Citation: 2011 TCC 204
Date: 20110407
Dockets: 2009-335(EI)
2009-336(CPP)
BETWEEN:
1772887 ONTARIO LIMITED,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
HEATHER HARTON,
Intervenor;
Dockets: 2009-849(EI)
2009-850(CPP)
AND BETWEEN:
YVONNE BRIOUX,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
1772887 ONTARIO LIMITED,
Intervenor;
Dockets: 2009-228(EI)
2009-229(CPP)
AND BETWEEN:
KLARA PALOTAY,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
1772887 ONTARIO LIMITED,
Intervenor.
REASONS FOR JUDGMENT
Hershfield J.
[1] 1772887 Ontario Limited
(“Pi Media”) operates a commercial photography studio in Canada. As part of its
operations the company hired workers on an as needed basis to supplement its
full-time staff or perform required services. These workers performed services as
senior stylists, junior stylists, assistant stylists, photographic assistants
and carpenters.
[2] The Minister of
National Revenue (the “Minister”) initially assessed Pi Media in respect of the
2004, 2005 and 2006 taxation years on the basis that these workers were engaged
under a contract of service to the effect that Employment Insurance premiums
and Canada Pension Plan contributions were required to have been made by Pi
Media in respect of the engagement of those workers during those years. The
initial decision of the Minister was appealed and varied, however the varied
decision is now being appealed.
The basis of that decision, which affects 70 workers, is that each of them at
all relevant times was engaged by Pi Media under a contract of service and was an
employee of Pi Media not an independent contractor.
[3] Pi Media and two of
the workers, Klara Palotay and Yvonne Brioux, appealed the Minister’s decision.
A third worker, Heather Harton, intervened.
All three such workers, in agreement with Pi Media, took the position that they
were engaged by Pi Media under a contract for services and were independent
contractors.
[4] Each of Heather
Harton, Yvonne Brioux and Klara Palotay appeared as witnesses at the hearing on
their own behalf. Each was a senior stylist. In addition, Pi Media called the
following witnesses: Gary MacLean, Director photographic operations Pi Media;
Iris Simpson, senior stylist; Sarah Rodrigues, assistant and junior stylist; Jason
Grenci, photographic assistant; Blaise Misiek, photographic assistant; Devin Gallagher,
photographic assistant, and Gary Thompson, carpenter.
[5] The Respondent
called one witness, namely, an appeals officer from the Canada Revenue Agency
(“CRA”).
[6] The Respondent and
Pi Media agreed at the outset of the hearing that the witnesses who had been
engaged by Pi Media as independent contractors would be treated as
representative of the category of worker to which they belonged so that the
disposition of Pi Media’s appeal in respect of all the workers in each category
would be disposed accordingly. The appeals of Yvonne Brioux and Klara Palotay,
although capable of being treated separately, were, in effect, treated as
representative of their category of worker. Heather Harton, in effect, was similarly
treated.
General
Background
[7] Pi Media was the
largest pre-press, studio facility in Canada during the subject years. Prior to the years in
question, there was a consolidation of the commercial photography industry.
This eliminated smaller studios and resulted in Pi Media being the largest. It
did 100% of the printing and website advertising for Sears which was its
largest client. Prior to the consolidation, Sears work was divided among a
number of competing studios. The consolidation and Sears work resulted in Pi
Media offering the most opportunity to freelancers. This was confirmed by
witnesses such as Ms. Palotay who has been a stylist since 1965, working as a
freelance stylist since 1968. She testified that once Pi Media received all of
Sears catalogue work, there was a large volume of freelance work for her there.
Similarly, Ms. Brioux testified that she had been working freelance for a
number of years prior to making contact with Pi Media in 2003. Regular work at
Pi Media was the result of there not being many studios doing catalogue work at
that time. Ms. Harton testified that operations like Sears, prior to 2003,
divided their commercial photography work amongst five or six large studios in
Toronto from whom she was able to get freelance styling work. As the scene changed
it became increasingly apparent that Pi Media afforded her the best freelancing
opportunities. The division of Sears work was also confirmed by Mr. MacLean who
first commenced working with Pi Media in 1995 when Sears business was divided
between 5 studios.
[8] As a studio, Pi
Media provided all of the services required to prepare print advertisements for
catalogues, flyers, in-store signage and websites. The services included
meeting with clients. A client such as Sears communicated its instructions to
Pi Media regarding the content of a catalogue by having its marketers and
buyers attend the meeting with Pi Media’s sales team who would promote a
concept as created by Pi Media’s creative team for a catalogue as conceived by
Pi Media’s creative team. Once a concept was agreed upon, Pi Media’s creative
team generated layouts, drawings and swipes that detailed the composition of
the required shot including the mood, the lighting, the set and the props and
producers prepared production schedules. The layouts include art instructions
and set out whether the product, if clothing, would be on-figure or off-figure.
An on-figure shot would involve the use of a model.
[9] Exhibits produced
at the hearing demonstrated that there was a considerable amount of detail
provided by Pi Media’s creative team. In a sense one can describe the creative
team’s work as creating a virtual blueprint of the shot required. The creative
information includes a swipe that helps direct the mood or feel that the design
team intends to create and might even suggest the lighting treatment. The
location of the shot, the products, their placement, and the props and their
placement can be specifically set out. Essentially, all of the components
required to complete a shot are supplied and laid out by Pi Media. The
carpenter would build the set. The photo assistant and assistant stylist would
get the merchandise as each may be assigned. The photo assistant would assist
with setting up the lighting. The assistant stylist would press clothes and
other fabric materials as required. The stylist would style the merchandise. The
photographer would work with the stylist to create the desired image and take
the required shots.
[10] Prior to the shoot,
there would be a pre-production meeting that would include some of the stylists
and photographic assistants where a particular shot would be discussed. Pi
Media’s art director would discuss the creative concepts and pass out the
layouts, drawings and other materials detailing the required shot. Some of the
senior stylists such as Ms. Brioux and Ms. Palotay said they would not attend
such meetings. The photographic assistants might attend the meetings to gain
knowledge regarding the photographic requirements of a shot, however, Mr.
Gallagher testified that the photographer would attend more of these meetings.
Regardless, everyone was given a specific visual portrayal of how the photographs
were to be taken.
[11] As already noted, the
team that created the actual photographs consisted of photographers, stylists, photographic
assistants and carpenters. Stylists
were categorized by Pi Media as being assistant stylists, junior stylists and
senior stylists. As well, stylists had their own specialties: on-figure fashion
stylists who worked with models; off-figure fashion stylists; hard-line
stylists who worked on photo shoots of products; and soft stylists who styled
room sets and home fashions such as bedding and drapes.
[12] As to the studios
themselves, Pi Media operated two commercial photography studios in Toronto. One, on Benton Road, is a 150,000 square
foot facility having 50 photography sets, a merchandise warehouse sale and a
carpentry shop. A second facility on Lesmill Road is a 70,000 square foot facility
having photography sets, a merchandise warehouse and a carpentry area. Other
than location shoots all the photography was performed in one of Pi Media’s
studios.
[13] In the subject
years, Pi Media employed about 75 persons to work in the two studios including
20 to 25 employee stylists, five to six employee photographic assistants and
five employee carpenters. The freelancers worked alongside their counterparts.
