Date:
20011204
Dockets:
2000-4109-EI,
2000-4108-CPP
BETWEEN:
FAMILY
SERVICE LONDON,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent,
AND
2000-4131(EI)
2000-4132(CPP)
BETWEEN:
SUSAN
DENOMY,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Reasons
for Judgment
Rip,
J.T.C.C.
[1]
Family Service London ("FSL") and Susan Denomy appeal
from determinations and decisions of the Minister of National
Revenue ("Minister"), dated June 29, 2000, made in
accordance with the Employment Insurance Act
("Act") and Canada Pension Plan
("CPP"), respectively. The Minister states that
FSL was the actual employer and Mrs. Denomy was the deemed
employee of C. Jamie Williams during the period from
September 17, 1998 to January 7, 1999. There was, according to
the Minister, "an employer/employee relationship to
constitute a contract of service". According to the
Minister, the FSL and Mrs. Denomy were employers; Mr.
Williams was the employee in these relationships. Therefore, the
employment was "insurable employment" under the Act and
"pensionable employment" under the CPP. As a
result, FSL and Mrs. Denomy were liable for insurance
premiums under the Act and for contributions under the
CPP on the earnings received by Mr. Williams. The
appeals were heard together on common evidence.
[2]
FSL is a non-profit organization operating in London,
Ontario. Among other things, FSL runs a community integration
program, which facilitates the integration of developmentally
challenged adults in the community and advocates for their
participation in community.
[3]
David Morse is a community integration worker with FSL. In
late summer of 1998 Mr. Morse received a telephone call from
the Ministry of the Solicitor General and Correction Services
("Ministry") asking for assistance for
Carl O'Connor. Mr. Morse was advised that
Mr. O'Connor, a developmentally challenged adult and a
repeat sex offender, was about to be released from Guelph
Correctional Institute ("Guelph"), a division of the
Ministry. Mr. O'Connor was considered to be a high-risk
offender in need of 24-hour supervision.
[4]
Mr. Morse indicated at trial that he could have declined or
advised Guelph to send Mr. O'Connor to the "men's
mission" but this would have put the community at risk.
Mr. Morse proceeded then to inquire into various options in
an effort to find support for Mr. O'Connor, but was
unsuccessful as Mr. O'Connor did not have any funding.
Mr. O'Connor would not have funding until he applied for
welfare after his release. Mr. Morse advised
Lesley Logan, a social worker at Guelph, that he was unable
to find accommodations for Mr. O'Connor because of lack
of funding.
[5]
Mr. Morse testified that a little while later he received a
phone call from Guelph saying that the Adult Community Operations
Branch of the Ministry was committing an amount of $12,000. This
was confirmed by letter dated May 29, 1998 from Mrs. Logan
advising Mr. Morse that the $12,000 had been committed for
Mr. O'Connor and stated that the funding was to be used
"to purchase services, supports, respite care etc. This
money can be used to establish residential services for
Mr. O'Connor to provide him with the supervision and
support that he needs in order to reduce the risk and establish
an appropriate placement for him".
[5]
Upon learning that funding had been allocated to Mr. O'Connor, Mr. Morse contacted Susan Denomy.
Mrs. Denomy provided room and board on one prior occasion in
connection with an individual introduced to her by
Mr. Morse. Mrs. Denomy and her husband agreed to
provide room and board and supervision to Mr. O'Connor
while they were home, provided that another person supervised
Mr. O'Connor when the Denomys were not at home.
Mr. O'Connor would pay Mrs. Denomy out of his welfare
payments.
[6]
Mr. Morse suggested to the Ministry that
monitors be paid at the rate of $9.00 an hour, which was
approved. He also obtained approval for a reimbursement of $20.00
per trip to the monitors if they had to drive
Mr. O'Connor to an activity. Mr. Morse then began his search for monitors to
supervise Mr. O'Connor when the Denomys were out of the
house. He did so by spreading the word with various agencies that
monitors were required. Mr. Morse and Mrs. Denomy met with the monitors before they were
hired.
[7]
Mr. O'Connor is believed in some areas to function
mentally at the level of a 12 year old, and as Mr. Morse
testified, as far as decision-making and making purposeful
decisions and weighing consequences, perhaps functioned at a five
or six year old level. Mrs. Denomy testified that a joint
bank account in her name and Mr. O'Connor was opened to
assist Mr. O'Connor with bank account matters because as
a result of his developmental disability he was unable to deal
with the financial arrangements on his own. All money received by
Mr. O'Connor was deposited in the joint bank account and
payments to monitors were made out of this bank
account.
[8]
Mr. Williams was one of the monitors who was engaged to provide
supervision to Mr. O'Connor when the Denomys were not at
home.
[9]
One of the issues before me is whether Mr. Williams was an
employee of one or more of the Ministry, FSL and Mrs. Denomy
or was an independent contractor.
