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Citation: 2003TCC731
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Date: 20031015
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Docket: 2002-4240(EI)
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BETWEEN:
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630393 SASKATCHEWAN LTD. O/A DOVE HOME CARE
SERVICES,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
AND BETWEEN:
Docket: 2002-4241(CPP)
630393 SASKATCHEWAN LTD. O/A DOVE HOME CARE
SERVICES,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
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____________________________________________________________________
REASONS FOR JUDGMENT
Beaubier,
J.
[1] These appeals were heard together on common evidence
at Regina, Saskatchewan on October 1, 2003. Shannon Chapple, a Registered
Nurse, and the operating officer of the Appellant, was the only witness.
[2] The particulars in the appeal are set out
in paragraphs 4 to 11 inclusive of the Reply to Notice of Appeal Number
2002-4240 (EI). They read:
4. In response to the appeal, the
Minister decided that Elizabeth Beggs, Luce Delaurier, Christine Davies,
Shriley Gentles, Jean Kerr, Andrea Muldridge and Rose Phillips were not
employed under a contract of service with the Appellant but were in insurable employment
pursuant to paragraph 6(g) of the Employment Insurance Regulations for
the periods as follows:
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Elizabeth Beggs
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January 1, 2001
to July 16, 2001
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Luce Delaurier
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January 1, 2001
to June 5, 2001
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Christine Davies
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January 1, 2001
to June 11, 2001
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Shriley Gentles
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January 1, 2001
to June 5, 2001
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Jean Kerr
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January 1, 2001
to June 4, 2001
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Andrea Muldridge
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January 1, 2001
to April 30, 2001
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Rose Phillips
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January 1, 2001
to June 4, 2001
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5. By Notice of Assessment dated
February 27, 2002, the Appellant was assessed for, among other things,
employment insurance premiums in the amount of $14,216.42 for the 2001 year, in
respect of the individuals listed in Schedule “A” attached to and
forming part of the Reply to the Notice of Appeal.
6. The Appellant
appealed to the Minister for a reconsideration of the 2001 assessment.
7. In response to the
appeal, the Minister confirmed the assessment for the 2001 year as the
individuals listed in Schedule "A" attached to and forming
part of the Reply to the Notice of Appeal (collectively hereinafter "the
Workers") were not employed under a contract of service but were in
insurable employment pursuant to paragraph 6(g) of the Employment Insurance
Regulations.
8. In so assessing as he did with
respect to the Workers, the Minister relied on the following assumptions
of fact:
(a) the
Appellant is in the business of arranging health care providers to care for
it's clients in homes, hospitals and institutions;
(b) the
Appellant obtains contracts with clients (hereinafter "the Client")
to provide health care personnel;
(c) the
Appellant screens and places qualified personnel;
(d) the
Appellant charges the Client for providing the health care personnel;
(e) the
Workers were hired as care providers and their services ranged from nursing
which was provided by Workers who were registered nurses to companionship which
was provided by Workers with no special training;
(f) the
Workers earned a set hourly wage;
(g) the
wages ranged from $8.00 to $22.00 per hour depending on the Workers'
qualifications;
(h) the
Appellant set the Workers' pay rates;
(i) the
Appellant paid the Workers;
(j) the
Workers' personal service was required;
(k) the
Client or someone acting on the Client's behalf determined the type of care the
Client required;
(l) the
Client or someone acting on the Client's behalf could direct or instruct the
Workers;
(m) the
services provided by the Workers was subject to the approval of the Client or
someone acting on the Client's behalf;
(n) some
of the Workers performed services at a methadone clinic;
(o) a
Board of Directors directed the operation of the methadone clinic;
(p) the
Board of Directors of the methadone clinic set guidelines, policies and
procedures, and could issue instructions and direction to the Workers;
(q) all
of the tools and equipment required were provided by the Client or the facility
the Client was in;
(r) the
Workers did not incur any expenses in the performance of their duties;
(s) the
Workers did not have a chance of profit or risk of loss;
(t) the
Appellant placed the Workers in employment to perform services for the Client;
(u) the
Appellant acted as a placement or employment agency;
(v) the
Workers were under the direction and control of the Client;
(w) the
Appellant remunerated the Workers, and
(x) wages
paid by the Appellant to the Workers are detailed on Schedule "B"
attached to and forming part of the Reply to the Notice of Appeal.
B. ISSUES TO BE DECIDED
9. The issue to be decided is whether
the Workers were in insurable employment, for the 2001 year, pursuant to
section 6(g) of the Employment Insurance Regulations.
C. STATUTORY
PROVISIONS, GROUNDS RELIED ON AND RELIEF SOUGHT
10. The Respondent relies on
subsection 2(1) and paragraph 5(1)(a) of the Employment Insurance Act and
paragraph 6(g) of the Employment Insurance Regulations.
11. He submits that the Workers were
engaged in insurable employment, for the 2001 year, within the meaning of
paragraph 6(g) of the Employment Insurance Regulations as:
(a) the
Appellant placed the Workers in employment to perform services for the Client,
(b) the
Appellant acted as a placement or employment agency,
(c) the
Workers were under the direction and control of the Client, and
(d) the
Appellant remunerated the Workers.
[3] Assumptions 8(a), (b), (c), (d), (f), (g),
(i), (j), (m), (n), (q), (u) and (w) were not refuted by the evidence.
[4] The Court accepts all of Ms. Chapple’s
testimony as true.
