Academy of Artisans v. M.N.R., docket 2000-3509-EI

Date: 20010417

Dockets: 2000-3509-EI, 2000-4053-CPP

BETWEEN:

ACADEMY OF ARTISANS,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Bowman, A.C.J.

[1]            These appeals under the Employment Insurance Act and the Canada Pension Plan are from decisions that Cheryl Hailstone was employed in pensionable and insurable employment from September 1, 1998 to June 26, 1999.

[2]            The case is unique and I can state my conclusion at the outset. It is this: I have never seen anything that looked less like an employment relationship than that which existed between Ms. Hailstone and the appellant, which I shall describe as the Academy.

[3]            The Academy is a somewhat unusual organization. It was created by Dahlia Organ whose husband is independently wealthy and it is owned by Mrs. Organ and Mr. Don Colvin. Whether it is a non-profit organization is not clear from the evidence but it is not run with any particular profit motive in mind. Mr. Colvin described its creation and operation as a labour of love. I agree. Its principal purpose seems to be to provide a facility where people —whether children, teenagers or adults — can study such things as painting, pottery, photography, knitting, stained glass production and a variety of other crafts. Whether a class in any particular craft is offered depends upon whether a teacher is available. Sometimes teachers will disappear for months at a time when they are engaged in something else. When and if they reappear a class will be put together if there are enough students interested.

[4]            Students will sign up for a specified number of lessons. Usually a particular craft or subject will be stipulated, but students can move to another subject. If a student misses a class he or she will be given credit and can attend at a later time. The students provide their own materials.

[5]            The relationship with the teachers is as unstructured as with the students. They are not supervised. They determine the content of their classes. They are free to switch the time of their classes by speaking to the students and without consulting the Academy, although they must ensure that a studio is available. They are free to give private lessons to students who are also enrolled in the Academy. This can be done in their own homes or at the Academy in which case they would pay for studio space. The financial arrangements are equally varied and informal. In one case it involves the Academy and the teacher sharing an air fare from British Columbia. In another it involves the provision of studio space.

[6]            The same laisser-faire approach is evident in the case of Ms. Hailstone. She is free to change the time of her classes and would be free to hold them in her home. She is paid $35 per hour if she has four students and proportionally less if there are fewer. If no one turns up she is not paid. She determines the content of her lessons. She is subject to no control or supervision by the Academy.

[7]            Ms. Hailstone is an artist. She teaches for the Toronto District School Board of Education where, in contrast to the arrangement she has with the Academy, she is subject to the same rules as any teacher in the public school system.

[8]            At the Academy she supplies her own material such as paper or brushes. She believed she could be reimbursed by the Academy for materials used in the class although this has never happened to her recollection.

[9]            Ms. Hailstone is also a portrait artist who paints on commission. She sometimes displays her work at the Academy.

[10]          The assumptions pleaded by the respondent are as follows

(a)            the Appellant operates a school of arts;

(b)            the Worker is an accredited art teacher;

(c)            the Worker was hired by the Appellant to give part-time art classes to the Appellant's students;

(d)            the Worker was paid by the Appellant on an hourly basis;

(e)            the services were performed by the Worker on the Appellant's premises;

(f)             the Appellant provided the facilities, furnishings and equipment required by the Worker to perform the services;

(g)            the Worker was remunerated by the Appellant on an hourly basis;

(h)            the Appellant reimbursed the Worker for any supplies the Worker provided to perform the services;

(i)             the Worker was required to follow the Appellant's schedule;

(j)             the Worker was required to comply with the Appellant's policies and procedures;

(k)            the Worker performed the services personally to the Appellant.

[11]          Some of the assumptions are plainly wrong.

(f)             is questionable, at best. The students supplied their own material and Ms. Hailstone brought her own material;

(h)            is wrong. She was never reimbursed for anything although she considered it possible if she had asked. Whether this fact is true or not, it points in neither direction in determining the issue in this case. It is one thing to say that an independent contractor supplies his own tools, such as hammer and saws. It is quite a different thing to say that if the customer pays for materials consumed in the course of performing the duties contracted for this makes the contractor an employee;

(i) and (j) were flatly denied by both Ms. Hailstone and Mr. Colvin. She was certainly not required to follow the appellant's schedule and there were no policies and procedures.

