Docket: 2005-3397(EI)
BETWEEN:
GILLES PELLETIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
____________________________________________________________________
Appeal heard
on June 29, 2006, at Matane, Quebec
Before: The Honourable
Justice Alain Tardif
Appearances:
|
Counsel for the Appellant:
|
Denis
Tremblay
|
|
Counsel for the Respondent:
|
Martin Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeal under subsection 103(1) of the Employment
Insurance Act concerning the Appellant's employment with the Coopérative
Forestière de la MRC de Matane during the periods from January 27 to April 30,
1999, May 3 to October 13, 1999, October 18 to
December 21, 1999, January 7 to May 26, 2000,
May 29 to October 14, 2000, October 16, 2000 to
June 23, 2001, June 25 to September 28, 2001,
October 12 to November 2, 2001, November 8 to
December 14, 2001, and January 7 to July 5, 2002, is
dismissed, and the determination made by the Minister of National Revenue on
July 7, 2005, is confirmed in that the Appellant was not employed in
insurable employment during the periods in issue, in accordance with the
attached Reasons for Judgment.
Signed at Ottawa, Canada, this 24th day of November 2006.
"Alain Tardif"
Translation certified true
on this 12th day of July 2007.
Brian McCordick, Translator
Citation: 2006TCC639
Date: 20061124
Docket: 2005-3397(EI)
BETWEEN:
GILLES PELLETIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] This is an appeal
from a determination by the Respondent, of which the Appellant was notified by
letter dated July 7, 2005. The determination was that the work done
by the Appellant during the periods from January 27 to April 30, 1999, May 3 to
October 13, 1999, October 18 to December 21, 1999, January 7 to May 26, 2000,
May 29 to October 14, 2000, October 16, 2000 to June 23, 2001, June 25 to
September 28, 2001, October 12 to November 2, 2001, November 8 to December 14,
2001, and January 7 to July 5, 2002, for the Coopérative Forestière de la MRC de Matane, was not
insurable employment.
[2] In order to explain
and justify his decision, the Minister of National Revenue
("the Minister") relied, inter alia, on the following
assumptions of fact:
[TRANSLATION]
(a) The Payor
became a cooperative corporation on March 10, 1999.
(b) The Payor
essentially did sylvicultural work such as pre-commercial thinning, release
cutting, and, to a lesser extent, timber extraction.
(c) The Payor was
headed by a board of directors consisting of six or seven people.
(d) The Appellant
was the Payor's President and CEO until his resignation in September 2002.
(e) The Payor had a
business relationship with two other entities: Les industries Mec-Bois Inc.,
a wood processing plant of which the Appellant and the Payor each owned 25% of
the shares; and Foresterie 2002 Inc., of which the Payor was the sole
shareholder and the Appellant was the sole director.
(f) The Appellant
got a loan from the Payor in order to purchase his shares in Les Industries
Mec-Bois Inc.
(g) The Appellant
and two other persons guaranteed a $90,000 loan granted by the Bank of Montreal
to the Payor so that the Payor could invest in Les Industries Mec-Bois Inc.
(h) During the
periods in issue, the Appellant did not work for Les Industries Mec-Bois Inc. or
for Foresterie 2002.
(i) As the Payor's
CEO, the Appellant applied and planned for contracts, looked after insurance,
workers' compensation and employee assistance in order to proceed to purchase
materials.
(j) The Appellant
worked on the Payor's premises, on the road, and, at least once a week, in the
woods.
(k) The Appellant's
work schedule was very flexible, but was generally from Monday to Friday
between 8:00 a.m. and 5:00 p.m. He could work weekends.
(l) The Appellant
received fixed weekly remuneration regardless of the hours that he actually
worked.
(m) The Appellant
rendered numerous services to the Payor outside the periods during which he was
entered in the payroll journal.
(n) The Appellant
received his salary based on the money available [from] the Payor's account.
(o) When the Payor
had no cash on hand, the Appellant worked as a volunteer and merely got his
expenses reimbursed by the Payor.
