Citation: 2008TCC80
Date: 20080204
Dockets: 2007-2067(EI)
2007-2068(CPP)
BETWEEN:
KELOWNA
CHRISTIAN CENTER SOCIETY,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
HEATHER WIK,
Intervenor.
REASONS FOR JUDGMENT
(delivered orally from the Bench on January 30, 2008)
Woods J.
[1] These are
reasons delivered orally relating to appeals instituted by the Kelowna Christian
Center Society against the Minister of National Revenue.
[2] The issue to be
decided is whether Heather Wik, who was hired by the Society as a teacher, was
engaged as an employee or independent contractor during a ten-month school term
in 2005 and 2006. The Minister of National Revenue determined that she was
engaged in insurable and pensionable employment for purposes of the Employment
Insurance Act and the Canada Pension Plan. The Society appeals that
determination.
[3] Ms. Wik
participated in the hearing as an intervenor, and seeks confirmation of the
Minister’s determination that she was an employee primarily for the purposes of
determining maternity benefits under the Employment Insurance Act.
[4] I will first
provide some background about the appellant and the intervenor.
[5] The appellant is
a non-profit society whose activities include the operation of a number of
schools. Some of the schools operate in a traditional way with fixed classrooms
but the school that is at issue in this appeal provides distance learning
through online education. In general, the online school provides assistance for
home-schooled students for grades kindergarten through 12.
[6] When teachers
are hired by the appellant to teach in traditional classrooms, they are hired
as employees. But when teachers contract to teach for the online school, the
appellant intends to hire them as independent contractors. I would note,
however, that this is not explicitly stated in the standard form contract that
each teacher in the online school signs.
[7] Ms. Wik was
hired as a teacher at the online school for a ten-month school term.
[8] As I understand
it, there are two types of services that the online school offers to home-schooled
families. One service offers online courses. Some teachers are hired
specifically for this but Ms. Wik was not one of them. Accordingly, this service
is not at issue in these appeals. The other service offered to home-schooled
families is called the Individualized Program. As I understand it, the main
objective of this program is to assist home-schooled families in complying with
government prescribed regulations called learning outcomes. It was this program
that Ms. Wik contracted for.
[9] Ms. Wik’s
responsibilities were to work with an assigned number of students, in her case
13 or 14. The school had estimated that a teacher would spend approximately one
hour each week per student and accordingly Ms. Wik’s work load was anticipated
to be about 14 hours per week.
[10] In general, the
work required that Ms. Wik first collaborate with each family to develop an
individualized learning plan that satisfied the government’s learning outcomes.
She then assisted the parents in the implementation of the learning plan
throughout the school year, primarily by means of an email communication once a
week. She was also required to assess the student’s work three times a year and
determine whether the learning outcomes had been satisfied.
[11] I turn now to the
issue to be decided.
[12] The legal
principle that is to be applied in situations such as this is well known and I
will not repeat it here. Essentially, it must be decided whether Ms. Wik
was operating her own business. This depends on a careful review of all the
facts and circumstances and a weighing of factors such as the ability of the
school to control the manner in which Ms. Wik’s work was done, the ownership of
Ms. Wik’s equipment and supplies, her opportunity for profit or loss, and
lastly the intention of the parties.
[13] Based on the
evidence presented, I have concluded that the relationship between the online
school and Ms. Wik is more consistent with an independent contractor
relationship. My reasons are as follows.
[14] I will first
consider the intention of the parties. Based on the evidence as a whole, I have
concluded that there was no specific understanding between Ms. Wik and the
online school that she be engaged as an independent contractor. Ms. Wik
testified to that effect and I find her testimony to be credible.
[15] Notwithstanding
that there was no agreement between the parties, I also find that the school’s
administration did attempt to communicate what its intention was to teachers.
This was done at an orientation meeting at the commencement of the year which
all teachers are required to attend. I accept the testimony of the
superintendent of the school, Gregory Bitgood, when he said that he thought
that the school’s intention was implicit. I think that it is likely that most
teachers would have understood the school’s position in this respect.
[16] Although Ms. Wik
did not appreciate that she was to be engaged as an independent contractor, I
think that she was not paying close attention to a number of red flags. No
source deductions were made. A course on how to carry on your own business was
offered to teachers at the orientation session. In addition, the teachers’ remuneration
was different from a traditional teaching position. One thing that could
legitimately cause confusion, however, was the fact that the school
administration referred to the teachers as staff. On balance, though, I think
that Ms. Wik should have realized that this relationship was fundamentally
different from her former teaching jobs.