[14] Pi Media’s work
fluctuated seasonally. The Sears fall and winter catalogue was shot in late
January and February. In April to July, Sears Wish Book was shot and in
September and October, the Sears spring and summer catalogue was shot. At other
times business at the studio was slow.
[15] I turn now to review the testimony of each of the
witnesses.
The Testimony
of Gary Maclean (Director Photographic Operations)
[16] Mr. Maclean’s
testimony provided much of the background summarized above. As to his evidence
regarding the working circumstances of the workers concerned with these appeals
it was general, although it did provide some insight into the nature of the
engagements particularly those of the more experienced workers.
[17] For example, I
trusted his testimony that while the layouts were done by the design team, the experienced
workers, in general, are largely hired because of their expertise and come with
considerable skills. They are individuals who have been in the industry for the
most part for a long time and who are able to help produce the ultimate product
that would meet the approval of not only Pi Media’s art directors but that of its
clients, as well. As these workers were hired for their expertise, they had to
perform their work personally.
[18] He confirmed that freelance
workers were booked for specific projects lasting from a few days to a few
weeks or a month. Generally speaking such workers, once engaged, worked regular
hours although they reported in and out so that Pi Media would know who was in
the building. If the studio was busy, daily studio hours would be extended from
8:30 a.m. to 5:30 p.m. to 7:00 a.m. to 7:00 p.m. The regiment of regular hours
during a project was essentially required so as to keep the team of people
required to work on the project available at the same times. Although the
workers were generally kept busy through a typical work day, he said that if
there was no work, they were free to leave. My impression, however, was that
such freedom applied primarily to senior stylists who could not so readily be
assigned other work. They were too specialized and were paid by the hour at a
rate up to three times the hourly rate of a junior stylist.
[19] As confirmed by
other witnesses, Mr. MacLean testified that all the workers entered their time
in a system that was similar to time sheets. The system was called a docket max
system and time was entered in relation to a specific project. This allowed Pi
Media to better understand and forecast time requirements in relation to its
projects and assess the profitability of a particular project. It also was
relied on as a way to track hours for the purpose of calculating a worker’s
pay.
[20] He also testified
that freelance workers could accept or decline work from Pi Media on a project
by project basis. However, Pi Media could put a hold on a worker if it knew it
would require assistance during a particular time. A hold is a booking whereby
they hold a worker for a particular time. Freelance workers did not have to
work exclusively for Pi Media but if they were put on hold, they would require
Pi Media’s permission to be released. If the worker was approached by another
studio, the worker would then communicate with Pi Media and ask to be booked or
released. Pi Media had to do one or the other. Again, based on the testimony of
others, it seems clear to me that holds would only be put on senior stylists.
[21] Mr. Maclean
estimated that workers on hold would only be asked to be released about 10% of
the time. He estimated that Pi Media would release a hold about half the time
that it was requested.
[22] He confirmed that the
workers performed their duties at Pi Media’s studios and on location. Pi
Media’s studios not only provided the space but provided the lighting, equipment
and merchandise as was necessary for the wide variety of shots. The experienced
workers were not instructed on what tools, equipment or materials to use to
complete their work. Stylists came with their own kit which included clamps and
sprays and brushes and the like. Pi Media did not provide tools or equipment to
the stylists or to the assistants aside from commercial irons, steamers and
ironing boards. Pi Media provided carpenters with large tools, such as an
industrial table saw, that were located in Pi Media’s carpentry shop.
Carpenters were only expected to bring small tools such as hammers, cordless
drills, a work belt and the like.
[23] Mr. MacLean
testified that the freelance workers are paid a higher rate of pay than
employees. They are paid an hourly or daily rate. A daily rate was charged when
Pi Media utilized the services of an agency to find a stylist. The pay rates
varied by level of experience. Workers with more experience could command more
money. Each worker had his or her own negotiated rate. Factors that influenced
the rate were budgets, production value and the experience of the worker.
Workers who were paid a fixed daily rate were paid for the full day. Workers
were not paid when they were on hold. Workers invoiced Pi Media every week or every
two weeks or at the end of a project and were paid by direct deposit or by
cheque as requested. Most workers submitted invoices to Pi Media in their own
name. Workers were not paid bonuses other than an increased overtime rate of
pay. They did not receive vacation pay, sick pay or other benefits from Pi
Media.
[24] With respect to the
intention of the parties, while he may have given the impression that the engagement
of workers as independent contractors was mutual, in general terms, at least in
respect of less experienced workers, I am of the view that Pi Media made the
decision as to whether a worker would be offered work as an employee or
independent contractor. On the other hand, with respect to senior workers, the
senior stylists, I am of the view they only offered their services as
independent contractors.
The
Testimony of Gary Thompson (Carpenter)
[25] I will leave some of
my evidentiary findings in respect of Mr. Thompson to my analysis as I find his
case to be the most difficult given the conflicting influences of the degree of
control over what work he could be assigned and the extent to which he was
pursuing his own established business.
[26] As a carpenter, Mr.
Thompson was responsible for building the sets for the photo-shoots. He was
told what to build by the art director and the studio director and worked off
of layouts provided by them. He was supervised by the studio manager and the
general manager but did not need close supervision. The manager could also
direct him to do various maintenance work. He had to ask permission if he
wanted to leave early.
[27] He worked hours that
Pi Media needed him to work and he followed Pi Media’s policies. He did
essentially the same work as performed by full-time employee carpenters except
he did not have to prepare estimates of his time to complete a project.
[28] He provided his own
small tools but was provided at no cost many of the tools required in his
carpentry work by Pi Media. He was reimbursed for mileage if he travelled to a
shoot location.
[29] Mr. Thompson, only
worked for Pi Media during the relevant period. He was paid an hourly wage,
which he negotiated with the general manager.
[30] He testified that it was his intention to be an
independent contractor.
The
Testimony of Jason Grenci (Photographic Assistant)
[31] Mr. Grenci’s job was
to assist the photographer he was working with. He was provided with layouts
that detailed the work that he had to do and his hours were largely determined
by the photographer he worked with. However, he did other general tasks for Pi
Media as well as assist photographers. He could be assigned such additional
work if he completed work that was initially assigned to him.
[32] The studio manager
would assign Mr. Grenci to assist a particular photographer. He had no say in
the decision. Once assigned, his work would be directed by the photographer and
the stylist working on the shot.
[33] He was provided with
any and all tools and equipment he needed and performed the same services that
were performed by assistants who were employees of Pi Media.
[34] Mr. Grenci was paid
an hourly rate of $12 per hour which was the rate he was offered. Other than
working additional hours, there was nothing Mr. Grenci could do to earn more
money.
[35] While Mr. Grenci said
he intended to be an independent contractor, it was Pi Media that determined
the nature of the engagement based on what it was prepared to offer.
[36] Mr. Grenci went to
work for Pi Media because, according to his own testimony, it was a “great
place to start and learn the actual business of photography”. He had no other engagements during the relevant period.
The
Testimony of Blaise Misiek (Photographic Assistant)
[37] Mr. Misiek became an
assistant as a stepping stone to becoming a photographer in this industry.
[38] He did what he was
asked to do by the photographer. He was provided with the layout and plans, the
detailed work he had to do, and, he was supervised by the photographer. Like
Mr. Grenci, his hours were largely determined by the photographer who he was
assigned to by the studio supervisor.
[39] As in the case of
Mr. Grenci, he could be assigned additional work if he finished a particular
assignment early. There were full-time workers that were engaged as employees
who performed similar work as Mr. Misiek.