(p) On July 10,
2001, the Appellant received $14,000 from the Payor as a "work bonus"
for services rendered between October 15, 2000 and
June 23, 2001.
(q) During the
period from October 15, 2000, to June 23, 2001, the
Appellant worked for the Payor on a volunteer basis and drew employment
insurance benefits.
(r) Despite the
numerous periods of employment in issue, the Appellant received only four Records
of Employment (ROEs) from the Payor from May 3, 1999, to
November 2, 2001.
(s) On October 22, 1999, the Appellant received an ROE from the Payor for
the period from May 3 to October 13, 1999, reporting 960
insurable hours and total insurable earnings of $14,400.
(t) On October 17, 2000, the Appellant received an ROE from the Payor for
the period from May 29 to October 6, 2000, reporting 760 insurable hours and
total insurable earnings of $14,820.
(u) On October 2, 2001, the Appellant received an ROE from the Payor for
the period from June 25 to September 28, 2001, reporting 644 insurable hours
and total insurable earnings of $11,544.
(v) On November 13, 2001, the Appellant received an ROE from the Payor for
the period from October 15 to November 2, 2001, reporting 141 insurable hours
and total insurable earnings of $2,340.
(w) The Appellant
claims to have worked for the Payor on a volunteer basis in 2002.
(x) The ROEs issued
by the Payor do not reflect reality insofar as the periods of employment or the
hours actually worked are concerned, and they do not reflect the remuneration
earned by the Appellant during the periods in issue.
(y) In addition,
the quantity and frequency of the volunteer work done by the Appellant are
inconsistent with the definition of a true contract of service.
[3] The contents of
subparagraphs 5 (a), (b), (c), (d), (h), (i), (j), (k), (l), (r), (s), (t), (u)
and (v) were admitted to. As for subparagraph (e), it was denied as written.
Subparagraphs (f), (m), (n), (o), (p), (q), (w), (x) and (y) were denied, while
no knowledge was claimed with respect to subparagraph (g).
[4] During the periods
in issue, the cooperative was very active; generally, during these periods, several
co‑op employees were assigned to the work that was part of the co-op's
economic vocation, that is to say, sylviculture, selective cutting, brush clearing,
etc.
[5] One might say that
the Appellant was the maestro of the planning and administrative
management of the contracts obtained by the cooperative. He split his time
between administrative management work and field work that he did in order to
ensure that the work was properly planned, and, above all, efficiently
performed.
[6] The Appellant
claims that the only work that he did outside the periods reported in the ROEs
was essentially volunteer work, and he said that this accounted for very little
time — not more than a few hours a week.
[7] This so-called
volunteer work purportedly consisted primarily in going to the office,
generally on Thursday afternoons, to listen to the business' telephone
answering machine and respond to the messages on it. The Appellant says that he
did this volunteer work until the various files, in which withholdings had been
made until completion of the work, were closed.
[8] The Appellant's
testimony can be summarized as follows: I worked during the periods reported in
the Records of Employment (ROEs) and was paid a salary for that work. My
periods of employment correspond exactly and exclusively to the periods set out
in the ROEs. Outside these periods, I did no work because I was not paid; in
other words, the ROEs should refer only to paid work; although the volunteer or
unpaid work generally came within my job description, it did not have to be
reported in my ROEs.
