Citation: 2012 TCC 4
Date: 20120104
Dockets: 2011-2056(EI)
2011-2057(CPP)
BETWEEN:
INTEGRANUITY MARKETING LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
Integranuity Marketing Ltd.
(“Integranuity”) appeals with respect to decisions of the Minister of National
Revenue that Ian Leslie was engaged in insurable and pensionable employment for
purposes of the Employment Insurance Act and the Canada Pension Plan.
The sole issue is whether Mr. Leslie was engaged as an employee or independent
contractor.
[2]
The period at issue is from October
10, 2009 to February 22, 2010.
Background
[3]
In relevant period, Integranuity
was in the business of providing direct sales services for large organizations
such as financial institutions and telecommunications firms. Sales were carried
out by various methods such as door‑to-door campaigns, at events and
through kiosks.
[4]
Integranuity was based in Burnaby, British Columbia and was managed and owned by Reynold Cha.
[5]
The worker at issue in this
appeal, Ian Leslie, was engaged by Integranuity in door-to-door sales for Shaw
Communications and was paid on a commission basis. Shaw approved Mr. Leslie’s
engagement and issued a Shaw badge to him.
[6]
Mr. Leslie signed a standard form contract which stated that he was
engaged as an independent distributor and did not qualify for benefits such as
minimum wage, worker’s compensation or employment insurance.
[7]
The contract describes that the
worker is an independent businessperson, with the opportunity for profit and
risk of loss, and with control over the place, time and method by which
products are offered for sale. It states that the worker is not assigned
routes, that the worker can select his own days and hours of work and that the
worker is not required to ask permission for time off. Integranuity could,
however, designate a time to pick up or return products. The contract also
states that the worker is free to develop their own sales presentation.
Analysis
[8]
The principles to be applied in a
case such as this were recently set out in TBT Personnel Services Inc. v The
Queen, 2011 FCA 256. Leave to appeal this decision is currently pending,
but the decision succinctly sets out the relevant principles as they currently
stand. The relevant parts are reproduced below:
[8]
The leading case on the principles to be
applied in distinguishing a contract of service from a contract for services is
Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553 (C.A.).
Wiebe Door was approved by Justice Major, writing for the Supreme Court
of Canada in 67112 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983. He summarized
the relevant principles as follows at paragraphs 47-48:
47.
[...] 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.
48.
It bears repeating that the above factors constitute a non-exhaustive list, and
there is no set formula as to their application. The relative weight of each
will depend on the particular facts and circumstances of the case.
[9] In Wolf v. Canada, 2002 FCA 96, [2002] 4 F.C. 396 (C.A.),
and Royal Winnipeg Ballet v. Canada (Minister of National Revenue - M.N.R.),
2006 FCA 87, [2007] 1 F.C.R. 35, this
Court added that where there is evidence that the parties had a common
intention as to the legal relationship between them, it is necessary to
consider that evidence, but it is also necessary to consider the Wiebe Door
factors to determine whether the facts are consistent with the parties'
expressed intention.
[9]
The central question,
then, is whether Mr. Leslie was carrying on business on his own account.
[10]
I will first consider
the parties’ intent. The contract is well
drafted in this respect. Based on this document, the parties intended that Mr.
Leslie carry on business on his own account.
[11]
Mr. Leslie testified that he did
not carefully read the contract. I accept this testimony but it does not negate
his intention. Mr. Leslie willingly signed the contract, and by that action he
intended to accept the contract’s terms.
[12]
I now turn to the Wiebe
Door factors of control, chance of profit, risk of loss and ownership of
equipment.
[13]
The written contract suggests that many of the Wiebe
Door factors are supportive of the parties’ expressed intent. The worker is
to have considerable freedom as to how to perform the work and he has to bear
expenses relating to the work, such as transportation. Mr. Cha confirmed in his
oral testimony that the contract properly reflects the nature of the
relationship.
[14]
The problem here is that Mr.
Leslie’s experience, as expressed in his testimony, was different than that
suggested by the written contract. He testified that he worked six days a week
and that workers worked in teams, not independently. They started work each day
at a set time at Integranuity’s office where they learned about the applicable
promotions for the day and were given a list of houses to visit in a particular
area (called “lead sheets”). The team traveled together in one of the worker’s
vehicles to the designated area, the team arranged when to take a break for a
short dinner, and they returned to Integranuity’s offices after work to review
the daily sales with management.
[15]
Mr. Leslie testified that he was
criticized on one occasion when he and a friend did not travel with the team
and they took a break before starting work. He also stated that Integranuity
sent someone to accompany his friend on the door‑to‑door sales,
presumably to boost performance.
[16]
This testimony, which I
accept, calls into question Integranuity’s lack of control which is outlined in
the written contract.
[17]
Counsel for
Integranuity suggests that there could be reasons to explain Mr. Leslie’s
experience which are not inconsistent with the written contract. I agree with
this, but the evidence did not satisfy me in this respect. On the whole, I am
not satisfied that the terms of the written contract were being respected by
Integranuity.
[18]
As for Mr. Cha’s
testimony, which supported the contract, I would note that his testimony was self-interested
and that he was the only witness on behalf of Integranuity. None of the other workers
were called to testify. Further, Mr. Cha’s testimony focussed to a great extent
on the worker’s rights as expressed in the contract. These rights are virtually
meaningless unless Integranuity endorsed them in practice. Mr. Leslie’s
experience suggests to me that the corporation did not endorse them, at least
with respect to Mr. Leslie’s engagement. To the extent that there was
inconsistency between the testimony of Mr. Leslie and Mr. Cha, I prefer Mr.
Leslie’s testimony, which appeared to be more straightforward.
[19]
Based on the
assumptions by the Minister, and the evidence as a whole, I have concluded that
Integranuity considered that it could exercise significant control over most of
the aspects of how Mr. Leslie’s work was performed.
[20]
The control factor
strongly points to an employment relationship in this case.
[21]
As for the other Wiebe
Door factors, the lack of reimbursement for expenses supports
Integranuity’s position because it is not typical of an employment
relationship. However, it is not a significant factor since the expenses
incurred were modest – car pooling expenses to work sites and the use of
personal cell phones to call in sales. The other Wiebe Door factors tend
to be neutral. The workers had a chance of profit through commissions, but this
is not uncommon in an employment relationship. There was no significant risk of
loss.
[22]
After considering the
factors as a whole, I have concluded that the relationship was not consistent
with the intention expressed in the contract. In my view, Mr. Leslie was
engaged as an employee.
[23]
The appeal is dismissed, and the
decisions of the Minister are confirmed. Each party shall bear their own costs.
Signed at Toronto, Ontario this 4th day of January 2012.
“J. Woods”
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