[40] Pi Media provided
him with all the tools and equipment he needed.
[41] He was initially
paid $12 an hour but he was given a raise to $14 per hour effective February 1,
2005 but it was reduced slightly only a week later when he was hired as a
full-time employee. During the time that he was an assistant his evidence as to
whether or not he had other engagements, was vague at best.
[42] As in the case of
Mr. Grenci, he said he intended to be hired as an independent contractor, but again
I find that it was Pi Media that determined the nature of the engagement based
on what it was prepared to offer. He had no other engagements during the
relevant period.
The
Testimony of Devin Gallagher (Photographic Assistant)
[43] Once again as a
photographic assistant, Mr. Gallagher followed the direction of the
photographer. He also acknowledged to being under the direction of a stylist,
with whom he might be working on a project. He was provided with detailed
layouts of the work he had to do and if there were any changes to the project
it was the photographer or art director who would instruct him. He was assigned
to a particular photographer.
[44] He was supervised by
the studio manager who also set his hours of work. He could be assigned
additional work if he completed work initially assigned before the end of the
day.
[45] Mr. Gallagher’s
day-to-day work did not change when he became a full-time employee.
[46] He was provided with
all the equipment and tools he needed and was paid an hourly rate of $12 per
hour, which was a rate he was offered and accepted. He testified that he would
be paid even if he was fixing a mistake that he had made.
[47] Although Mr.
Gallagher said he intended to be an independent contractor, it was Pi Media
that determined the nature of the engagement based on what it was prepared to
offer. Mr. Gallagher worked as a contract worker up until 2005 when he became a
full-time employee in August. He earned a small amount in 2004 from another
source.
The
Testimony of Heather Harton (Senior Stylist)
[48] Ms. Harton was a
hard-line stylist. She confirmed that she received specific art instructions and
layouts as to what she had to do on a particular project and for a particular
shot. She would get things ready for a shot including retrieving and readying
merchandise. She was not supervised but had no say as to whether or not a
particular shot would be approved or whether or not it needed to be redone. She
would follow instructions if there was a change notice given in respect of any
shot. In general, she would follow Pi Media’s instructions. She recorded her
time in the data system and performed the same duties as senior stylists
employed by Pi Media. In general, she followed Pi Media’s general working hours
and consulted with a studio manager before leaving early.
[49] She attended handout
meetings where the general concepts of projects were assigned and explained.
This would be the forum at which a creative direction or process was conveyed
by the art directors.
[50] Ms. Harton was, nonetheless,
independent in the execution of her responsibilities. It was her job to execute
the layouts provided and style a shot in accordance with the creative direction
conveyed to her. She was very experienced and capable of understanding and
giving effect to the artistic requirements of a shot. She did not need anyone
looking over her shoulder in any aspect of her work. If there were problems,
she would consult with the art director.
[51] During 2004 through
2006, Ms. Harton worked regularly for Pi Media on a project by project basis.
Once on a project she would have to advise a Pi Media supervisor if she could
not come in. At times she worked for other studios, although that was not
required when she had steady work at Pi Media. One of the studios she worked
for other than Pi Media was a studio called McCrae Studios where she charged a
daily rate of $400. Still, she worked almost exclusively for Pi Media and her
income came primarily from Pi Media throughout the relevant period.
[52] She was provided
with a portable commercial steam iron and a professional ironing board for
pressing clothes. She did, however, provide smaller styling tools as she felt
necessary. She provided her own portable commercial steam iron and professional
ironing board when working at McCrae Studios as they did not have suitable
equipment.
[53] She had an access
card to Pi Media’s studio at all relevant times irrespective of whether or not
she was working on a project. She submitted an invoice once a week and was paid
every two weeks by direct deposit. She did not have a business account.
[54] Ms. Harton was paid
$35 an hour. She determined that rate based on her experience and skills and
the amount of steady work Pi Media provided. She said that she had other clients
that she charged $40 an hour.
[55] Ms. Harton was not
required to provide her services exclusively to Pi Media but Pi Media often had
a hold on her time. Even when that was not the case, as mere courtesy to them,
she would notify them if she was going to work somewhere. Other studios were
sometimes offered a second hold on her time.
[56] Ms. Harton could
accept or decline work from Pi Media. She was not obligated to work on any project.
[57] She regarded herself
as a freelance independent contractor and conducted herself as such. She got
other work on the recommendation of other stylists or photographers that she
knew or worked with and if she was available she would go. She had a business
card and a GST registration number. She charged Pi Media GST. She claimed
business income and expenses on her tax return and made CPP contributions as a
self-employed person.
The Testimony of Yvonne Brioux (Senior Stylist)
[58] Ms. Brioux was a
soft-goods stylist. Her testimony indicated that she was somewhat less
compliant as a worker than the Respondent would have me believe. She regarded
the art director’s direction as being general. Even though she could not change
a layout and she followed directions as to changes required, Pi Media’s
dependence on her expertise came through loud and clear. While she did not
decide if a photograph on a particular catalogue page would be of a duvet or
bed, her role was to use her creative abilities to make decisions regarding the
styling of the merchandise identified by the layouts. She was not supervised in
any way in respect of the performance of that aspect of her contractual duties.
[59] She had a flexible
work schedule. She was a professional in all respects. She had worked on
hundreds of layouts and projects of the nature that Pi Media would require her
to undertake on its behalf.
[60] She would be
provided with specific projects and specific dates which she could accept or
not. Once a project was accepted she would record her time in the normal
fashion and comply with the normal schedules and report if she could not be there
on a given day. She did not attend pre-production meetings as a rule. She would
consult with the photographer and work as part of the team. She was provided
with an access code to the studio which she maintained throughout relevant
periods.
[61] She was provided
with most of the tools that she required for the performance of her duties,
although, like other stylists, she had her own styling kit. Her duties were the
same as those of employed stylists.
[62] She submitted an
invoice once a week. She was paid by the hour, every two weeks and funds went
into a personal chequing account. She was paid $38 per hour in 2004 and
negotiated that up to $40 per hour in 2005 and 2006.
[63] She was not required
to provide her services exclusively to Pi Media. She worked primarily for Pi
Media during the subject period. She testified that she had other opportunities
for a significant number of shoots for other studios but that she did not take
the work because she was offered more work with Pi Media. Like Ms. Harton, she
was not paid overtime for additional work hours.
[64] She intended to be
an independent contractor. She was a freelancer who worked when it suited her. She
was not familiar with other companies such as Quebecor that had significant catalogue
work in the subject years. She had essentially retired in 2002 and sailed with
her husband. She refused full-time employment with Pi Media as she wanted to
work when and as she pleased. She could call for work after a sailing trip with
her husband or otherwise when she wanted and could work.
[65] She did not have a
business card, a registered business name or a personal portfolio. She did not
charge GST. She paid CPP as a self-employed person but requested income tax
deductions from her cheques in order to avoid a liability at the end of the
year. She received no benefits from Pi Media.
The
Testimony of Klara Palotay (Senior Stylist)
[66] Ms. Palotay was a
senior stylist who did off figure and soft-line styling with a specialty in styling
drapes. While she received all her instructions from the layouts and swipes
provided to her by the creative team, she not only did not require any
supervision, but was relied on for her artistic talent to create a desired look
or effect or even to suggest a particular set. She was given latitude to create
a style to show drapes and she suggested that she, or she and the photographer,
were given considerable latitude to create a desired style for a shot. However,
she would have to comply with a change notice. She was supplied with any
required tools and sets.
