Citation: 2013 TCC 129
Date: 20130426
Dockets: 2011-2090(EI), 2011-2094(CPP),
2012-3162(EI),
2012-3164(CPP),
2012-3165(EI),
2012-3166(CPP),
2012-3167(EI),
2012-3169(CPP),
2012-3170(EI),
2012-3171(CPP),
2012-3173(EI), 2012-3174(CPP)
BETWEEN:
3142774 NOVA SCOTIA LIMITED,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Pizzitelli J.
[1]
These are appeals from
the decisions of the Minister of National Revenue (the “Minister”) that six
different Workers were determined to be in insurable and pensionable employment
with the Appellant, 3142774 Nova Scotia Limited, during different periods
throughout the 2009 and 2010 calendar years. With respect to the Worker Karen
Bellefeuille, the period in question is from January 1, 2009 to December 31, 2010
and for the Worker John Gulbrandson the period is from December 1, 2009 to
December 31, 2010. For the Workers Stephanie Sachetti, Andrew Schuhmann and
Jerzy Wesecki the period in question is from January 1, 2010 to December 31, 2010
and for the Worker Shawna Bobyk the period in question is September 1, 2009 to
September 29, 2010.
[2]
These appeals were
heard at the same time and on common evidence except to the extent the evidence
of the particular Workers can relate only to their specific matter.
[3]
The only issues to be
decided in these matters is whether the Workers were, during their respective
period above described, employed in insurable employment within the meaning of
paragraph 5(1)(a) of the Employment Insurance Act and whether
they were employed in pensionable employment within the meaning of paragraph
6(1)(a) of the Canada Pension Plan. In short, whether each of the
Workers was in a contract of services, and hence an employee of the Appellant,
or whether in a contract for services and hence an independent contractor
during the relevant Period.
[4]
The Appellant was a Nova Scotia corporation incorporated in 2006 and primarily carried on the business of providing
cleaning and maintenance services to small and medium-size commercial and
industrial clients under the operating name of Custom Building Maintenance
throughout Nova Scotia. The Appellant was based in New Bedford and during the
relevant Periods employed full-time employees as well as utilized the services
of independent contractors; the relationship of some of which are clearly in
issue in these matters.
[5]
The Workers supplied
their services at different locations in Nova Scotia, at the Appellant’s
clients’ locations, with each of the Workers performing their duties at
anywhere from one to three different locations. The duties of the Workers were
general cleaning duties including mopping and vacuuming of floors, dusting,
taking out garbage, cleaning washrooms and cleaning showers where installed.
[6]
In all cases, there is
no dispute that the Workers travelled back and forth from the locations to
their homes using their own vehicles and were not compensated for any travel
expenses. In all cases, however, it is clear the Appellant provided substantially
all of the tools and equipment necessary for the Worker to perform his or her
duties including the mops, brooms, vacuum cleaners and general supplies which
included chemical cleaners, gloves, rags, towels and toilet paper although one
Worker testified that the Appellant’s clients provided its own garbage bags and
paper toiletries. None of the Workers carried liability insurance although the
Appellant carried insurance to cover protection from liability due to any
Workers or any helpers they might use.
[7]
In all cases, the
Workers performed their duties at the client’s premises, in most cases during
the hours the specific client was closed for business. Each of the Workers was
designated a period of time on specific days to complete their duties and based
on the agreement the Appellant had with its clients, the Workers had a time
period within which to complete their duties ranging from a morning during
specific weekdays for the Worker Bellefeuille to anytime after the close of
business on Friday until the opening of business the next Monday for the Worker
Schuhmann. Whether the Worker completed his/her tasks in a shorter or longer
period of time than the designated allocated hours for each client did not
affect the level of remuneration paid which remain fixed per location serviced.
[8]
Some of the Workers
held full-time jobs during their relevant period and clearly provided their
services for extra money while others were not otherwise gamefully employed
elsewhere although all the Workers had the flexibility to refuse to perform any
cleaning contract offered to them by the Appellant and to work for such other
parties during the period as they so chose; it being clear that none of the
Workers was required to exclusively provide its services to only the Appellant.