[11] Subject to
paragraph 5(1)(a) of the Act "insurable
employment" is:
(a) employment in
Canada by one or more employers, under any express or implied
contract of service or apprenticeship, written or oral, whether
the earnings of the employed person are received from the
employer or some other person and whether the earnings are
calculated by time or by the piece, or partly by time and partly
by the piece, or otherwise;
[12]
"Personable employment", under the CPP, "is
employment in Canada that is not excepted employment".
[13] Mrs.
Denomy, the respondent says, is a "deemed employer".
Generally a "deemed employer" is one who supervises or
controls an insured person or who concurs in permitting an
insured person to work on the "deemed" employer's
premises or property under licence or agreement or pays the
employee. The Regulations to the Act and CPP
describe such an employer. A "deemed employer" is
described in the Insurance Earnings and Collection of Premiums
Regulations to the
Act. Section 10 of this Regulation reads as
follows:
10. (1) Where, in any case not coming within any other
provision of these Regulations, an insured person
works
(a) under the general control or direct supervision of, or
is paid by, a person other than the insured person's actual
employer, or
(b) with the concurrence of a person other than the
insured person's actual employer, on premises or property
with respect to which that other person has any rights or
privileges under a licence, permit or agreement,
that other person shall,
for the purposes of maintaining records, calculating the
insurable earnings of the insured person and paying, deducting
and remitting the premiums payable on those insurable earnings
under the Act and these Regulations, be deemed to be the employer
of the insured person in addition to the actual
employer.
(2) The amount of any
employer's premium paid by the person who is deemed to be the
employer under subsection (1) is recoverable by that person from
the actual employer.
(3) Where a person who
is deemed under these Regulations to be an employer of an insured
person fails to pay, deduct or remit the premiums that an
employer is required to pay, deduct or remit under the Act or
these Regulations, the provisions of Parts IV and VI of the Act
shall apply to the person as if the person were the actual
employer.
[14] The
relevant sections of the Canada Pension Plan Regulations are:
Sec. 8.1.
-- (1) Every person by whom the
remuneration of an employee for services performed in pensionable
employment is paid either wholly or in part is, for the purpose
of calculating the employee's contributory salary and wages,
maintaining records and filing returns, and paying, deducting and
remitting the contributions payable thereon under the Act and
these Regulations, deemed to be an employer of that employee in
addition to the actual employer of that employee.
(1.1) The amount of any
contributions paid by the person who is deemed to be the employer
under subsection (1) is recoverable by that person from the
actual employer.
(2) Where a person who
is deemed by subsection (1) to be an employer fails to pay,
deduct or remit the contributions that an employer is required to
pay, deduct and remit under the Act and these Regulations, the
provisions of Part I of the Act shall apply to that person as if
he were the actual employer.
[15] Of course
if Mr. Williams was an independent contractor the appeals will be
allowed.
[16] The leading
case on whether an individual is employed pursuant to a contract
of service (i.e. an employee) rather than a contract for service
(i.e. an independent contractor) is Wiebe Door Services Ltd.
v. M.N.R.. In Wiebe Door,
MacGuigan J., reviewed the various tests applied by the Courts
and affirmed the comments of Cooke J. in Market Investigations
Ltd. v. Minister of Social Security, in which he
stated:
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 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. 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.
[17] Hence, in
determining whether an individual is engaged as an employee or as
an independent contractor, a court must examine the degree of
control and supervision of the worker, the risk of profits and
loss to the worker, the ownership of tools to perform the task
and the integration of the individual into the purported
employer's business.
[18] When
determining whether the parties have established an
employee-employer relationship, the total relationship of
the parties must be considered. Circumstances may arise in which
one or more of these factors are not applicable. ". . . 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."
[19] In the
appeals at bar the facts are that Mrs. Denomy,
Mr. Morse and Mr. O'Connor interviewed Mr. Williams
for the position of monitor. Mr. Morse testified that it was
Mr. O'Connor who ultimately determined who would be
hired. Three or four monitors were hired for
Mr. O'Connor. Mr. Williams was referred to
Mrs. Denomy by a co-worker at the institution where he
worked. He was a direct care worker for individuals with
developmental disabilities and mental illness. The monitors
worked out of Mrs. Denomy's home, as that was where Mr.
O'Connor was living. Mr. Williams provided his own
automobile in order to perform some of his duties.
Mrs. Denomy testified that at the interview the monitors
were told what the rate of pay for the services was and that they
would be responsible to pay CPP and EI premiums.
Mr. Williams testified that there was no discussion about
benefits and that he did not expect he was going to receive any
benefits.
[20] Mr.
Williams testified that he informed Mrs. Denomy what shifts he
was available for and had control over the number of shifts he
could work. He stated that the monitors would set their own
hours, subject to the voluntary extension of his hours when he
waited for his replacement to arrive. Mr. Williams set his
own work schedule around his other job. Mrs. Denomy
testified that if one of the monitors could not work a shift then
he would find his own replacement.