[67] She was free to and
did, for example in 2006, work for other studios although her primary
engagements were with Pi Media. In 2004 and 2005 she did not work for any other
studio. She could refuse a project and subject to the restraints of a project
and the team with which she worked, she could determine her own work hours. The
restraints of working with a team, however, limited such freedom. She could
leave whenever the project requirements for the day were finished. She reported
in if she could not make it in on a day she was scheduled to work.
[68] Ms. Palotay
negotiated her rate of pay at $35 per hour without deductions or benefits. Her
time was punched in, in the same manner as a full-time employee. She had an
access card throughout the subject period even though there were a considerable
number of days during that period where she did not work for Pi Media.
[69] Ms. Palotay
invoiced her work and charged and remitted GST although on her 2006 tax return
she showed income from Qnet (Quebecor) as employment income because she was
issued a T4 slip. Still, she considered herself a freelance stylist. She
negotiated a pay rate of $35 an hour – had no deductions taken from her pay and
received no benefits. She maintained a personal portfolio and had a registered
business name.
The
Testimony of Iris Simpson (Senior Stylist)
[70] Ms. Simpson was an
on-figure stylist. She acknowledged that she attended pre-production
information meetings where she was shown what layouts, staging and props had
been selected for a shot. The portrayals were the product of the creative team who
essentially dictated the desired effect and mood. But Pi Media would largely rely
on the stylist’s ability to create the desired effect. The stylist would pick
the particular model to reflect the desired mood: for example, “a young businesswoman:
fashionable but not edgy”. Ms. Simpson testified that the layout was just the
guideline for the fashion shot. Her role was to exceed the client’s
expectations and sometimes it was her poses that were the ones chosen and
printed in the catalogue.
[71] That is, it was the
overall look that was generated by the art department. Execution of that look
was for the stylist. She would book the hair and make-up people and could decide
many of the final details of the shoot such as the models’ hair styles (straight,
blown etc.) and, in consultation with the photographer, their positioning which
would be largely consistent with that set by the creative team or swipe. She
was not subject to Pi Media’s direction on how to prepare for or even schedule
a shoot.
[72] Ms. Simpson invoiced
Pi Media and charged GST. She had a registered business. She had her own very
extensive and impressive portfolio which she sent to prospective clients to
promote her services. She could decline work, was free to work with other
studios and did so during the relevant period although her primary engagements
were with Pi Media.
[73] Like the other
stylists she performed her services for Pi Media primarily at its premises and
had to perform her services personally during regular hours although she had
some freedom to determine her hours. She returned her access card after each
project. She had an extensive styling kit that went way beyond anything
described by the others. It included props and clothing, belts, fabrics,
jewellery, makeup, even a buttocks enhancer and a lot more from stain removers
to irons. The list was long.
[74] She filed income tax
returns as a person in business, had a home office and claimed expenses related
to her kit items of over $6,500 for supplies and props in 2004. She was paid a
daily or hourly rate which she negotiated. She viewed herself as a freelance,
self-employed worker.
The Testimony of Sarah Rodrigues (Assistant – Junior Stylist)
[75] Ms. Rodrigues
graduated from Humber College in fashion in April 2005 and started work as an assistant on-figure
stylist in May 2005. She considered herself as a freelance independent
contractor although she acknowledged she was told by Pi Media that that was how
she was being retained.
[76] As an assistant she
did not work on the set with the stylist, the photographer or the models. She
pressed clothes, retrieved and put them away and followed the direction of a
supervisor, as well as the stylist she was assigned to. She testified that she
received training from Pi Media during this period and shadowed a senior
stylist during the last few months.
[77] Pi Media taught her
how to read a layout, instructed her on how to use their data time system and
how to retrieve the required clothing, props and merchandise for a shoot. She
was also under the direction of the stylist to whom she was assigned and she
had no say in the stylist that she was assigned to assist. Based on the
testimony of one of the senior stylists, assistant stylists were pretty much
there to do whatever the senior stylist asked of them.
[78] The producer at Pi
Media would also provide instructions on how Ms. Rodrigues was to do her work.
More generally she was supervised by Pi Media’s supervisor of the fashion
department on a need-to-know basis.
[79] In October, 2005 she
became a junior on-figure stylist now attending pre-production meetings working
on set with the models and photographer. However, she was strictly limited to
doing retail weekend flyers which as she said had “a smaller book”. It was her
“start as a stylist”. It was her first experience styling an on-figure fashion
shot. She did get to work directly with the models, pinning clothes to fit, and
makeup people. She said as a junior stylist that she could book a model but in
consultation with an art director. She said that she could book the hair and
make-up artist but admitted that she had the help of other more experienced
stylists given her lack of knowledge and experience. She also testified that
later, as a producer, her job was to book schedules: dealing with modeling
agencies, booking models and hair and makeup artists. That being her role as
producer makes me leery of accepting that she had a significant role in that
area as a junior stylist although I accept that senior stylists played a big
part in such decisions.
[80] As a junior stylist
she said she had similar duties as a senior stylist but being less experienced
she could not do catalogue work which she described as more “finicky” and since
she was just starting out, “they” did not want her to start out on catalogues.
There was no direct supervision once she became proficient in her work and
could be assigned projects on that basis. There were occasions, however, when
the supervisor was not satisfied with a shot and she would be instructed how to
better style or improve it.
[81] As a junior stylist
she said that she had some creative responsibilities on set and, again in that
respect, saw her role as not much different than that of a senior stylist. While
she made such claims, I note that her testimony was not always consistent on
the extent of her ability to style a shot on her own.
[82] In September of 2006
she became a producer and continued in that capacity as a full-time employee in
January, 2007. As a producer she had to book schedules that coordinated the
team of players needed to produce a required shot. She learned how to bring a
layout into production. She detailed the required merchandise and backgrounds
and organized everything into schedules.
[83] During the time she
was an assistant and junior stylist her hours were determined by her supervisor
but once assigned, when Pi Media had work for her, she performed her duties at
Pi Media’s studio on a regular daily 8 hour basis. She was provided with an
access card which she did not return after the completion of a project. In the
beginning, there were odd days when Pi Media did not need her services, but
after a few months she was working regularly at Pi Media. Initially, she was
earning $9 an hour but over time her rate increased as she became more
experienced and then she eventually negotiated a rate of $14 an hour. At that
time she tried to implement a day rate of $150 but was cutback to $14 an hour.
[84] Ms. Rodrigues was
paid for the hours worked. She clocked in and out daily and normally worked
regular business hours. She was instructed not to leave early when a job was
done without checking in first with a supervisor who might assign additional
work.
[85] Ms. Rodrigues was
told that she must provide an invoice for her hours worked. She did so on an
weekly basis. She was paid bi-weekly by direct deposit to her personal account.
She did not charge or remit GST.
[86] She provided some
small supplies such as scissors, needles and pins. The cost of these goods was
roughly $100. She received no reimbursement for any such costs. Nor was she
reimbursed for her transportation costs for attending one on-location shot
during the subject period.
[87] She received no
benefits. She filed income tax returns on the basis of being self-employed and
claimed an expense relating to supplies of some $100 for both 2005 and 2006.
