Gaudreau & Associés, Avocats, S.E.N.C. v. M.N.R., docket 98-59-UI

Date: 19990507

Docket: 98-59-UI

BETWEEN:

GAUDREAU ET ASSOCIÉS, AVOCATS, S.E.N.C.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Charron, D.J.T.C.C.

[1] This appeal was heard at Québec, Quebec, on February 17, 1999, to determine whether Charles Hamel (the worker) held insurable employment within the meaning of the Unemployment Insurance Act from November 15, 1994, to December 20, 1996, when he worked for the appellant.

[2] By letter dated October 23, 1997, the respondent informed the appellant that the employment was insurable during the period at issue because it met the requirements for a contract of service.

Statement of the facts

[3] The facts on which the respondent relied in making his decision are set out as follows in paragraph 5 of the Reply to the Notice of Appeal:

[TRANSLATION]

(a) The appellant is a law firm operating as a general partnership with the following partners: Pierre Gaudreau, Nathalie Caron and François Pelletier. (denied as written)

(b) The appellant hired the worker in November 1994 as a lawyer with corporate law experience. (denied as written)

(c) The worker was hired by Pierre Gaudreau to handle his files, and more specifically the Médiévales de Québec file (denied as written)

(d) The worker provided his services on the appellant’s premises under Mr. Gaudreau’s supervision. (denied as written)

(e) The worker generally worked from 8:00 a.m. to 7:00 p.m. Monday to Friday, or about 50 hours a week. (no knowledge)

(f) The worker used the appellant’s equipment and secretarial services. (admitted)

(g) The worker did not have any clients; his files were assigned to him by Mr. Gaudreau. (denied as written)

(h) When the worker had to bill a client, he did so in the appellant’s name. (admitted)

(i) The worker was responsible for collecting from the clients to whom he provided services, but he was not responsible for unpaid accounts and he continued to receive his full salary from the appellant. (denied as written)

(j) The worker received a fixed salary of $500 a week, paid irregularly every 15 days. (denied)

(k) The worker did not have to seek out clients, did not have to pay the appellant rent and did not have to incur any expenses in performing his work for the appellant. (denied as written)

(l) The appellant supervised, directed and controlled the worker’s work. (denied as written)

[4] The appellant admitted the truth of all the facts alleged in the various subparagraphs of paragraph 5 of the Reply to the Notice of Appeal except those it denied or said it had no knowledge of, as indicated in parentheses at the end of each subparagraph.

Pierre Gaudreau’s testimony

[5] In June 1994, Charles Hamel’s mother told Pierre Gaudreau that her son, a lawyer, was out of work. On June 2, 1994, Mr. Hamel sent his curriculum vitae to Mr. Gaudreau, who arranged to meet with him on June 23. Mr. Gaudreau asked Mr. Hamel to come and work at his firm. Mr. Hamel agreed, and as he did not have any clients, he did not have to pay any rent. Mr. Gaudreau and Mr. Hamel agreed that the latter would look after Mr. Gaudreau’s files since Mr. Gaudreau was too busy with the Médiévales organization.

[TRANSLATION]

Listen, he said, take an office here and I’ll . . . give you some work that can make you some money for now and then we’ll adjust things. I understand, I mean, that you don’t have any financial resources, you can’t pay rent, etc., so we’ll adjust things as we go along.

He then assigned him some work for certain companies he controlled. It was agreed that Mr. Hamel would be paid $500 a week. For the appellant, Mr. Hamel did the usual work performed by a lawyer. Mr. Gaudreau said that Mr. Hamel did not have a work schedule, did what he wanted and was not entitled to take annual holidays: he was a self-employed worker. The appellant filed four bundles of cheques issued by it to pay Mr. Hamel’s salary (Exhibits I-1, I-2, I-3 and A-5).

[6] The appellant operates under the firm name “Gaudreau et Associés, avocats, S.E.N.C.”:

[TRANSLATION]

Of course, Mr. Gaudreau said, the work was supervised as in any law firm, with the seniors lawyers looking over what the junior lawyers did.