The length of time the Workers provided their respective services to the
Appellant ranged from four to six weeks for the Workers Sachetti and Wesecki to
over a year for the Workers Schuhmann and Bobyk, with the others for periods in
between that range.
[9]
Each of the Workers was
paid a fixed amount monthly, payable semi‑monthly, in respect of all the
locations he or she serviced and during the relevant periods there was no
deduction made for any payroll remittances, no vacation pay paid, and no
medical, pension or other benefits paid or provided to the Workers. The Workers
submitted no invoices to the Appellant and no GST was charged to the Appellant
by any of the Workers and the evidence is that none of the Workers were GST/HST
registrants nor did the level of their income from business exceed the $30,000
amount that would require them to be registrants under the Excise Tax Act.
[10]
All the Workers
testified that a representative of the Appellant accompanied them their first
day or so at each client location to advise them what needed to be done there,
where chemicals and supplies were stored, and what chemicals to use where, i.e.,
on the floor or in the showers and a suggested routine to perform the required
tasks unless the tasks were so obvious no instruction was necessary such as how
to sweep, mop or generally clean. It is clear from the evidence that apart from
dealing with complaints or client comments or generally monthly inspections, there
was no further on-site supervision of the Workers’ duties, who generally worked
alone, notwithstanding that a few of the Workers referred to having a
supervisor. The evidence is also clear that the duties required to be performed
required little skill for their ongoing performance.
[11]
In the event of any
deficiencies in the performance of their duties, the Workers were either
required to rectify the deficiencies if they forgot to perform some elements of
their duties as was the case for the Worker Sachetti or were given feedback
from the Appellant as to client complaints so they could remedy the
deficiencies during their next attendance. The only specific example of cleaning
deficiencies other than forgotten work or client complaints about Worker performance
of work to be remedied in the future above was in the evidence of the Worker
Bobyk who testified she was instructed to start using a different chemical
cleaner on unsealed grout in the showers of the health club she serviced to
remedy what was in fact a construction defect of the client’s premises
discovered after the Appellant investigated a complaint.
[12]
The only evidence of
who bore responsibility for any damage done to the client premises by the
Worker was in respect to the Worker Bobyk who was back‑charged for the
cost of keys she admitted to having thrown away causing the Appellant to have
to change locks for its client. Other Workers testified they thought the Appellant
would be responsible for damage to the client premises but agreed none had been
caused so had no example of the Appellant agreeing to be so responsible. The Appellant
testified responsibility would depend on the damage caused and by whom.
[13]
The main disagreement
between the parties and on which the evidence is inconsistent pertains to the
basis for payment, the level of control and supervision and the risk of profit
and loss which I will address in the context of examining the evidence in the
context of the law.
The Law
[14]
The judicial test for
determining the issue of whether a worker is in a contract of services and
hence an employee, or in a contract for services and hence an independent
contractor, was considered by the Supreme Court of Canada in 671122 Ontario
Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 4 C.T.C.
139 (S.C.C.), where in paragraph 47, Major J. made it clear there was no
universal test and that:
47 …
The central question is whether the person who has been engaged to perform the
services is performing them as a person in business on his own account. …
[15]
In determining such
question, the Supreme Court of Canada agreed with the approach of the Federal
Court of Appeal in Wiebe Door Services Ltd. v. Minister of National Revenue,
86 DTC 553 (F.C.A.), where certain factors had to be taken into account
including the level of control the employer has over the worker’s activities,
whether the worker provides his or her own equipment, whether the worker hires
his or her own helpers, the degree of financial risk taken by the worker, the
degree of responsibility for investment and management held by the worker and
the worker’s opportunity for profit in the performance of his or her task but
stressed such factors were not an exhaustive list and there is no set formula.
