|
Citation: 2011 TCC 558
|
|
Date: 20111206
|
|
Dockets: 2011-1863(EI)
2011-1864(CPP)
|
|
BETWEEN:
|
|
VIJAY MEHTA,
|
|
Appellant,
|
|
and
|
|
|
|
THE MINISTER OF NATIONAL REVENUE,
|
|
Respondent.
|
REASONS FOR JUDGMENT
(Edited from the transcript of Reasons for Judgment
delivered orally from the Bench on October 27, 2011 in Toronto, Ontario)
Campbell J.
[1] Let the record show that I am now
delivering oral reasons in the matters of Vijay Mehta, which I heard earlier
today.
[2] The Appellant has appealed a
determination by the Minister of National Revenue that Mr. Mehta was engaged in
insurable and pensionable employment by Dixie X-Ray Associates Limited, (which
I will refer to throughout as “Dixie” or the “Payor”), during the period
January 1st, 2007 to August 17th, 2010, pursuant to paragraph 5(1)(a) of
the Employment Insurance Act and paragraph 6(1)(a) of the Canada
Pension Plan. Both appeals were heard together on common evidence.
[3] The issue is whether the
Payor employed Mr. Mehta as an employee or as an independent contractor during
this period.
[4] The Appellant is trained as a
medical diagnostic imaging technician with specialty knowledge in administering
muscular/skeletal ultrasounds. Over the course of his career, he has
established a close liaison with several medical experts in this field and a
number of sports clinics and sports associations that deal with professional
athletes. The Appellant has worked for the Payor for approximately five years,
although he sees patients occasionally at other clinics.
[5] Dixie, the Payor, operates a number of health care
clinics that provide various diagnostic imaging services to the public. Its
hours of operation were Monday to Saturday, 8 a.m. to 8 p.m. The Appellant
performed his duties at the Mississauga, North York and Woodbridge
locations of Dixie. Dixie employed a number of technicians at its locations.
[6] The Appellant can perform a
range of imaging services to the general public who come through the doors at
Dixie, but he is generally performing the specialized imaging, and a large
number of those are performed on, what he termed, his and I quote, “own
patients”, who are referred to him by specialty sports doctors and clinics.
[7] The Appellant testified that
professional athletes are referred to him to receive muscular/skeletal imaging
services. His Tuesday and Thursday days at Dixie are devoted to seeing sports
patients that are referred to him by these outside sources. On Wednesday, he
spends half a day with a specialist doctor at a Dixie location offering injections
to patients. He stated that he has the freedom to bring these doctors to the
Dixie premises to do the injections for the public.
[8] The Appellant's hours of work
could vary but were confined to the hours the Dixie locations stayed open to
the public. His schedule varied according to the Dixie location and the number
of appointments that were booked. His evidence was that he generally worked
from eight to three for Dixie, but due to demand by patients he could be
providing services beyond the 3 p.m. timeframe.
[9] The Appellant received $36 hourly and was paid on a bi-weekly basis by
cheque. He could hire helpers to assist with patients and scheduling but only
Dixie could hire actual substitutes or replacements for Mr. Mehta if it was
required at the clinics.
[10] At the end of the year, Dixie paid
10 per cent of Mr. Mehta's total gross wages for what he described as
a “bonus” for bringing patients to the clinics, and not as vacation pay of
10 per cent as the Respondent characterized it.
[11] The Appellant provided
timesheets to Dixie but not invoices for payment. He also submitted the imaging
results by way of reports to Dixie and Dixie was then responsible for distributing the reports
to the appropriate sources.
[12] Dixie provided the premises rent-free
to Mr. Mehta as well as all of the diagnostic tools and equipment and supplies,
worth approximately $300,000, at no cost to him. In addition, Dixie was
responsible for all repairs and maintenance of the equipment and the premises. Mr. Mehta
testified that he used his own computer to do reports, but the evidence was not
clear that this was a requirement of his duties.
[13] The parties did have a short
work agreement, dated November 5, 2007, which established very little
in respect of what the actual terms and conditions of employment were, and even
the hourly wage and commencement date of the contract were left blank. About
the only relevant item in this one-page document was the reference to the
Appellant's status as a contractor and his personal responsibility for source
deductions.
[14] Certainly, the stated intention of the Appellant and probably Dixie,
although no one appeared on its behalf, was that the relationship was one of
independent contractor and not one of employee–employer.
[15] The question to be asked
is whether the facts brought forth in the evidence today are consistent with
and supportive of the parties' intentions. I am referring here to the Royal
Winnipeg Ballet decision (Royal Winnipeg Ballet v. Minister of National Revenue, [2006] F.C.J. No. 339).
[16] To determine this, the facts
must be analyzed and reviewed within the fourfold test of the Wiebe Door
decision (Wiebe Door
Services v. Minister of National Revenue (1986), 87 D.T.C. 5025 (F.C.A.)), that is, control, ownership of tools, chance of
profit and risk of loss.
[17] The Supreme Court of Canada in Sagaz Industries (more accurately known as 671122
Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59) confirmed
these factors and, at paragraphs 47 and 48, stated the following:
[47] Although
there is no universal test to determine whether a person is an employee or an
independent contractor, I agree with MacGuigan J.A. that a persuasive approach
to the issue is that taken by Cooke J. in Market Investigations, supra.
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.
[18] In concurring reasons in
the decision in Wolf v The Queen, 2002 D.T.C. 6853 (F.C.A.),
Justice Décary of the Federal Court of Appeal stated the following at paragraph 117:
[117] The test, therefore, is
whether, looking at the total relationship of the parties, there is control on
the one hand and subordination on the other. I say, with great respect, that
the courts, in their propensity to create artificial legal categories, have
sometimes overlooked the very factor which is the essence of a contractual
relationship, i.e. the intention of the parties. …
[19] The label, which parties
attach to their work relationship, and the manner in which they describe it are
relevant, but may not necessarily be determinative. However, where the facts
are close and could support a conclusion either of independent contractor or
employee, the intent and mutual understanding of their relationship will be of
paramount importance.
