Date: 20000717
Docket: 1999-5012-EI
BETWEEN:
TE'MEXW TREATY ASSOCIATION,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Rowe, D.J.T.C.C.
[1] On November 26, 1999 the Minister of National Revenue (the
"Minister") decided Ardyth Cooper (the worker) - during
the period from April 29, 1997 to February 23, 1999 - had been
employed by Te'mexw Treaty Association (TTA) pursuant to a
contract of service and was, therefore, in insurable employment
with TTA pursuant to paragraph 5(1)(a) of the
Employment Insurance Act. Te'mexw (rhymes with
hummock) Treaty Association appealed from the decision and argues
that the relationship with Ardyth Cooper was not that of master
and servant and she was functioning as an independent contractor
throughout her working relationship with TTA.
[2] Robert Sam testified he lives in Victoria, British
Columbia and is Chief of Songhees First Nation (Songhees).
Currently, he is also concerned with day-to-day activities of the
Songhees Band but prior to his election he had worked as a
negotiator for TTA. Songhees was one of the larger members of TTA
which is composed of five First Nations and each designated a
person to act as negotiator.Sam stated that, from his
perspective, his work as a negotiator is not a full-time job and
he still fulfils his duties as Chief and also operates his own
business. TTA was established in 1994 and he became involved in
1996. He does not spend much time at the TTA office as there is
no designated work space for him so he performs most of his work
at home where he uses his own office equipment and furnishings.
Upon assuming duties as a negotiator with TTA, Sam stated his
understanding was that he would be working as an independent
contractor. TTA provided him with no training and he was working
without supervision. He had known Ardyth Cooper for many years
and during the time she represented T'Sou-ke (Sooke) First
Nation at the treaty table he understood she also sat on other
boards and commissions. Cooper's contract with TTA as a
negotiator had not been renewed following a decision of the Board
of Directors in which the view had been expressed that Cooper had
been undermining Wilson Bob in his role as Chairman of TTA.
[3] In cross-examination, Robert Sam agreed he had signed a
contract in the same form as the one dated May, 1996 pertaining
to Ardyth Cooper (Exhibit R-1). The contract set forth a
description of services to be performed. Sam stated he took
direction from Wilson Bob, Chief of Negotiators for TTA,
supervised TTA office staff, on occasion, and submitted monthly
reports together with an invoice for services rendered.
Initially, the remuneration was in the sum of $835.00 - paid
twice a month - for a total of $1,670.00 together with an
additional amount of $300.00 per day for work relating to special
portfolios. However, by the time Sam became involved with TTA,
the pay had been increased to approximately $4,000.00 per month,
although in Sam's opinion the workload had not increased. TTA
also reimbursed individual negotiators for travel costs.
Sam's original contract expired in 1997 and he thought he had
signed a renewal. He was aware his contract had provided for
termination by either party upon 21 days notice.
[4] Linda Vanden Berg testified she is an anthropologist
residing in Victoria, British Columbia. She acted as the
Co-ordinator and Administrator for TTA. While doing graduate work
at the University of Victoria, she had been contacted by Wilson
Bob who asked her to do some work for purposes of the treaty
negotiation process that had begun in 1990. In 1994, five First
Nations - Scia'New (Beecher Bay) Snaw Naw As (Nanoose),
Malahat, Lekwungen (Songhees), and T'Sou-ke (Sooke) formed
TTA. Because she had done work for each of the First Nations
involved in the treaty process, she was asked to assist with the
structure of TTA, a body registered pursuant to the Society
Act of British Columbia. Each of the members appointed a
negotiator and TTA had employees in the office. Vanden Berg
stated she was contracted by TTA to carry out the task as
Co-ordinator in the same manner as lawyers might provide
services pursuant to a retainer agreement. TTA receives funding
on the basis that of the monies received - year to year - 20% is
made up of grants from the federal and provincial governments and
the balance of 80% is subject to a loan agreement structured in
such a way that if and when any treaty settlement is concluded,
any amounts advanced to date for purposes of the treaty
negotiating process will then be deducted. Because there is no
certainty that funding by the two levels of government will be
ongoing, and in light of the possibility the talks could
collapse, TTA did not want to have employees which could have
certain rights arising from their dismissal which would occur as
a consequence of a cessation in funding. In February, 1996, there
was a formal selection of treaty negotiators by each of the five
members of TTA and the negotiators were supposed to possess
skills required for that task. T'Sou-ke First Nation chose
Ardyth Cooper as their candidate and the Board of Directors of
TTA had the right to accept that nomination or to decline to do
so on the basis it was the body issuing the contract to the
negotiators. The contract was issued to Cooper and she became
part of TTA's negotiating team involved in treaty
