Citation: 2006TCC623
Date: 20061114
Docket: 2006-434(EI)
BETWEEN:
POS AMERICA INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
JESSE TAKKEN,
Intervenor,
Docket: 2006-435(CPP)
AND BETWEEN:
POS AMERICA INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
JESSE TAKKEN,
Intervenor,
Docket: 2006-436(EI)
AND BETWEEN:
POS AMERICA INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
Docket: 2006-437(CPP)
AND BETWEEN:
POS AMERICA INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Beaubier, J.
[1] These appeals were
heard together on common evidence at Kelowna, British Columbia, on November 1, 2006. Rhonda J.
Lesher (Ms. Lesher) testified for the Appellant. The Respondent called the two
alleged employees, David Crawford and Jesse Takken, an Intervenor. The periods
of alleged employment that are in dispute are:
Jesse Takken – May 1, 2004 to May
31, 2005
David Crawford – February 2, 2003
to October 11, 2004.
[2] The allegations and
assumptions respecting Jesse Takken in files 2006-434(EI) and 435(CPP) are
essentially the same. Paragraphs 10 to 12 of file 2006-434(EI) read as follows:
10. In response to the Appellant’s appeal of
that ruling under section 91 of the Employment Insurance Act, S.C. 1996
c.23 (the “Act”), the Minister determined that the Worker was employed
by the Appellant in insurable employment during the Period.
11. In determining that the Worker was employed
in insurable employment with the Appellant during the Period, the Minister
relied on the following assumptions of fact:
a) the Appellant was in the business of
software development;
b) the Appellant’s head offices were located
in Voorhees, New Jersey, U.S.A.;
c) the Appellant operated an office in Kelowna, British
Columbia under the trade name of VIP Solutions;
d) the Appellant’s shares are owned wholly by
Stephen Passas;
e) the Appellant’s day to day business
operation in Kelowna was
controlled by R.J. Lesher, director of operations;
f) the Appellant provided the office from
which the Worker performed his duties in addition to all the tools and
equipment required;
g) the Worker’s duties were software design
and development;
h) the Worker’s duties were performed at the
Appellant’s place of business;
i) the Worker was required to work 40 hours
per week from Monday to Friday;
j) the Appellant supervised the Worker;
k) the Appellant required the Worker to
record his hours worked;
l) the Worker did not provide services
elsewhere during the Period;
m) the Worker was required to report progress
to the Appellant on a daily basis;
n) the Worker did not incur any expenses in
the performance of his duties;
o) the Worker was required to provide his
services personally;
p) the Worker was paid at the rate of $25.00
per hour;
q) the Worker did not charge the Appellant
G.S.T.;
r) the Worker received paid vacation leave;
s) the Worker did not provide any tools or
equipment;
t) the Worker was not free to come and go as
he pleased; and
u) the Worker’s intention was to be an
employee.
B. ISSUES TO BE DECIDED
12. The issue is whether the Worker was
employed in insurable employment with the Appellant during the Period.
None of the assumptions in
paragraph 11 were refuted by the evidence. However, respecting assumption
11(m), the evidence is that Mr. Takken was in the same premises as Ms. Lesher
and reported to her frequently each week, if not daily.
[3] The allegations and
assumptions respecting David Crawford in files 2006-436(EI) and 437(CPP) are
also essentially the same. Paragraphs 10 to 12 of file 2006-436(EI) read as follows:
10. In response to the Appellant’s appeal of
that ruling under section 91 of the Employment Insurance Act, S.C. 1996
c.23 (the “Act”), the Minister determined that the Worker was employed
by the Appellant in insurable employment during the Period.