[16]
As set out in Royal
Winnipeg Ballet v. Canada (Minister of National Revenue – M.N.R.), 2006 FCA
87, 2006 DTC 6323 (F.C.A.), the Federal Court of Appeal confirmed that the
intention of the parties was a factor to be considered, and agreed with Sagaz
and Wiebe Door above that the label the parties ascribe to the
relationship is not determinative of it. In paragraph 56 of Royal Winnipeg
Ballet, Sharlow J.A. stated:
56 …
There is ample authority for the proposition that parties to a contract cannot
change the legal nature of that contract merely by asserting that it is
something else. …
[17]
Accordingly, the
parties are in agreement that an objective analysis of the Wiebe Door
factors, generally known as the four-in-one test, is necessary before any consideration
of the subjective intention of the parties, if necessary, as confirmed by the
Courts in many instances including in the case of 1392644 Ontario Inc.
(Connor Homes) v. Canada (Minister of National Revenue – M.N.R.), 2013 FCA
85, [2013] F.C.J. No. 327 (QL), which stated in paragraph 37 thereof that the
intention of the parties “must also be grounded in a verifiable objective
reality”.
[18]
In this case, the
Respondent acknowledges that the subjective intention of the Workers other than
Shawna Bobyk and possibly Karen Bellefeuille is evidence in the written
subcontractor agreements as being one of independent contractor, but, relying
on the above case law, argues the Wiebe Door factors demonstrate that
all the Workers are in a relationship of employment with the Appellant. The
Appellant obviously disagrees so we continue to an analysis of the Wiebe
Door factors.
Analysis
Control
[19]
The strongest
disagreement between the parties is in relation to this very important factor.
The Respondent mainly argues that the Appellant controlled the Workers because
it determined the number of hours the Workers required to perform their duties,
because the Workers were required to abide by the Appellant’s company policies,
because the Appellant controlled the number of cleaning locations assigned to
the Workers, and because the Appellant exercised or had the ability to exercise
a degree of supervision over the Workers through training, evaluation and on-site
visits that went beyond mere monitoring.
[20]
With respect to the
Respondent, I simply do not find that the evidence in these matters supports
its position. Rather, I find that the position of the Appellant is strongly
supported by the evidence, namely that the Appellant’s degree of supervision is
limited only to a monitoring function that is not indicative of an
employer-employee relationship.
[21]
The evidence is clear
that none of the Workers had fixed hours of work. Instead, the Appellant’s
contract with its clients set out the day or days the cleaning was to occur and
the range of time periods during which the cleaning could occur, as discussed
above. Most of the Workers were required to attend at the client’s location
directly after the close of business on any day and complete the duties before
the opening of business the next business day, with an entire weekend in
between in many cases. The client in fact determined the period during which it
was prepared to have the services conducted. Within that range of time to
perform such services, the Workers could attend and complete their tasks during
whatever hours suited them. The Workers did not punch a time clock, check-in
with the Appellant at the start of any work nor check-out in any way. They had
broad scope in determining the specific hours in which to supply their services
and had possession of the entrance keys to let themselves in to do so. This is
indicative of a relationship of independent contractor.
[22]
The evidence is also
that the Appellant limited the number of cleaning contracts any Worker could
have to a maximum of three to limit the exposure the Appellant would have in
the event any Worker did not show up or terminated its agreement. This is to me
a reasonable business decision of the Appellant. Considering the evidence of
the Workers was very consistent that they were free to turn down any cleaning
contract offered to them by the Appellant in any event as well as provide their
services to any other party and hence were not required to exclusively work for
the Appellant, I cannot see any unreasonable restriction imposed on the Workers
by the Appellant’s maximum contract policy with the Workers that amounts to any
control over the Workers in this regard.
[23]
As for the Respondent’s
argument that the written contracts and testimony of the Appellant confirms
that the Appellant’s company policies are part of the contract with the Workers
and that this, in itself, is indicative of an employment relationship I cannot
come to that conclusion. Firstly, no policy documents were tendered into
evidence that would enable me to evaluate the position of the Respondent in
that regard. In fact, the only evidence regarding the company policies came
from the evidence of the Workers, the Respondent’s own witnesses, all of whom
testified they did not recall receiving a copy of any such document, or if they
did, that it pertained to policies like dealing with “what if” there were
problems. The Worker Gulbrandson testified he did not get a copy of the policies
but recalls they referred to what happened if he “messed up”, his obligation to
re‑clean and take care of the equipment as well as the fact he would be
back‑charged if the Appellant had to get someone else to re-clean or
substitute for him. The Worker Schuhmann thought he might have seen the
document at one of the cleaning locations but clearly had a vague memory of the
issue. The only evidence on this issue seems to point to holding the Worker
responsible for the performance of its duties or that no policy documents were
communicated to the Workers in the first place.
