Citation: 2007TCC596
Date: 20071026
Docket: 2003-3760(EI)
BETWEEN:
PIERRE CAREY,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Angers J.
[1] Pierre Carey is appealing against a
decision of the Minister of National Revenue (the "Minister") to the
effect that his employment from May 27 to November 9, 2002, with Théresa
Jean, operating as Nipugt Eco Tech (the "payer"), was not insurable
employment within the meaning of the Employment Insurance Act (the
"Act").
[2] The Minister based his decision on the
following assumptions of fact:
(a) The payer was the sole owner
of an enterprise which supplied American pharmaceutical companies with branches
of Taxus canadensis (the "shrub"), also known as ground
hemlock or Canada yew. The extract obtained from young branches
of this shrub is used in the treatment of cancer; (admitted)
(b) The appellant harvested the
young branches of the shrub (the "harvest") to sell them to the
payer; (admitted)
(c) The appellant was paid $0.60
per pound for his harvest; (admitted)
(d) The payer did not know how
many hours the appellant worked; (denied)
(e) The appellant was
responsible for finding harvesting sites; (admitted)
(f) It was up to the appellant
to seek permission from the owners of wooded lots to harvest the shrub;
(admitted)
(g) The appellant could have received
help to harvest the branches and sell them on his own behalf; (denied)
(h) The appellant had to store
his harvest and deliver it at his own expense to the payer's collection depot
every week; (denied)
(i) The appellant had to purchase
his own pruning shears to do the harvest; (admitted)
(j) The payer supplied bags for
storing the harvest; (admitted) and
(k) The appellant determined the
size of the harvest and his hours of work. (denied)
[3] The appellant admitted assumptions (a),
(b), (c), (e), (f), (i) and (j) and denied the others. The appellant and a work
colleague, Pierre Lapointe, testified at trial. It was Mr. Lapointe who
had approached the appellant and who had given him information about this work.
The appellant allegedly filled out a form and met with Théresa Jean and her
friend Ryan Smith. The appellant was allegedly given Exhibit A-1, a salary
guide for harvests. In this guide, salaries are calculated by taking into
consideration employment insurance benefits and paid on the basis of the number
of pounds of shrub branches cut.
[4] On the payer's recommendation, the appellant allegedly
opted for the first scenario in the guide, that is, the scenario under which he
had to harvest 763 pounds of branches at a rate of $0.60 per pound for a
gross income of $458 per week. Employee source deductions for employment
insurance, Canada Pension Plan, income tax, vacation pay and administration
fees were to be subtracted from that amount. The appellant's net income was
$303. However, the appellant testified that his gross weekly income was $416,
and his net income was $303. In my opinion, the payer deducted her own share of
the employment insurance premiums, Canada Pension Plan contributions and
administration fees from the amounts paid to the appellant.
[5] The payer gave the appellant four hours of
training. He was advised about the various generations of branches and their
lengths, selective cutting techniques and the consequences of not adhering to
the instructions, namely, that the harvest could be refused, or the price per
pound could be reduced. This was very difficult work, and it took the appellant
10 hours of work per day to meet the required quota.
[6] The harvest was carried out on private
land, and the appellant had to personally ask the owners for permission. He had
to specify the lot numbers and write them on the bags. When the harvest was
done in Quebec, an inspector from the Quebec government would visit the site of the
harvest three to four times during the summer to ensure proper management of
this resource. The payer would contact Mr. Lapointe by telephone but would
not go to the harvest sites.
[7] The appellant had to travel to his work
site in the forest in his own automobile and at his own expense. He then had to
carry his harvest to the weigh station. The appellant also had to store his
harvest during the week, because initially the weigh station was only open on
Saturdays and Sundays. The weigh station was subsequently open from Tuesday to
Saturday. The appellant used his own pruning shears and set his own work
schedule.
[8] Louise Gauthier-Boudreau is the appeals
officer who ruled that the appellant's employment was not insurable. She
testified that she had had a telephone conversation with the appellant and Eric
Smith on May 27, 2003. The following information was given to her during
this call. The business was started up in 2001. Eric Smith began running
Théresa Jean's business in 2002. He also became the owner of this business that
same year. He is Ryan Smith's father. An advertisement was placed in the
newspapers to recruit workers for the harvest. The price paid was $0.60 per
pound, and the worker determined the number of weeks he or she wanted to work.
The worker also had the choice of [translation]
"participating in source deductions or not", according to the
terms used by the enterprise. Therefore, the worker was either self-employed or
received a salary with source deductions.
[9] During this same conversation, the appeals
officer was also advised that the worker decided where to harvest and made the
required arrangements with the owners of the premises. The payer did not assume
any liability for damage caused to private property. The worker determined the
duration of his or her work. Remuneration was based on production volume and
was done by direct deposit. The harvest was handed in at the weigh station. The
weight in pounds and the place where the product was harvested were indicated. People
usually worked in teams of two, and they could obtain help. Workers paid their
own travelling expenses and purchased their own pruning shears.
[10] Therefore, at issue is whether the
appellant and the payer entered into a contract of service within the meaning
of paragraph 5(1)(a) of the Act such that the work in this case is
insurable employment.