negotiations with the federal and provincial governments. Cooper
did not receive a per diem for travel but travel expenses had to
be submitted to Vanden Berg for approval and a car allowance - at
the standard federal government rate of 37 cents per kilometre -
was paid to all negotiators. Work done pursuant to a special
portfolio was compensated at the rate of $300.00 per day. Upon
the expiration of Cooper's contract on March 31, 1997, she
continued to work on a month-to-month basis under the same terms
and conditions except that her remuneration was increased to
$4,166.00 per month, paid on a semi-monthly basis. The workload
had not increased from the previous period when the remuneration
had been $1,670.00 per month but additional funding had been
obtained pursuant to the loan agreement which permitted extra
money to be utilized for all purposes of TTA, including payments
to negotiators. The increase brought the remuneration to TTA
negotiators nearer to that paid to the federal and provincial
government representatives at the treaty table. Vanden Berg
stated she is not a negotiator but was part of many negotiating
teams in her capacity as Co-ordinator. She was aware that Cooper
was on a fish committee and also on the Board of Directors of
Heritage Trust while she was working as a negotiator with TTA and
Cooper was free to enter into other contracts provided she was
not placed into a conflict of interest. In addition, Cooper
carried out a number of band-related activities at Sooke as her
father was Chief of the T'Sou-ke First Nation. The
negotiators worked together to establish dates and times for
future meetings and Cooper was part of that process. Cooper was
required to attend meetings involving the treaty negotiations but
could have hired others to perform related duties. However, she
would have been responsible for their compensation. The members
of the TTA negotiating team chose areas of responsibility within
their area of interest and Cooper chose education as a portfolio
but it was not assigned to her in a formal manner. Cooper - as
part of her duties as a negotiator - was required to solicit the
needs and desires from members of the T'Sou-ke First Nation
with respect to treaty negotiations and to provide treaty
information to the Band members as well as report her findings to
TTA on a regular basis. There was no special office space
designated for use by treaty negotiators but the treaty clerks
were located in offices at each member's location primarily
for the purpose of consultation with the community. There was no
office equipment supplied by TTA to negotiators and Cooper used
her own cellular phone, fax and laptop computer. Negotiating
meetings were held on a rotating basis within the community of
the members of TTA or at government buildings. Contrary to the
assumption of the Minister at paragraph 5(n) of the Reply to
Notice of Appeal, Cooper was not expected to perform any duties
in the TTA office when she was not attending scheduled meetings.
She was - as assumed at paragraph 5(p) - directed in her
activities by the Chief of Negotiators and was required to comply
with policies and procedures established by the Board but the
only restriction pertaining to engaging in outside activities
(paragraph 5(q)) was that she not become involved in a conflict
of interest, actual or perceived. TTA provided business cards to
Cooper - at no cost to her - containing both her name and TTA. By
letter dated February 16, 1997, TTA advised Cooper she was
dismissed from the position of negotiator and that effective
February 17, 1999, she was not to attend any further meetings or
to purport to represent TTA in any way. Vanden Berg stated
Cooper's dismissal was due - in part - to complaints from
some people within the community about not being properly
informed as to details of the negotiating process and the TTA
Board - comprised of elders of each TTA member - decided not to
renew her contract. At one point during the working relationship
between Cooper and TTA, Vanden Berg stated Cooper was not pleased
with certain proposed additions to a renewal of the existing
contract and was explicit about not wanting to provide her
services to TTA as an employee and - instead - wished to have the
status of independent contractor. A copy of Minutes of the
meeting of the Board of Directors of TTA dated March 26, 1997 -
was filed as Exhibit A-1 - and - at page 6 - Vanden Berg referred
to the following entry:
"Ardyth Cooper expressed concern with the
reference to overtime. She was under the impression that the idea
of a flat rate was that it was a contract versus a staff
relationship. She agreed with Pat Chipps concerning the
financial implications. She stated she did not want to get into a
situation of recording overtime. She commented that, if the
system is working, it should be left as is."
[5] Vanden Berg stated there had never been any intention that
treaty negotiators would be paid any overtime, holiday pay or
other benefits usually associated with the status of employee. At
each First Nation TTA member - except T'Sou-ke - there was a
portable building used for TTA purposes and the treaty clerks
would work at those offices. In the Band office at Sooke, there
was space assigned for the specific use of TTA. No T4 slips were
ever issued by TTA to any of the negotiators.
