Dockets: 2010-1689(CPP)
2010-1690(EI)
BETWEEN:
JAMES BOOKER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
____________________________________________________________________
Appeal heard on December 17, 2010 at Toronto, Ontario
By: The Honourable Justice Judith Woods
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
|
Leslie M. Ross
Diana
Aird
|
____________________________________________________________________
JUDGMENT
The appeal with respect to assessments made under the Employment
Insurance Act and the Canada Pension Plan for the period from January 1, 2008 to August 31, 2009 is allowed, and the assessments are
vacated. Each party shall bear their own costs.
Signed at Toronto, Ontario this 26th day of January 2011.
“J. M. Woods”
Citation: 2011 TCC 44
Date: 20110126
Dockets: 2010-1689(CPP)
2010-1690(EI)
BETWEEN:
JAMES BOOKER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
The appellant, James Booker,
operates a business in Collingwood, Ontario which specializes in the design and
construction of fences for commercial and residential customers. The business
name is The Fence Factory.
[2]
This appeal concerns assessments
made under the Employment Insurance Act and the Canada Pension Plan
in relation to four workers who were engaged to construct fences. The appellant
was assessed premiums and contributions, and related interest, for the period
from January 1, 2008 to August 31, 2009.
[3]
The appellant submits that the
four workers, Kevin King, James Attridge, Tyler Harvey and Tom Dobson, were
engaged as independent contractors, and that the assessments should therefore
be vacated.
[4]
The
applicable principles in a case such as this are well known. The hallmark of
being an independent contractor is that the person is in business for himself.
The intention of the parties is very relevant, but it is not determinative. The
applicable test was described by the Federal Court of Appeal in Royal Winnipeg
Ballet v. MNR, 2006 FCA 87, 2006 DTC 6323 in the following manner:
64 In these circumstances, it seems to me
wrong in principle to set aside, as worthy of no weight, the uncontradicted
evidence of the parties as to their common understanding of their legal
relationship, even if that evidence cannot be conclusive. The judge should have
considered the Wiebe
Door factors in the
light of this uncontradicted evidence and asked himself whether, on balance,
the facts were consistent with the conclusion that the dancers were
self-employed, as the parties understood to be the case, or were more
consistent with the conclusion that the dancers were employees. Failing to take
that approach led the judge to an incorrect conclusion.
[5]
With these principles in mind, I
will first consider the intention of the parties.
[6]
James Booker testified on his own
behalf and Kevin King testified on behalf of the respondent. Based on their
evidence, the intention was clear that the workers were in business for
themselves. Mr. Booker’s intention was made evident as employee source
deductions were not made and Mr. King acknowledged in cross examination that
this was the intention.
[7]
In the respondent’s reply, an
argument was made that the workers did not intend to be independent contractors
because none of them had registered business names, GST accounts or business
bank accounts.
[8]
These factors alone do not negate
an intention on the part of the workers to be independent contractors. I do not
find the argument to be persuasive.
[9]
Intention is not determinative,
however. One must consider whether the relationship was consistent with this
intention. I find that it was.
[10]
The Wiebe Door factors
include control, ownership of tools, opportunity for profit and risk of loss and
integration.
[11]
The relationship between the
appellant and the workers was quite casual. There was no commitment given to
the workers as to work hours and they were only offered work when it was
available. The workers were not obligated to accept jobs when they were offered
and it was expected that the workers may have other sources of income. Mr. King
testified that he had other construction jobs while working for the
appellant.
[12]
In a typical job, the workers
worked in teams of two. The appellant informed them of the specifications for
the fence to be constructed and the time within which the work was to be
completed. The appellant would then deliver the materials to the work site.
Beyond this, the workers had little supervision and they could perform the work
during times of their choosing. They were also free to bring helpers and they did
so on occasion. Although some oversight was provided by the appellant, and some
training was given when needed, the level of control was only sufficient to
ensure that the construction satisfied the expectations of the appellant’s
customers.
[13]
The considerable freedom exercised
by the workers and the lack of control is consistent with the workers being in
business for themselves.
[14]
As for tools, the appellant
provided most of the tools at the job site. The workers were responsible for
getting to the work sites at their own expense and they often brought small
personal tools that they used on other construction jobs. This factor points
slightly more towards an employment relationship, but it is not a strong factor
when considered against the lack of control.
[15]
The workers were paid on an hourly
basis. I find this to be a neutral factor which is consistent with either type
of relationship.
[16]
As for integration, it is not a
significant factor in this case. The workers were engaged on an as needed basis
and likely could have been easily replaced.
[17]
Overall, the relationship is
consistent with the parties’ intention that the workers be engaged as
independent contractors.
[18]
Finally, I would mention that an
appeal by another worker hired by the appellant had come before this Court in
2005. In that case, the worker was successful in satisfying the Court that he
was engaged as an employee: Harris v. MNR, 2005 TCC 700.
[19]
I have reviewed the reasons of
MacLatchy D.J. in that case with some care as it is important for this Court to
provide consistency.
[20]
There are important distinguishing
facts in that case. In particular, some source deductions had been made by the
appellant in relation to Mr. Harris, he had a senior position as a manager, and
he reported to work on a daily basis during the seasonal operation of the
business. The judge also found that Mr. Booker considered Mr. Harris to be an
employee. The circumstances of the workers in these appeals are sufficiently
different to warrant a different conclusion.
[21]
The appeal will be allowed, and
the assessments will be vacated.
Signed at Toronto, Ontario this 26th
day of January 2011.
“J. M. Woods”
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