[OFFICIAL ENGLISH TRANSLATION]
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Reference: 2004TCC402
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Date: 20040611
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Dockets: 2003-1634(EI)
2003-1636(CPP)
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BETWEEN:
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ROGER COUTURIER,
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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
Angers J.
[1] The
Appellant is appealing from a decision of the Minister of National Revenue (the
“Minister”) in which it was found that the Appellant was not employed in an
insurable or pensionable employment for the period of February 18 to August 2,
2002, while he was working for Long Potato Growers Ltd. (the “Payor”), within
the meaning OF paragraph 5(1)(a) of the Employment Insurance Act (the
“Act”) and section 6 of the Canada Pension Plan (“CPP”). The two
appeals were heard on common evidence.
[2] In
making his decision, the Respondent relied on the following assumptions of
fact, which were either admitted or denied as indicated:
a) the Payor is
involved in potato-growing and wood-cutting; [admitted]
b) the Appellant
is a wood-cutter, and he owns a skidder worth approximately $20,000; [admitted]
c) during the
period at issue, the Appellant was hired by the Payor to harvest wood; [admitted]
d) the use of
the skidder was an integral part of the wood harvesting contract between the
Appellant and the Payor; [denied]
e) the wood
harvesting contract was between the Appellant and the Payor; [admitted]
f) the
Appellant was required to hire another wood-cutter; [admitted]
g) the
wood-cutter’s pay came directly from the Appellant’s income; [admitted]
h) the
harvesting work was paid on the basis of a set amount per cord of wood,
depending on the type of wood cut; [admitted]
i) payments for
the wood were divided between the Appellant and his skidder at the beginning of
the period; [denied]
j) after the
wood-cutter was hired, payments were divided between the Appellant, his
skidder, and the wood-cutter; [admitted]
k) the Appellant
received $590 per week for 14 weeks and $594 for 9 weeks during the period at
issue; [admitted]
l) the
wood-cutter also received $590 per week; [admitted]
m) the balance of
the payments was allotted to the skidder; [admitted]
n) the Appellant
decided on the amount that would be recorded in the payroll register as his
wages; [denied]
o) the Appellant
was responsible for the expenses relating to the use of his skidder; [admitted]
p) the wood
harvesting carried out from January 2002 until February 18 was not included by
the Payor in the Appellant’s period of work; [admitted]
q) the Appellant
harvested wood under a contract of enterprise; and
r) a contract
of employment did not exist between the Appellant and the Payor.
[3] The
Appellant purchased a skidder in the fall of 2001 with financial assistance
from the Payor. He repaid the Payor with the income from the first harvests of
wood he carried out during the first two months of 2002. This explains why the
Appellant’s record of employment identified February 18, 2002, as the first day
of work. The Appellant started to work before this period, and the amounts
received were used to repay the loan from the Payor.
[4] At
the outset, the Appellant worked alone. Further to an inspection by a forestry
safety officer, the Appellant was required to hire a worker. He selected the
worker, but this person was paid by the Payor. However, the worker’s wages
were deducted from the Appellant’s wages. The Appellant was paid according to
the number of cords of wood cut. The Appellant and his worker each received
$590 per week, and the balance was applied against the usage costs for the
skidder. This distribution was made in accordance with the Appellant’s wishes.
[5] To
perform his work, the Appellant provided four chainsaws and his skidder. He
incurred all the expenses for the use and maintenance of the chainsaws and the
skidder. In cases of major mechanical failures or where the weather would not
permit the Appellant to perform his work, the Payor did not assign any other
work, and the Appellant did not work.
[6] A
representative of the Payor indicated where the wood was to be cut and the size
of the cut wood. He visited the sites every two or three days. No register of
hours of work was maintained, because income was based on the volume of wood
cut, according to a scale of rates. The Appellant set his own hours of work.
[7] In
his testimony, the Appellant stated that he had been self-employed since April
2003. However, he signed an employment questionnaire for Human Resources
Development Canada in which he reported that he had been self-employed since
February 11, 2002, that his business name was JKR Lumberjack, and that he was a
skidder operator. The questionnaire also revealed that he worked with a
wood-cutter five days a week, for eight hours a day. His remuneration for his
services was determined according to a set rate per cord of wood cut. The
remuneration identified in the questionnaire is the same as the amounts he
received from the Payor for the first nine weeks.
[8] Ms.
Joanne Robichaud, Appeal Officer, confirmed some facts with respect to the
relationship between the Appellant and the Payor, and filed her report. She
confirmed that, according to the information received from the Payor’s
representatives, the Appellant’s hours of work were not recorded, because he
was paid based on the amount of wood cut. Moreover, the value of the wood cut
during the first two months of 2002 was used solely to repay the loan made by
the Payor to the Appellant to enable him to purchase his skidder. The
Appellant admitted to this fact.
[9] In
Wiebe Door Services Ltd. v. Minister of National Revenue, [1986]
3 F.C. 553, the Federal Court of Appeal established a useful guide for
distinguishing a contract of employment from a contract of enterprise. In 671122
Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] 2
S.C.R. 983, the Supreme Court of Canada endorsed this guide, summarizing the
legal situation as follows at paragraphs 47 and 48:
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.
[10] In Charbonneau v. Canada, [1996] F.C.J. No. 1337 (Q.L.),
Marceau J. of the Federal Court of Appeal recalls that the factors at issue 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.