[24]
As for the Respondent’s
argument that the Court should draw a negative inference from the fact the
Appellant failed to enter the company policy documents into evidence, there was
no evidence pleaded by the Respondent that it even requested any such
documentation and I fail to see why the Respondent could not have led such
document into evidence if it was the one relying on same. I am not prepared to
draw any such negative inference one way or the other in the circumstances;
particularly since the Respondent’s witnesses testified as to their
understanding of the documents.
[25]
The Respondent’s main
argument is that the Appellant exercised a degree of supervision over the
Workers that was determinative of control over not only assigning the duties of
the Workers but in determining “how” they performed them evidenced by the
training received by the Workers, the evaluation of the Workers and on-site supervisory
visits.
[26]
In City Water
International Inc. v. Canada (Minister of National Revenue ‑ M.N.R.),
2006 FCA 350, [2006] F.C.J. No. 1653 (QL), the Federal Court of Appeal, citing its
earlier decision delivered by Létourneau J.A. in Livreur Plus Inc. v. Canada
(Minister of National Revenue), 2004 FCA 68, [2004] F.C.J. No. 267 (QL), confirmed
in paragraph 18 that “the Court should not confuse control over the result or
quality of the work with control over its performance by the worker responsible
for doing it” and that “Monitoring the result must not be confused with
controlling the worker”.
[27]
While there is no
dispute with this principle of law, the Respondent argues that the control
exercised by the Appellant over the Workers exceeds simply monitoring. Frankly,
I simply cannot agree with the Respondent for several reasons.
[28]
Firstly, the evidence
was consistent among all the Workers that the so-called training received by
the Workers amounted to no more than the Appellant sending a representative to
work with the Worker for its first shift or two to ensure the Worker understood
the scope of his/her duties, where the cleaning closet with supplies was and
what chemicals to use for different tasks. There is no evidence of any ongoing
supervision on a daily basis beyond this initial indoctrination procedure and
follow-up on receiving complaints. It is also relevant that the Workers
themselves testified that the level of skill necessary to perform their duties
was minimal. In fact, the Worker Wesecki testified that his spouse helped him
at times with cleaning and was obviously able to assist even though she
obviously never received any training or indoctrination by the Appellant. The
Worker Gulbrandson testified his mother–in-law assisted him on occasion without
pay and was a better cleaner than him even though she obviously had no initial
training or indoctrination.
[29]
Secondly, while there
is no dispute that the terms of the Appellant’s client contracts form a part of
the Subcontractors Agreement with the four Workers who acknowledged signing one
and that such client contracts evidence that there would be monthly or weekly
site evaluations by the Appellant’s service manager to assess the cleaner, that
an after-hours supervisor works with the customer service manager to keep the
staff on track and give them necessary course correction or that close contact
will be kept with management concerning all work performed, all of such terms
do not amount to determinative proof of control. The client contract speaks to
the level of service and quality control the client can expect, and, by its
inclusion as a term of at least the written contracts above referred to, that
was expected of the Worker. The evidence is that the Worker was not supervised
on a daily basis and that if the client complained to the Appellant, either
directly or by leaving notes in the binder left at each location for the
Appellant’s customer representative to review, the Appellant would intervene
usually by attending to deal with the Worker and suggest changes to satisfy the
complaint which some of the Workers referred to as retraining. This is in my
view nothing less than a measure of quality control on an as-needed basis.
