Docket: 2011-1538(EI)
BETWEEN:
NICOLE MARCIL,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
and
LES ENTREPRISES GHISLAIN MATHIEU INC.,
Intervener.
[OFFICIAL ENGLISH
TRANSLATION]
____________________________________________________________________
Appeal
heard on September 23, 2011, at Chicoutimi, Quebec.
Before: The Honourable Justice Johanne
d’Auray
Appearances:
|
For the appellant:
|
The appellant herself
|
|
Counsel for the respondent:
|
Marie-France Dompierre
|
|
Agent for the intervener:
|
Ghislain Mathieu
|
____________________________________________________________________
JUDGMENT
The appeal under subsection 103(1) of the Employment
Insurance Act (the Act) is dismissed and the decision of the Minister dated
February 21, 2011, determining that the appellant did not hold insurable
employment, within the meaning of paragraph 5(2)(i) and subsection 5(3)
of the Act, during the period from August 2, 2009, to August 6, 2010, when
working for Les Entreprises Ghislain Mathieu Inc., is confirmed.
Signed at Ottawa, Canada, on this 3rd day
of October 2011.
“Johanne D’Auray”
Translation certified true
On this 26th day of October 2011
Monica F. Chamberlain, Translator
Citation: 2011 TCC 463
Date: 20111003
Docket: 2011-1538(EI)
BETWEEN:
NICOLE MARCIL,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
and
LES ENTREPRISES GHISLAIN MATHIEU INC.,
Intervener.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
D'Auray J.
[1]
At issue in this appeal
is whether the appellant’s employment is excluded employment within the meaning
of paragraph 5(2)(i) of the Employment Insurance Act (Act).
Facts
[2]
In her testimony, the
appellant indicated that she worked as a secretary for her spouse’s company, Les
Entreprises Ghislain Mathieu Inc. (intervener), for 30 years.
[3]
The intervener operated
a lumber transportation and loading business. The intervener was a
sub-contractor for the forester Robec Inc.
[4]
The intervener employed
fourteen drivers and two mechanics. Under the arrangement with Robec Inc., Robec
paid the drivers except for overtime, which was paid by the intervener. Robec
Inc. was the intervener’s sole client.
[5]
The intervener was the
owner of seven trucks and a front-end loader.
[6]
The intervener's gross
income at the end of its fiscal year ending April 30 was:
|
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
|
2,212,199
|
2,458,463
|
2,424,836
|
2,208,959
|
1,759,630
|
1,585,949
|
[7]
The appellant's duties
were to pay accounts, answer the telephone, make deposits, fill out Records of
Employment, make federal and provincial remittances, complete GST and QST
reports, complete reports regarding excise tax on diesel, reconcile the
truckers' hours, order parts for the trucks as needed, do monthly and yearly reconciliations
and, when necessary, prepare correspondence.
[8]
The intervener's office
was located in the personal residence of the appellant and her spouse, Ghislain
Mathieu. The office was fitted out with a computer, a photocopier and a
printer. The Appellant used the intervener's tools to do her work.
[9]
Regarding the hours
worked, the appellant testified [Translation]
“when we work, we work 24/7”. I understood by this that the appellant generally
worked from 8 a.m. to 12 p.m. and 1 p.m. to 5 p.m. However,
when the telephone rang outside of business hours, she answered it. It was unavoidable,
as the appellant explained, [Translation]
“when you have a company, you want to succeed”.
[10]
Under
cross-examination, the appellant indicated that the intervener's slow period
was from March to May, sometimes until August.
[11]
The appellant also
stated that she had the authority to sign all the cheques; she had no monetary
limit.
[12]
During the period when
the intervener's activities slowed down, the appellant worked six to seven
hours a week.
[13]
The appellant would
sometimes work from the cottage, but her spouse, Mr. Mathieu, indicated
that they went there mainly on weekends and very rarely during the week. Moreover,
the appellant brought work with her to the cottage. The intervener did not see
any problem with that.
[14]
To the question whether
another person would agree to be on call 24/7, the appellant answered [Translation] “we are owners, I am his
spouse, we have to work”.