[88] Ms. Rodrigues was
not told she was required to work exclusively for Pi Media or that she needed
Pi Media’s permission for her to work elsewhere. She earned a small amount in
2005 from another source.
[89] Ms. Rodrigues did
not have a portfolio until 2006. She was not registered as a business.
Respondent’s
Witness
[90] The Respondent called
the appeals officer who was familiar with the subject appeals. Her evidence was
not challenged and appears to have been tendered to confirm that Pi Media
issued T4A information slips to the workers and that the income was declared.
The CRA Trust Examiner having determined that the workers were engaged as
employees deleted the T4As and issued T4s.
The Submissions of Appellants and Intervenor
[91] The Appellant
asserts that each of the workers was engaged during the subject period to
perform their services as a person in business for their own account. This is
the central question as set out in 671122 Ontario Ltd. v. Sagaz
Industries Canada Inc.
[95] The Appellant emphasizes that the evidence supports
that each of the freelance workers had a business distinct of that of Pi Media.
Pi Media carries on business of providing pre-press services required to
prepare advertisements. Assistant stylists provide merchandise, preparation and
pressing services; junior and senior stylists provide styling services for
on-figure fashion photography, off-figure photography, hard-line photography
(products and home fashion), or photography of room sets or drapes.
Photographic assistants provide services to prepare sets and merchandise and
assist photographers to photograph the merchandise for catalogues and other
advertising media. Carpenters provide carpentry services to build sets,
furniture and props required to display merchandise to be photographed for
catalogues.
[96] With respect to the stylists, the Appellant argues that
junior and senior stylists were not told how to style the clothing on models,
the off-figure fashions, the sheets and duvets on beds in room sets or the
drapes on the set. The artistic expression of a creative concept through the
styling rested with the junior and senior stylists alone. The evidence
confirmed that although there was some monitoring by the creative director and
shots were ultimately approved by the client, there was no supervision or
control exercised by Pi Media to suggest that it was in charge of the shoot. Dictating
how the shot was to be presented and monitoring the quality of the end product
did not constitute direction, supervision or control over the work performed by
the stylists.
[97] The Appellants’ assertions go further in suggesting
that no one from Pi Media supervised the assistant stylists when they prepared
and pressed the merchandise for a shoot. It is asserted that the simplicity of
tasks performed by the worker should not be considered when determining whether
the worker is in a subordinate relationship with the payer.
[98] The Appellant also discusses a line of cases dealing
with the question of what constitutes “carrying on a business”. Essentially
this line of argument was to distinguish cases where it was found that an
undertaking was not a business when it was just pursuing training. It was
submitted that assistant stylists and photographic assistants were not engaged
in “pre-start up” activities to prepare for being in business in the future but
rather they were gaining experience in their business by seamlessly moving from
position to position. It is argued that they were engaged in self-educational
activities while being economically productive in the conduct of a business.
[99] With respect to carpenters, it is asserted that the
freelance carpenters who Pi Media engaged were very similar to the
circumstances of the carpenter in Panache Fine Cabinetry v. M.N.R.
who was found to be an independent contractor.
[100] The Appellants go on to consider chance of profit and
risk of loss and argue that the ability to negotiate contract rights can and
should be taken as reflecting, and there is authority for finding that such
ability reflects, a chance of profit, if not a risk of loss. Since all the
parties were free to accept or decline work, such decision making factor would
constitute a chance for profit as well. Further it was argued that a choice to
work primarily or solely for Pi Media was simply the result of the
consolidation of the industry.
[101] As to intentions of the workers, needless to say the
Appellants cite Wolf, and The Royal Winnipeg Ballet v. M.N.R.,
and argues that the evidence supports the conclusion that all of the workers had
the common intention with Pi Media to work as independent contractors.
[102] With respect to The Royal Winnipeg Ballet, in
particular, the Appellants rely on the distinction made in that case in respect
of dancers whose artistic expression was not found to suffer from the argument
that dancers were assigned roles and whose performances were choreographed and
directed in considerable detail. Their special talent to provide the required artistic
expression diminished the impact of the control exercised over them by the
directors and choreographers who represented the ballet company. The dancers
were still independent contractors. The dancers had some chance for profit
because they were free to negotiate with the ballet company. The dancers had
the right to accept other engagements that did not conflict with their engagement
with the dance company.
[103] The comparison with that case continues. Notwithstanding
that the dance company supplied dancers with the necessary items for a
performance, the dancers had their own rehearsal wear, orthopedic devices and
other incidental items. The provision of such tools, albeit less consequential relative
to the supplies supplied by the dance company, was still sufficient to be given
weight in support of the position that the dancers were independent
contractors.
[104] The Appellants’ submissions also responded to each of the
Respondent’s assumptions made in the Replies to the Notices of Appeal. However,
I do not find it necessary to review those responses. Also, the Appellants
submitted a reply to the Respondent’s written submissions but again I do not
feel it is necessary to review those responses. As well, I note that Ms. Brioux
made a submission to the Court; however, such submission for the most part was
an attempt to raise new evidence and, in any event, offered no insight into
matters that I might properly consider in respect of her appeal.
The Respondent’s Submissions
[105] The Respondent
acknowledges that the workers were not full-time workers and that they could
work for other payers when not engaged by Pi Media. Still, the Respondent does
not regard the engagements as casual and argues that even if they are, they are
insurable and pensionable as it was not “employment of a casual nature other
than for the purpose of the employer’s trade or business”. That is the statutory provision that excludes
certain engagements as insurable employment or pensionable employment.
[106] Subsection 5(2) of the Employment Insurance Act (“EIA”)
provides:
Excluded employment
5(2) Insurable
employment does not include
(a) employment of a casual
nature other than for the purpose of the employer’s trade or business;
[107] Subsection 6(2) of the Canada Pension Plan (“CPP”) provides:
Excepted employment
6(2) Excepted
employment is
(b) employment of a casual
nature otherwise than for the purpose of the employer’s trade or business;
[108] Such excluded
engagements are discussed in Roussy v. Canada. In that decision,
the Federal Court of Appeal distinguishes work that is transitory in nature or
having unpredictable work schedules, which is casual employment, from
engagements where the worker is being hired for specified hours for a definite
period or on a particular project until it is completed which is not casual.
Short periods of employment, if they are definite and specific, where the
presence and commitment of the employee during the period is not vague or
transitory are not periods of casual employment. It is asserted that none of
the workers in the subject appeals are engaged in work of a casual nature.
[109] As well, it is
asserted that there is no evidence that the workers ever performed services
“other than for the purposes of the employer’s trade or business”.
[110] The Respondent also
relies on the decision of Justice Archambault in Dynamex Canada Corp. v.
M.N.R..
In that decision Justice Archambault thoroughly canvasses the nature of the
employment relationship and cites a variety of sources in addressing that
question. One reference relied on by the Respondent was to an author quoted by
Justice Archambault at paragraphs 17 and 18 who noted that although self-styled
independent contractors are entitled to sell their services to the world at
large, the fact that they work entirely or substantially for one employer would
suggest that they are really employees. It is asserted that all of the workers
in the subject appeals fit this category of worker.
[111] The Respondent also
prepared a chart showing what each witness who testified at the hearing earned
or filed as being their total business or other employment income. Pi Media
accounted for more than 90% of most of the workers total reported business or
other employment income.