[6] In cross-examination, Vanden Berg was referred to page 6
of the Minutes of the March 26, 1997 meeting - Exhibit A-1 - at
which she had commented that some negotiators were putting in
more time than others and that new contracts - put forward as a
topic for discussion - should contain an hourly rate. Then, at
the bottom of page 6, Vanden Berg - according to the minutes -
stated:
"... contractors are only paid for work. The fact that
the negotiators are getting a fixed rate would indicate to
Revenue Canada that the negotiators are actually employees.
... The B.C. government encountered this with their
contractors."
[7] Vanden Berg agreed the payment of the flat rate continued
even after the remuneration had been increased to $4,166.00 per
month. There had been no special projects which attracted payment
of the additional sum of $300.00 per day referred to in the
contract. However, Vanden Berg stated it was clear to her that no
negotiator wanted to have the status of employee and each could
take on extra duties for other persons or entities. Vanden Berg
operates through a corporation, Vanden Berg & Associates Inc.
(Associates Inc.) and it does work under contract for First
Nations throughout British Columbia and may be performing
services in relation to 20 projects during a particular time
period. Her corporation has five employees and utilizes the
services of various specialists from time to time on a
sub-contract basis. The diagram of structure within TTA - Exhibit
R-2- is accurate except that Wilson Bob was Chief of Negotiators
and not the Chief Negotiator. The technical support outlined on
the sheet is provided by Associates Inc. The government of each
First Nation belonging to TTA was comprised of a Chief and two or
three Councillors - depending on the population of the community.
The contract - Exhibit R-1 - had been prepared by a solicitor and
it contained the expiry date of March 31, 1997. Some negotiators
were also Chief of their Band and others carried out additional
activities arising from business. Wilson Bob was Chairman of the
Board of Directors of TTA and was also a negotiator who fulfilled
the role as Chief of Negotiators, meaning he was the main
spokesperson at the negotiating table. Vanden Berg - in her role
as the operating mind of Associates Inc. - was an adviser and she
did not instruct TTA staff who were supervised by each local
Chief and Council.
[8] In re-examination, Vanden Berg stated the negotiators,
while working as a team receiving and giving advice one to the
other, acted independently and did not want the negotiation work
to become a full-time activity as they were constantly aware the
treaty process was fully dependent on funding from the federal
and provincial governments and that it might not be renewed.
[9] Denise Purcell stated she lives at Sooke and is a
negotiator for the T'Sou-ke First Nation. She signed a Letter
of Retainer in April, 1999 following the departure of Ardyth
Cooper. The community decided it wanted two negotiators - one to
deal with matters pertaining to land and self-government - and
the other to be concerned with fishing resources and rights. The
remuneration of $4,166.00 per month - previously paid to Cooper -
was divided equally between Purcell and the other negotiator. She
accepted the position on the basis she would be functioning as an
independent contractor and had the ability to profit by
performing her duties in less time. In her opinion, the status of
independent contractor was more appropriate because the
negotiating table was constantly in jeopardy and could collapse
totally due to a cut-off in funding. Purcell stated she has known
Cooper for some time and at one point Cooper had asked her to do
some policy development work for TTA. Purcell stated she owned
her own computer - with e-mail - printer, office equipment and
performs 99% of her work at home. Her background is in human
resources and she also had provided advice on the subject of
personnel to TTA but that was separate from her duties as a
negotiator. Previously, she had worked 19 years for the
federal government. The treaty clerks produced a bi-weekly
newsletter which was distributed within the community.
[10] In cross-examination, Purcell stated there is only a
certain amount of money allotted to the negotiation process and
T'Sou-ke First Nation wanted two negotiators. She does
not carry on any other negotiating business and when Cooper
approached her to do some policy work, TTA had not agreed Cooper
could hire her.
[11] Rose Marie Dumont testified she lives at Sooke and works
as a Treaty Clerk for the T'Sou-ke First Nation. She is also
a member of the Finance Committee and each year receives a T4
slip setting out the income earned by her. She also receives
holiday pay, payment for statutory holidays and is compensated
for overtime. She is also supplied with telephones, computers,
fax machine and other office equipment. Dumont stated she met
Ardyth Cooper in 1992 when Cooper was the Band Manager for
T'Sou-ke First Nation. Dumont stated Cooper, while working
for TTA as a negotiator, had mentioned - on several occasions -
that she was an independent contractor and was not required to
pay employment insurance premiums and had the ability to come and
go as she pleased. At one point, Cooper wanted T'Sou-ke First
Nation to opt out of the TTA process due to a shortfall in
funding. This proposal did not meet with the approval of the
members of the Band and a letter - Exhibit A-3 - was directed to
Wilson Bob on February 7, 1999 requesting that Cooper be removed
as their negotiator. Earlier, by letter dated January 20, 1999 -
Exhibit A-4 - Wilson Bob had advised the members of TTA the
contract of Cooper would not be renewed. The Board of Directors
of TTA declined to renew her contract and - as requested by the
community - two negotiators took over her previous duties. In
Dumont's opinion, Cooper was able to absent herself as she
chose, including taking a vacation to Hawaii.