11. In determining that the Worker was employed
in insurable employment with the Appellant during the Period, the Minister
relied on the following assumptions of fact:
a) the Appellant was in the business of
software development;
b) the Appellant’s head offices were located
in Voorhees, New Jersey, U.S.A.;
c) the Appellant’s shares are owned wholly by
Stephen Passas;
d) the Appellant operated an office in Kelowna, British Columbia under the trade
name of VIP Solutions;
e) the Appellant’s day to day business
operation in Kelowna was
controlled by R.J. Lesher, Director of Operations;
f) the Worker’s duties included software
programming in visual basics, database programming, evaluation of third party
software, interfacing with third party software, database repair and customer
service;
g) the Appellant provided the office from
which the Worker performed his duties;
h) the Appellant provided the supplies,
materials and equipment for the Worker to perform his duties;
i) the Appellant required the Worker to sign
a contract;
j) the Worker was required to work from 8:00
a.m. to 4:30 p.m. Monday to Friday;
k) the Appellant required the Worker to
record his hours on a timesheet;
l) the Appellant supervised the Worker on a
daily basis;
m) the Worker’s rate of pay was approximately
$3,950.00 per month at the end of his employment;
n) the Worker was paid twice monthly by
cheque;
o) the Worker did not charge the Appellant
G.S.T.;
p) the Worker did not incur any expenses in
the performance of his duties;
q) the Worker did not provide any tools or
equipment;
r) the Worker was not free to come and go as
he pleased;
s) the Worker did not provide services
elsewhere during the Period; and
t) the Appellant required the Workers’
personal service.
B. ISSUES TO BE DECIDED
12. The issue is whether the Worker was
employed in insurable employment with the Appellant during the Period.
Except for the fact that during Mr.
Crawford’s Period the VIP offices were in Westbank, British Columbia, a suburb of Kelowna, none of the
assumptions in paragraph 11 were refuted by the evidence.
[4] Both Mr. Takken and
Mr. Crawford signed an identical form contract prepared by “VIP” respecting
their hiring. Jesse Takken’s is dated 19 February, 2004 (Exhibit R-1) and David
Crawford’s is dated 25 February, 2004 (Exhibit A-2, Tab 4). Paragraphs 6 and 7
of those contracts read as follows:
6. The Contractor shall work 40 (Forty) hours
per week only. Hours of Company operation are Monday thru Friday, 8:00 AM –
4:30 PM. Only Canadian Statutory Holidays will be paid as a bonus to the
Contractor, unless otherwise stated in writing by an Authorized Company
Representative. Any time taken off by the Contractor will be deducted from the
next pay period or an arrangement can be made to make up the hours lost.
7. Contract payment will commence on the 1st
and 15th of each month for the contract duration. Each Contract will be
reviewed yearly. Negotiated contract wage is set for one year only and may be renegotiated
if the Contract is renewed at the year’s anniversary date. For the Year 2004
beginning month of March 1 the Contractor shall receive $2,500.00
US dollars per calendar month, effective for one full calendar year.
Messrs. Takken and Crawford worked
on the basis of a 40 hour week as stated and “banked” any extra hours or made
up hours to arrive at 40 hours per week. They each took weeks of holidays which
sometimes may have included a few days of “banked” time.
[5] In addition, Mr. Takken
signed a second contract pre-dated to February 19, 2002 (Exhibit A-1, Tab 1) in
May of 2005; a few days later, he was laid off effective May 31, 2005 because
the Appellant converted from developing software to selling the developed
product. In the Court’s view Exhibit A-1, Tab 1, is a mere cover-up after the event
and was not followed by the Appellant in any event: for example, paragraph 2.1
fixes the pay at $25.30 per hour (from which 30¢ was subtracted for equipment rent.)
However, it is not expressly in US funds, which means in Canada that it is Canadian funds. But Mr.
Takken was paid thereafter in US funds anyway.
[6] Both workers were paid bi-monthly throughout in the
amount of $2,500 US per month.
[7] As a result, despite the wording of the form contracts
quoted and signed by the parties, in practice, the intention of the parties was
not that the workers should be contractors. Rather, the intention of both
parties was that the workers should become employees of the Appellant. They
were controlled by the Appellant; they used the Appellant’s tools in the Appellant’s
premises; they had no risk of profit or loss; and they were completely
integrated into the Appellant’s business operations. They were not in business
for themselves; the business was the Appellant’s.
[8] The appeals are dismissed.
Signed at Ottawa, Canada, this 14th day of November 2006.
"D.W. Beaubier"
Email this Content