[112] Recognizing that the
central question that must be addressed before reliance can be placed on the
casual worker provisions in determining whether or not a worker was an
independent contractor, the Respondent addressed that question by reference to
the common law as set out in Wiebe Door and Sagaz Industries. I will deal with such arguments under
traditional headings.
Pi
Media’s control over the Workers
[113] It is argued that
control is demonstrated by the payer having the right to direct the manner of
doing the work even if that right was not exercised. The Respondent asserted
that the detailed written and visual instructions found in the layouts, art
instructions, swipes and more, were required to be followed by all the workers
and demonstrated Pi Media’s right to control that which was to be done, the way
it shall be done, the means to be employed in doing it and the time and place
where it shall be done. These instructions were sufficiently detailed as not to
allow any material input by the workers in terms of the final result and any
examples of such input were indulgences that did not alter Pi Media’s right to
control the worker.
[114] Even senior stylists
were provided detailed instructions. It was asserted that the fact that such
highly skilled workers did not require supervision once they were assigned
their work does not alter Pi Media’s ultimate right of control over them. If the detailed instructions called
for a model sitting, the stylists could not style the shot with the model standing.
The Respondent also relied on there being no evidence denying that an art
director could direct how a specific shoot was to be completed.
[115] It was submitted that the
workers’ ability to decline to work on a project is no different than any other
part-time or temporary employee declining a shift that they were not scheduled
to work. However, once they accepted the shift they were controlled by
Pi-Media.
Pi
Media provided the essential tools and equipment
[116] Pi Media provided the
workers, at no cost to them, the sets, merchandise, construction materials,
models, irons, steamers, stationary power tools, paging equipment and the like.
The workers provided few if any tools.
Workers had no chance of profit or risk of
loss
[117] The Respondent argued
that none of the workers had a substantial investment in a business. There was
no risk of loss. It was submitted that the workers were not entrepreneurs.
[118] They accepted, or in
some cases negotiated, a daily or hourly rate but they could do nothing to earn
more than work additional hours or days. Being able to obtain a better hourly
rate for themselves in a negotiation was submitted not to be reflective of a
chance of profit. As noted by Justice Bowie in Gagnon v. M.N.R.: “That, however, is not
entrepreneurship; it is simply a reflection of the different values of
different people in the labour market”.
[119] There was no reward
based on anything other than the hourly or daily rate paid. The Respondent
argued that any artistic initiative that a worker provided was to enhance the
profit of Pi Media. There was no reward or chance of profit for any business of
the worker when the worker’s skill had an added value. For example, when Ms.
Palotay spoke of initiating a set design idea, it saved Pi Media money and
enhanced its profitability, not her own. It was submitted that her work
enhancing Pi Media’s business was indicative of her work being on account of Pi
Media’s business not her own.
Intention
[120] Respondent argues that
intentions are not determinative in this case and that stated intentions cannot
displace the clear results of the tests that are set out in Wiebe Door and
Sagaz Industries which determine the true
nature of a relationship.
It is Pi Media’s business
[121] The Respondent asserts
that none of the workers were running a business. It was submitted that any of
the indicia of separate businesses were not sufficient to support a finding
that any of the workers had a business or that they were working on their own
account in the performance of their services. Of note is a reference to Gartry
(W.C.) v. Canada where Justice Bowman (as he then
was) noted that attention must be paid to when a business starts. The
Respondent suggests that some of the workers here have an intention to learn a
craft which precedes starting a business.
Onus of Proof
[122] Lastly, it was pointed
out that the initial onus was on the Appellants to disprove the assumptions
made by the Minister. The Respondent in reliance on the assumptions made in
respect of the assessments asserts that the burden in respect of that onus has
not been discharged.
Analysis
[123] There is little doubt
that the workers in this case are not casual workers. The regularity of the
work they performed for Pi Media and that they were engaged or offered work on
a regular project by project basis dictates a finding that they were not. Therefore
the exclusions in paragraphs 5(2)(a) of the EIA and 6(2)(b)
of the CPP are not applicable. That takes me to consider these appeals
as guided by the traditional tests for determining whether an engagement is one
of service or one for services.
[124] Both Counsel provided
written submissions that provided a very detailed and thorough review of the
evidence, focusing on aspects that are required to be weighed in determining
whether an engagement is entered into under a contract of service or a contract
for services. However, at the end of the day, the testimony of each witness
cannot be assessed purely on the basis of checking off a list of each aspect of
an engagement that might be considered in making that determination particularly
where one is asked to make a finding that would apply to a representative
category.
[125] As my analysis will
hopefully illustrate, the exercise is more about determining what factors must
be given the most weight in this case.
Senior
Stylists
[126] I am inclined as a
starting point to suggest that the workers that have made the best case are the
senior stylists. In spite of the Respondent’s reliance on the commonalities of
indicia of employment shared by these workers such as Pi Media’s provision of
tools and artistic direction, all four senior stylists who testified impressed
me as being very much their own boss. That they performed their work with many
of the earmarks of employed workers, such as recording their time, working
normal hours, advising when they were leaving and (except Ms. Rodrigues) having
access cards even when they were not working on a project, did not weigh
heavily in the formulation of my view that they were each engaged in their own
business and working for their own account in a contract for services with Pi
Media.
[127] Earning all or most of
their income from one client is not a factor to be given much, if any weight,
in this case either. The industry in which they worked imposed this. Pi Media
was one of the few if not, practically speaking, the only game of its type in
town during the subject period. That does not undermine a finding that they all
had the skill and experience to have a very credible entrepreneurial basis for
carrying on their own business and that each conducted themselves as any
business person would in similar circumstances.
[128] They owned all the
tools they needed to own to carry on their business. They worked regular hours
on projects as the nature of the projects required. They entered time on a data
system by project to allow attributing costs associated with particular
projects. That it was used to track billable hours is no employment tag at all
in a case like this. As to following direction, they followed direction much
like any professional person, performing artist or independent tradesperson,
with a marketable skill, would and they did so in an entrepreneurial manner. If
they had sufficient business they registered for, collected and remitted GST.
They had portfolios as they may have felt necessary to market their contractor
services. They were no less independent contractors by having one client whose
business was served by their services than Pi Media would be by serving the
business needs of one client – such as Sears.
[129] I would assign to each
of them the benefit of each others’ testimony as reflective of the conditions
and nature of their engagement. They were not required to go to pre-production
meetings although most did. They followed layouts and swipes but had the liberty
to stage the required shots using their own artistic flare. They were retained
because of their skill to get the shot right, without retakes, to the
satisfaction of their client, Pi Media. No one could tell Ms. Palotay exactly how
to display a drape once she was told the desired look. Ms. Simpson was clearly relied
on to pick and present a model that would convey the desired look.
[130] While the rigours and
training of a professional ballet dancer are very different and may exceed that
demanded of stylists, the comparison that Pi Media’s counsel makes with the
case of The Royal Winnipeg Ballet is not inappropriate in the case of
senior stylists.
[131] Further, I fully
accept that each of the senior stylists took on projects as and when and with
whom they saw the best opportunity to earn income with an entrepreneurial
boldness that says: “I’m sailing this week, find another contractor”.
[132] To conclude my findings,
with respect to senior stylists, I will very summarily comment on the
traditional factors considered in cases such as these.
[133] As to the provision of
tools, the nominal need for the workers in this case to have tools of their own
is of little import. That will often be the case when what one sells is a talent
that can be exploited without a significant investment in tools and where the
industry norm for clients of such workers is to provide the necessary tools
including the location where the work is to be preformed.
