Tino Construction Ltée v. M.N.R., docket 2000-1118-EI

Date: 20010419

Docket: 2000-1118-EI

BETWEEN:

TINO CONSTRUCTION LTÉE,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Somers, D.J.T.C.C.

[1]            This appeal was heard at Montréal, Quebec, on March 6, 2001.

[2]            By letter dated September 24, 1999, the Minister of National Revenue (the "Minister") informed the Appellant that Gerard Lecours, the Worker, did hold insurable employment from June 1, 1998 to January 29, 1999 because there was an employer/employee relationship between the Worker and the Appellant. Furthermore, it was decided that while working for the Appellant the total insurable hours of the Worker was 577 and the insurable earnings for the period totaled $3,950.00.

[3]            Paragraph 5(1)(a) of the Employment Insurance Act reads 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 own merits.

[5]            In reaching his decision the Minister relied on the following assumptions of fact which were admitted, denied or ignored by the Appellant:

"(a)          the Appellant refused to give the requested information to the Respondent's Agent; (denied)

(b)            on June 1st, 1998, the Appellant signed a written agreement with the Worker; (admitted)

(c)            the Worker was hired as manager and caretaker of a building located at 4430 Verdun Avenue; (admitted)

(d)            the Worker's tasks were enumerated in the signed agreement; (admitted)

(e)            in consideration for his services, the Worker occupied the apartment number 14 free of rent and received a salary of $50 per month; (admitted)

(f)             the rental value of the apartment was $450 per month; (admitted)

(g)            the Worker gave reports to Ernest Perlini and Anna Perlini; (admitted)

(h)            the Worker worked 20 to 30 hours per week; (denied)

(i)             the Worker had to be available any time during the week; (denied)

(j)             the Worker had all the equipment or tools furnished by the Appellant; (admitted)

(k)            the Worker was paid by check once at the end of December 1998; (admitted)

(l)             the Worker was laid off by the Appellant, by letter dated January 6, 1999, which took effect on January 29, 1999; (admitted)

(m)           the salary of January 1999 has never been paid to the Worker; (admitted)

(n)            the total earnings of the Worker were:

                Rent                                         $450         X              8 months                 $3,600

                Monthly salary      50$           X              7 months                 $350

                Total                                                                                                        $3,950 (ignored)

(o)            during the disputed period, the minimum salary was of $6.80 per hour until October 1st, 1998 and $6.90 after October 1st, 1998; (ignored)

(p)            for the period of June 1st to October 1st, 1998, the working hours of the Worker were 294 hours ($2,000 divided by $6.80=294 hours); (ignored)

(q)            for the period of October 1st, 1998 to January 29, 1999, the working hours of the Worker were 283 hours ($1,950 divided by $6.90=283 hours); (ignored)

(r)             during the disputed period, the insurable hours of the Worker totaled 577 hours. (ignored)"

[6]            The Appellant was the owner of a building consisting of 29 apartments. The Appellant signed a written agreement (Exhibit A-3) with the Worker who was hired as manager and caretaker. The agreement was signed by Ernest Perlini as director of the Appellant, the Worker and his common-law spouse Ginette Vaillancourt.

[7]            The Worker did the work as set out in the written agreement. His duties as janitor consisted, amongst others, in maintaining the building in good condition: he had to wash and clean the entrance and the hallways, dispose of the garbage, do the usual minor repairs in the apartments and cut the grass around the building. These duties were performed over a period of 7 days a week.

[8]            The agreement stated the Worker and his spouse had the free use of an apartment in the building which had a rental value of $450 per month plus a salary of $50 per month.

[9]            The Worker and his spouse testified readily and honestly. Their testimonies were credible. The Court has no reason to disbelieve them. They stated in Court and to the Appeals Officer that the Worker did the work according to the terms of the written agreement. The Worker's spouse did not perform any work apart from answering the telephone at times because the Worker had a serious hearing problem which the Court evidenced during his testimony.

[10]          The Worker's spouse had a full-time job elsewhere, working 33.75 hours a week as a cleaning lady at Place Bonaventure. Furthermore, as of September 1, 1998 she stopped working due to a nervous breakdown; she was under medication and could not perform any duties at the apartment building.

[11]          Both Anna Perlini the bookkeeper and Ernest Perlini stated that the Worker's spouse did the work and not the Worker. Their testimonies cannot be relied on since both of them did not live or work at the apartment building. The Appellant had the burden of proof that the Minister erred in fact and in law in rendering his decision, but did not succeed.

[12]          Case law consistently recognizes four factors to distinguish a contract of service from a contract for services. In the case of Wiebe Door Services Ltd. v. M.N.R. 87 DTC 5025, the Federal Court of Appeal enunciated these four basic factors:

                (1)            the degree or absence of control, exercised by the alleged employer;

                (2)            ownership of tools;

                (3)            chance of profit and risks of loss;

                (4)            integration of the alleged employees work into the alleged employers business.

Control

[13]          The Worker signed a written agreement prepared by the Appellant. The Worker assumed the responsibilities of janitor as set in the said agreement. The Worker had to report to the Appellant through Ernest Perlini. The Worker was on duty 7 days a week; he lived and worked in the building. The work was performed by the Worker not by other people.

Ownership of tools

[14]          The Worker lived and worked in the building. The Appellant supplied the Worker with all the equipment and products to carry out his duties.

Chance of profit and risks of loss

[15]          The Worker received, as admitted, a salary of $50 per month plus the free use of an apartment which had a rental value of $450 per month. A cheque dated December 21, 1998 in the amount of $300 (Exhibit A-4) signed by Ernest Perlini on behalf of the Appellant was issued to the Worker and his spouse representing the salary paid to the Worker for the months of July to December of 1998.

Integration

[16]          The Worker was certainly integrated in the business of the Appellant and it was the only job the Worker had during the period in question.

[17]          The evidence is conclusive, after analyzing the four basic factors mentioned above, that the working relationship between the Appellant and the Worker was one of a contract of service.

[18]          By letter dated January 21, 1999 (Exhibit A-5), the Appellant's attorney advised the Worker and his spouse that the agreement was cancelled and that they had to vacate their apartment by January 23, 1999. The Worker testified that he performed his usual duties until the end of January 1999 but has not been paid the $50 monthly salary.

[19]          The Appellant ignored subparagraphs (n) to (r) of paragraph 6 of the Reply to the Notice of Appeal. The Appellant did not make an issue, during the hearing, of the method of calculation of the hours worked or the total insurable earnings. The said calculations are deemed to be true.

[20]          Taking into consideration all of the circumstances, including the testimonies and documentary evidence, the Court is satisfied that the Appellant has failed in its onus of establishing on a balance of probabilities that the Minister erred in fact and in law in rendering his decision.

[21]          In rendering his decision the Minister relied on paragraph 5(1)(a) of the Employment Insurance Act and subsection 10(4) of the Employment Insurance Regulations.

[22]          The Worker was engaged in insurable employment during the period in issue pursuant to paragraph 5(1)(a) of the Employment Insurance Act.

[23]          The appeal is dismissed.

Signed at Ottawa, Canada, this 19th day of April 2001.

"J.F. Somers"

D.J.T.C.C.