[9] He also
categorically denied the contents of Exhibit I‑4, which should be
reproduced here:
|
Week
|
Hours
outside
|
Hours
at office
|
Hourly
rate
|
Total
|
|
Week of October 15 to
October 21, 2000
Week of October 22 to
October 28, 2000
Week of October 29 to
November 4, 2000
Week of November 5 to
November 11, 2000
Week of November 12 to
November 18, 2000
Week of November 19 to
November 25, 2000
Week of November 26 to
December 2, 2000
Week of December 3 to
December 9, 2000
Week of December 10 to
December 16, 2000
Week of December 17 to
December 23, 2000
Week of January 7 to
January 13, 2001
Week of January 14 to
January 20, 2001
Week of January 21 to
January 27, 2001
Week of January 28 to
February 3, 2001
Week of February 4 to
February 10, 2001
Week of February 11 to
February 17, 2001
Week of February 18 to
February 24, 2001
Week of February 25 to
March 3, 2001
Week of March 4 to
March 10, 2001
Week of March 11 to
March 17, 2001
Week of March 18 to
March 24, 2001
Week of March 25 to
March 31, 2001
Week of April 1 to
April 7, 2001
Week of April 8 to
April 14, 2001
Week of April 15 to
April 21, 2001
Week of April 22 to
April 28, 2001
Week of April 29 to
May 5, 2001
Week May 6 to May 12, 2001
Week of May 13 to May
19, 2001
Week of May 20 to May
26, 2001
Week of May 27 to June
2, 2001
Week of June 3 to June
9, 2001
Week of June 10 to
June 16, 2001
Week of June 17 to
June 23, 2001
|
6
4
5
7
4
3
6
5
5
7
8
14
22
8
18
41
40
26
28
12
20
16
38
40
40
40
40
40
40
4
6
5
4
8
|
40
40
40
40
40
40
40
40
40
40
34
26
18
32
22
4
4
14
12
28
20
24
2
40
40
40
40
40
Total
|
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
|
$460.00
$440.00
$450.00
$470.00
$440.00
$430.00
$460.00
$450.00
$450.00
$470.00
$420.00
$400.00
$400.00
$400.00
$400.00
$450.00
$440.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$440.00
$460.00
$450.00
$440.00
$480.00
$14,500.00
|
[10] Thus, the Appellant denies
doing the work described in Exhibit I‑4, and claims that it
essentially consisted of fictitious documents that were necessary to transfer
and withdraw RRSP money invested in the Fonds de solidarité des travailleurs du
Québec.
[11] The Respondent's
evidence, which consisted of the answers obtained during the cross-examination
of the Appellant as well as the testimony of Éric Richard and Jacynthe
Bélanger, revealed a completely different picture of the situation.
[12] Indeed, it was very
clearly shown that the work done by the Appellant did not end on the dates set
out in the ROEs. A very important dimension of his work continued beyond those
dates.
[13] Moreover, the nature
of the work involved could not be justified as work related to his status as
chairman of the board, as opposed to work related to his capacity as CEO.
Primarily, the duties of this work were directly related to his job as CEO of
the Coopérative Forestière de
la MRC de Matane, for which he received remuneration.
[14] Among other things,
I am referring to the collection work after jobs for the cooperative's clients
were completed, the efforts to obtain new contracts for the following year, the
planning of activities, and so forth. These tasks were specifically related to
his job as CEO.
[15] The Appellant tried
to contradict several parts of his statutory declaration, citing the pretext
that he did not draft it himself and had been intimidated by the investigators'
leading questions.
[16] In this regard, the
Court noted that the Appellant was not the sort of person who tends to get
intimidated; rather, he was the type of person who tends to impose his
perception of things.
[17] I also noticed a few
explanations that were totally outlandish coming from a person of his knowledge
and expertise. One such instance was when he said that anything done without
pay cannot be work and therefore should not be taken into account by the
Respondent.
[18] After arguing that
he devoted a few hours to volunteer work, he was contradicted by his own daily
planner (Exhibit I‑2) which contains many entries that show
unequivocally that his workload outside the periods in issue was actually quite
heavy.
[19] The Respondent also
produced Exhibit I‑3, a voluminous document showing how assiduous he
was during the periods in which he testified that he was not employed by the
cooperative, and setting out the numerous expense accounts for which he was
reimbursed during those periods.
[20] The significance of
the Appellant's expense accounts outside the periods in issue is clearly
reflected in Exhibit I‑7, at paragraph 18, which is worth
reproducing:
[TRANSLATION]
18. The worker
regularly submitted expense accounts outside his periods of employment. When we
verified these documents, we noticed that most of the claims included mileage.
