Docket: T-349-16
Citation:
2016 FC 1257
Ottawa, Ontario, November 10, 2016
PRESENT: The
Honourable Mr. Justice Barnes
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BETWEEN:
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PEEPEEKISIS
CREE NATION NO. 81
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Applicant
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and
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TODD DIETER
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Respondent
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JUDGMENT AND REASONS
[1]
This is an application by Peepeekisis Cree
Nation No.81 [Peepeekisis] challenging an Adjudicator’s award of compensation
for the unjust dismissal of the Respondent, Todd Dieter.
I.
Background
[2]
Mr. Dieter was engaged by Peepeekisis in April
2011 under a so-called Contract for Professional Services to perform water
delivery services to forty on-reserve households on a weekly basis for a term
of two years. He was to be paid compensation of $45,000 per year in regular
bi-weekly installments. The initial contract expired on April 27, 2013. The
contract was twice extended by mutual agreement of the parties, first to June
30, 2014 and again to July 14, 2015. The written contract for the period
through to July 2015 was never signed by either party, but both parties abided
by its terms until it was unilaterally terminated by Peepeekisis on November
19, 2014. The contract set out the terms of engagement and described
Mr. Dieter as an independent contractor.
[3]
On February 19, 2015, Mr. Dieter brought a
complaint of unjust dismissal under Part III of the Canada Labour Code,
RSC, 1985, c L-2 [Code]. The Minister appointed Mr. Dan Cameron [the
Adjudicator] to determine the complaint and to that end a hearing was conducted
in Regina, Saskatchewan on December 4, 2015. The Adjudicator rendered a decision
in favour of Mr. Dieter on January 28, 2016, awarding him compensation of
$30,000.
[4]
Peepeekisis attacks the decision on the basis
that the Adjudicator lacked jurisdiction to award damages to Mr. Dieter because
he was not a “person” contemplated by section
240 of the Code. Peepeekisis argues that Mr. Dieter was not its employee but
rather an independent contractor without recourse to relief under the Code.
Peepeekisis also challenges the Adjudicator’s determination that Mr. Dieter was
a dependent contractor entitled to statutory relief.
[5]
I do not agree with Peepeekisis that the issues
it raises must be reviewed on the standard of correctness. These are issues
that require an adjudicator to apply the facts concerning the contractual
relationship to a set of common law and statutory principles. Determinations of
mixed fact and law – even those going to the adjudicator’s authority to decide
– are entitled to some deference and are to be reviewed on the standard of
reasonableness.
[6]
There are some obvious problems with the
Adjudicator’s decision. The question that remains, though, is whether those
problems are sufficient to render the decision unreasonable.
[7]
The Adjudicator first considered whether Mr.
Dieter met the common law definition of an employee or, alternatively, whether
he was an independent contractor. In finding Mr. Dieter to be an independent
contractor the Adjudicator employed the following analysis:
i) Todd Dieter; Employee or Independent Contractor?
The leading cases on the test for
determining whether a worker is an employee or independent contractor are the
Federal Court of Appeal’s decision in Wiebe Door Service Ltd. v. M.N.R., [1986]
3 F.C. 553 (C.A.) and the Supreme Court of Canada’s decision in 671122 Ontario
Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983. In Sagaz Industries,
the finding was, “… there is no one conclusive test which can be universally
applied to determine whether a person is an employee or an independent
contractor” and that one must look at “.. the total relationship of the
parties.” While there is no universal test the Sagaz decision endorsed the
approach taken in the Wiebe Door decision, summarized as follows:
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. In making this determination, the level
of control the employer has over the worker’s activities will always be a
factor. However, other factors to consider include 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 tasks.
The key determinates are:
- what level of control does the employer have over the workers
activities?
- does the worker provide his own equipment; maintain the
equipment used,?
- does the worker hire his own helpers?
- does the worker assume financial risk? , eg: costs are higher
than contract anticipated
- is the worker required to make investments? Equipment,
materials, repairs, licencing…
- Is there an opportunity for profit? , eg: costs are much lower
than anticipated
- what is the actual conduct engaged in by the parties?
- what was the actual understanding of the
parties as to the nature of their relationship?