[12] In cross-examination, a letter dated July 9, 1999 sent by
Rose Dumont and Michelle Sprinkling to George Jones, counsel for
the appellant, was referred to and filed as Exhibit R-3. Dumont
stated the letter had been prompted by a telephone call from a
female person to the Band office to request a T4 slip for Cooper.
In response, Dumont had advised the caller that Cooper had never
been an employee of T'Sou-ke First Nation and that she had
been working as a negotiator under contract for TTA and, as a
result, could not understand why Cooper would be at an Employment
Insurance office attempting to apply for benefits. The Band
Office had never issued any T4 to Cooper and the document -
Exhibit A-2 - was never produced by anyone at T'Sou-ke First
Nation or on behalf of TTA. Cooper had her own fax machine and
laptop computer and could use supplies at the treaty office,
although none were specifically provided to her. Prior to closing
the appellant's case, counsel filed - as Exhibit A-5 - a
Certificate of Incorporation dated September 8, 1994 pertaining
to TTA having been incorporated under the Society Act
of British Columbia together with the constitution of TTA
as a non-profit society.
[13] Ardyth Cooper testified she is a resident of Sooke,
British Columbia and is a member of the T'Sou-ke First
Nation. She began working for TTA in April, 1996 and the
following month signed the contract - Exhibit R-1 - which set out
a description of her duties. She signed the contract on the basis
of being a consultant and at the time her main priority was to
avoid paying income tax on her remuneration because it was being
earned on a reserve and was, therefore, exempt from taxation.
Cooper stated she had been told TTA could not afford to pay
premiums for Employment Insurance or contributions to Canada
Pension Plan. Initially, she invoiced TTA the sum of $885.00
twice per month together with any additional amount arising from
work on special projects which was billed out at $300.00 per day.
Later, the pay was increased to the sum of $2083.34 twice per
month and she understood she would now be working full time. A
photocopy of some of her pay cheques - Exhibit R-4 - indicated
they were issued on the T'Sou-ke Nation Treaty Office
account. She had been reimbursed by TTA for work-related expenses
and there was no need for her to submit income tax returns.
Cooper's view of her duties was that they included operating
the Treaty Office at the T'Souke reserve and participating in
negotiating sessions under the direction of the Board of
Directors of TTA and Wilson Bob, Chief of Negotiators. She was
required to attend meetings and could not send a substitute to
perform her duties. An example of a calendar in which her
commitments were set out was filed - Exhibit R-5 - pertaining to
the month of January, 1999. An entry featuring square brackets
indicated the activity was not related to TTA work. Other
negotiators had taken holidays in August but she waited until
November when she went to Hawaii and had advised staff at the
Treaty Office of her intended absence. Cooper stated she felt
there was an expectation on the part of members of her community
that she would be a full-time negotiator for TTA as the salary
was substantial - especially in the context of her community -
and she felt she should devote ample time and effort to her task,
including participating in a Women in Fisheries Committee,
at the request of some members of the T'Sou-ke First Nation.
She worked at home - on occasion - but also worked out of the TTA
office at T'Sou-ke Nation and some supplies were provided to
her for use in the course of her work. She attended a First
Nations Summit in her capacity as a member of the TTA negotiating
team. Michelle Sprinkling and Rose Dumont assisted her in the
office with matters such as co-ordinating schedules and arranging
meetings. They also provided advice on using the computer. Her
business card - Exhibit R-7 - described her as
"Negotiator for the T'Sou-ke Nation, T'Sou-ke
Treaty Office."
