Frontier Business Centre Ltd. v. M.N.R., docket 97-1106-UI

Date: 19980519

Docket: 97-1106-UI,

97-124-CPP

BETWEEN:

FRONTIER BUSINESS CENTRE LTD.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

ReasonsFOR Judgment

(Delivered from the bench in Saskatoon, Saskatchewan, on April 2, 1998.)

Bowman, J.T.C.C.

[1]            These appeals under the Unemployment Insurance Act (now the Employment Insurance Act) and the Canada Pension Plan involve the question whether two commissioned salesmen, Ronald Bussiere and Henry Krahn were employed by the appellant under a contract of service and were therefore employed in insurable employment within the meaning of the Unemployment Insurance Act and the Canada Pension Plan.

[2]            Ronald Bussiere and Henry Krahn were described as "the workers" in the reply to the notice of appeal and shall sometimes be so referred to herein.

[3]            The appellant carried on business in the period in question, 1995, as an insurance agent and also as a seller of new and used farm equipment.

[4]            Mr. Bussiere and Mr. Krahn were engaged as salesmen of new and used farm equipment.

[5]            They had no fixed hours and operated out of their homes. They were discouraged from coming to the office except to report sales or to pick up equipment for the purpose of display or to deliver to the purchasers. The reason for this was that Mr. Lalonde, the President, wanted to sell from the office himself and to avoid the payment of commission.

[6]            The appellant was owned by Robert Lalonde and Raymond Bussiere, a cousin of Ronald Bussiere.

[7]            The workers had no fixed territory although Mr. Lalonde suggested that they endeavour to avoid overlapping, a suggestion to which they paid little attention. They usually worked out such conflicts between themselves. Mr. Krahn was retired and earned about $9,000 in 1995. Mr. Krahn was of a Mennonite background and sold more to the Mennonite community. Mr. Bussiere was more aggressive and earned about $56,000 from commissions in 1995.

[8]            They were paid a commission of 30% of the net profit on the sale of any equipment. They were not required to sell anything or to meet any sales quotas. If they wanted a holiday they simply took time off for which they were not paid. They paid their own expenses and these were taken into account when the commissions were paid on the basis that they bore 30% of the expense and the appellant bore 70%.

[9]            They were free to sell other products although in practice they did not sell competitor's products and would have been discouraged from doing so.

[10]          They paid their own cost of cellular phones that they used. Mr. Bussiere testified that he kept an office in his home which he paid for himself and he deducted it in the computation of his income. He was not reiumbursed for the cost. Mr. Bussiere also advertised at his own expense. They were free to hire other persons to assist them. They were not subject to the direction of the appellant, although sometimes the appellant would supply them with leads.

[11]          Mr. Krahn used his own automobile; Mr. Bussiere used the company's truck and in return the company used Mr. Bussiere's truck. Both had access to the company's truck for making deliveries if they needed it. They set their own hours and decided when and where they would work. They did not need the appellant's approval to take time off.

[12]          Mr. Krahn was put under the company's medical and drug plan, Mr. Bussiere was not. They recorded no hours of work. They were free to hire other people, for which they paid, and they were free to choose what sales they would follow up on. They had a discretion as to how much they would charge for equipment and what they would allow on trade-ins.

[13]          Based on the evidence of Mr. Lalonde, Mr. Bussiere, and the questionnaire filled in by Mr. Lalonde and put in evidence by counsel for the respondent, I have no hesitation in finding that Mr. Bussiere and Mr. Krahn were self-employed independent salesmen and were not employed under a contract of service.

[14]          The fourfold test set out in Wiebe Door Services Ltd. control, use of tools, integration and chance of profit, risk of loss, points clearly to this conclusion. There was no control -- they came and went as they saw fit, they were subject to no supervision, they chose their own hours and their own territory. They were not integrated into the organization although they no doubt contributed to the overall profit in the same way as any independent contractor who performs services to the company would. They substantially provided their own tools, such as cars and cellular phones, although they could use the company's truck on occasion for deliveries. They clearly had a chance of profit - the more they sold the more they made - and the risk of loss - if they did not sell, they made no money and they lost their running expenses such as home office and cellular phones.

[15]          The Wiebe Door case stands for the proposition that all factors must be taken into account. No single factor can necessarily predominate and each, depending on the circumstances of the particular case, must be assigned it proper weight. Here, all of the guiding factors point to the conclusion that Mr. Bussiere and Mr. Krahn were not employees and were not employed under a contract of service.

[16]          The appeals are therefore allowed and the determinations of the Minister of National Revenue are reversed.

Signed at Ottawa, Canada, this 19th day of May 1998.

"D.G.H. Bowman"

J.T.C.C.

COURT FILE NOS.:                                                              97-1106(UI)

                                                                                                                97-124(CPP)

STYLE OF CAUSE:                                                               Frontier Business Centre Ltd. and

                                                                                                                The Minister of National Revenue

PLACE OF HEARING:                                                         Saskatoon, Saskatchewan

DATE OF HEARING:                                                           April 1-2, 1998

REASONS FOR JUDGMENT BY:                      D.G.H. Bowman

DATE OF REASONS FOR JUDGMENT:          May 19, 1998

APPEARANCES:

Agent for the Appellant:                                     Robert Lalonde

Counsel for the Respondent:                              Marvin Luther, Esq.

COUNSEL OF RECORD:

For the Appellant:                

Name:                                                                --

Firm:                                                  --

For the Respondent:                                                             George Thomson

                                                                                                                Deputy Attorney General of                                                                                                                              Canada

                                                                                                                                Ottawa, Canada

97-1106(UI)

97-124(CPP)

BETWEEN:

FRONTIER BUSINESS CENTRE LTD.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Appeals heard on April 1-2, 1998, at Saskatoon, Saskatchewan, by

the Honourable Judge D.G.H. Bowman

Appearances

Agent for the Appellant:             Robert Lalonde

Counsel for the Respondent:      Marvin Luther, Esq.

JUDGMENT

          The appeals are therefore allowed and the determinations of the Minister of National Revenue are reversed in accordance with the transcript of the reasons for judgment.

Signed at Ottawa, Canada, this 20th day of May 1998.

"D.G.H. Bowman"

J.T.C.C.