While Mr. Dieter “reported” to the Director
of Public Works and Housing, he was not directly supervised by any member of
the Peepeekisis Cree First Nation. The contract sets out what he had to do, ie:
“..hauling 40 units of water…” not how he had to do it. He was responsible for
any “..assessment fees, payments….required by law, government regulation or
order or by agreement”. He was required to provide his own vehicle and
equipment and pay his own operating expenses, he was responsible for all losses
in the provision of his services as well as all legal actions or claims rising
as a result of his employment. As well, he received no employee benefits from
the Peepeekisis Cree First Nation.
By these measures , Mr, Dieter was an
independent contractor .
[8]
The above approach cannot be faulted on judicial
review because it represents an appropriate assessment of the evidence applied
to well recognized legal principles. It is, accordingly, a reasonable
conclusion.
[9]
The Adjudicator then went on to determine Mr.
Dieter’s level of contractual dependency in accordance with the decision of the
Ontario Court of Appeal in McKee v Reid’s Heritage Homes Ltd, 2009 ONCA
916, 184 ACWS (3d) 1013. In that decision the Court recognized an intermediate
category between employees and independent contractors (i.e., dependent
contractors) based on a relationship of economic dependency. That category was
defined by the Court in the following way:
[30] I conclude that an intermediate
category exists, which consists, at least, of those non-employment work
relationships that exhibit a certain minimum economic dependency, which may be
demonstrated by complete or near-complete exclusivity. Workers in this category
are known as “dependent contractors” and they are owed reasonable notice upon
termination.
. . .
[36] Given this concern to safeguard
workers who are formally “contractors” but who are in a position of economic
vulnerability, it only makes sense to carve the dependent contractor category
out of the broader existing contractor category and leave the range of the
employee category intact. Therefore the appropriate analysis for distinguishing
employees from “contractors” generally is the existing analysis for
distinguishing employees from independent contractors.
[10]
Applying these principles the Adjudicator found
Mr. Dieter to be a dependent contractor because his “years
of employment were solely with the Peepeekisis Cree First Nation”.
Although this analysis is admittedly thin it is supported by the evidence. If
the scope of work contemplated by the parties was something other than full
time and exclusive, it would be reasonable to expect better evidence on the
point from Peepeekisis. As it was, the governing contract contemplated the
provision of water delivery services up to five days each week to forty homes.
On this basis the Adjudicator’s findings of exclusivity and dependency are
entitled to deference and are not open to challenge on judicial review.
[11]
The Adjudicator then turned to the matter of his
jurisdiction under Part III of the Code and, specifically, his authority to
grant relief under section 240. Instead of considering whether section 240
applied to dependent contractors defined under the common law, the Adjudicator
resorted to the definition of “employee” found
in Part I of the Code. That provision expressly designates dependent
contractors as employees. The Adjudicator’s analysis on this point was limited
to a finding that, at the time of his termination, Mr. Dieter was an employee
of Peepeekisis. On that basis the Adjudicator held that Mr. Dieter was entitled
to damages in lieu of reasonable notice equivalent to the remaining term of his
contract (i.e., $30,000.00).
[12]
The fundamental problem with this analysis is
that the definition of “employee” in Part I of
the Code has been held to be inapplicable to Part III. In Dynamax Canada Inc
v Mamona, 2003 FCA 248, 123 ACWS (3d) 288, the Court accepted as correct an
adjudicator’s finding that Part I of the Code dealing with industrial relations
has no application to Part III dealing with employment standards including
wrongful terminations. By relying on the definition of “employee”
in Part I of the Code, the Adjudicator made a legal error. In the absence of
any definition of “person” in section 240 it was
accordingly necessary for the Adjudicator to consider whether a dependent
contractor at common law was entitled to relief for unjust dismissal.
Unfortunately, the jurisprudence on this point appears to be unsettled. It may
have been open to the Adjudicator to determine that Mr. Dieter was a “person” protected by section 240, but the required
analysis was never carried out. This was a reviewable error.
[13]
In these circumstances the matter must be
referred back for reconsideration. I agree with the parties that there is no
reason why this matter cannot be returned to the same Adjudicator for a
redetermination in accordance with these reasons. Such an approach may minimize
the legal costs associated with the reassessment.
[14]
On the issue of costs I am mindful of the
circumstances facing Mr. Dieter and the long delays he has faced in finalizing
his complaint. I am also concerned about the failure by Peepeekisis to present
a cogent case to the Adjudicator. Had the Band retained legal counsel, the
error that was made here might well have been avoided. In these unusual
circumstances, I am awarding no costs to either party.
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