Cooper stated she received her fixed remuneration twice per
month and had no other business at the time she became a
negotiator with TTA. On occasion, she would attend certain
provincial government functions at the request of the Chief of
T'Sou-ke Nation in order to foster and maintain good
relations. She received a letter - Exhibit R-9 - from Wilson Bob,
dated June 26, 1997, requesting she confirm with the Women in
Fisheries Committee that any participation by her was not on
behalf of TTA nor in her capacity as a negotiator for TTA. In the
letter of termination - Exhibit R-10 - dated February 16, 1999,
signed by Wilson Bob as Chairman of the Board of Directors and
Burt Charles, Co-chairman, Cooper referred to the third paragraph
which reads:
"The Te'mexw Treaty Association hereby gives you
notice that your contract for the position of a negotiator for
the Te'mexw Treaty Association (as representative of the
T'Sou-ke Nation) is hereby cancelled and you are dismissed
from your position. Your contract, if such exists, will not be
renewed."
[14] Then, in lieu of 30 days notice, TTA paid Cooper her
regular remuneration for the period February 17, 1999 to March
18, 1999.
[15] In cross-examination, Cooper stated she has no knowledge
of the origin of the T4 slips - Exhibit A-2 - as the only
discussion she ever had in that regard was with an employee of
Revenue Canada in connection with her claim for employment
insurance benefits and it had been her understanding that someone
at the Employment Insurance office had requested a T4 from TTA in
relation to her earnings as a negotiator. Cooper explained she
enjoyed her work and devoted a great deal of time and effort
toward earning what was a considerable amount of money. She had
never been informed by any member of the Band Council that people
were unhappy with her performance. In Cooper's opinion, it
was not correct to suggest she had only decided her status with
TTA was that of an employee only after she had been terminated in
February, 1999. As for her comments recorded in the Minutes -
Exhibit A-1 - she does not recall whether or not she received a
copy but does admit having made the observation, " if it
ain't broke, don't fix it". The contracts expired on
March 31st of each year and the particular meeting on
March 26, 1997 was held shortly before the date set for
renewal. Once the term - March 31, 1997 - had expired in the
original contract - Exhibit R-1 - Cooper had not signed any new
contracts or any renewals. All the negotiators merely continued
on the same basis as before. Cooper stated she had attended the
University of Victoria in 1970 studying arts and anthropology and
also had worked for the Royal British Columbia Museum. She
attended one year of law school at the University of British
Columbia and has participated in advanced management studies at
Banff. In addition, she had researched foetal alcohol syndrome
for the Department of Indian Affairs and was a member of the
Committee on the Status of Women. During her working life, Cooper
stated she has been both an employee and an independent
contractor and has also been appointed to positions requiring an
Order-in Council. Currently, she is a part-time student and also
provides services to the provincial government pursuant to an
Order-in-Council appointment. In Cooper's view of the overall
structure of TTA, the Directors were appointed by each Band
Council and she did not make any distinction between services
rendered for TTA or for the benefit of the 200 members of the
T'Sou-ke First Nation. A lunch held for elders took place in
a portable building used by TTA and - in her opinion - was a
function consistent with the purposes of TTA. While TTA was not a
supporter of the fishtrap proposal, the Chief of T'Sou-ke
Nation - also a Director of TTA - did support the project but
there was a change in the cabinet post in the Ministry of
Fisheries for British Columbia and the concept was not pursued.
At one point, a large deficit for TTA had been projected and she
was concerned about the cost of payments to consultants, lawyers,
office space rental in downtown Victoria and other expenses. As
for her calendar - Exhibit R-5 - it was an example of the method
used by her for recording events and the blank spaces probably
meant that she was in the Treaty Office. When she attended the
First Nations Summit, she did so on the basis it was necessary
for her to be there in connection with her duties as a TTA
negotiator even though her expenses were paid by the summit
organizers from a separate budget.
[16] The matter of Cooper having been given a staff jacket
arose at some point during the evidence and, in rebuttal, Rose
Dumont testified the jackets had been provided to contractors
working at the T'Sou-ke Nation, including a biologist working
for the Department of Fisheries and it was not intended to denote
status as an employee.
[17] Counsel for the appellant submitted there was a lack of
evidence pointing to any intent by Cooper to have been regarded
as an employee of TTA and that this was significant when
considered in the context of control as borne out by the actual
conduct of the parties. Less time spent on TTA work permitted
additional time to be available for other revenue-producing
activities and, in counsel's submission, the job of treaty
negotiator was not integral to the activities of TTA as there
were other people fulfilling a similar role. The increase in
salary was not related to any change in the duties of a
negotiator and counsel pointed out it had nothing whatever to do
with the role being transformed into a full-time occupation.