[30]
Finally, the Respondent
also argues that the grading system utilized by the Appellant in which the
client rates the Worker’s performance on a scale of one to five is indicative
of an evaluation of employees. The client could either enter its evaluation in
the binder for review by the Appellant’s customer representative or could
presumably communicate it to the Appellant directly. In my view, this amounts
to no more than customer feedback which is a form of monitoring. As Sheridan
J. stated in Watson (c.o.b. Bonnie’s Cleaning Services) v. Canada (Minister of National Revenue - M.N.R.), 2005 TCC 134, [2005] T.C.J. No. 77 (QL), at paragraph
10:
10 …
it was to be expected that Ms. Watson would “monitor” a worker’s performance
through feedback from clients. Rather than indicia of “control” or
“supervision”, it is a testament to the good stewardship that made
Bonnie’s Cleaning so successful. …
[31]
The evidence is clear
that the Appellant’s representative would either check in with the Worker every
week or two and otherwise rely on the customer for feedback for its quality
control and issue directives for rectifying any found lapses. I cannot see how
this can be elevated to the degree of supervision that would establish control
of how the Worker performs his/her services; especially when little or no skill
is involved.
[32]
Having regard to all
the evidence, I simply cannot find that the Appellant controlled the Workers in
the performance of their services in such a manner as to be indicative of an
employer-employee relationship. In my strong view, an analysis of the control
factor indicates a relationship of independent contractor.
Tools
[33]
As mentioned in the
facts above, there is no dispute between the parties that the Appellant
provided all the necessary tools for the performance of the Workers’ services
including brooms, mops, rags, chemical cleaners and a vacuum cleaner. At first
glance, it would appear that this factor would support the conclusion that the
relationship was one of employer-employee. However, the Appellant has argued
that the supply of the tools by it was in effect because it could use its
buying power to obtain these items at lower cost as well as the fact that the
provision of cleaning chemicals was necessary for it to ensure compliance with
Workplace Hazardous Materials Information System for it and its clients which
makes both credible and good business sense.
[34]
It should be noted that
each of the Workers had to supply their own transportation to each of the job
locations and was not reimbursed for gas or travel expenses of any kind. This,
of course, would support the conclusion the relationship was one of independent
contractor as found in the City Water International Inc. case where the
Federal Court of Appeal held that the workers would have had to provide their
own bicycles or vehicles to attend at the customer locations. The Worker
Sachetti testified that she sometimes got driven in a company car to assist her
sister who also worked for the Appellant, but in terms of her own services to
the locations she serviced she provided her own transportation. There was no
evidence the Appellant paid Stephanie Sachetti to assist her sister and the
evidence suggests any such services were provided to the sister and not the Appellant
so such evidence is of no assistance here.
[35]
I should also like to
comment on the Respondent’s argument that the Workers providing their own
transportation to their place of work is no different to an employee finding
his or her way to work each day and hence is not a factor. With respect to the
Respondent, most employees report to the same place of work each day and are
not generally required or have the option of working at different locations
without reimbursement for any travelling required at the employer’s request or
without the provision of employer transportation. The Workers here were not
provided any assistance for travel, regardless of whether they serviced one or
more locations and the evidence is clear none of the Workers reported to the
Appellant’s place of business on any day other than for an initial interview
before being hired or to pick up their payment cheques.
[36]
In Watson (c.o.b.
Bonnie’s Cleaning Services), Sheridan J., dealing with a similar business
where the Workers were found to drive themselves to the job sites and had the
majority of tools provided to them, stated at paragraph 13:
13 …
As for the cleaning tools, it was reasonable for Bonnie’s Cleaning to provide
the major tools needed given Bonnie’s Cleaning contractual obligations to its
construction site clients, the difficulty of imposing specific equipment
requirements on self-employed cleaners working for other clients as well as
Bonnie’s Cleaning clients, and Ms. Watson’s own concerns of ensuring hygienic
standards of delivery of cleaning services. I am of the view that in these
particular circumstances, to the extent the ownership of tools has any
application, it favours Ms. Watson’s positions.
[37]
In the cases at hand,
having regard to the various cleaning requirements of different clients ranging
from small offices to health clubs and the need for the Appellant to meet its
Hazardous Materials monitoring requirements, as well as the fact the
Appellant’s inventory system was such that it kept cleaning supplies and tools
on each site which it replenished periodically as well as the rather minimum
tooling requirements to begin with, it appears more than sensible that the
provision of tools by the Appellant can just as easily be said to favour the Appellant’s
position, however I would not consider this factor to be determinative in the
circumstances .
