22 December 1994 External T.I. 9431565 - INDIANS - EMPLOYEES

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

		943156
XXXXXXXXXX	J.D. Brooks

Attention: XXXXXXXXXX

December 22, 1994

Dear Sirs:

This is in reply to your letter of December 6, 1994 in which you requested our views as to whether a certain unidentified tribal council you represent would qualify as an organization described in Guideline 4 of the Department's Indian Act Exemption for Employment Income Guidelines.

The tribal council's legal head office is on a reserve, and it maintains a payroll office on reserve, however its main administration and operations office is not on reserve but is located in a city which is central to several Indian bands in the council. All the management staff work at the administration office.

You also stated that the tribal council is incorporated and that it is governed by a board of directors and that the managers take their direction from the board of directors. The board of directors meets approximately monthly and always holds its meetings on one of the reserves of the bands which the tribal council represents.

We provide the following general information which addresses your concern but is not necessarily applicable to any specific tribal council.

It is a question of fact as to whether an organization is "resident on reserve". As stated in the Guidelines, an employer is resident on reserve if "the reserve is the place where the central management and control over the employer organization is actually located. The central management and control of an organization is usually considered to be exercised by the group that performs the function of a board of directors of the organization. However, it may be that the real management and control of an organization is exercised by some other person or group. Generally, management and control is exercised at the principal place of business but it is recognized that this function may be legitimately exercised in a place other than the principal administrative office of the organization." Where an organization which would otherwise not be considered to be resident on reserve is asserting that it satisfies the definition because it holds its board of directors meetings on reserve, it should generally be considered to satisfy the definition where management and control over the organization is legitimately exercised during those meetings. In addition, in our view, the fact that the board of directors meetings are held on different reserves would not, in and by itself, cause an organization to not be considered resident on reserve.

Although we have provided these general comments, a review of the minutes of boards of directors meetings and resolutions or by-laws passed thereat would be required to conclusively resolve this question of fact and this would best be resolved by a District Office. Nevertheless, in our view, in a situation where the board of directors meet monthly on a reserve, albeit different reserves, at which decisions are made which direct an organization's operations, such an organization would generally be considered resident on reserve.

We trust that these comments will be of assistance.

R. Albert
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch