself gave
evidence. He had worked with the Appellant several years before
as an employee. He dropped off a resume in January 2000, received
a call and subsequently was engaged. He was presented with the
form of contract. He asked if he needed a lawyer and was told he
could do whatever he thought right. He said the contract looked
alright to him and he was told others had signed it, so he signed
it. He knew before applying that the Appellant had "gone to
independent contractors", but said he did not know what that
meant. He said he found out after signing the contract when
Liefur Bjornson apparently explained it all to him. He later, in
January 2001, signed another contract using a business name
"Canadian Loss Control Services". That was a name he
said the Appellant made up for him. He also obtained a G.S.T.
registration number.
[41] He described how the work was assigned
to him by being placed in his mailbox at the company office, much
as Cormier had described. He confirmed the latter's evidence with
respect to the equipment he needed, the obligation to buy a
digital camera, and the borrowing of the laptop computer.
[42] He felt that he was supervised over the
first couple of months in that Bjornson or another inspector,
Steve, would review his work. They would point out to him things
that he might have left out.
[43] He would talk to Darlene Taylor in the
office on a daily basis who told him he was supposed to check in
regularly with her. If he felt not qualified to do an assignment,
he would turn it back to her.
[44] Sometimes when he went out of town to
work, he would rent a vehicle which he paid for himself out of
his fee.
[45] He explained that for the first couple
of months, he remained employed at an auto parts business.
[46] These are the salient facts as I find
them. There is really not any conflict between the witnesses.
Their evidence is pretty much the same. Although Cormier and
Bjornson were much more sure about what they were doing and how
they were doing it, on the whole, I did not feel that the
evidence of the Worker was in conflict with their evidence.
Application of Law to the Facts
[47] Title: It must still be
clearly understood that even where the parties choose to put a
title on their relationship, if the true nature and substance of
the arrangement does not accord with that title, it is the
substance to which the Court must have regard. That legal
principle has not changed (see Shell Canada Ltd. v. Canada
(1999) S.C.J. No. 30). Having said that, it is also fair to say
that where the parties genuinely choose a particular method of
setting up their working arrangement, it is not for the Minister
or this Court to disregard that choice. Due deference must be
given to the method chosen by the parties and if on the evidence
as a whole there is no substantial reason to derogate from the
title chosen by the parties, then it should be left untouched.
The Wolf and Precision Gutter cases very much
substantiate that proposition.
[48] Whilst I have some reservations as to
how well the Worker understood all that was involved at the time
he signed the contract, I am quite confident that he did so
understand by the time he started working when it was explained
fully to him by Bjornson.
[49] Control: As this aspect of
the test has been traditionally applied, it has been consistently
pointed out that it is not the actual control so much as the
right to control that is important for the Court to consider. The
more professional and competent a person is or the more
experience they have in their field, the less likely there is to
be any actual control, which creates difficulty in applying this
test. Indeed as Major, J. pointed out in the Sagaz case
(above), there may be less control exercised in the case of a
competent professional employee than in the case of an
independent contractor. Nonetheless, it is another factor to be
weighed in the balance.
[50] All in all, I saw very little, if any,
signs of control over the Worker. He was free to take work or not
as he saw fit. He could come and go as he pleased, all the
hallmarks of an independent contractor.
[51] It is apparent that the clients of the
Appellant required their reports to be done in a certain way, to
contain certain specified information and to be filed
electronically. The Appellant passed these requirements onto the
worker. This does not amount to control. It is the very work
which has to be done for the clients.
[52] Tools and Equipment:
Basically, the Worker was required to have his own tools, e.g.
car, computer, camera. In fact, he borrowed a computer but it was
clear that this was a temporary loan. This requirement to have
for use in his work all these tools of his own, points clearly to
an arrangement with an independent contractor.
[53] Profit and Loss: How much
he made depended very much upon how much work he chose to take
on, and how diligently he performed it. As per the Precision
Gutters case (above), this is clearly an indication of a
person in business for himself. Similarly, he needed equipment.
If he had no income, he still had these expenses. If he lost or
broke his equipment, he stood to make a loss. All these factors
have an entrepreneurial aspect to them and are again an
indication of an independent contractor working under a contract
for services.
[54] Integration: This is the
aspect of the test which has been most often criticized. The
question to be asked is "whose business is it"? That
must be asked from the point of view of the worker, not the
employer as from the latter's point of view it will always look
like its business. In other words, were there two businesses here
or one.
[55] When I look at this from the Worker's
point of view, it is clear to me that he was operating his own
independent business. Ultimately, he went so far as to sign a new
contract in his new business name. True, he was encouraged to do
this by the Appellant, but nonetheless, he did so. There was a
certain entrepreneurial element to his work. He could come and go
as he chose, he could make what money he chose, and he faced
expenses of his own to do the work, which he paid out of his
fees. He invoiced for his work. In my view, there were clearly
two independent businesses operating here.
Conclusion
[56] When I look at the forest as a whole
and not just at the individual trees, I am well satisfied on the
evidence that the Worker was an independent employee working
under a contract for services. I am mindful of the
words again of Justice Décary in the Wolf case
(above):
In our day and age, when a worker decides to keep his freedom
to come in and out of a contract almost at will, when the hiring
person wants to have no liability towards a worker other than the
price of work and when the terms of the contract and its
performance reflect those intentions, the contract should
generally be characterised as a contract for services. If
specific factors have to be identified, I would name lack of job
security, disregard for employee-type benefits, freedom of choice
and mobility concerns. (my emphasis)
[57] This case very much accords with those
words. In the event, the appeals are allowed and the decisions of
the Minister vacated.
Signed at Calgary, Alberta, this 16th day of July 2003.
Porter, D.J.
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