[17] Where does that
leave us with respect to the factor of intention? Quite clearly, the parties
did not have a common intention, but I think that it is significant that the
school’s administration made bona fide efforts to communicate its
intention. If Ms. Wik had been paying close attention to what was being
communicated, I think she would have had at the very least real doubts about
this being an employment relationship.
[18] I would note,
however, that the school failed to make this clear in their standard form
contract, and it appears that the school also failed to specifically notify
teachers that this teaching contract would not count towards maternity benefits.
That is very unfortunate but it is not a sufficient reason for me to find that
this was an employment relationship.
[19] I will turn now
to the terms of the contract which are quite different from a traditional
employment relationship which usually has set hours of work, an indefinite
period of hiring, and an hourly wage or salary. In this case, Ms. Wik was paid
an annual amount per student and she was free to perform the services on her
own time and at a location chosen by her. She could even work while traveling
because all she needed was internet access. Further, the school tried to
accommodate the work load that the teachers desired. In Ms. Wik’s case, she
wanted about 15 students and this was considerably less than a full-time work
load which would be about 40 students. Further, I note that Ms. Wik was
provided some benefits such as a dental plan but these were on an optional
basis and Ms. Wik had to contribute to the cost. These factors when considered
together support the appellant’s position.
[20] I also note that
Ms. Wik had to purchase her own equipment and supplies, but I think that it is
significant that the school provided compensation towards some of these costs.
I consider this factor to be neutral, not pointing strongly to either an employment
or independent contractor relationship.
[21] Another fact that
was raised at the hearing was that teachers were allowed to subcontract out
their work. I do not think that this is a significant factor in this case
because there is no indication that this was communicated to Ms. Wik. I accept Ms.
Wik’s testimony that she did not think that subcontracting was possible.
[22] Finally, I come
to the issue of control. The question here is the extent to which the school
could dictate to Ms. Wik how she performed her teaching responsibilities.
[23] I think that it
is relevant in considering this factor that the school clearly thought that it
had entered into an independent contractor relationship. There is nothing in
the contract that Ms. Wik signed that indicates that the school had the ability
to generally dictate how the work was done. The contract does set out specific
policies, such as communication policies, and it provides that the school could
make certain demands in peripheral areas, such as writing articles for the
newsletter or relational matters with the parents. But in the core areas of
teaching and assessment, Ms. Wik contractually had considerable freedom in how
to perform this work. When the contract is looked at as a whole, I find that it
supports the appellant’s position that it does not have the ability to control
how the work was done.
[24] That is not the
end of the matter, however, because it is also necessary to look beyond the
contract to consider whether the school’s administration actually did try to
dictate to Ms. Wik how her work should be done. If the school’s administration
attempted to exercise considerable control over the manner in which the work
was done, then I think that this would be significant.
[25] In this regard,
the respondent introduced a document called the teacher’s handbook which sets
out policies and procedures that teachers are to follow. In general, I find
that it does not go over the line in trying to exercise control over how the
teachers perform their work. The procedures provide a framework for the
teachers to work within, but there is a lot of freedom, as might be expected
when you are dealing with home-schooled education where the parents play a
fundamental role.
[26] In addition, the
respondent introduced Ms. Wik as a witness and she testified that a teacher
working for the administration, Janet Rainbow, communicated with her on a very
frequent basis. She testified that she had received over 80 emails from Ms.
Rainbow and a sample of these emails were introduced into evidence to show the
nature of the relationship.
[27] For the most
part, I think that Ms. Rainbow’s communications can be described as being in
the nature of a support to a teacher rather than providing directives. Ms.
Rainbow was described at the hearing more than once as someone who was a great
resource. The emails indicate that Ms. Rainbow did at times impose requirements
on the teachers, but this is to be expected where government regulations need
to be satisfied and parents’ expectations need to be met. There were one or two
instances where Ms. Rainbow stepped over the line, in my view, but I do not
think that these are sufficient to tip the scales in favour of an employment
relationship.
[28] I would also
comment that Ms. Wik was hired at a time when this program was quite new. In
this circumstance, it would be expected that there would be considerable
communication between the administration and the teachers as everyone was
trying to figure out how best to deliver the services to the families and
satisfy government regulations.
[29] Overall, I find
that the school administration did not go over the line in exercising control
and that it did not have the contractual ability to do so.
[30] When all of the
above factors are weighed, I conclude that the facts support the position of
the appellant that Ms. Wik was engaged as an independent contractor. Although
there are some factors that point toward an employment relationship, I think
that the majority are in the appellant’s favour.
[31] The appeals will
be allowed, and the decisions of the Minister will be vacated on the basis that
Ms. Wik was not engaged in insurable or pensionable employment. There will be
no order as to costs.
Signed at Toronto, Ontario this 4th day of February, 2008.
"J. Woods"
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