[5] In particular, she testified that the Appellant
and its clients distinguished between the professional workers, Registered
Nurses (R.N.s) and Licensed Practical Nurses (L.P.N.s), and its other workers.
The professional workers were placed with patients without any inspection or
direction by the Appellant other than the contractual instructions it received
that an R.N. or L.P.N. was required. They accepted that as the “Type of
Service” (Exhibit R-3) to be provided and the professional placed with the
client did the entire assessment of the client’s needs without any input or
supervision from the Appellant. Often these professional services were paid by
some form of health insurance.
[6] The majority of the patients were Level 3,
Level 4, or required palliative care.
[7] The remaining placements, Nurses Aides,
often had no training except what the Appellant provided. They had no
licensing or other form of certification. Before placing them with a client,
Ms. Chapple would personally assess the client’s needs and situations and would
prescribe the care to the worker and contract it with the client.
[8] Ms. Chapple testified that the pay rates
for the professionals were substantially higher because of their qualifications
and because they were not controlled by the Appellant or the client. Rather, as
professionals, they made the decisions. The Court accepts this as true,
because they were customarily in the client’s home and were not under the
direction of a hospital or a doctor. They were hired independently and their
reports to the Appellant and the Health Region are professional reports and not
those of someone under direction. This finding distinguishes these
professionals from registered nurses in hospitals (Sheridan v. Canada, [1985]
F.C.J. No. 230 (F.C.A.)) and from those controlled by a patient’s doctor (Health
Assist Registry of Toronto Inc. v. Canada [1996] T.C.J. No. 203).
[9] It is in light of these findings that the
remaining assumptions are reviewed as follows:
8(e) The question to be decided is who “hired” the
workers -- the client or the Appellant. Apparently the client contacts the
Appellant for an appropriate worker and the Appellant sends whoever is
available with the appropriate qualifications according to the order of its
list. Non-professionals are screened. The client pays the Appellant, who in
turn pays the worker.
8(h) The pay rates for the professionals are
negotiated between the Appellant and the professionals.
8(k) Where a professional is sent, that
professional determines the type of care the client requires. Otherwise Ms.
Chapple and the client determine the type of care the client requires.
8(l) The professionals are not directed or
instructed by the client; the non-professionals are.
8(o) Is not
true.
8(p) Is subject to the foregoing findings as between
professional and non-professional workers.
8(r) Is wrong insofar as any uniforms, professional
fees and other normal professional disbursements or travelling may be required.
8(s) Is subject to 8(r).
8(t) Workers can refuse placements.
8(v) Is subject to the foregoing findings.
8(x) Ms. Chapple’s testimony disputed the concept
of “wages” in this assumption.
[10] Using the concepts contained in Wiebe
Door Services Ltd. v. MNR, 87 DTC 5025, the Court finds:
Control
The professionals were not controlled. The
non-professionals were controlled by the Appellant and the client.
Tools
The Appellant did not supply
any tools; nor did the client provide “tools”. The professionals had whatever
tools they needed for their professional duties; the others had none.
Chance
of Profit, Risk of Loss
On the whole, the risk of loss
was that of not being placed. The profit was whatever was earned for the
professionals less their normal expenses.
Integration
Seventy-six percent of those
placed worked elsewhere on a full time basis. Thus the workers could come and
go and were not dependant on the Appellant and the Appellant was not dependant
on the workers. Each could replace the other.
[11] The issue in
each of these appeals is:
1. In the
employment insurance appeal it is whether the workers were in insurable
employment for the 2001 year pursuant to subparagraph 6(g) of the Employment
Insurance Regulations which reads:
6.
Employment in any of the following employments, unless it is excluded from
insurable employment by any provision of these Regulations, is included in
insurable employment:
…
(g) employment of a person who is placed in
that employment by a placement or employment agency to perform services for and under the direction and control of a client of the agency, where
that person is remunerated by the agency for the performance of those services.
2. In
the Canada Pension Plan appeal it is whether the workers were in pensionable
employment for the 2001 year pursuant to section 34 of the Canada Pension
Plan Regulations which reads:
34. (1) Where any individual is placed by a
placement or employment agency in employment with or for performance of
services for a client of the agency and the terms or conditions on which the
employment or services are performed and the remuneration thereof is paid
constitute a contract of service or are analogous to a contract of service, the
employment or performance of services is included in pensionable employment and
the agency or the client, whichever pays the remuneration to the individual,
shall, for the purposes of maintaining records and filing returns and paying,
deducting and remitting contributions payable by and in respect of the
individual under the Act and these Regulations, be deemed to be the employer of
the individual.
(2) For the purposes of subsection (1),
"placement or employment agency" includes any person or organization
that is engaged in the business of placing individuals in employment or for
performance of services or of securing employment for individuals for a fee,
reward or other remuneration.
[12] Thus, the Regulations differ. The Court
finds that the Appellant is liable to pay the Canada Pension Plan
contributions for all of the placements in question based upon section 34
quoted.
[13] However, the Court accepts Ms. Chapple’s
testimony that the R.N.s and the L.P.N.s were not placed in employment to
perform service for and under the direction of a client or the agency and
therefore the Appellant is not liable for the Employment Insurance premiums
respecting them.
[14] These matters are referred to the Minister
of National Revenue for reconsideration accordingly.
Signed at
Saskatoon, Saskatchewan, this 15th day of October 2003.
Beaubier,
J.
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