Pigeon v. M.N.R., docket 98-195-UI

Date: 19980922

Dockets: 98-195-UI; 98-196-UI; 98-197-UI

BETWEEN:

MARCEL PIGEON,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Tardif, J.T.C.C.

[1] These are appeals relating to different periods in which the appellant did work for different payers. In case 98-195(UI), the periods at issue were October 9 to October 28, 1995 and December 4, 1995 to September 28, 1996, and the payers were Marcel Martin and Denise Tremblay. In case 98-196(UI), the period at issue was October 7 to November 2, 1996 and the payer was Sylvain Beaumont. Finally, in case 98-197(UI), the period at issue was July 7 to July 27, 1996 and the payers were Solange Brisson and Rodrigue and Oscar Thibault.

[2] Counsel agreed to proceed on common evidence in all three cases. It was first clearly indicated that the work done by Marcel Pigeon was essentially the same for all the payers and for all the periods at issue. The appellant testified at length. He stated he had been a forestry worker since the 1970s. Over the years he had worked for various employers, including the U.P.A. (for 17 years), the Rexford company, and so on. He had also done various jobs, including cutting timber and measuring; he had also been a foreman responsible for timber yards and water transport. In addition, he has worked as a busher in recent years. The evidence is that the appellant is still involved in the forestry industry.

[3] In 1992 he was forced to recognize that his physical ability was seriously affected by back pain and a problem in one shoulder. The doctors he consulted at the time urged him to find a new line of work. He tried unsuccessfully to obtain compensation from the C.S.S.T.. He also tried in vain to take advantage of various training programs so he could be recycled into other areas.

[4] Finding it completely impossible to obtain employment, the appellant took a number of initiatives with a view to doing various types of work for various businesses. Thus, he worked for companies such as Hydro Québec. In the case of Hydro Québec, for a predetermined sum he did work consisting essentially of clearing right-of-ways so Hydro Québec lines could go through.

[5] As far as the work done for the payers referred to at the outset is concerned, the appellant did what was described as gardening: in other words, it involved clearing certain forested areas or private woodlots in which the trees had grown to maturity. This work entailed selectively cutting certain trees while leaving new growth in order to ensure continuity. The trees he had to cut down were shown to him by the owners of the woodlot or were marked by paint or a ribbon.

[6] Following behind the specialists in forestry development, the appellant worked alone, although on a few occasions his son went with him to the work site and gave him a hand.

[7] The felled timber then had to be hauled to the road for loading on trucks which in turn would transport it to the purchasers. The hauling of the timber was done by the woodlot owners with the appellant’s help.

[8] The appellant was paid by the various payers in the same way. They kept 50 % of the value of the wood cut and gave the appellant the other 50 %; the appellant had to deduct all the expenses associated with the cutting, which left him a weekly salary of approximately $500 for the periods at issue. He explained that experience told him exactly how many trees he had to cut down for a cord of wood, and as he knew the price paid, he could calculate quite accurately the remuneration he would receive.

[9] The appellant had to pay all the expenses associated with cutting the timber. He cut it using his own chainsaws and assumed with respect to these all maintenance and repair costs and costs relating to their use. Transportation costs incurred for hauling the timber to the road were the only costs for which he was not responsible.

[10] He also explained that the woodlot owners visited him on the various sites several times a week in order to see how the work was progressing.

[11] He was usually paid when the woodlot owner received payment for the wood sold. The appellant generally worked from 8 a.m. to 5 p.m. every day, although he sometimes began much earlier so he could leave sooner. In this regard, he received no instructions as to work method or as to the number of hours he was to put in to complete his work. In other words, he was in complete control of his schedule, except that the woodlot owners wanted the work done quickly and well.

[12] The appellant next called Jocelyne D’Astous who was acquainted with the appellant and the payers. She was especially well informed about payment methods. At the payers' request she had had to take the necessary steps for them to obtain an employer’s number so the usual deductions could be made from the salary paid to the appellant.

[13] It was also established by her testimony that during the periods at issue the payers had only one employee, the appellant. Ms. D'Astous indicated that she had had to answer questions from the payers as to the cost of an employee earning approximately $500 a week. She answered by indicating to those concerned what it cost for various deductions, such as unemployment insurance, workman’s compensation and so on.

[14] Ms. D’Astous’s testimony was followed by that of Jean-Louis Belzile, a timber measurer for the U.P.A. During the periods at issue Mr. Belzile was responsible for transporting timber from the private lots to the purchasers. He explained that farmers generally had a quota allowing them to sell certain quantities of timber; that quota had to be used, otherwise the producers risked losing it. He also explained that the quotas were not cumulative. Thus, a farmer who did not take advantage of the quota allocated to him could not expect to fill a double quota the following year, and so it was important to use up the allocated quota each year.

[15] Mr. Belzile, who had over 25 years’ experience in the forestry industry, explained that it was a very special sector of economic activity in which work was generally performed under three distinct types of arrangement. Under the first the work was done by contractors specializing in the field in question, under the second it was done by self-employed workers and under the third employees did the work. He explained that employees in this field were actually paid according to a formula that was unique and special to them. He thus indicated that workers were paid essentially on the basis of work done: lumberjacks were paid according to the number of cords of timber cut, the price varying by species. In general the industry worked with two different types of timber: conifers and deciduous trees, commonly called hardwood or softwood.