[18] Counsel for the respondent submitted the evidence
established there was control over the work to be performed and
direction was given by Wilson Bob, Chief of Negotiators. As for
the tools, there were very little required and business cards
were supplied by TTA as well as office space and supplies, when
needed. Further, there was no chance of profit or risk of loss as
Ardyth Cooper had been reimbursed for work-related travel and
other expenses. As for the matter of integration, counsel
submitted the very heart and soul of TTA - a non-profit society -
was the treaty negotiation process and the function carried out
by the appellant was in accord with that stated purpose.
[19] In Wiebe Door Services Ltd. v. M.N.R., [1986] 2
C.T.C. 200, the Federal Court of Appeal approved subjecting the
evidence to the following tests, with the admonition that the
tests be regarded as a four-in-one test with emphasis on the
combined force of the whole scheme of operations. The tests
are:
1. The Control Test
2. Ownership of Tools
3. Chance of Profit or Risk of Loss
4. The integration test
Control:
[20] There was very little control exercised by the appellant
over the worker in the within appeal. The mandate of TTA was to
provide a mechanism by which treaty negotiations could be
conducted on behalf of five separate First Nations. Personal
attendance was required at the negotiating table and the
negotiatiors were expected to submit reports on a regular basis
and to maintain contact with members of their community with
respect to details of ongoing talks. The meetings were scheduled
by a process of consensus and dates for future talks had to meet
the requirements of all participants at the treaty table. The
work of Ardyth Cooper was not supervised other than she was
subject to direction from Wilson Bob, Chief of Negotiatiors. From
the standpoint of control - looked at in isolation - there would
be very little to distinguish the worker from other persons
involved in the process who were independent consultants carrying
on a separate business.
Tools:
[21] There were very few tools and equipment required to carry
out the task of treaty negotiator. While the evidence disclosed
the worker had some of her own office equipment, she also
utilized the services of the office staff at the TTA office at
T'Sou-ke Nation and was able to use supplies, as required. In
today's workplace, it is not unusual for employees to provide
their own laptop computers, pagers, cellular telephones and to be
hooked to the Internet, all at their own cost without
specifically being required to do so by an employer. The reason
is that the worker wants to have access to modern communication
devices for a variety of purposes, including work. Such
communication equipment and computing devices such as laptop
models or hand-held notebooks with enormous storage capacity have
become the modern equivalent of the hand tools previously owned
by carpenters, masons, mechanics and other tradespeople. There
was office space provided to Ardyth Cooper and the evidence
disclosed she rarely worked at home and - instead - carried out
the majority of her work by using the TTA Treaty Office as a base
of operations, relying on the staff to provide her with
assistance in scheduling and performing certain work by utilizing
the computer in the office.
Chance of Profit or Risk of Loss:
[22] Initially, the remuneration for a treaty negotiator was
in the sum of $835.00 - paid twice monthly - together with the
opportunity to earn additional money at the rate of $300.00 per
day while working on a special project. Later, the payment was
increased to $4,166.00 per month despite the fact the workload
remained essentially the same. The additional daily rate was no
longer applicable and all negotiators at TTA received the same
amount of salary, despite the fact some worked more hours than
others. Travel - including a mileage allowance - and work-related
expenses were reimbursed by TTA and office space and supplies
were provided if the worker chose to utilize the office instead
of performing work at home. There was no chance to increase
profit from the activity remunerated by TTA and putting in less
time - while earning the same amount - in order to free up time
to take on other revenue-producing activities is not the manner
in which the test is used. One has to look at the work which is
performed within the context of the relationship between payor
and worker and determine whether in the course of carrying out
those duties there is an opportunity for the worker to profit by
sound management and whether - for various reasons - there is a
potential to suffer loss. There was no required supply of capital
assets by the worker and expenditures were compensated by TTA or
- in the case of attendance at the First Nations Summit - by the
organizers of the conference through special funding for that
purpose.
Integration:
[23] The worker in the within appeal was - in effect -
nominated by her community - T'Sou-ke Nation - to be a treaty
negotiator through the umbrella organization - TTA - a non-profit
society incorporated specially for the purposes set forth in the
constitution, all of which related in one manner or another to
preparing for and carrying out effective treaty negotiations with
the Government of Canada and the Government of the Province of
British Columbia including raising funds to finance the treaty
negotiation process by receiving grants and entering into loan
agreements. The Board of Directors of TTA approved Ardyth Cooper
as a suitable candidate to serve as a treaty negotiator and she
was offered the opportunity to carry out the required duties
pursuant to a written contract (Exhibit R-1). All negotiations
were then undertaken pursuant to the policies and directives
established by the Board of Directors of TTA, as administered by
the staff under the direction of Wilson Bob, Chief of
Negotiators. The worker was advised by letter sent by Wilson Bob
that she was required to clearly state to a committee dealing
with a fish project that her participation was not on behalf of
TTA.