[21] The
monitors used their own discretion when working with
Mr. O'Connor outside of the house. Mr. Morse
testified that Mr. O'Connor would give the monitor
instructions as to the activities he wanted to do on a given day.
Neither Mrs. Denomy nor Mr. Morse directed the monitors
what to do. However, the monitors were asked to provide a short
summary of what occurred with Mr. O'Connor during their
respective shifts; this description was written in a
communication book for the exclusive use of
Mr. O'Connor's clinician. It had nothing to do with
FSL.
[22] The hours
of work of each monitor were recorded on a time sheet.
Mrs. Denomy would forward the hours to Mr. Morse at FSL
who in turn would forward the information to Guelph. The Ministry
would then issue a cheque to Mrs. Denomy, which
Mrs. Denomy would deposit in the joint bank account with
Mr. O'Connor and, as stated earlier, the monitors would
be paid from this account. Mr. Williams testified that while
he was paid on a regular basis, there was a period of about five
to six weeks where he did not get paid and when he inquired with
Mrs. Denomy she mentioned that this had happened once
before.
[22] The
Minister states that Mr. Williams had to perform the
services personally. However, Mr. Williams had the flexibility to
get one of the other monitors to work his shift, or simply tell
Mrs. Denomy that he could not work a certain
shift.
[23] The
Minister also assessed based on the belief that FSL set the
general duties and conditions of employment, including the rate
of pay and reporting requirements. From the evidence before me it
appears that FSL merely recommended a rate of pay and that the
Ministry agreed. The reporting requirements were for the benefit
of Mr. O'Connor's clinician and not FSL. As well,
Mr. Williams' general duties were simply to monitor
Mr. O'Connor, how he chose to monitor Mr. Williams was
up to him.
[24] The
Minister also states that the terms of Mr. Williams'
employment did not allow him to profit or expose him to a risk of
loss. That appears to be true, however, even when
Mr. Williams did not receive payment for services for five
to six weeks, he continued to work with Mr. O'Connor not
knowing if or when he would be paid.
[25] FSL did not
supervise Mr. Williams either directly or indirectly.
Mr. Williams was paid to take care of Mr. O'Connor
and exercise his skill (he had experience working with
developmentally and disabled individuals), without control or
supervision. Mr. Williams required a car to transport
Mr. O'Connor to activities. Mr. Williams provided
his own car and was paid by the Ministry for the use of his car.
The monitoring required no other tools except a location, which
was provided by Mr. O'Connor in consequence of his room
and board relationship with Mrs. Denomy.
[26] FSL
provided no training to Mr. Williams in connection with his
monitoring activities, as Mr. Williams already had
experience working with mentally challenged individuals. I infer
that this was one of the main reasons Mr. Williams'
services were retained. It does not appear that FSL was in the
business of providing monitoring services. Mr. Williams was not
in the business of providing monitoring services; he was a direct
care worker at an institution. However, Mr. Williams did
have specific skills that made him ideal for the position,
specifically his experience working with developmentally and
mental disabled people. As well, Mr. Williams was free to
offer these skills to other organizations.
[27] In
Hastie v. Canada, the appellant
had been assessed for failure to deduct and remit unemployment
insurance and Canada pension premiums from amounts paid by her to
a babysitter, who took care of the appellant's children in
the afternoon and evenings three days a week. The appellant was a
single mother of twin girls. The appellant was supported entirely
by welfare benefits. The appellant also received a subsidy of
$326 per month from the Province of British Columbia for
childcare. Bowman J., as he then was, allowed the appeal on the
basis that the babysitter was employed pursuant to a contract for
service and was not employed by the appellant in insurable
employment. The circumstances in that case are not dissimilar to
those at bar.
[28] The total
relationship of Mr. O'Connor and Mr. Williams, as
well as that of Mr. Williams and the appellants, was one in
which Mr. Williams was paid to supervise
Mr. O'Connor at Mrs. Denomy's home when neither she
nor her husband were at home. Mr. Williams was hired to
exercise his skills. His work with Mr. O'Connor was not
restricted to the Denomy's residence. At all times when
Mr. Williams was with Mr. O'Connor he was not
answerable to, nor under the direction of, either
appellant.
[29] I should
also add that if Mr. Williams were not an independent contractor
during the period in question, then his employer was not FSL, but
the Ministry, and these five such employment would be
"excepted employment" for CPP purposes and not
insurable for purposes of the Act. FSL acted simply as a
conduit to facilitate the Ministry's goal of establishing a
residence for Mr. O'Connor and provide him with the
requisite supervision and support. FSL did not otherwise provide
such services.