[134] As to risk of loss, the
absence of a need for a worker to make a large investment in tools also reflects
itself in a relatively small capital investment which explains one aspect of
the modest risk of loss in this case. As well, the apparent lack of liability
for mistakes is, ultimately, of little import since the cost of rectifying a
mistake, the cost of re-doing a photo session, is not problematic given its
rarity due to the skills of the talented senior people whose combined input
consistently produce the desired result in the array of shots produced at a
given session.
[135] As to chance for profit,
I am satisfied that the rates of pay negotiated by the senior stylists for
services to be performed by them are consistent with such rates, hourly or
daily, being considered as their chance for profit in a true business and
entrepreneurial sense. That will almost always be the case where the industry
norm dictates that the chance of profit for independent contractors is limited
to negotiating a better hourly or daily rate and taking on more hours of work
where it can be found. I have absolutely no doubt, based on their testimony and
the varying rates of pay, that each of the senior stylists negotiated their
rate of compensation in an entrepreneurial manner as contractors working on
their own behalf.
[136] As to control, as
emphasized above, I am not troubled by the degree of control Pi Media’s art
department have over senior stylists. It carries little weight measured against
the entrepreneurial aspects and freedoms enjoyed by them as persons pursuing
their own businesses. Similarly, I find that their entrepreneurial independence
impacts my view of the relevance of the intentions of the parties in this case.
The senior stylists were not under the thumb of Pi Media when the terms of
their contractual dealing were, from time to time, project by project, being set.
I dare say, as a group, it is my impression that they would refuse to consider
an employment engagement. Their endeavours were established as businesses and
the intention to enter into a contract for services was mutual.
[137] There is nothing about
the terms of engagement, such as having stylists on hold, that speak to a
finding of employment. Indeed, keeping a person who has agreed, in respect of a
particular time period, to be on hold, on a pay or release basis, only serves in
this case to underline their independent status.
[138] I see no reason to
elaborate further. There is nothing in the authorities relied on by the
Respondent that dissuade me from my finding that the senior stylists are
independent contractors. Accordingly, the separate appeals of Ms. Brioux and
Ms. Palotay are allowed. Similarly, the appeals of Pi Media as they relate to
persons identified by the Respondent and Pi Media as senior stylists, including
Ms. Harton and Ms. Simpson are allowed.
Assistant
Stylists and Assistant Photographers
[139] The assistant
photographers and assistant stylists can be readily disposed of with similar
conviction, but with a different result.
[140] The common testimony
of the assistant photographers is that they provide no tools, have no say as to
which photographer they are assigned to assist, they follow directions of Pi
Media supervisors or art directors or its contractor agents the photographers
and senior stylists and are subject to being assigned general tasks. They work under
supervision. They are not paid to produce an end result and have no real say in
their rate of pay. They are paid to perform tasks that are a necessary part of
Pi Media’s business.
[141] The terms of their
engagement were determined wholly at the instance of Pi Media. Any pretence of
these individuals having indicia of having their own business was just that, a
pretence. Indeed as a group, they offered little even in the way of mere
trappings that might suggest any of them carried on business for their own
account or had any other clients to speak of.
[142] That they only worked
when there were projects for them to work on, and that they could work
elsewhere is, in their case, only indicative of their being casual workers
subject to the casual workers provision of the subject enactments as argued by
the Respondent. As well, these workers are little more than apprentices who are
included in the sphere of insurable and pensionable employment.
[143] These are clearly
individuals who have come to Pi Media to learn a craft, to have hands-on
training in a studio environment and watch, assist and work with others so as
to develop marketable skills. As Mr. Grenci said, Pi Media is a “great place to
start and learn the actual business of photography”. Being an assistant photographer
at Pi Media was, as Mr. Misiek said, a stepping stone to becoming a
photographer in this industry.
[144] As found by Justice Archambault in Charron v. M.N.R. in the context of a graduate student performing research for a professor:
Although traditionally
the contract of apprenticeship seems to have existed between tradesmen, I do
not think that for the purposes of the Act its scope should be limited to this
kind of activity. A young scientist can learn his trade from contact with
experienced researchers just as an apprentice electrician can from a master
electrician. …
[145] While I acknowledge that the Respondent did not rely on
there being an apprenticeship in this case and that the parties themselves did
not enter into a contract of apprenticeship, the analogy speaks loudly, in my
view. Further and more to the point in respect of an argument that the
Respondent did make, which was that the assistants, being in the initial phase
of learning a marketable skill, were at a stage preceding starting a business, I
see no reason not to import authorities that considered the question of when a
business exits. Such cases are in the context of reasonable expectation of
profit. Their reasoning, in my view, is not materially distinguishable from
that required when considering when a source of income might be considered a
business source. For example, in Price
v. Canada I
noted that expenses incurred pre-start-up are personal. Similarly, pursuit of
one’s prospective career is not yet a business. A supervised workplace that
offers a worker training while performing a subservient role more likely than
not reflects the role of an employee engaged in assisting an employer’s
business. Applying the “whose business is it?” test in Sagaz Industries
then, in such a case, will only rarely give room for a finding that the worker
is an independent contractor. No such room exists here in the case of the
assistant photographers.
[146] This is not even a
close case that would allow me to consider the intentions of the parties.
However, were intentions relevant, I would find that I am not satisfied on the
evidence that the intentions were mutual. An employer cannot impose independent
contractor status on temporary workers. I am satisfied on the evidence, in this
case, that that is what happened, in this case, with these workers.
[147] Nothing here
distinguishes the case of assistant stylists from that of assistant
photographers. Ms. Rodrigues was the only witness in this category. She went
right from College in April, 2005 to Pi Media in May as an assistant stylist
where she did nothing on-set: just assisting the stylist by retrieving,
pressing and lining up clothes and returning them when a shot was completed. She
was trained to read layouts, instructed how to perform tasks and was supervised
and directed by a supervisor, a producer and senior stylists. She was in a
subordinate position and was clearly on a training path to be part of the Pi
Media team. I will say more on that under the next heading “Junior Stylists” but
in any event my findings and conclusions in respect of assistant stylists as
represented by Ms. Rodrigues are that their situation in every relevant way is
essentially the same as that of the assistant photographers and that they are
no more independent contractors than are those workers.
Junior Stylists
[148] Again, Ms. Rodrigues
was the only witness in this category. As I said, she went right from school to
Pi Media as an assistant stylist where she did nothing on-set.
[149] Within 5 months she
became a junior stylist working now on-set doing strictly flyers. As she said:
“It was kind of my start as a stylist.” She was styling fashion shots –
something she admitted she had never done before. She could book a model but
only in consultation with an art director which is to say she could make the
telephone call that booked the model. She acknowledged that there were times
when she had to be instructed on how to better style a shot. By the time she
was a junior stylist she was working regularly for Pi Media earning $14 per
hour and could be given additional work. This does not reflect the level of
expertise and independence enjoyed by senior stylists. The difference speaks
loudly.
[150] A year later she
became a producer, still as a so-called freelancer, for some three months at
which point, in January of 2007, she became an employee of Pi Media working as
a producer for another year when she became an employed stylist, a position she
still holds today.