[11] In Wiebe Door Services Ltd v. Minister of
National Revenue [1986]
3 F.C. 553, the Federal Court of Appeal set out some tests which are
useful for answering this question. In 671122 Ontario Ltd. v. Sagaz Industries
Canada Inc., [2001] 2 S.C.R. 983, the Supreme Court of
Canada approved these tests by summing up the state of the law as follows, at
paragraphs 47 and 48:
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.
[12] In Charbonneau v. Canada [1996]
F.C.J. No. 1337 (Q.L.) Marceau J.A. of the Federal Court of Appeal noted that
the factors in question are reference points which are generally useful to
consider, but not to the point of jeopardizing the ultimate goal of the exercise,
which is to determine the overall relationship between the parties.
[13] In a recent
judgment, the Federal Court of Appeal once again explained the legal principles
which govern the insurability of employment. In Livreur Plus Inc. v. Canada,
[2004] F.C.J. No. 267, Létourneau J.A. summarized these principles as
follows, at paragraphs 18 and 19 of his judgment:
In these circumstances, the tests mentioned in Wiebe
Door Services Ltd. v. M.N.R., 87 D.T.C. 5025, namely the degree
of control, ownership of the work tools, the chance of profit and risk of loss,
and finally integration, are only points of reference: Charbonneau v. Canada
(Minister of National Revenue - M.N.R.) (1996), 207 N.R. 299, paragraph 3.
Where a real contract exists, the Court must determine whether there is between
the parties a relationship of subordination which is characteristic of a
contract of employment, or whether there is instead a degree of independence
which indicates a contract of enterprise: ibid.
Having said that, in terms of control the Court should not
confuse control over the result or quality of the work with control over its
performance by the worker responsible for doing it: Vulcain Alarme Inc. v.
The Minister of National Revenue, A-376-98, May 11, 1999, paragraph 10, (F.C.A.); D&J Driveway Inc. v. The Minister of
National Revenue, supra, at paragraph 9. As our colleague Décary J.A.
said in Charbonneau v. Canada (Minister of National Revenue - M.N.R.), supra,
followed in Jaillet v. Canada (Minister of National Revenue - M.N.R.), 2002
FCA 394, "It is indeed rare for a person to give out work and not to
ensure that the work is performed in accordance with his or her requirements
and at the locations agreed upon. Monitoring the result must not be confused
with controlling the worker".
[14] The evidence shows that the
payer had two categories of workers: those who were self-employed, which seemed
to be most of them, and those who, like the appellant, were paid a salary, with
all that this entails, including administrative fees. The common denominator in
all this is the fact that no matter what kind of relationship existed,
remuneration was based on a price of $0.60 per pound multiplied by the number
of pounds harvested, regardless of whether this was an employee or a self-employed
worker. The only difference was that the appellant and his colleague had to
harvest at least 763 pounds per week to receive their salaries. Otherwise,
from what they understood, they would lose their employment.
[15] For all intents and purposes, the only thing that
interested the payer was the quantity of the harvested product, that it was cut
according to her instructions and that the lot number allowed the harvest site
to be identified. The appellant, meanwhile, had to find harvest sites, obtain
permission from the owner to cut the branches, store and transport his harvest
and cover all travelling expenses. He was free to set his own work schedule. The
fact that the appellant had to obtain permission from the owner to cut branches
leads to the conclusion that the payer had no right of ownership in the harvest
before paying the per-pound price. It is therefore reasonable to conclude that
it was the appellant's harvest which was sold to the payer, such that the
payment was a purchase price, not payment for services rendered by the
appellant as an employee of the payer.
[16] Given this situation, it is difficult to
conclude that the payer exercised any control over the appellant. He was free
to work irregular hours and in places he chose. His hours of work were not
accounted for by the payer, and the only instructions the appellant received
were the ones given to him at the beginning and concerned the branch harvesting
process. Regular inspections were made to conserve the resource. Given the
little control exercised by the payer, the appellant's situation is more akin
to that of a self-employed worker than an employee.
[17] The fact that the appellant used his own
pruning shears and transported his harvest to the weigh station at his own
expense also indicates that the appellant is a self-employed worker under a
contract of service. In this case, the appellant went to the various harvesting
sites at his own expense, used his own all-terrain vehicle and paid for the
vehicle's operating expenses himself. The mere fact that the payer supplied the
bags does not establish that this was a contract of service.
[18] Even though the appellant was paid at a
predetermined rate, this calculation was made on the basis of a price per pound
and a minimum weight warranting a salary. It is obvious in this case that it
was the appellant who chose to be an employee rather than be self-employed. It
seems that this choice was of little significance to the payer, because in both
cases it only cost her $0.60 per pound. Even if the intent of the parties in
this case was to treat the appellant as an employee rather than a self-employed
worker, I am not bound by what the parties agreed on if the evidence submitted
leads me to conclude that things were otherwise. In my opinion, such is the
case here.
[19] In addition, on the basis of the evidence
submitted, it is difficult to conclude that the appellant's work was
significantly integrated with the payer's activities. The payer needed to
obtain the resource, but in this case she was not the owner of the properties on
which the product was harvested, nor did she in any way seek permission to
access these properties.
[20] In my opinion, and according to the
analysis of the facts submitted to me, the relationship which existed between
the parties does not support the argument that there was a contract of service.
Therefore, the employment was not insurable. Accordingly, the appeal is
dismissed.
Signed at Ottawa,
Canada, this 26th day of October 2007.
"François Angers"
Translation certified true
on this 31st day of January 2008-01-31
Michael Palles, Reviser
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