[24] At p. 206 of his judgment in Wiebe (supra),
MacGuigan, J.A. stated:
"Of course, the organization test of Lord Denning and
others produces entirely acceptable results when properly
applied, that is, when the question of organization or
integration is approached from the persona of the
"employee" and not from that of the
"employer," because it is always too easy from the
superior perspective of the larger enterprise to assume that
every contributing cause is so arranged purely for the
convenience of the larger entity. We must keep in mind that it
was with respect to the business of the employee that Lord Wright
addressed the question "Whose business is it?"
Perhaps the best synthesis found in the authorities is that of
Cooke, J. in Market Investigations, Ltd. v. Minister of Social
Security, [1968] 3 All. E.R. 732 at 738-39:
The observations of Lord Wright, of Denning L.J., and of the
judges of the Supreme Court in the U.S.A. suggest that the
fundamental test to be applied is this: "Is the person who
has engaged himself to perform these services performing them as
a person in business on his own account?" If the answer to
that question is "yes", then the contract is a contract
for services. If the answer is "no" then the contract
is a contract of service. No exhaustive list has been compiled
and perhaps no exhaustive list can be compiled of considerations
which are relevant in determining that question, nor can strict
rules be laid down as to the relative weight which the various
considerations should carry in particular cases. The most that
can be said is that control will no doubt always have to be
considered, although it can no longer be regarded as the sole
determining factor; and that factors, which may be of importance,
are such matters as whether the man performing the services
provides his own equipment, whether he hires his own helpers,
what degree of financial risk be taken, what degree of
responsibility for investment and management he has, and whether
and how far he has an opportunity of profiting from sound
management in the performance of his task. The application of the
general test may be easier in a case where the person who engages
himself to perform the services does so in the course of an
already established business of his own; but this factor is not
decisive, and a person who engages himself to perform services
for another may well be an independent contractor even though he
has not entered into the contract in the course of an existing
business carried on by him.
There is no escape for the trial judge, when confronted with
such a problem, from carefully weighing all of the relevant
factors, as outlined by Cooke, J."
[25] The business in the within appeal was the activity
mandated by the constitution of TTA and it was the raison
d'être of that corporate body as a non-profit
society. The formation of TTA was for the purposes of serving as
an umbrella organization by which negotiations - in a
co-ordinated manner - could be carried out on behalf of five
First Nations having - to some extent - varied interests which
could be presented at the treaty table. One can see an example of
an independent contractor by examining the role of Linda Vanden
Berg's corporation (Associates Inc.) in the context of her
supply of services to TTA and to various other groups within the
province wherein there is a separate and distinct structure
dealing with TTA on an entity-to-entity basis with the ability of
Associates Inc. to carry on dozens of projects at the same time
by utilizing staff personnel as well as sub-contractors with
expertise in various disciplines as required from time to time.
In the within appeal, Ardyth Cooper was hired by TTA as a treaty
negotiator at a fixed salary. She was not an individual who was
operating a business on her own account. As she stated in her
evidence, when she signed the contract - Exhibit R-1 - her main
concern was that she was not entering into a working relationship
that could be construed in a manner that could imperil the
tax-free status of her remuneration as income earned on a reserve
and therefore exempt from the provisions of the Income Tax
Act. There are some similarities in the within appeal to the
case of Sliammon Development Corporation v. M.N.R. [2000]
T.C.J. No. 109, dated February 28, 2000. In Sliammon,
the worker – Alfred C. Butterfield - was
subject to a much higher degree of control and day-to-day
supervision and was required to attend at the office of the payor
in order to carry out the work. In that appeal, Sliammon
Development Corporation (SDC) had advertised for a Business
Manager and then had purported to assign the requisite duties to
the worker pursuant to a written contract which - as in the
within appeal - expired but was then permitted to continue and to
govern the ongoing relationship of the parties on the basis that
it had been extended or renewed. In Sliammon, the worker -
from the outset - had considered himself to be an employee and
had taken that position with the SDC accountants and others
representing the payor. In the within appeal, Ardyth Cooper's
attitude was borne out by the comment that " if it ain't
broke don't fix it". She was satisfied to have the
purported status of an independent contractor pursuant to the
written contract and any continuance thereof - by reason of
conduct of the parties as opposed to any written renewal - and to
proceed on the same basis as before. It is obvious the pay
increase for negotiators was - in no way - tied to the position
suddenly having been transformed into a full-time job. However,
the jurisprudence is clear on this point. What the parties
thought their relationship was will not change the facts. In the
case of The Minister of National Revenue v. Emily
Standing, 147 NR 238, Stone J.A. at pp. 239 - 240 stated:
"...There is no foundation in the case law for the
proposition that such a relationship may exist merely because the
parties choose to describe it to be so regardless of the
surrounding circumstances when weighed in the light of the
Wiebe Door test."