[30] Whether, in
these circumstances, Mrs. Denomy was also an employer is
questionable. I have held that if Mr. Williams was an employee,
his employer was the Ministry. The employment was in Canada by
Her Majesty in the right of Ontario and was thus not insurable
employment for purpose of the Act and was "excepted
employment" for purposes of the CPP. It would offend
common sense to hold that Mr. Williams' employment was not
insurable (and excepted) as far as the Ontario government is
concerned and insurable (and not excepted) as far as Mrs. Denomy
is concerned.
[31] The appeals
are allowed. The decisions and determinations of the Minister
that Mr. Williams was employed by FSL and Mrs. Denomy as
employer and deemed employee respectively during the period in
issue are reversed.
Signed at
Ottawa, Canada, this 4th day of December 2001.
J.T.C.C.
COURT FILE
NO.:
2000-4109(EI) & 2000-4108(CPP)
2000-4131(EI) & 2000-4132(CPP)
STYLE OF
CAUSE:
Family Service London and
Susan
Denomy and Her Majesty the Queen
PLACE OF
HEARING:
London, Ontario
DATE OF
HEARING:
April 25, 2001
REASONS FOR
JUDGMENT BY: The Honourable Judge G.J.
Rip
DATE OF
JUDGMENT:
December 4, 2001
APPEARANCES:
Agent for
the
Appellant:
Warren Brooke
Counsel
for the
Respondent:
Daniel Bourgeois
COUNSEL OF
RECORD:
Agent for
the Appellant:
Name:
Warren Brooke
Firm:
125 Woodward Avenue
London, Ontario N6H 2H1
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa,
Canada
2000-4109(EI)
BETWEEN:
FAMILY
SERVICE LONDON,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeal of Susan
Denomy,
(2000-4131(EI)) on
April 25, 2001, at London, Ontario, by
the
Honourable Judge Gerald J. Rip
Appearances
Agent for
the
Appellant:
Warren Brooke
Counsel
for the
Respondent:
Daniel Bourgeois
JUDGMENT
The appeal pursuant to subsection 103(1) of the Employment
Insurance Act ("Act") is allowed and the
decision of the Minister of National Revenue, on the appeal made
to him under section 91 of that Act, is reversed on the
basis that the worker, Christopher Jamie Williams, was not
engaged in insurable employment during the period from September
17, 1998 to January 7, 1999.
Signed at
Ottawa, Canada, this 4th day of December 2001.
J.T.C.C.
2000-4131(EI)
BETWEEN:
SUSAN
DENOMY,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeal of Family Service
London,
(2000-4109(EI)) on
April 25, 2001, at London, Ontario, by
the
Honourable Judge Gerald J. Rip
Appearances
Agent for
the
Appellant:
Warren Brooke
Counsel
for the
Respondent:
Daniel Bourgeois
JUDGMENT
The appeal pursuant to subsection 103(1) of the Employment
Insurance Act ("Act") is allowed and the
decision of the Minister of National Revenue, on the appeal made
to him under section 91 of that Act, is reversed on the
basis that the worker, Christopher Jamie Williams, was not
engaged in insurable employment during the period from September
17, 1998 to January 7, 1999.
Signed at
Ottawa, Canada, this 4th day of December 2001.
J.T.C.C.
2000-4108(CPP)
BETWEEN:
FAMILY
SERVICE LONDON,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeal of Susan
Denomy,
(2000-4132(CPP)) on
April 25, 2001, at London, Ontario, by
the
Honourable Judge Gerald J. Rip
Appearances
Agent for
the
Appellant:
Warren Brooke
Counsel
for the
Respondent:
Daniel Bourgeois
JUDGMENT
The appeal pursuant to subsection 28 of the Canada Pension
Plan is allowed and the decision of the Minister of National
Revenue, on the appeal made to him under section 27 of that
Plan, is reversed on the basis that the worker,
Christopher Jamie Williams, was not engaged in
pensionable employment during the period from September 17, 1998
to January 7, 1999.
Signed at
Ottawa, Canada, this 4th day of December 2001.
J.T.C.C.
2000-4132(CPP)
BETWEEN:
SUSAN
DENOMY,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeal of Family Service
London,
(2000-4108(CPP)) on
April 25, 2001, at London, Ontario, by
the
Honourable Judge Gerald J. Rip
Appearances
Agent for
the
Appellant:
Warren Brooke
Counsel
for the
Respondent:
Daniel Bourgeois
JUDGMENT
The appeal pursuant to subsection 28 of the Canada Pension
Plan is allowed and the decision of the Minister of National
Revenue, on the appeal made to him under section 27 of that
Plan, is reversed on the basis that the worker,
Christopher Jamie Williams, was not engaged in
pensionable employment during the period from September 17, 1998
to January 7, 1999.
Signed at
Ottawa, Canada, this 4th day of December 2001.
J.T.C.C.
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