Docket: 2012-3489(EI)
BETWEEN:
NATHALIE ANDREA PAVAO
(formerly Nathalie Andrea Olivera),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
____________________________________________________________________
Appeal heard on common
evidence with the appeal of
Nathalie Andrea Pavao (2012-3490(CPP))
on June
27, 2013 at Toronto, Ontario
By: The Honourable
Justice Judith M. Woods
Appearances:
|
For the
Appellant:
|
The
Appellant herself
|
|
Counsel for the Respondent:
|
Tony Cheung
|
____________________________________________________________________
JUDGMENT
The appeal with respect to a decision made under the Employment
Insurance Act that the appellant was not engaged in insurable employment
with Fiscal Fitness Inc. during the period from May 23, 2010 to June 3, 2011 is
dismissed, and the decision is confirmed.
Signed at Toronto, Ontario this 27th day of September 2013.
“J. M. Woods”
Docket: 2012-3490(CPP)
BETWEEN:
NATHALIE ANDREA PAVAO
(formerly Nathalie Andrea Olivera),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
____________________________________________________________________
Appeal heard on common
evidence with the appeal of
Nathalie Andrea Pavao (formerly Nathalie Andrea
Olivera) (2012-3489(EI))
on June
27, 2013 at Toronto, Ontario
By: The Honourable Justice Judith M. Woods
Appearances:
|
For the
Appellant:
|
The Appellant herself
|
|
Counsel for the
Respondent:
|
Tony Cheung
|
____________________________________________________________________
JUDGMENT
The appeal with respect to a decision made under the Canada
Pension Plan that the appellant was not engaged in pensionable employment
with Fiscal Fitness Inc. during the period from May 23, 2010 to June 3, 2011 is
dismissed, and the decision is confirmed.
Signed at Toronto, Ontario this 27th day of September 2013.
“J. M. Woods”
Citation: 2013 TCC 305
Date: 20130927
Dockets: 2012-3489(EI)
2012-3490(CPP)
BETWEEN:
NATHALIE ANDREA PAVAO
(formerly Nathalie Andrea Olivera),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
The appellant, Nathalie Pavao, was
engaged by Fiscal Fitness Inc. (the “Payer”) to provide swimming lessons at its
fitness facility. After Ms. Pavao applied for employment insurance benefits,
the Minister of National Revenue ruled that she was engaged as an independent
contractor for purposes of the Employment Insurance Act and Canada
Pension Plan. Ms. Pavao appeals this ruling.
[2]
The period at issue is from May
23, 2010 to June 3, 2011.
[3]
At the hearing, Ms. Pavao
testified on her own behalf. Testimony on behalf of the Crown was provided by
Lori Ferren who worked for the Payer and was in charge of the fitness facility.
Background
[4]
The Payer operates a fitness
facility in a Hilton Hotel in the Toronto area. The facility is operated as a
private club under the name Club Markham, and hotel guests may also use the
facility. The Payer and the hotel have common ownership.
[5]
While she was a student, Ms. Pavao
approached the Payer about the possibility of providing aquafit classes at the
Club’s pool. This led to her engagement to provide swimming instruction to
members of the Club and their children. From the Payer’s perspective, the
arrangement was perceived to be a benefit to their members. Most of the
customers were children of Club members who were typically given lessons on
Saturday morning.
[6]
The engagement began in January
2010 and was slow to develop because the Club had not provided a swim
instructor for some time. Ms. Pavao’s services were advertised through business
cards that were kept at reception and Ms. Pavao prepared a flyer which was
on display.
[7]
Ms. Pavao was a qualified swim
instructor and was experienced in this type of work. She also taught one day a
week at the YMCA. At the time of the engagement, Ms. Ferren simply reviewed
with Ms. Pavao how the services would be performed and approved them. The
services were consistent with a Red Cross manual that Ms. Pavao received in the
course of receiving her teaching qualification.
[8]
Club members who were interested
in arranging lessons were provided with Ms. Pavao’s telephone number and
she would arrange the lessons directly with them.
[9]
Customers paid fees to the Payer
and Ms. Pavao received 70 percent of this. The fees were generally $20 per
session for children and $25 for adults. Ms. Ferron explained the 70/30
allocation to Ms. Pavao on the basis that the Payer was being compensated for
its costs plus a small profit.
[10]
Ms. Ferren prepared invoices for
Ms. Pavao’s services which she would include with the pay cheques. The pay stub
only showed the amount paid to Ms. Pavao and no source deductions were
taken.