Risk of Profit and Loss
[38]
The Respondent takes
the position that the Workers were basically paid an hourly wage and did not
negotiate their remuneration, had to perform their work personally and were replaced
only by the Appellant, and had no responsibility for any investment or
management and hence this factor favours a finding that the Workers were
employees while the Appellant argues that the Workers’ compensation was fixed
regardless of the hours worked, that the Workers had the right to hire helpers
and replacements, had the choice as to whether to accept work or not and
supplied their own vehicles and incurred responsibility for their own travel
expenses.
[39]
Frankly, I agree with
most of the Appellant’s position in these matters and find these factors also
support the conclusion that the Workers were independent contractors for
several reasons.
[40]
The Workers all
testified on a consistent basis that their compensation was based on a fixed
amount per contract, paid semi-monthly. Although the Worker Sachetti suggested
she was paid on an hourly basis of $10 per hour, it is clear from her testimony
that she received the same amount regardless of whether she completed her
duties within the estimated time or not. The Worker Wesnecki testified as well
that in fact on the days his wife helped him with his contract the time for
completion went from three hours to one-half hour, a significant savings in
time.
[41]
The evidence is that each
of the Workers could reject work on any contract, as did one of the Workers
when the client moved its business location to a more distant location that the
Worker chose not to continue to service due to travel time and the extra costs
of same. In addition, each of the Workers could turn down work on any new
contract offered to them. The evidence is also that if the client terminated
the agreement with the Appellant, the contract with the Worker who serviced
that client, whether oral or written, was also at an end and hence the Worker
had some uncertainty as to its continued compensation. These facts are
consistent with the control an independent contractor has over the work he is
prepared to do as well as the level of compensation and hence profit he might
gain from any work undertaken. The Workers also generally testified that they
were free to work for other parties and hence could increase their profit by
not only taking on more work, either from the Appellant up to three contracts
or from any other party, and could utilize helpers if they so chose. As
Sheridan J. confirmed in paragraph 14 of the Watson (c.o.b. Bonnie’s Cleaning
Services) case after discussing similar facts as above:
14 …
None of this is consistent with an employer-employee relationship where a
diligent employee can rely on receiving a fixed amount if she performs her
duties during working hours assigned to her by the employer. Rather, such
uncertainty points to a finding … as an independent contractor.
[42]
The Respondent has
suggested that since the Workers used only family members as helpers and did
not pay them that the fact they were entitled to hire helpers should be given
little weight, relying on the decision of Bédard J. in Priority One
Janitorial Services Inc. v. Minister of National Revenue, 2012 TCC 1, 2012
CarswellNat 122. In that case, Bédard J. found that the only evidence of the
use of helpers was one of the workers who used his spouse. In the cases at hand,
at least two of the Workers used family members, both a spouse and mother-in-law
and all of the Workers were consistent in their evidence they were allowed to
use helpers and accordingly this case is distinguishable from Priority One.
If a person in business has the flexibility to hire helpers then it seems clear
to me he has the flexibility to increase his profits or reduce his losses as
also found by Weisman J. in Mediclean Inc v. Canada (Minister of National
Revenue, M.N.R.), 2009 TCC 340, [2009] T.C.J. No. 288 (QL), who
at paragraph 54 stated that “where one has the right to hire a helper or a
replacement, that automatically entails the chance of profit and indeed a risk
of loss”.
[43]
There is some dispute
as to whether the Workers could hire replacements. One of the Workers testified
they could hire replacement workers although the general evidence from most of
the Workers is that they at most utilized family members as helpers or did not
hire replacements because they were required to notify the Appellant if they
were unable to attend to do their work and the Appellant provided the
replacement. Notwithstanding that most Workers may have had to follow the
procedure of notifying the Appellant who provided the replacement, it is clear
that if such replacement was provided, the Worker was charged an hourly rate as
agreed in the written contract or oral agreement for the provision of such
replacement which was deducted from the Worker’s next payment. In these cases,
it is irrelevant then whether the Worker was required to hire the replacement
or simply be responsible for paying for one. The risk was the Worker’s and such
risk automatically entails the chance of profit or risk of loss as Weisman J.
alluded to in Mediclean above.
