Date: 20010301
Docket: 2000-1639-CPP,
2000-1640-EI
BETWEEN:
TIGER COURIER INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Beaubier, J.T.C.C.
[1] These appeals were heard on common
evidence at Saskatoon, Saskatchewan on February 22, 2001. The
Appellant called Melvin Kurmey, Stacey Kliewer, Fraser Faulkner,
Elvin Dashney, James Gebert, Vic Garman and Ernie Foth. The
Respondent called the worker in question, Robert Smiroldo.
[2] The Appellant has appealed
decisions that Robert Smiroldo was employed by the Appellant
pursuant to a contract for service for the period January 1, 1998
to February 15, 1999.
[3] The assumptions in both Replies
are identical. Paragraph 14 in the Employment Insurance Reply
reads:
14. In so deciding as he
did, the Minister relied on the following assumptions of
fact:
(a) the facts as
admitted above;
(b) the Appellant
was not related to the Worker;
(c) the Appellant
operates a courier business;
(d) the Worker
provided services as a driver in a specific area;
(e) the Worker's
day involved the following:
(i) starting
at the Appellant's warehouse he would sort waybills for the
freight;
(ii) locate the
packages to be delivered to the Appellant's clients;
(iii) load the packages;
(iv) deliver the
packages;
(v) pick up packages
to be returned to the warehouse for delivery;
(vi) return to the
warehouse and unload the packages from the truck to be
delivered;
(vii) complete necessary paperwork;
and
(viii) load the highway
trailers;
(f) the Worker
did not have a written contract;
(g) the Appellant
set the price lists used by the Worker;
(h) the Worker could
set his own hours but he was required to meet the scheduled
delivery times of the Appellant's clients in doing so;
(i) the Worker
had the exclusive right to deliver packages to the area assigned
to him;
(j) the Worker
was remunerated based on a system of weight, type of freight and
the number of units delivered;
(k) the Worker was
paid bi-weekly;
(l) the
Worker's hours were not recorded;
(m) the Worker did not
invoice the Appellant but rather would turn in the waybills to
the Appellant;
(n) the Appellant
calculated the remuneration based on the waybills turned in by
the Worker;
(o) any replacement
workers hired by the Worker had to be pre-approved by the
Appellant;
(p) the Worker was
required to:
(i) provide his
own vehicle and wheeler dolly;
(ii) pay for half of
his uniform cost;
(iii) pay $50 per month
for rental on a two-way radio;
(q) the Worker's
uniform and vehicle had the Appellant's logo on it;
(r) the Appellant
provided the rate sheets, the way bills and Tiger Courier
literature to the Worker;
(s) the Worker was
responsible for the following costs:
(i) vehicle
expenses including lease, license plates, insurance, fuel,
repairs and liability insurance;
(ii) premiums for
WCB coverage provided by the Appellant;
(t) the
Appellant trained the Worker when he first began in the
procedures of the Appellant.
[4] Assumptions 14 (b), (c), (d),
(e)(i) to (vi) inclusive, (f), (g), (h), (i), (j), (k), (l), (m),
(n), (p), (q) and (s) were not refuted.
[5] The Appellant began its courier
business in Saskatoon in 1984 or 1985. At that time it used
Dasher Courier for pickup and deliveries on a fee per item basis.
As its business developed it kept using the same Dasher drivers.
Eventually it contracted with four Dasher drivers to do the
pick-ups and deliveries. These four paid Dasher off, purchased
their own trucks, the city was divided into four zones and the
drivers began pick-ups and deliveries for Tiger the same way that
Dasher Courier had done before.
[6] By the time of the period in
question Tiger had divided Saskatoon into five zones. Each had
its own driver who owned and operated his own van at his own
expense and paid for his own insurance premiums including
Workers' Compensation. No taxes, employment insurance or
Canada Pension Plan were withheld from the drivers by Tiger. None
of the drivers registered for GST because Tiger's accountant
advised them that their work amounted to what could be called a
"wash" for GST purposes.
[7] Each driver's day during a
five-day week throughout the period consisted of the
following:
6:30 a.m. or sooner - Arrive with van at Tiger's
warehouse and sort incoming freight and load van.
8:00
a.m. - Leave warehouse with van and make deliveries in his
zone and any pick-ups at pre-set pick-up times or by order
received by radio from Tiger's dispatcher.
11:00
a.m. - 12:00 p.m. - Radio in to confirm and take
lunch break (usually at home). (If finished by about 10:00 a.m. a
driver could do pick-ups for the North Battleford and Prince
Albert deliveries throughout Saskatoon for delivery to North
Battleford or Prince Albert. Drivers who were
"hustlers" or those with short routes or few deliveries
could do this for extra income.)
12:00
to 1:00-2:00 - Lunch
After lunch to 5:00 p.m. - Do pick-ups in pick-up
zone.
5:00
p.m. - Bring pick-ups to Tiger warehouse and place pick-ups
in designated shipping cages for various destinations and assist
in palletizing or wrapping any remaining shipments, and then
drive van home. But -
5:30
- 6:00 to 6:30 p.m. - One driver each day stayed at
Tiger's warehouse on a rotation basis while the forklift
operator loaded the shipments into semi-trailers for Calgary,
Edmonton, Winnipeg, etc. This was primarily for safety
purposes.
