Citation: 2008TCC569
Date: 20081016
Dockets: 2008-235(EI), 2008-236(CPP)
BETWEEN:
SHANNON FRASER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Webb J.
[1]
The Appellant has
appealed the decision of the Respondent that the Appellant was not employed
under a contract of service with Turning Point Counselling and Consulting Inc.
during the period from July 17, 2006 to September 29, 2006 for the purposes of
the Employment Insurance Act (the “EI Act”) and the Canada
Pension Plan (the “CPP”). The Respondent had, therefore, determined
that the Appellant was not engaged in insurable employment for the purposes of
the EI Act, nor was she engaged in pensionable employment for the
purpose of the CPP while she was providing services to Turning Point in
2006.
[2]
Turning Point had an
agreement with the Blood Tribe pursuant to which Turning Point would provide
counselling services at an office located on the Reserve. To provide these
services Turning Point retained the services of counsellors who would attend at
the office on the Blood Tribe Reserve.
[3]
The issue in this case
is whether the Appellant was retained as an employee or as an independent
contractor in relation to the counselling services that she was providing in
2006 at the office located on the Blood Tribe Reserve.
[4]
The question of whether
an individual is an employee or an independent contractor has been the subject
of several cases. In 671122 Ontario Ltd. v. Sagaz Industries Canada
Inc., [2001] S.C.J. 61, 2001 S.C.C. 59 (“Sagaz”), Justice Major of
the Supreme Court of Canada stated as follows:
46 In
my opinion, there is no one conclusive test which can be universally applied to
determine whether a person is an employee or an independent contractor. Lord
Denning stated in Stevenson Jordan, supra, that it may be impossible to give a
precise definition of the distinction (p. 111) and, similarly, Fleming observed
that "no single test seems to yield an invariably clear and acceptable
answer to the many variables of ever changing employment relations ..."
(p. 416). Further, I agree with MacGuigan J.A. in Wiebe Door, at p. 563,
citing Atiyah, supra, at p. 38, that what must always occur is a search for the
total relationship of the parties:
[I]t
is exceedingly doubtful whether the search for a formula in the nature of a
single test for identifying a contract of service any longer serves a useful
purpose.... The most that can profitably be done is to examine all the possible
factors which have been referred to in these cases as bearing on the nature of
the relationship between the parties concerned. Clearly not all of these
factors will be relevant in all cases, or have the same weight in all cases.
Equally clearly no magic formula can be propounded for determining which
factors should, in any given case, be treated as the determining ones.
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.
(emphasis added)
[5]
It is therefore
necessary to review the facts of this case in relation to the factors as
identified by the Supreme Court of Canada.
Control
[6]
Turning Point had
access to the office on the Reserve during weekdays. The hours for which
counsellors were provided by Turning Point were determined by the contract
between the Blood Tribe and Turning Point. One counsellor was provided on
Mondays and Tuesdays, and one on Thursdays and Fridays. Every second week two
counsellors were provided on Monday and one on Tuesday, Thursday and Friday.
Turning Point maintained a list of available dates and had a pool of
counsellors available to provide the counselling services on the Reserve. The
counsellors were able to select the day or days on which they chose to work from
the list of available days.
[7]
The Appellant did not
report directly to Turning Point. Although the hours would be set by Turning
Point this was as a result of the agreement with the Blood Tribe. This
case is very similar to Direct Care In-Home Health Services Inc. v.
The Minister of National Revenue, 2005 TCC 173.
In that case, the appellant company had a pool of nurses that were available to
provide home care/nursing services to the clients of the Community Care Access
Centres of Ottawa and to its own clients. In analyzing the concept of control
in that case, Justice Hershfield stated as follows:
11 Analysis
of this factor involves a determination of who controls the work and how, when
and where it is to be performed. If control over work once assigned is found to
reside with the worker, then this factor points in the direction of a finding
of independent contractor; if control over performance of the worker is found
to reside with the employer, then it points towards a finding of an
employer-employee relationship.3 However, in times of increased
specialization this test may be seen as less reliable, so more emphasis seems
to be placed on whether the service engaged is simply "results"
oriented; i.e. "here is a specific task -- you are engaged to do it".