[16] Mr. Belzile also said that forestry workers were themselves responsible for paying all costs relating to the use of tools they needed to do their work, and he indicated that these unique workers were given equally unique treatment in tax matters, that is, they were entitled to claim expenses related to the performance of their work, even though they were neither self-employed workers nor contractors.

[17] The respondent called Marcel Martin, Sylvain Beaumont and Rodrigue Thibault. These were the three individuals who paid the appellant’s salary during the period at issue in the three appeals herein. It was quite clear from the testimony of these three witnesses that the payers in all three cases knew the appellant relatively well: all had used his services because he had an excellent reputation as a forestry worker. All three witnesses spoke very highly of the appellant's qualifications, skills and knowledge with respect to selective cutting.

[18] In particular, Rodrigue Thibault indicated that the appellant worked efficiently while at the same time being respectful of the environment. He added that the appellant loved the forest and always treated the woodlot where he was working as if it was his own. He was careful of the new growth and did his work in a way that was orderly, tidy and beneficial to the woodlot owner.

[19] All three witnesses also clearly indicated that the work involved no clear-cutting, in which everything is cut down with no concern for the future. They indicated that for that reason it was essential that the work be done by someone who was responsible, competent and reliable. They indicated that they were interested in the work done by the appellant as he ensured that everything was in keeping and consistent with their expectations. Finally, they indicated how the appellant was paid, all of which essentially confirmed the appellant’s testimony.

Analysis

[20] The respondent argued that this was a case in which everything was arranged to enable the appellant to receive unemployment insurance benefits. Although recognizing that the courts had given individuals the right to do so, counsel added that those were cases in which the courts were required to be even more vigilant in analyzing the facts and to determine whether there was not a disguised or camouflaged contract of service.

[21] I think it is important to note in the instant case that work relating to the cutting of timber or forestry work in general is a very significant sector of economic activity, in which the rules applicable to workers are at once exceptional and very special.

[22] In general, the work is seasonal and physically extremely difficult, requiring the use of very special tools and equipment. These characteristics undoubtedly explain a number of facts: workers are required to provide their own tools and personally assume all expenses relating to their use, which is not usually the case for most employees.

[23] Again, forestry is unusual in the modes of payment applicable to workers in that field: they are generally paid exclusively according to what they produce, so that the function of supervision or control does not take the traditional form. Further, the quality and quantity of timber cut are often the only means of verifying the lumberjack’s efficiency. It is demanding work and methods may vary from one worker to another and efficiency does not necessarily hinge on use of the same work methods. Methods differ from one lumberjack to another. Consequently, such workers are often left to themselves: payers exercise their supervisory authority by examining the quality and quantity of work done much more than on the basis of indicia relating to the way in which the work should be done. Alongside the verification of the performance of the work, supervisory authority is of course exercised through the description of the work to be done, which defines the start and the end of the work period and also the timber to be cut.

[24] I believe that in the instant case the weight of the evidence clearly showed that the appellant, in performing work for any of the payers in question, was always subordinated to them. Indeed, one of them very clearly and unequivocally admitted that the appellant did not act on his own initiative and that he made no decisions. Although some of the work he did might suggest that he was independent, it was work he was given which he essentially did for and on behalf of the payer, who had expressly laid down the parameters of the work to be done.

[25] In my view, the evidence quite persuasively showed that the appellant was highly competent in performing his work; his competence and experience meant a correspondingly reduced need for instructions and recommendations from the payers. However, they could and indeed did point out, specify and define what they wanted when indicating to him the beginning and end of the work periods.

[26] The other aspect, namely that the payers left absolutely nothing undone to ensure that everything was carried out properly, correctly and in due form does not seem significant. Moreover, the salaries were reasonable.

[27] So far as an arrangement is concerned, I am satisfied that the parties would have agreed that the insurable earnings represented the maximum insurable amount; I am also satisfied that the payers would not have taken the trouble to structure an entire business for the benefit of the appellant alone. They were very interested in the quality of the appellant’s work and did what was necessary to comply with the special rules of the industry, while assuming their responsibilities as employers. The appellant was a competent, reliable and responsible person. He needed to work to earn his living and wanted to work.

[28] The payers all had the same concern: they wanted a specific quality of work and the appellant had the qualifications to meet their expectations. They agreed on performance and salary provisions using a formula which was followed and respected in every particular. The work was done in accordance with the rules and tests for determining whether there is a contract of service.

[29] In the circumstances, I have no hesitation in concluding that the facts described establish the existence of a genuine contract of service. Certainly, some aspects of the work might suggest a conclusion that the appellant was a self-employed worker. However, I feel that such a conclusion must be excluded given the fact that forestry work is of a special nature and has its own particular characteristics.

[30] For these reasons, the appeals are allowed and the work done by the appellant from October 9 to October 28, 1995 and from December 4, 1995 to September 28, 1996 for the payers Marcel Martin and Denise Tremblay, from October 7 to November 2, 1996 for the payer Sylvain Beaumont, and from July 7 to July 27, 1996 for the payers Solange Brisson and Rodrigue and Oscar Thibault was performed pursuant to a genuine contract of service.

Signed at Ottawa, Canada, this 22nd day of September 1998.

"Alain Tardif"

J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 30th day of April 1999.

Erich Klein, Revisor