[11] In a recent decision, the Federal Court of Appeal restated the legal
principles governing the issue of the insurability of employment. In Livreur
Plus Inc. v. Canada, [2004] F.C.J. No. 267, Létourneau J. summarized
these principles in paragraphs 18 and 19 of his judgment as follows:
In these
circumstances, the tests mentioned in Wiebe Door Services Ltd. v. M.N.R.,
87 D.T.C. 5025, namely the degree of control, ownership of the work tools, the
chance of profit and risk of loss, and finally integration, are only points of
reference: Charbonneau v. Canada (Minister of National Revenue - M.N.R.) (1996), 207 N.R. 299, paragraph 3. Where
a real contract exists, the Court must determine whether there is between the
parties a relationship of subordination which is characteristic of a contract
of employment, or whether there is instead a degree of independence which
indicates a contract of enterprise: ibid.
Having
said that, in terms of control the Court should not confuse control over the
result or quality of the work with control over its performance by the worker
responsible for doing it: Vulcain Alarme Inc. v. The Minister of
National Revenue, A-376-98, May 11, 1999, paragraph 10, (F.C.A.); D&J
Driveway Inc. v. The Minister of National Revenue, supra, at
paragraph 9. As our colleague Décary J.A. said in Charbonneau v. Canada
(Minister of National Revenue - M.N.R.), supra, followed in Jaillet
v. Canada (Minister of National Revenue - M.N.R.), 2002 FCA 394,
"It is indeed rare for a person to give out work and not to ensure that
the work is performed in accordance with his or her requirements and at the
locations agreed upon. Monitoring the result must not be confused with
controlling the worker."
[12] In this case, the Payor’s version of the facts is unknown, except for
the information the Appeal Officer gathered at the time of her investigation.
The Appellant has not contradicted this information. The information to be
retained from the facts presented overall is that the Payor did not keep track
of the Appellant’s and the worker’s hours of work, and based himself solely on
the quantity of wood cut and measured to pay them. The weekly advances were
determined by the Appellant, and the balance owing reimbursed the expenses
incurred in the use of the skidder. At the end of the period, the advances
were adjusted in accordance with the quantity of wood that was actually cut.
The worker’s wages were deducted from the Appellant’s income. All expenses
relating to the skidder were incurred by the Appellant, and a major mechanical
failure resulted in a work stoppage with no remuneration.
[13] The work method, the use of the skidder or the chainsaw, the number of
work days per week, and the number of work hours per day were at the discretion
of the Appellant. The Payor did not check how the Appellant was performing his
work; it only ensured that the Appellant was cutting the wood in the correct
area and in the lengths required. The Payor had a greater interest in the
quantity of wood cut, therefore in the results, than in exercising control over
the Appellant’s activities. As Létourneau J. stated in Livreur Plus Inc.,
supra, “monitoring
the result must not be confused with controlling the worker.” He refers to Charbonneau v. Canada, supra. In this case, Décary J. wrote the
following:
Supervision of the work every second day and measuring
the volume every two weeks do not, in this case, create a relationship of
subordination, and are entirely consistent with the requirements of a contract
of enterprise. It is indeed rare for a person to give out work and not to
ensure that the work is performed in accordance with his or her requirements and
at the locations agreed upon. Monitoring the result must not be
confused with controlling the worker.
[14] In light of the facts, the Payor was interested only in the quantity
of wood cut, not in exercising control over the Appellant. The Payor was not
free to assign workers other than the Appellant and his worker to the skidder.
It is difficult to establish subordination in a case like this one. Moreover,
the Appellant’s activities were neither integrated nor coordinated with those
of the Payor. Even though the Appellant knew that the Appellant was harvesting
wood in the designated areas, the Payor’s daily activities did not depend on
those of the Appellant. The relationships described in the case at issue do
not create a relationship of subordination comparable to the one that exists
between an employer and an employee. In Canada v. Rousselle,
[1990] F.C.J. No. 990, Hugessen J. concluded as follows in a similar case: “[…]
the fact of giving instructions on the type of wood to
be cut and checking it when it is measured does not in itself create a
relationship of subordination like that which exists between an employer and an
employee.”
[15] In this case, the Appellant assumed full responsibility for the
expenses relating to the use of the skidder and its maintenance and repairs.
This type of agreement points clearly to the existence of a contract of
enterprise, where the chance of profit or the risk of loss is the Appellant’s
only. Ownership of a chainsaw in this type of work does not prevent a
wood-cutter from being considered an employee. However, in this case, the
Appellant provided his own skidder, financed by the Payor, something that is
not normally asked of a worker in the presence of a contract of employment,
owing to the costs. (See Canada v. Rousselle,
supra).
[16] I cannot ignore the fact that, on February 11, 2002—seven days before
the alleged first day of work—the Appellant considered himself to be
self-employed, operating under the business name JKR Lumberjack.
[17] The facts overall allow me to conclude that the relationship between
the Payor and the Appellant points to the existence of a contract of
enterprise. The Appellant, therefore, was not hired under a contract of
employment during the period at issue, thus he could not carry on an insurable
employment within the meaning of the Act or a pensionable employment within the
meaning of the CPP. Therefore, the appeals are dismissed.
Signed at Ottawa, Canada, this 11th day of June 2004.
Angers
J.
Certified true
translation
Colette
Dupuis-Beaulne
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