In such case there is no relationship of subordination which is a fundamental
requirement of an employee-employer relationship.4 Further,
monitoring the results, which every engagement of services may require, should
not be confused with control or subordination of a worker.5
12 In
the case at bar, the Worker was free to decline an engagement for any reason,
or indeed, for no reason at all. She could leave a client and still be engaged
with another more to her liking. She was free to do other work as and when she
pleased. Moreover, although nursing care tasks were offered to her, there was
no promise of that and she was not supervised in her performance of those
tasks. Each task offered was a results oriented task from the Appellant's
perspective. The fact that the Appellant could offer such tasks from time to
time and to some extent monitor performance does not militate toward a finding
of an employee-employer relationship. As in D & J Driveway, where there was
not a sufficient relationship of subordination between the company and drivers
to warrant a conclusion that a contract of employment existed, there is not a
sufficient relationship of subordination in the case at bar to warrant a
conclusion that the relationship of the parties is that of employee-employer.
In D & J Driveway specific delivery tasks were available to drivers who
could agree or refuse to make deliveries when called upon. When drivers agreed
to make a delivery no control was exercised over the way in which they carried
out their duty. Similarly in Wolf, Justice Desjardins noted that a link of
subordination had not been created where the worker, a free-lance mechanical
engineer hired on a one-year renewable contract, was assigned tasks over which
the worker was the "master".6 As in these cases, I do not
see the Worker, in the case at bar, as being in a subordinate relationship with
the Appellant as is required to find a contract of service. That is, the
control test points toward a finding of an independent contractor relationship.
[8]
In the present case,
the Appellant was also free to decline any engagement and she actually selected
the days that she would work from the list of available days. There was no
relationship of subordination between the Appellant and Turning Point.
Therefore, this case is indistinguishable from Direct Care In-Home Health
Services Inc. in relation to this issue and the facts in this case in
relation to the control factor would lead to a conclusion that the Appellant
was an independent contractor.
Tools and Equipment
[9]
There were minimal
tools and equipment that were required for the Appellant to perform her
services. There were some reference materials available in the office and the
office was provided for her on the Reserve. The Appellant used her own vehicle to
travel to the Reserve and was not reimbursed for travelling costs. The
Appellant’s vehicle was not used in the performance of her duties but simply to
travel to the place of work. Since the main tools that the Appellant would use
would be her knowledge, experience and training, this factor is of little
assistance in determining whether the Appellant was an employee or an
independent contractor.
Opportunity for profit/risk of loss
[10]
The opportunity for
profit arose as a result of the Appellant accepting days of work providing
counselling services at the Reserve. There was minimal risk of loss as the
Appellant did not have any investment in any assets in relation to the services
that she was providing. In Direct Care In-Home Health Services Inc.,
Justice Hershfield made the following comments in relation to the
opportunity for profit in a similar situation where individuals were able to
accept or decline shifts:
19 In
addition, the fact that the Worker was able to decline an engagement for any
reason must not be overlooked. The Worker in that sense had control over how
much money she could earn to an extent far greater than that exercised by most
employees. The Worker could increase her earnings and chance of profit by
accepting more engagements from the Appellant. On the other hand, since she was
not assured any hours, she had a risk that some expenses such as vehicle
expenses could exceed income. Of course many employees might be in similar
circumstances so I would not put too much emphasis on this factor in
characterizing the nature of the relationship.
[11]
I agree with the
comments of Justice Hershfield that the facts of this case, which are very
similar to the facts in Direct Care In-Home Health Services Inc., in
relation to this factor are of little assistance in determining whether the
Appellant was an employee or an independent contractor.