Mr. Hamel worked in an office provided by the appellant starting in November or December 1994. In 1996, Mr. Gaudreau was not satisfied with Mr. Hamel’s services and was thinking of dismissing him, not because he was incompetent but because he was too young. His curriculum vitae indicates that he is 33 years old (Exhibit A-1). Mr. Gaudreau was the one who supervised Mr. Hamel in the performance of his professional duties. Mr. Gaudreau did not check the hours worked by Mr. Hamel but could have done so if necessary. The appellant’s office paid the cost of proceedings.

François Pelletier’s testimony

[7] Mr. Pelletier, a lawyer with the appellant law firm, explained how things occur in practice:

[TRANSLATION]

But it often happens that we’ll discuss an important case, we’ll discuss it together with the other partners at the office. It’s always been like that. We often discuss cases in the morning over a cup of coffee or when we have our office meetings. We explain the problems we may have in a case and we give each other advice. . . .

There’s no doubt that we may discuss appeal cases a little more because sometimes your way of looking at a case you’ve argued, I find that you’ve got it on your mind too much, and sometimes you haven’t seen the judge’s mistakes. You have the judgment read by someone else, another partner who’ll give you advice like: “Well, such and such a thing. . . .” Say I’ve raised a point of law, well Mr. Gaudreau may say to me: “I wouldn’t give so much importance to that point of law, I wouldn’t use it as the first argument, I’d perhaps use it as the second.” Basically, it’s like we’re helping each other with our cases. No distinctions were made in the treatment of Mr. Hamel, Mr. Gaudreau or Ms. Caron. Mr. Hamel was also invited to these meetings just like the other partners. The billing is generally done in the name of Gaudreau et Associés, with some exceptions.

Charles Hamel’s testimony

[8] Charles Hamel, a lawyer by profession, was asked to come to Mr. Gaudreau’s office around November 15, 1994. Mr. Gaudreau said to him: [TRANSLATION] “Listen, Charles, I’m looking for someone to work with us here.” At that time, Mr. Gaudreau was doing a great deal of work for the Médiévales de Québec and had almost no time to spend at his office. Mr. Hamel accepted Mr. Gaudreau’s offer and asked for a weekly salary of $500, at which point they had a deal. Mr. Hamel received that amount by cheque more or less every two weeks until December 20, 1996. Mr. Gaudreau came into Mr. Hamel's office that day and told him he was being let go because he could no longer pay him. During the entire period at issue, Mr. Gaudreau came to the office every morning when he was in town and stopped in at Mr. Hamel’s office to talk shop. Sometimes they met in this way in the afternoon and sometimes, exceptionally, they met in Mr. Gaudreau’s office. Mr. Gaudreau asked him to make motions to dismiss appeals and asked him for explanations concerning certain files, and they discussed these matters together. Mr. Hamel considered Mr. Gaudreau to be his supervisor. Mr. Hamel generally worked from 8:00 a.m. to 7:00 p.m. Monday to Friday, or 50 hours a week, and he used the appellant’s equipment and services. When he had to bill a client, he did so in the name of Gaudreau et Associés (Exhibit I-5).

Analysis of the facts in relation to the law

[9] It must now be determined whether the worker’s activities fall under the concept of insurable employment, that is, whether or not there was a contract of employment.

[10] The courts have established four essential tests for identifying a contract of employment. The leading case in this area is City of Montreal v. Montreal Locomotive Works Ltd., [1947] 1 D.L.R. 161. The tests are as follows: (1) control; (2) ownership of the tools; (3) chance of profit; and (4) risk of loss. In Wiebe Door Services Ltd. v. M.N.R., the Federal Court of Appeal added to these the degree of integration. This list is not exhaustive, however.

[11] The evidence showed that the worker’s work was done under the appellant’s supervision and that there was a relationship of subordination between them. It was the appellant that owned the business necessary to its operations. A profit could be made or a loss incurred in operating the business only by the appellant and not by the worker, who received only a fixed salary. The worker did his work on the appellant’s premises and was very much integrated into its business. Finally, it was the appellant that provided the worker with the necessary equipment and services.

[12] Accordingly, the appeal is dismissed and the respondent’s decision is affirmed.

Signed at Ottawa, Canada, this 7th day of May 1999.

“G. Charron”

D.J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 10th day of April 2000.

Erich Klein, Revisor