[44]
The Respondent has also
argued that since the Workers were given keys and testified they were not
permitted to release the keys to other parties that in fact they could not
practically hire any replacements. The Respondent called as a witness a client
representative who testified that she would only expect under the terms of
their contract with the Appellant that any replacement would have to be a bonded
employee of the Appellant. Frankly, this evidence serves to rationalize the
other evidence of the Workers that the Workers were required to notify the
Appellant if they could not attend and the Appellant would send a replacement
which I accept as the credible evidence in respect of hiring replacements.
However, as I stated above, the fact that client security protocols may
prohibit a Worker from passing on a key to a replacement did not relieve the
Worker from taking financial responsibility for the cost of the Appellant
supplying such replacement so the Risk of Loss was still with the Worker.
[45]
The Respondent has also
suggested that in most cases after any complaints by clients, that the
Appellant would investigate and suggest a “course correction” where the remedy
to the deficiency would be carried out at the next attendance and hence there
was no risk of loss to the Worker from deficient work. Frankly, since the
Worker was paid the same regardless of how long it took to complete any work,
it seems to me that if a Worker is required to do any remedial work next time
that he or she would lose some flexibility in completing work faster or take
longer to complete such work so there would still be some risk to the Worker.
There is evidence that where some of the work was not performed altogether that
the Worker Sachetti had to re-attend to remedy the deficiency. Accordingly, it
seems to me that where the deficiency is a more serious matter, the option to
simply remedy the work next time or do better after retraining was not an
option.
[46]
Finally with respect to
this factor, the Respondent has suggested that since the Appellant provided all
tools and equipment at no cost to the Workers that the Workers had no
responsibility for investment or management in performing its work. As I stated
earlier, the Worker had an investment in its vehicle and covered its travel
expenses as well as bore the risk of replacement workers and remedying
deficient work so I find the Worker did have an investment in some tools and
did have responsibility for the performance of his or her work.
[47]
In my view, the Workers
had both a chance of Profit and Risk of Loss having regard to the above factors
as well as an investment in their enterprise which are clear indicia of
commerciality and an independent contractor status.
Other Factors
[48]
The Respondent has
argued that since the Workers did not advertise their services, invoice the
Appellant or register as a GST Registrant pursuant to the Excise Tax Act
that there was little indicia of commerciality and hence such factors support a
relationship of employment.
[49]
With respect to the
Respondent, the evidence is clear that most of the Workers obtained their
contracts by searching for work online. This is certainly how most of the
Workers came into contract with the Appellant. Most of the Workers were
interested in only enhancing their other income and thus turned to the internet
for leads as opposed to spending dollars on advertising which frankly makes
good business sense in the circumstances. The degree of commerciality must be
analysed in the context of the business; both its nature and size included,
which in the case of these Workers, would suggest it would not be profitable to
expend unnecessary sums to advertise.
[50]
The fact the Workers
did not invoice the Appellant at all is not determinative when one considers
they were under a fixed contract for each location that paid them a fixed
amount twice monthly, In these circumstances, it made little sense to invoice
the Appellant especially when the Workers were not GST registrants due to the
fact their income from such commercial activity did not exceed the $30,000 per
year income threshold under the Excise Tax Act.
[51]
These other factors are,
in my view, indeterminative and so I give them little or no weight.
Conclusion
[52]
Having regard to the
above analyses, I am of the strong view that the Wiebe Door factors
support a finding that the Workers were independent contractors, which finding
is consistent with the subjective intention expressed in the written subcontracts
entered into by all the four Workers who executed such signed agreement. With
respect to the two workers who do not appear to have signed a written
agreement, the Wiebe Door factors speak for themselves in their regard
and there is no need to dwelve further into the matter of the intention of the
parties.
[53]
The appeals of the
Appellant are allowed in full, without costs.
Signed
at Ottawa, Canada, this 26th day of April 2013.
“F.J. Pizzitelli”
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