[12]          We are all familiar with the four-in-one test developed in Wiebe Door Services Ltd. v. M.N.R., 87 DTC 5025 (F.C.A.). In it the four elements of ownership of tools, control, chance of profit or risk of loss, and integration must be factored into a unified test. Obviously no single element can be allowed to predominate. Each must be given its appropriate weight in the context of the particular case.

[13]          There is a danger in cases of this sort to become hung up on an overly minute examination of the four elements and to forget that the object of the enquiry is to determine the true nature of the overall relationship.

[14]          No doubt on one view of the matter one might find in Ms. Hailstone's relationship with the Academy traces of the things that might subsist in an ordinary employment situation. For example, she teaches in the Academy's studio. She is paid an hourly rate. The relationship could probably be terminated if she behaved inappropriately such as hitting the students or turning up drunk. Her services are important in the context of the Academy's operation. Thus one might say there are traces of the four elements in the Wiebe test.

[15]          But this is merely clutching at straws and such arguments do not hold water. Even if one were to look at each element individually (which I am aware we are not supposed to do) realistically the tests are not met. There is not an iota of control. Ms. Hailstone supplies her own materials, such as they are. Her remuneration depends upon how many students turn up. If none turn up, or if her teaching is so bad that no one enrols, she earns nothing. Her position is at best precarious. This might be contrasted with the ordinary teaching situation in a high school or university where remuneration is not dependent on the number of students and no matter how bad a teacher is the salary keeps on coming in and as a practical matter he or she cannot be gotten rid of. So far as the integration test is concerned I do not see how it points in either direction. Of course the school could not function without the teachers but that would be equally true whether they were engaged under a contract of service or a contract for service. The integration test is in most cases at best inconclusive and hard to apply and at most unhelpful.

[16]          Quite apart from the somewhat unedifying attempt to parse the four-in-one test, if one steps back a few paces and looks at the forest and not the bark on the trees, what is the picture that emerges? Certainly not a conventional school where people are employed to teach a pre-arranged curriculum from nine to four. Rather, the Academy is a framework or facility within which free artistic spirits can in effect pursue their artistic endeavours and at the same time modestly supplement their income while waiting for something else to turn up. People like Ms. Hailstone are clearly self-employed. To attempt to characterize her relationship with the Academy as one of master and servant is unrealistic.

[17]          The appeals are allowed and the decisions that Ms. Hailstone was employed in insurable and pensionable employment by the appellant are vacated.

Signed at Vancouver, Canada, this 17th day of April 2001.

"D.G.H. Bowman"

A.C.J.

COURT FILE NOS.:                                              2000-3509(EI) and 2000-4053(CPP)

STYLE OF CAUSE:                                               Between Academy of Artisans and

                                                                                The Minister of National Revenue

PLACE OF HEARING:                                         Toronto, Ontario

DATE OF HEARING:                                           April 3, 2001

REASONS FOR JUDGMENT BY:                      The Honourable D.G.H. Bowman

                                                                                Associate Chief Judge

DATE OF JUDGMENT:                                       April 17, 2001

APPEARANCES:

Agent for the Appellant:                                     Don Colvin

Counsel for the Respondent:                              Jocelyn Espejo Clarke

COUNSEL OF RECORD:

For the Appellant:                

Name:                      --

Firm:                        --

For the Respondent:                                             Morris Rosenberg

                                                                                Deputy Attorney General of Canada

                                                                                Ottawa, Canada

2000-3509(EI)

2000-4053(CPP)

BETWEEN:

ACADEMY OF ARTISANS,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Appeals heard on April 3, 2001 at Toronto, Ontario, by

The Honourable D.G.H. Bowman, Associate Chief Judge

Appearances

Agent for the Appellant:             Don Colvin

Counsel for the Respondent:      Jocelyn Espejo Clarke

JUDGMENT

          It is ordered that the appeals be allowed and the decisions of the Minister of National Revenue made under the Employment Insurance Act and the Canada Pension Plan that Ms. Hailstone was employed in insurable and pensionable and employment by the appellant from September 1, 1998 to June 26, 1999 be vacated.

Signed at Vancouver, Canada, this 17th day of April 2001.

"D.G.H. Bowman"

A.C.J.