Ability to Hire Helpers
[12]
In this particular case
the Appellant could not have hired someone else to perform her services and
since the services were only to be provided by her, she did not need any
helpers. The nature of the activity would require that any person who is
providing counselling services would have to be trained as a counsellor. As
well, the arrangement was simply that counselling work was to be provided on
certain days. Therefore if one counsellor could not work on a particular day,
then another counsellor from the pool could work on that day.
[13]
The fact that she was
to personally provide the services would suggest that the Appellant was an
employee but since there are other situations where a professional person is
retained as an independent contractor to personally provide services (for
example a doctor who is specifically retained to perform a particular surgery
or a lawyer who is specifically retained to try a particular case), little
weight will be given to this factor.
Investment and management
[14]
The Appellant did not
have any responsibility for investment or management of Turning Point which
would suggest that the Appellant was an independent contractor. However, there
are also many situations where employees may not have any responsibility for
investment and management. If a counsellor is hired as an employee to provide
counselling services, that individual, although he or she is an employee, may
not have any responsibility for investment or management. He or she is hired as
a counsellor, not as a manager. Therefore this factor is of little assistance
in determining whether the Appellant was an employee or an independent
contractor in this case.
Conclusion
[15]
In this case, when the above
factors are viewed in isolation many of the factors are of little assistance in
determining whether the Appellant was an employee or an independent contractor.
However, another factor that is significant in this case is that the Appellant
had previously worked for Turning Point in 2002. The Appellant
acknowledged that when she worked for Turning Point in 2002, she was working as
an independent contractor and not as an employee. The Appellant also
acknowledged that she has worked as an employee for other persons. Therefore
she was aware of the distinction between being an employee and an independent
contractor.
[16]
When she worked for
Turning Point in 2002, she signed a contract which clearly stated that she was
not an employee of Turning Point and that her contract with Turning Point was
for services. Keith Houston, who is a director of Turning Point, stated
that when the Appellant was retained to provide services again in 2006, he
informed the Appellant that the terms of her previous contract would still
apply. The Appellant did not deny that she was informed that the terms of her
previous contract would still apply.
[17]
I accept the testimony
of Keith Houston and find that it was a term and condition of her engagement by
Turning Point in 2006 that she would be retained as an independent contractor.
[18]
Therefore in my
opinion, there would have been a common intent for the Appellant to be retained
as an independent contractor when she was hired in 2006. When she later applied
for maternity leave benefits, she decided to apply for a ruling to see if the
arrangement could be viewed as an employer/employee relationship.
[19]
The time that the
agreement between the Appellant and Turning Point was made would be the relevant
time to determine if they had a common intent. It seems to me that since they
would have had a common intent at that time for the Appellant to be an
independent contractor, that this is a significant factor to support a finding that the Appellant was an independent
contractor (Royal Winnipeg Ballet v. M.N.R., 2006 FCA 87, 2006 DTC 6323, Panache Fine
Cabinetry v. M.N.R 2008 TCC 513.).
[20]
The Appellant was
retained for a flat amount of $32 per hour with no source deductions. The
Appellant stated that her only other source of income in 2006 was employment
income. She was paid $2,440 in 2006 by Turning Point and therefore if she was
an independent contractor, she would have been a small supplier for the
purposes of the Excise Tax Act. Since there was no indication that she
was registered for the purposes of the Excise Tax Act, no GST would have
been collectible on fees of only $2,440 if she would have been an independent
contractor. The Appellant did not remit any GST in relation to the amounts that
she was paid but since she would have been a small supplier in any event, the
fact that the Appellant did not remit GST is not material.
[21]
In my opinion, the
facts in this case more strongly support a finding that the Appellant was an
independent contractor than that she was an employee and, just as the facts in Direct
Care In-Home Health Services Inc. led to a conclusion that the registered
nurse was an independent contractor, the facts in this case lead to a similar
conclusion and therefore in this case, the Appellant was an independent contractor.
[22]
The appeals are
therefore dismissed, without costs.
Signed at Halifax,
Nova Scotia, this 16th day of October 2008.
“Wyman W. Webb”
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