Date: 20011023
Docket: 2000-3942-EI
BETWEEN:
9043-5066 QUEBEC INC. (VOYAGE VASCO
CENTRE-VILLE),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor
Judgment
Somers, D.J.T.C.C.
[1]
This appeal was heard in Montreal, Quebec, on June 12, 2001.
[2]
By letter dated June 22, 2000, the Minister of National Revenue
(the "Minister") informed the Appellant that Sergio
Poblete (the Worker) did hold insurable employment from April
1998 to January 15, 1999 because there was an employer-employee
relationship between the Worker and the Appellant.
[3]
Paragraph 5(1)(a) of the Employment Insurance Act
reads in part as follows:
5.(1) Subject to subsection (2), 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;
...
[4]
The burden of proof is on the Appellant. It must show on a
balance of probabilities that the Minister erred in fact and in
law in his decision. Each case stands on its merits.
[5]
In reaching his decision, the Minister relied on the following
assumptions of fact which were admitted or denied:
a)
the Appellant has been incorporated on November 12, 1996;
(admitted)
b)
the Appellant exploited a travel agency under the name of
Voyage Vasco and Voyage Vasco Centre-Ville; (admitted)
c)
in April 1998, the Worker was engaged as a representative of
sales for the Appellant; (denied)
d)
the Worker was working only at the business place of the
Appellant; (denied)
e)
the Worker had a fixed schedule, Monday to Friday from
9:30 a.m. to 6:30 p.m. and on Saturday from 11:00 a.m. to
2:00 p.m.; (denied)
f)
the Worker was supervised by the Appellant in his duties;
(denied)
g)
the Appellant was assuming all office expenses of the Worker;
(denied)
h)
the Appellant was assuming the responsibility insurance for the
Worker; (denied)
i)
all the equipment needed by the Worker were furnished by the
Appellant; (denied)
j)
the Appellant paid the Worker on a commission basis;
(admitted)
k)
the Appellant and the Worker divided the commissions on the sales
in equal part following the decision of the Appellant;
(admitted)
l)
the Worker's expenses concerning publicity, parking, and mail
expeditions were reimbursed in part by the Appellant;
(admitted)
m)
the Worker had no risk of financial losses; (denied)
n)
the Worker was laid off after asking to be an employee.
(denied)
[6]
The Appellant was incorporated on November 12, 1996, operating a
travel agency under the name of Voyage Vasco and Voyage Vasco
Centre-Ville.
[7]
The Worker started to do some work for the Appellant beginning in
April 1998 and ending on January 15, 1999 as a representative of
sales. The Appellant's representatives, husband and wife,
operated the business. According to them, the Worker presented
himself at the office and offered to be a sales representative.
The Appellant's representatives stated that he was to be an
outside agent and his place of work was at his home.
[8]
As time went on, the Worker operated from the Appellant's
office where a table, phone, computer and parking were provided
to him. The Worker had his own cellular phone and was to pay for
his own publicity.
[9]
The office was open from 9 a.m. to 5 p.m., five days a week and
Saturday from 10 a.m. to 3 p.m. The invoices, with the
Appellant's name on them, were submitted by the Worker to the
Appellant and had to be accepted by the manager of the company.
The commission paid was agreed upon from these invoices and
calculated by the Appellant.
[10] While the
Appellant's representative stated the Worker could work
elsewhere, during the period at issue, the Worker laboured
exclusively for the Appellant. The Appellant's representative
stated the Worker was to assume his own responsibility insurance.
However, the Worker stated he did not have a personal
responsibility insurance policy.
[11] The
distinction between a contract of service and a contract for
services is a question of law and fact.
[12] A
contract of service is a contract under which one party, the
servant or employee, agrees for a period of time or indefinitely
and either full-time or part-time, to work for the other
party, the master or employer. A contract for services is a
contract under which the one party agrees that a certain
specified work will be done for the other.
[13] A
contract of service does not normally envisage the accomplishment
of a specified work but does normally contemplate the servant
putting his personal services at the disposal of the master
during some period of time. A contract for services does normally
envisage the accomplishment of a specified job or task and
normally does not require that the contractor do anything
personally.