[8] With respect to the assumptions
not referred to as unrefuted:
14(e)(vii) and (viii) - The shippers were supposed to do
their own paperwork. Tiger did the delivery paper work and
billed. If Tiger was not paid, the drivers were paid anyway by
Tiger. All paperwork was in Tiger's name. Tiger loaded the
highway trailers.
14(o)
- The workers (drivers) chose their own replacement drivers
and paid them. The replacement driver used that worker's van.
Tiger only confirmed that the replacement was qualified to drive
and generally suitable.
(r)
- There is no evidence that there was any Tiger
"literature". The rest of this is correct.
(t)
- Initially the Dasher drivers developed the procedures. A
new worker was trained by the driver he replaced and by his
fellow drivers. The Appellant might give some instruction in the
paperwork if it proved faulty by a new driver.
[9] In summary, the evidence
respecting the drivers, including Mr. Smiroldo, is that:
1. Each driver decided if
he would take his van to work each day. If he did not, he might
get a substitute driver as a replacement to drive the van, or
phone in, whereupon the other four drivers would split up his
zone.
2. The drivers only phoned
in at their lunch break, which might last an hour or two,
depending on the driver's choice.
3. Vacations were strictly
the drivers' choices.
4. Drivers could have
other occupations. One owned and managed his own rental
properties. Drivers could use their vans for other purposes. They
could quit the Tiger contract at any time and work for a
competitor and some did that.
5. Drivers could refuse
customers in a zone and Mr. Smiroldo did so when one customer was
so distant as to be uneconomic. By doing this Mr. Smiroldo
improved his own profits. Tiger retained a courier company to
service this customer. Similarly Tiger took a customer in
Mr. Smiroldo's zone and gave that customer to another
driver at the customer's request. That driver was a friend of
that customer. Thus the drivers competed for profit in those ways
as well as soliciting customers, soliciting additional work from
existing customers, and referring prospects to Tiger to solicit.
It appears that the drivers received fifty percent of each fee
that a customer was billed, and Tiger received the other fifty
percent.
6. Drivers did not get any
employee benefits from Tiger. Nor did they receive holiday or
sick time from Tiger. They were entirely independent and had no
union.
7. The other drivers had
to approve a new owner operator of a van. Reselection of zones if
a driver left Tiger with his van was done by the drivers among
themselves, essentially based on their seniority. However Mr.
Smiroldo had a bad customer and driving record and he was told by
Tiger that he would not be considered for an open downtown,
higher-volume, zone until he improved. He never improved and
eventually, because of many failures and complaints by customers
and the public, he was terminated by Tiger. On the evidence
submitted, that termination was for cause.
8. The drivers received
payment from Tiger based on bills submitted. Mr. Smiroldo
had over-weighed customers on occasion. The customers complained
to Tiger, which reduced those bills. He also destroyed some goods
for which Tiger paid the loss, not Mr. Smiroldo. All van expenses
were his and he also deducted work place in home expenses as a
businessman. In some years Tiger signed an employee vehicle
income tax form for the drivers. However the drivers and Tiger
treated the drivers as independent contractors. Profitability
depended on the size of the zones, distances from Tiger's
warehouse, the number of customers, the number of deliveries, the
customer rates which were set by Tiger in competition with
Loomis, Purolator, etc. It also depended on drivers'
relationships with customers, their hustle, the costs and
expenses of their vans, how often they showed up for work and
their relationships with the other drivers.
[10] Using the Wiebe Door tests:
1. Except for the paper,
all of the drivers' tools were their own. They did
wear Tiger jackets and put the Tiger logo on their vans, but they
chose their vans and the rest of their clothing.
2. Control in their
zones was up to the drivers. How they worked their zone and
developed customer relationships and improved their volumes was
up to them. Getting out to deliver by 8:00 a.m. and getting
pick-ups back by 5:00 p.m. five days each week was what Tiger
required. Even delivery or pick-up times to customers were
dictated by the customers and not Tiger.
3. Profitability
- On this basis, the drivers could lose. The vans were a
continuing expense. If work in a zone fell off, a loss to the
driver was foreseeable. The opposite is true for profits. The
drivers could suffer a loss or make a profit.
4. Integration
- The drivers were not integrated into Tiger. They were
independent contractors in their respective zones. If they failed
to work then drivers and vans could replace them. They could also
have started similar businesses, as one of those who testified
did in fact. Tiger and the drivers were symbiotic. The drivers
were in the transportation business, as Porter, D.T.C.J. found in
Mayne Nickless Transport Inc. v. M.N.R. 97-1416
(UI), whereas Tiger was in the courier business. The drivers
chose their own vans, arranged their own routes, rented their
radios, marketed their services and accepted and refused
customers and loads. The drivers conducted their transportation
businesses just as Dasher did ten years before and as another
courier firm did in substitution for Mr. Smiroldo and other
drivers from time to time. Similarly, substitute drivers came and
went and former drivers were replaced with new vans and operators
when they stopped doing business with Tiger. Neither the drivers
nor Tiger were an integral part of the other's business. Each
could be, and was, replaced over time.
[11] The appeals are allowed. Robert
Smiroldo was not an employee of the Appellant during the periods
in question. The decisions of the Minister are vacated. The
Appellant is awarded the costs to which it is entitled pursuant
to statute.
Signed at Ottawa, Canada, this 1st day of March,
2001.
J.T.C.C.
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