Ferme Riomil Inc. v. M.N.R., docket 96-2221-UI

Date: 19980318

Docket: 96-2221-UI

BETWEEN:

LA FERME RIOMIL INC.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

SOMERS D.J.T.C.C.

[1] This appeal was heard at Sherbrooke, Quebec on February 11, 1998.

[2] The appellant is appealing a determination by the Minister of National Revenue ("the Minister") according to which the worker, Michel Isabelle, was employed with the appellant during the period from November 13, 1995 to March 1, 1996 in insurable employment within the meaning of the Unemployment Insurance Act ("the Act"), on the ground that there was an employer-employee relationship between them. It was determined that the appellant was the deemed employer of the worker as it paid the salaries.

[3] Section 3(1) of the Act reads in part as follows:

3. (1) Insurable employment is employment that is not included in excepted employment and is

(a) employment in Canada by one or more employers, under any express or implied contract of service or apprenticeship, written or oral, whether the earnings of the employed person are received from the employer or some other person and whether the earnings are calculated by time or by the piece, or partly by time and partly by the piece, or otherwise;

. . .

[4] In arriving at his decision the Minister relied on the following facts:

[TRANSLATION]

(a) the appellant operated a dairy farm with about 100 cows;

(b) the appellant's sole shareholder was Paul-Émile Laliberté;

(c) on November 3, 1995 the farm burned down;

(d) the appellant employed the services of Denis Guay to rebuild the farm buildings;

(e) the appellant bought the materials required by Denis Guay;

(f) the appellant paid the salaries of Denis Guay's workers every Friday;

(g) Denis Guay incurred no financial outlays;

(h) the worker was the boyfriend of Paul-Émile Laliberté's daughter;

(i) Paul-Émile Laliberté introduced the worker to Denis Guay;

(j) the worker was hired as an unskilled labourer;

(k) the worker had a schedule of 7:30 a.m. to 5:30 p.m. five days a week;

(l) Denis Guay gave the worker instructions;

(m) the worker was supervised and controlled by Denis Guay;

(n) the worker was paid $8 an hour;

(o) the appellant paid the salary by cheque on receipt of the worker's time sheet;

(p) there was a contract of service between Denis Guay and the worker;

(q) during the period at issue the appellant was the worker's deemed employer.

[5] All the facts alleged in the subparagraphs of paragraph 5 of the Reply to the Notice of Appeal were admitted by the appellant, except the fact alleged in subparagraph (q).

[6] The only witness to be heard at this hearing was Paul-Émile Laliberté, president of La Ferme Riomil Inc. Paul-Émile Laliberté's primary occupation is farmer. The appellant has 400 acres suitable for cultivation. In 1995 there was a major fire which destroyed the farm buildings; as he had no knowledge of construction Paul-Émile Laliberté employed the services of Denis Guay to rebuild the building. Denis Guay hired 12 workers.

[7] The materials were paid for by the appellant and not by Denis Guay. The labourers were paid by the week at a rate of $8 an hour and worked from 7:00 a.m. to 5:30 p.m. five days a week for a period of three months. The appellant paid the labourers' salaries according to the time sheet prepared by Denis Guay. The worker was supervised and controlled by Denis Guay.

[8] Through its counsel, the appellant argued that the worker's employment was excepted because it was casual employment. The appellant relied on s. 3(2)(b) of the Act, which reads as follows:

3. (2) Excepted employment is

. . .

(b) employment of a casual nature other than for the purpose of the employer's trade or business;

. . .

[9] For employment to be excepted two conditions must be met: first, it must be casual, and second, it must be for purposes other than those of the employer's trade or business. At first glance the worker's employment meets the two conditions stated in s. 3(2)(b) of the Act.

[10] In Evelyn and Manuel Roussy and M.N.R., a decision signed on October 7, 1992 (A-123-91), the Federal Court of Appeal held as follows at page 5:

If, however, someone is required to work specified hours for a definite period or on a particular project until it is completed, this is not casual, even if the period is a short one.

[11] In the instant case Michel Isabelle is an employee. This employment meets all the requirements of the tests laid down in the judgment in Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553. The employee was paid by the hour and supervised and controlled by Denis Guay, whose services were employed by Paul-Émile Laliberté.

[12] At the same time, the Court must decide who the deemed employer was. Section 3(1)(a) of the Act permits employment to be insurable regardless of whether the employee receives his pay from the employer or some other person.

[13] The legislature's intent is confirmed by s. 75(1)(d) and (f) of the Act, which reads as follows:

75. (1) The Minister may, with the approval of the Governor in Council, make regulations

. . .

(d) respecting the manner in which any provision of this Act that applies or extends to an employer of an insured person shall apply or extend to any person by whom the remuneration of an insured person for services performed in insurable employment is paid either wholly or in part, and to the employer of such person;

. . .

(f) providing that in any case or class of cases where insured persons

(i) work under the general control or direct supervision of or are paid by a person other than their actual employer, or

(ii) work with the concurrence of a person other than their actual employer on premises or property with respect to which that person has any rights or privileges under a licence, permit or agreement,

that other person shall for the purposes of paying premiums under this Act be deemed to be the employer of the insured persons in addition to the actual employer, and providing for the payment and recovery of premiums paid in respect of the insured persons;

. . .

[14] Section 18 of the Unemployment Insurance Regulations was adopted pursuant to s. 75 of the Act and reads as follows:

18. (1) Where, in any case not coming within any provision of these Regulations, an insured person performs services

(a) under the general control or direct supervision of or is paid by a person other than his actual employer, or

(b) with the concurrence of a person other than his actual employer, on premises or property with respect to which that other person has any right or privilege under a licence, permit or agreement,

that other person shall, for the purpose of calculating the earnings of the insured person and paying, deducting and remitting the premiums payable thereon under the Act and these Regulations, be deemed to be the employer of the insured person in addition to the actual employer, but the amount of any employer’s premium paid by that other person in accordance with this subsection is recoverable by him from the actual employer.

[15] In light of ss. 75 of the Act and 18 of the Unemployment Insurance (Collection of Premiums) Regulations it can be concluded that the deemed employer is the appellant.

[16] Although the worker, Michel Isabelle, was supervised and controlled by Denis Guay, whose services were retained by the appellant, the appellant is the deemed employer. The appellant paid for the materials and paid the employees' salaries. Denis Guay made no financial outlay for the rebuilding of the buildings over a three-month period. The employee was hired to do a certain project in a certain period of time. Under the foregoing sections, this is not casual employment; additionally, the worker's deemed employer is in fact the appellant.

[17] The appeal is dismissed and the decision by the Minister is affirmed.

Signed at Ottawa, Canada, March 18, 1998.

J.F. Somers

D.J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 16th day of November 1998.

Kathryn Barnard, Revisor