[20] The
Wiebe Door factors may have varying degrees of importance depending upon
the individual facts in evidence in each case. Contrary to the Respondent's
suggestion, the control factor often, although not always, plays a more
dominant role, and in Combined Insurance Co. of America v. Minister of National Revenue, [2007] FCA 60, 2007 F.C.J. No. 124, Justice Nadon of the Federal Court
of Appeal stated, at paragraph 35:
[35] … 2. There is no predetermined
way of applying the relevant factors and their importance will depend on the
circumstances and the particular facts of the case.
Although as a general rule the
control test is of special importance, the test developed in Wiebe Door and Sagaz
will nevertheless be useful in determining the real nature of the contract. [Emphasis added]
[21] I turn next to those
various factors in Wiebe Door. The first I'm going to deal with is
control. Here it is important to remember that it is the “right” to control or
direct the Appellant in the performance of his services and not the “actual”
control that may have been exercised. Respondent Counsel characterized this
factor as being neutral because the Appellant is a highly skilled professional
possessing specialized knowledge who required very little supervision. This would
be true whether Mr. Mehta was an employee or an independent contractor and
causes difficulty in applying the traditional tests of Wiebe Door.
[22] In
these circumstances, where Dixie would not have the necessary skills or knowledge to
supervise and oversee such a skilled individual, the control factor which has
such relevance in other circumstances has simply very little relevance here.
The Appellant did exert a fair amount of control over the type of patients to
whom he provided his services and could set his own hours, but within the
operating hours of Dixie clinics. He also was able to have medical specialists
of his own choosing to attend the clinic to offer injections. These facts
point, on a balance of probabilities, to the Appellant exercising more control
over the type of services he provided at the clinic.
[23] The
next is ownership of tools. This factor clearly supports the conclusion that
the Appellant is an employee because essentially all of the tools and equipment
are owned and maintained by the Payor, Dixie. These assets are worth a substantial amount. We
are not talking about a negligible assortment of supplies. In addition, the
Appellant is free to use the Payor's premises and facilities at no cost.
[24] The
next factor is profit. The only way normally the Appellant could pocket more
money was by working greater hours at his set rate of hourly wage. According to
the evidence, he did this on a consistent basis because of the supply of
patients from outside sources such as the sports clinics. However, the number
of additional hours he could work was confined to the operational hours of the
Dixie clinics. In this respect, it is not unlike any other employee who works
additional hours for an employer at a set hourly rate.
[25] In
the larger picture, it was clearly Dixie that was profiting from the increased traffic flow
to its clinics and the billings that would eventually result. The Appellant's
skills and expertise may have brought the patients through the doors of the
clinic, but all he could request as a result of that was a higher hourly rate.
That was his only bargaining power. It was Dixie who either made a profit or
loss at the end of the day through the operation and management of its various
clinics.
[26] The
next factor is loss. In conjunction with this, the Appellant had essentially no
potential for loss in performing these services. He did not pay rent or pay a
portion of overhead costs at the clinic; he did not provide tools or supplies;
maintain or repair any equipment, or employ staff, except for an occasional
helper; and the evidence was unclear whether he had ever actually hired help to
assist him at the Dixie clinics during this period.
[27] Mr.
Mehta had no investment in this business and assumed none of the risk
associated with the clinic's operation. Again, profit and loss factors point to
an employee status for Mr. Mehta.
[28] Hiring
of substitutes: the Appellant's employment with Dixie was for himself personally
to perform these services and he did not have the right to hire a replacement
for the clinic if he could not attend. He testified that he could hire helpers,
but again, the evidence is vague in this regard to support whether he ever, in
fact, did so during this period.
[29] In
respect to the vacation pay issue which the Appellant in his oral testimony
characterized as a 10 per cent bonus, the documentary evidence is
fully supportive of a contrary conclusion. Exhibit R-4, a handwritten note of
the Appellant, clearly referred to the 10 per cent payment of his
total salary in 2009 as vacation pay.
[30] In
addition, one of the cheques from Dixie to the Appellant, at Exhibit R-5,
references the amount as a vacation payment. Again, this is another factor that
supports my conclusion in these appeals.
[31] In
summary, all of the factors, with the exception of control, clearly point to
the Appellant being engaged by Dixie as an employee contrary to the Appellant's stated
intention that he was an independent contractor. The factor of control does not
point definitively to the Appellant as an independent contractor, but there are
some elements which support that the Appellant had a fair degree of latitude in
how and to whom he provided his specialized services.
[32] However,
the evidence did not address the key issue of whether Dixie had the “right” to
direct Mr. Mehta in the performance of the services at their clinics if Dixie
had so chosen.
[33] Where
such skilled workers are engaged, they generally require little to no direction
but the work relationship may still be such that Dixie may have had the ultimate
right to provide directions in respect to those services and the patients if it
chose to do so.
[34] In
looking at the totality of the circumstances and facts before me in these
appeals, in light of the Wiebe Door factors, I must conclude that the
Appellant is an employee of Dixie despite the written agreement stating that he
is a contractor.
[35] In
addition, when I ask the question: Is the Appellant, Mr. Mehta, performing his
diagnostic imaging services as a person in business on his own account? I must
answer that question that Mr. Mehta is not engaged in
his
own business. For these reasons the appeals are dismissed in both matters
without costs.
Signed at Ottawa, Canada, this 6th day of December 2011.
“Diane Campbell”
Email this Content