[15]
Mr. Mathieu also
indicated during his testimony, that before working for Robec Inc., the intervener
was a sub-contractor to Abitibi Bowater Inc. When Abitibi Bowater inc. closed,
the intervener became a subcontractor for Robec Inc.
[16]
Robec Inc. gave the
intervener so much work that Mr. Mathieu had to call the appellant in the
evening to ask that she order parts for the following day.
[17]
Mr. Mathieu stated that
no secretary would have done her job.
[18]
Moreover, he would not
have given anyone but the appellant authority to sign cheques for the
intervener without any monetary limits.
[19]
As for the appellant's
salary increase, he stated that the increase had been given before the forestry
industry and the business' activities slowed down. The appellant’s salary
increased from $520 gross per week, including the 4% vacation pay deduction,
to $728 gross per week as of February 7, 2010, a 40% increase.
[20]
When counsel for the respondent
asked him why he had dismissed the appellant in August, given that in August
2010 the intervener's activities were increasing, he replied that it was a
decision they made together.
Analysis
[21]
The respondent does not
dispute the fact that the appellant had worked for the intervener, but she
asserted that the appellant's employment is excluded under paragraph 5(2)(i)
of the EIA.
Paragraph 5(2)(i)
indicates:
(2) Insurable employment does not include:
…
(i) employment if the employer and employee are not
dealing with each other at arm's length.
[22]
There is no dispute
over the issue of arm’s length relationship. The appellant is the spouse of the
sole shareholder of the intervener.
[23]
The appellant and the
intervener challenge the respondents decision with respect to the application of
paragraph 5(3)(b) of the EIA, which reads as follows:
5(3) For the purposes of paragraph (2)(i),
(b) if the employer is, within the meaning of
that Act, related to the employee, they are deemed to deal with each other at
arm's length if the Minister of National Revenue is satisfied that, having
regard to all the circumstances of the employment, including the remuneration
paid, the terms and conditions, the duration and the nature and importance of
the work performed, it is reasonable to conclude that they would have entered
into a substantially similar contract of employment if they had been dealing
with each other at arm's length.
[24]
Chief Justice Richard
of the Federal Court of Appeal explained in Francine Denis v. Minister of
National Revenue, 2004 FCA 26, the role of the Tax Court of Canada judge in
an appeal from a determination by the Minister under the exclusionary
provisions of subsections 5(2) and 5(3) of the Act:
[5] The function of the Tax Court of Canada judge
in an appeal from a determination by the Minister under the exclusionary
provisions of subsections 5(2) and 3 of the Act is to inquire into all the
facts with the parties and witnesses called for the first time to testify under
oath, and to consider whether the Minister's conclusion still seems reasonable.
However, the judge should not substitute his or her own opinion for that of the
Minister when there are no new facts and there is no basis for thinking that
the known facts were misunderstood (Pérusse v. Canada (Minister of National
Revenue - M.N.R.), [2000] F.C.J. No. 310, March 10, 2000).
[25]
According to the
respondent, the non-arm's length relationship between the intervener and the
appellant governed the appellant's employment conditions. As indicated in Denis,
I cannot substitute my own opinion for that of the Minister when there are no
new facts. In addition, there is no basis for thinking that the known facts
were misunderstood by the respondent.
[26]
In light of the
testimony at the hearing regarding the remuneration paid, the terms and
conditions, the duration and the nature of the appellant's work:
-
the 40% salary
increase, particularly when activities in the forestry industry were slowing
down;
-
the hours worked by
the appellant, the availability of the appellant 24 hours a day/7 days a
week;
-
the appellant's lay-off
for no real reason in August, a period in which the intervener's activities
were picking up again;
I cannot find that the facts were misunderstood by the
respondent. I cannot conclude that the respondent was unreasonable in applying
his discretionary power as he did in this case, that is, in being satisfied
that the appellant and the intervener would not have entered into a
substantially similar contract of employment if they had been dealing with each
other at arm's length.
[27]
The appeal is dismissed.
Signed at Ottawa, Canada, on this 3rd day
of October 2011.
“Johanne D’Auray”
Translation certified true
On this 27th day of October 2011
Monica F. Chamberlain, Translator
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