[14] In
determining whether there is a contract of service or a contract
for services one must examine the combined force of the whole
scheme of operations.
[15] In
Wiebe Door Services Ltd. v. M.N.R. 87 DTC 5025, the
Federal Court of Appeal established four basic factors in
distinguishing a contract of service from a contract for services
which are: extent of control exercised by the employer, ownership
of tools, chance of profit or risk of loss and the integration of
the employee's work within the employer's business.
[16] Counsel
for the Minister stated that for the period from April 1998 to
June 3, 1998 the employment of the Worker was not insurable
because there was no employer-employee relationship between
the Worker and the Appellant.
[17]
Therefore, the Court will deal with the period from June 4, 1998
to January 15, 1999, to establish contractual relationship
between the employer and the employee.
Control:
[18] The
contracts with the clients were signed by the Worker and a
representative of the Appellant. These contracts stayed in the
possession of the Payor. The Worker worked in the office supplied
by the Appellant therefore supervision was immediate. The
Appellant had the power to exercise a control over the Worker.
There was sufficient control by the Appellant over the Worker to
conclude that there existed a contract of service.
Tools:
[19] The
Appellant supplied the office, table, telephone, computer and
parking, establishing a contract of service. The fact that the
Worker paid for his own errors or gasoline is of no consequence
in determining the nature of the contract.
Profit or Loss:
[20] Evidence
did not show that the Worker had a chance of profit or risk of
loss. The Worker was paid on a commission basis, which does not
prevent the Worker to be considered as an employee.
Integration:
[21] The
Worker was identified with the Appellant by working in its office
and using its equipment and stationery. The Worker worked
indefinitely for the Appellant and not for a specified time or
for a specified job. Evidence does not show that the Worker could
hire another person to do his work. Based on this factor the
Worker was hired under a contract of service.
[22] The
intentions of the parties may be a factor but the Court must look
at the combined force of the whole scheme of operation in order
to establish the nature of the contract.
[23] Taking
into consideration all of the circumstances, the Court concludes
that the Worker was engaged in insurable employment and that
there was an employer-employee relationship between the
Worker and the Appellant for the period June 4, 1998 to January
15, 1999.
[24]
Consequently, the appeal is allowed and the Minister's
decision is varied on the basis that the Worker was engaged in
insurable employment for the period June 4, 1998 to January 15,
1999.
Signed at Ottawa, Canada, this 23rd day of October 2001.
"J.F. Somers"
D.J.T.C.C.
Jurisprudence
Orton v. The Minister of National Revenue (1974) N.R.
9
Pouliot Assurances Inc. c. M.R.N. [1986] A.C.I.
no 419
Keith McDonald Realty Ltd. v. Canada (Minister of
National Revenue - M.N.R.) [1992] T.C.J. No. 310
Avondale Stores Ltd. v. Canada (Minister of National
Revenue - M.N.R.), [1997] T.C.J. No. 1343
Erin Mills Coiffures Ltd. (c.o.b. Nino d'Arena
Hair Design v. Canada (Minister of National Revenue - M.N.R)
[1999] T.C.J. No. 147
COURT FILE
NO.:
2000-3942(EI)
STYLE OF
CAUSE:
9043-5066 Quebec Inc.
(Voyage Vasco Centre-Ville) and M.N.R.
PLACE OF
HEARING:
Montreal, Quebec
DATE OF
HEARING:
June 12, 2001
REASONS FOR JUDGMENT
BY:
The Honourable Deputy Judge J.F. Somers
DATE OF
JUDGMENT:
October 23, 2001
APPEARANCES:
For the
Appellant:
Tak Waz Fong (Agent)
Counsel for the
Respondent:
Vlad Zolia
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-3942(EI)
BETWEEN:
9043-5066 QUEBEC INC. (VOYAGE VASCO
CENTRE-VILLE),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on June 12, 2001 at Montreal,
Quebec, by
the Honourable Deputy Judge J.F. Somers
Appearances
Agent for the
Appellant:
Tak Waz Fong
Counsel for the
Respondent:
Vlad Zolia
JUDGMENT
The
appeal is allowed and the decision of the Minister is varied in
accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 23rd day of October 2001.
D.J.T.C.C.
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