Access Post Production Audio Inc. v. M.N.R., docket 1999-4208-EI

Date: 20000526

Docket: 1999-4208-EI; 1999-4209-CPP

BETWEEN:

ACCESS POST PRODUCTION AUDIO INC.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Weisman, D.J.T.C.C.

[1] The Appellant is in the business of providing post-production audio services for animated cartoon series. For this purpose, it retained Mark Grosicki ("Grosicki") who is qualified in editing pre-recorded sounds onto cartoon storyboards, and in performing breakdown work which involves synchronizing dialogue with an actor's lip movements. Grosicki worked with the Appellant from June 15 to November 15, 1998. The question is whether he was employed under a contract of service and was therefore in insurable and pensionable employment within the meaning of paragraph 5(1)(a) of the Employment Insurance Act[1], and paragraph 6(1)(a) of the Canada Pension Plan.[2]

[2] The resolution of this issue requires application of the four-in-one test established in Wiebe Door Services Ltd. v. M.N.R.[3] as follows:

Control

[3] In performing his duties, Grosicki was directly under the control of Mr. Steven Cole, the President of the Appellant ("Cole"), and indirectly under that of the various Directors who were retained from time to time by the Appellant's clients for their productions. While Grosicki had to adhere to strict time limits, these were imposed more by the necessities of film production than by any exercise of control by the Appellant. As was standard in the industry, Grosicki enjoyed a fair degree of autonomy within those constraints. He was free to work on projects for more than one audio production company at the same time. While he performed his tasks at the Appellant's premises, there is no evidence of any control over his hours of work or working conditions. The control factor tends to indicate that the relationship between Grosicki and the Appellant lacked that degree of subordination which would constitute him an employee.

Tools

[4] Grosicki's tasks required utilization of sophisticated and expensive audio-visual equipment such as a spectral digital engine, DA88, JAZ Drive, DAT and DAT source recording library and materials, film editing bench, and related supplies. These were all provided to Grosicki by the Appellant at its premises as aforesaid. This factor indicates that Grosicki was an employee.

Integration/Organization

[5] Grosicki was free to work for different audio production companies at the same time as he worked for the Appellant, and in fact did so during the period in question. This factor tends to indicate that he was an independent contractor who integrated the Appellant's needs into his business.

Profit and loss

[6] Grosicki bore no expenses in connection with his work. He was paid $266 per reel for breakdown editing and $1,000 per show for assembly editing. His earnings could vary with the number of projects he undertook. He could only have a chance of profit and risk of loss in his dealings with the Appellant, however, if he did not have to perform his services personally, but could retain others for that purpose at a higher or lower rate of reward than he himself was assured. Grosicki was ambivalent as to whether he had to perform his services personally. Cole adopted contradictory positions. He asserted both that he hired Grosicki for his special expertise, and that Grosicki could hire others to perform his functions so long as the series Director was content with the results. I am satisfied on a balance of probabilities that Grosicki had to perform his services personally, and therefore had no chance of profit and risk of loss in connection therewith. This factor would indicate that he was an employee.

[7] The application of the four-in-one test produces equivocal results. I must consider the entire relationship between the parties and the combined force of the whole scheme of operations to ascertain if Grosicki was carrying on business in his own right.[4] In this regard, I note that he was not carrying on business at all. He had no expenses in connection with his work, did not have printed advertising material or characterize his income as business income for income tax purposes, and exhibited none of the many other attributes of a business. The fact that he had to provide his services personally is also a strong indication that he was an employee.[5]

[8] The burden of proof herein lies upon the Appellant.[6] Grosicki and Cole testified on its behalf. Unfortunately, Grosicki was vague and uncertain about the terms of his engagement, and Cole tended to contradict himself in this regard. In addition to the previous personal service issue, Cole initially insisted that Grosicki did only pre-production animation and was therefore beyond Cole's control, but subsequently reversed this position. Neither witness proved to be reliable. The Appellant has failed to discharge the burden of proof in this matter. I find that Grosicki was employed under a contract of service during the period in question and was in insurable and pensionable employment.

[9] The appeals will be dismissed.

Signed at Toronto, Ontario, this 26th day of May 2000.

"N. Weisman"

D.J.T.C.C.