[11]
In the initial meeting between Ms.
Ferren and Ms. Pavao, there was no specific mention of source deductions or
whether Ms. Pavao was to be an employee or independent contractor. There was no
written contract.
[12]
Ms. Pavao left the Club in June of
2011 due to a medical issue.
Analysis
[13]
The test to determine whether
someone is engaged as an employee or independent contractor is whether the individual
is performing the services as her own business on her own account. Mainville
J.A. described this test as deceivingly simple: 1392644 Ontario Inc v MNR,
2013 FCA 85 (“Connor Homes”).
[14]
Connor Homes is the most recent Federal Court of Appeal decision
which reviews the approach to be taken in some detail. The essence of the test
is summarized at paragraph 41 of that decision.
[41]
The central question at issue remains whether the person who has been engaged
to perform the services is, in actual fact, performing them as a person in
business on his own account. As stated in both Wiebe Door and Sagaz,
in making this determination no particular factor is dominant and there is no
set formula. The factors to consider will thus vary with the circumstances.
Nevertheless, the specific factors discussed in Wiebe Door and Sagaz will
usually be relevant, such as the level of control over the worker’s activities,
whether the worker provides his own equipment, hires his helpers, manages and
assumes financial risks, and has an opportunity of profit in the performance of
his tasks.
Intention of
parties
[15]
Connor Homes instructs that the intention of the parties must be
looked at first. In this particular case, I find that there was no common
intention between the parties.
[16]
It is clear that the Payer did not
intend to enter into an employment relationship because it did not take source
deductions.
[17]
It appears that the Payer did not
make this intention clear to Ms. Pavao. Ms. Pavao testified that she came away from the
initial meeting with the understanding that she would be an employee. This
conclusion was likely based on Ms. Pavao’s prior experience of always working
as an employee, rather than being based on anything Ms. Ferren had said. Ms.
Pavao testified that she thought that tax was being withheld, but the evidence
was not detailed enough to show that this was a reasonable conclusion on her
part.
[18]
I find that the parties did not
form a mutual intention as to the nature of the relationship. I turn then to
the conduct of the parties and the relevant tests as set out in Connor Homes.
Level
of control
[19]
The control test is whether the
payer has the ability to control the manner in which the work is done. The
evidence is clear that the Payer did not control the manner in which the
lessons were conducted. Ms. Pavao was the qualified instructor and she needed
no supervision in this respect. In addition, the Payer simply referred
customers to Ms. Pavao and left it to her to make the appropriate arrangements.
I find that this factor tilts toward an independent contractor relationship.
Whether worker
provides own equipment
[20]
The engagement did not require Ms.
Pavao to provide much in the way of equipment. As she described it, she
provided a swim suit. I do not think that this is a significant factor one way
or the other. Ms. Pavao was engaged to provide instruction at the Payer’s
facility. I would not describe this as the Payer providing a pool. Ms. Pavao
was performing services at the Payer’s pool for their mutual benefit.
Whether worker
hires helpers
[21]
Ms. Pavao did not hire helpers and
the matter was not discussed by the parties. I do not find this to be a
significant factor.
Does worker
manage and assume financial risk?
[22]
As far as the evidence reveals,
there was no significant risk associated with this engagement to Ms. Pavao. I
do not think that this is a significant factor in this particular case.
Does worker have
opportunity for profit?
[23]
The engagement contemplated that
Ms. Pavao would provide instruction as requested by Club members. She probably
had some opportunity to profit by seeking more customers, but this was likely
limited. This factor tilts slightly toward an independent contractor
relationship.
Conclusion
[24]
As the case law informs, it is
necessary to look at the entirety of the relationship. In this particular case,
the arrangement was quite casual in that the Payer did not guarantee any work
for Ms. Pavao and merely offered her services mostly as a benefit to Club
members. Further, the engagement did not take much of Ms. Pavao’s time.
[25]
I would conclude that Ms. Pavao
was engaged as an independent contractor.
[26]
Finally, I would comment that I
have sympathy for Ms. Pavao’s situation. She was quite young when she entered
into this relationship and it would have been desirable for the Payer to inform
her that it was not proposing to engage her as an employee. Nevertheless, the
appeal will be dismissed, and the rulings made by the Minister will be
confirmed.
Signed at Toronto, Ontario this 27th day of September
2013.
“J. M. Woods”
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