[151] I have no idea how
typical Ms. Rodrigues is of junior stylists nor do I profess, on the basis of
the evidence, to have an understanding of how this classification of worker is
particularly helpful. For a relatively short period she is given more
responsibility in a less demanding area and then quickly is advanced to yet
another position with very modest increases in pay. Throughout this period, she
has few, if any, indicia of having her own business.
[152] She became a full-time
employee in less than two years after being exposed to various aspects of Pi Media’s
business. It is said that she, like the others, received no formal training.
However, I cannot avoid the view that the evidence supports the finding that
Ms. Rodrigues was being groomed to be a well-rounded employee. She accepted
these moves as she had no particular business of her own. That there were no
other studios around that needed junior stylists was not the reason she was not
taking other engagements. She was pre-occupied with a near full-time, with pay,
training program with Pi Media while assisting it in its business.
[153] Taking on a different
office designation as a “junior” stylist that came with different assignments
and responsibilities in her case does not reflect the same level of business
autonomy as reflected, on the evidence I have heard, by the designation
“senior” stylist. On the evidence before me, the comparison pales.
[154] Put another way, I am
not satisfied that Ms Rodrigues was experienced enough to warrant my accepting,
on her say so, that she was operating a stylist’s business for her own account.
While as a junior stylist she may well have had more responsibility than as an
assistant, I am not satisfied that she was not in a subservient position. None
of the Wiebe Door tests would indicate that she engaged in anything other
a contract of service, serving the business of Pi Media.
[155] This is not a close
case. However, were intentions relevant, I would find that the situation of Ms.
Rodrigues did not change when she became a junior stylist. Her purported status
as an independent contractor was imposed on her. Mutuality was mere compliant
adherence of a status Pi Media sought to unilaterally impose on a temporary
worker being prepared for full-time employment.
Mr.
Thompson – Carpenters
[156] The case of the
carpenter is more difficult. If I accept the Respondent’s view of the evidence
of Gary Thompson, he is a casual worker engaged for the purpose of Pi Media’s
business. If I accept the Pi Media’s view of his evidence, he is an independent
contractor.
[157] Mr. Thompson described
his function as building sets. Prior to starting work at Pi Media in about 2004
he had worked for some four years for several other enterprises including
Morris Studios as a freelance contractor doing carpentry. Prior to that, he had
managed, as an employee, a cable company building custom cables. Once he
decided to try carpentry in about 1999 he registered his business under the
name GT Maintenance Services and promoted it as offering carpentry and
maintenance services. He had business cards that he used to promote his
business and got work by word of mouth as well. At Morris Studios he built sets
and at another place he built tables and shelves in its shipping/receiving
area. He was engaged at Morris Studios for a period of over a year and during
periods he was not engaged there, he found other jobs. He listed four other enterprises
to which he provided carpentry services in addition to Morris Studios all on an
independent contractor basis. For example at a company that he referred as
Enviroguard, he built countertops for water dispensers. Some engagements were
based on an hourly rate which varied between $18 and $24 an hour depending on
what he could negotiate. Some jobs he bought the materials and charged for
material and labour. As to the labour component, it might be by the hour or
just be based on a fair price for the work. Some jobs had a fixed price for a
particular product built. He delivered invoices for his work on his own invoice
forms in the name of GT Maintenance Services. His invoices to Pi Media were
also in his business name and exhibits of 2005 and 2006 invoices show a 7% tax
added with no GST registration number shown. He testified he collected and
remitted GST. Deposits went to his business account.
[158] As to the rate of pay
at Pi Media it was on an hourly basis. He worked the hours he was needed. He
testified he negotiated a $20 per hour rate with Mr. Maclean. He received no
benefits. He filed income tax returns reporting his income as business income
and claimed related expenses including a home office expense. His work was
similar to that of carpenters employed by Pi Media however, unlike employed carpenters,
he was not required to do any office work such as preparing reports or providing
estimates.
[159] He was told what to
build by the studio manager or art director and was provided a layout. Sets had
a standard layout and the industry had a way of doing things in constructing
sets. For example, a corner set had two temporary walls to be joined and
secured. Pi Media had a flooring system. He would lay it down as instructed: for
example, diagonal or otherwise. His work was supervised to some extent. He was
provided with the heavy tools such as a bench saw and a compressor for air
powered tools. He provided his own fully supplied tool belt. He paid for any
damage to his tools. He needed permission to leave early and was given odd building
maintenance jobs not directly related to his carpentry work building sets. In
this sense, he was in a very subordinate position. He was shuffled about to do
whatever maintenance work was required such as fix windows and doors that did not
shut or close properly. As to his work schedule, he made himself available as
needed. There were gaps as Pi Media’s business was slow but there was really no
other work for him during the subject period so his availability was not an
issue.
[160] Applying the Wiebe
Door tests from the perspective of the Sagaz Industries directive of
determining in whose business he was engaged, there is no clear answer, in this
case, in my view. The one factor that troubles me is the extent of
subordination to which he is subject. I am not referring to the set building. I
am referring to the maintenance work he was required to do as a regular part of
his job description. While I have the impression it was not the major function
he played, he was required to perform such role as requested. The question then
is whether that is sufficient to support a finding that the work he performed
was not the work of GT Maintenance Services. He was performing his services for
his own account, only if the work he performed was part of the services GT
Maintenance Services provides.
[161] In considering this
issue, my initial inclination was to weigh the
degree of subordination as illustrative of the true nature of the relationship.
Was he a self-styled independent contractor entitled to sell his services to
the world at large but who in fact worked entirely or substantially for one
employer during the subject period in a subordinated position suggesting that
he was an employee? Was his presence at Pi Media only serving the purposes of
Pi Media as opposed to those of GT Maintenance Services? Answering these
questions in the light of a troublesome subordination issue, might well have permitted
a finding that Mr. Thompson was an employee.
[162] However, offsetting
this inclination, was the evidence of the bona fides of GT Maintenance
Services. His business card, which I find was no prop but rather was a genuine
reflection of a business that he promoted as such since 1999, describes the
business as “Carpentry/Home Repairs”. Being told by a steady client to fix
doors and windows is what GT Maintenance Services does. To have essentially one
client due to slow economic times to whom you are more beholden because of such
conditions does not change that reality. While not part of the experienced artistic
team that enjoyed artistic freedom, I am satisfied that he was working for his
own account in this case as he was, in my view, primarily performing a function
that was part of his own business.
[163] Further, acknowledging
this as a close call, I find that intentions of the parties must be given
weight in this case. Mr. Thompson was not put in the position by Pi Media of
having to accept independent contractor status. I am satisfied that it was a
totally mutual intention giving effect to the true nature of the relationship.
[164] Accordingly, I find him to have been engaged in a
contract for services.
Conclusion
[165] The appeals of Pi
Media are dismissed in respect of the individual workers having, as agreed to
between the Respondent and Pi Media at the hearing, work category designations
of assistant photographers, assistant stylists and junior stylists. Such
workers have been found to have been engaged at all relevant times by Pi Media under
a contract of service. All such workers are to be treated accordingly for the
purposes of the EIA and the CPP. The appeals of Pi Media, Yvonne
Brioux and Klara Palotay are allowed on the basis that at all relevant times individual
workers having work category designations of senior stylists, as agreed to
between the Respondent and Pi Media at the hearing, were engaged by Pi Media
under a contract for services. All such workers are to be treated accordingly
for the purposes of the EIA and the CPP.
Signed at Ottawa, Canada this 7th day
of April 2011.
"J.E. Hershfield"
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