[26] Upon being advised she had been dismissed by TTA, Ardyth
Cooper subsequently had a Damascus experience on the road to the
Employment Insurance office. In keeping with this revelation
concerning a characterization of her status while working at TTA,
she sought benefits on the basis she had been an employee all
along, working pursuant to a contract of service. This posture is
not in accord with her conduct throughout the course of her
working relationship with TTA. A comment I made in
Sliammon - p. 7 - at paragraph 17 is also relevant here
and reads as follows:
"...The jurisprudence is clear that the parties
cannot assign themselves a status unless it accords with the
facts. However, I find it regrettable that people can accede to
an arrangement which - on the surface - may have several indicia
consistent with a relationship of independent contractor and then
claim to be an employee once the working relationship has come to
an end. It seems that one practical benefit of this volte-face is
that the born-again employee has been able to escape paying
employment insurance premiums and Canada Pension Plan
contributions throughout the term of employment and the
payor-employer becomes the subject of an assessment for both
parts of the premiums and/or contributions on the basis it is the
responsibility of an employer under the provisions of the
Employment Insurance Act and Canada Pension Plan to remit the
appropriate premiums and contributions pertaining to an employee.
The facts in the within appeal are not like those sometimes found
in appeals where the worker does not have any real bargaining
power and is basically forced to go along with a purported status
of independent contractor which has been thrust upon him or her
by a payor who insists on the worker acquiescing to that
characterization as a condition of being hired. In this instance,
Butterfield was a highly educated professional and could have
taken steps early on to clarify his status but that is a matter
of morals and business ethics and does not give rise to any form
of estoppel or other consequence in law which is capable of
preventing the Court from arriving at a true characterization of
status in accordance with the evidence."
[27] Another comment I made in Sliammon (supra),
at p. 7 - paragraph 15 - is also relevant to the within appeal.
It was made with regard to the continued provision of services by
Butterfield even though the term in his contract had expired. I
stated:
"...It would be highly unusual for an independent
contractor to continue to provide services following the
expiration of the term set forth in the contract."
[28] The continuation - by conduct - as opposed to any formal
renewal procedures as set out in the contract which expired March
31, 1997, tends to be more consistent with a status of employment
pursuant to a contract of service having an indeterminate term
rather than a contractual relationship - for a fixed term -
between independent parties. The wording of the contract -
Exhibit R-1 - signed by Cooper, referred to as "the
Consultant" under Term of Contract reads as follows:
"The Consultant agrees that this Agreement will be
terminated at the end of March, 1997 and may be renewed subject
to being reviewed by the Board of Directors."
[29] As noted earlier, a clause in said contract provided for
a 21-day notice to be given to the other party in the event of
termination. However, upon informing Cooper she had been
dismissed from her position as negotiator, TTA paid her 30 days
earnings in lieu of notice. The letter - Exhibit R-10 - dated
February 16, 1999 also informed Cooper as follows:
"...Your contract, if such exists, will not be
renewed."
[30] The above wording is significant and is supportive of the
view that Cooper was engaged in employment pursuant to a contract
of service as opposed to supplying her services within an
entrepreneurial context as an independent contractor.
[31] It is not the function of this Court to determine whether
the action taken by TTA was justified - or not - in terminating
the appellant's services and - on occasion - the appeal took
on some of the aspects of an unjust dismissal lawsuit. The fact
the ongoing funding of TTA may have been somewhat precarious does
not justify an attempted transformation of employees into
independent contractors any more than a department store clerk
working for a retail giant - about to go down the drain - is
suddenly an independent sales consultant conducting business on
his or her own account. Precariousness of payment for work done
does not assist in any determination of employment status.
[32] Taking into account the evidence and applying it in the
manner directed by the relevant jurisprudence, I conclude the
decision of the Minister is correct and it is hereby
confirmed.
[33] The appeal is dismissed.
Signed at Sidney, British Columbia, this 17th day of July
2000.
"D.W. Rowe"
D.J.T.C.C.