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Docket: 2002-4154(EI)
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BETWEEN:
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KATIE D. HAYWARD,
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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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____________________________________________________________________
Appeal heard on July 18, 2003 at Toronto, Ontario
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Before: The Honourable
W.E. MacLatchy, Deputy Judge
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Appearances:
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For the
Appellant:
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The Appellant
herself
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Counsel for the
Respondent:
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Bonnie Boucher
Carol Calabrese
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____________________________________________________________________
JUDGMENT
The appeal is dismissed and the decision of
the Minister is confirmed in accordance with the attached Reasons for Judgment.
Signed at Toronto,
Ontario, this 19th day of August 2003.
MacLatchy,
D.J.
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Citation:2003TCC527
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Date:20030819
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Docket: 2002-4154(EI)
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BETWEEN:
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KATIE D. HAYWARD,
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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
MacLatchy,
D.J.
[1] The
appeal was heard on July 18, 2003 at Toronto, Ontario.
[2] D.J.
McRae Contracting Ltd., the Payor, appealed a ruling to the Minister of
National Revenue, (the "Minister") for the determination of the
question of whether or not the Appellant was employed in insurable employment
while engaged by it for the period from January 1 to December 31, 2001, within
the meaning of the Employment Insurance Act (the "Act").
[3] By
letter dated October 10, 2002, the Minister informed the Appellant and the
Payor that it had been determined that the Appellant's engagement with the
Payor, during the period in question, was insurable employment for the reason
that the Appellant was employed pursuant to a contract of service.
[4] In
making his decision, the Minister relied on the following assumptions of fact:
a) The Payor is
a business involved in general contracting;
b) The
shareholders of the Payor are:
percentage
of shares
Appellant 25%
Rick Hayward 25%
Edward
Laffey 25%
Dawn Laffey 25%
c) Rick Hayward
is the Appellant's spouse;
d) Edward Laffey
is the Appellant's nephew;
e) Dawn Laffey
is Edward Laffey's spouse;
f) The
Appellant's duties for the Payor included accounting duties and various
clerical and related duties;
g) The Appellant
performed the services at the Payor's offices and at times at her home;
h) The Appellant
was paid an annual salary of $35,000.00;
i) The
Appellant was paid regularly on a bi-weekly basis;
j) The
Appellant's wages were determined by the Payor;
k) The Payor
could terminate the Appellant's employment at anytime;
l) The Payor
owned all the tools and equipment;
m) The
Appellant's duties were integral to the Payor's business.
All of the above assumptions were accepted as correct by the Appellant.
[5] The
issue before this Court is whether the Appellant was employed under a contract
of service pursuant to paragraph 5(1)(a) of the Act and further
whether the Appellant was in excluded employment within the meaning of
paragraph 5(2)(i) of the Act.
[6] A
careful and complete cross-examination of the Appellant was conducted by
counsel for the Respondent. The evidence elicited from the Appellant indicated
that no one shareholder could bind the Payor. There was no one shareholder that
had control of the corporation that was related to the Appellant. The Appellant
was related to her husband but not to the other two equal shareholders and her
husband did not control the corporation.
[7] The
Appellant was hired by the corporation with a clear job description that
included operating the internal organization of the company. She was not
controlled during the general internal operation of the corporation but was
subject to being terminated at the behest of the corporation. The corporation
provided the Appellant with an office and all the tools she could require to
perform her duties. She was paid a flat salary and was not in a position to
profit from the performance of her duties. It is true she would profit from the
financial success of the corporation but that was separate and apart from her
duties as an employee. She would not suffer any risk of loss. It was the corporation
that would be responsible for any loss occasioned in the operation of its
business. She had flexible hours and could operate from her home if it was more
convenient for her. She was also provided with health and dental coverage and
given a car allowance by the corporation. She was an integral part of the
operation of the business of the corporation. It was the business of the
corporation and not her business as such.
[8] Reviewing
the total relationship between the corporation and the Appellant, the Court has
reached the conclusion that the Appellant was employed pursuant to a contract
of service and her employment would be insurable within the meaning of the Act.
The further conclusion as indicated above, that the Appellant was not related
to the Payor, would confirm that the Appellant and the Payor were dealing with
each other at arm's length and the employment of the Appellant was not excluded
employment within the meaning of the Act.
[9] Reference
was made to a recent decision of this Court cited as Campbell v. Canada
(Minister of National Revenue – M.N.R.), [1998] T.C.J. No. 571, given by
Porter, D.J., dealing with the meaning "at arm's length". The law was
well researched and recorded in the judgment commencing at paragraph 5 through
and including paragraph 26 and this Court adopts the reasoning contained
therein.
[10] The appeal is dismissed and the decision of the Minister is hereby
confirmed.
Signed at Toronto, Ontario, this 19th day of
August 2003.
MacLatchy,
D.J.
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