In order better to quantify the services rendered by the worker outside his
periods of employment, we identified, on the attached tables, the days for
which he claimed expenses. Based on these tables, we saw that
·
In 1999, the worker
claimed 1977 km of travel from February 29 to April 9 and 805 km from
April 1 to May 31. Expense reimbursements were made during these
periods. His first day of work was May 3, 1999. (Tabs D, E1, E2 and E3.)
·
In 2000, he claimed
602 km in January, 250 km in February, 200 km in March, 300 km
in April and 1200 km in May. His first day of work was
May 29, 2000. (Tabs D, F1, F2, F3 and F4.)
·
In 2001, he claimed
1140 km in January, 500 km in February, 800 km in March and 1680
km in April. Gilles Pelletier was not on the payroll during the year 2002. (Tabs
D, I and J)
[21] During the
cross-examination of the Appellant, counsel for the Respondent sought to contradict
the Appellant using a day planner obtained from his employer. Counsel for
the Appellant vigorously objected to the production of a copy of this day
planner because the Respondent had not disclosed a copy when he requested one
under the Access to Information Act, and he subsequently obtained a copy
of the investigation report, better known as a CPT 101.
[22] I took the objection
under advisement and it is now time to dispose of it. Counsel submitted that
the Respondent was under an obligation to disclose a copy of the day planner to
him as part of his request for the file.
[23] Thus, he submitted
that the day planner was a very important, if not determinative, item of
evidence insofar as the preparation of the Appellant's case was concerned.
[24] He said that since
this document should have been sent to him in response to his access to
information request, this part of the testimony must be excluded from the
Respondent's evidence.
[25] First of all, I
believe that counsel for the Appellant would like to have the provisions of the
Access to the Information Act applied in a criminal context, where any
breach of the Crown's duty of disclosure is often fatal to the prosecution.
[26] This sort of
provision does not exist in employment insurance cases. The Respondent
certainly had the obligation under the Access to Information Act to
produce the documents that were important to the preparation of the Appellant's
case.
[27] However, this
obligation does not include the disclosure of copies of third‑party
documents. The Respondent's duty and obligation with respect to such documents
is to protect the third parties. Moreover, it was not proved that the essential
procedures for obtaining documents under the Access to Information Act
were followed, notably insofar as fees were concerned. Thus, the Appellant's
objection to the right to tender a copy of the Appellant's day planner was
unfounded and must be overruled.
[28] The Appellant also
argued that the Court should limit its analysis to the issue of the number of
insurable hours, not the insurability of the work that was done.
[29] This argument stems
from the fact that, at the time of the very first determination, it was
determined that the work done by the Appellant was insurable but that the
number of insurable hours was far greater than the hours stated in the ROEs.
[30] The Appellant objected
to this first determination by seeking a review of the determination. At that
time, his objection was essentially about the issue of insurable hours: in his
submission, only the hours reported in the ROEs were insurable.
[31] At his request, the
file was reviewed, and it was determined that none of the work done was
insurable. Based on this, he submits that the Court should essentially decide
whether the hours of work in issue outside the periods reported in the ROEs are
hours of insurable employment.
[32] Lastly, the
Appellant also argues that the Court should take account of the fact that the
Respondent formally determined that the Appellant's employment was insurable
and that the sole subject matter of his application for review was the number
of insurable hours.
[33] I do not believe
that I have the authority to determine whether or not the decision at the first
level was correct. The only decision under appeal and before this Court is the
determination of July 7, 2005; in the wake of that determination, the
Appellant filed a Notice of Appeal, which, in fact, reads as follows:
[TRANSLATION]
Grounds of appeal
In my submission, the decision is
unfounded in fact and in law because there was an employer-employee
relationship, and thus, a true contract of service.
[34] One can clearly
assert that the Appellant brought this complaint upon himself or is the author
of the situation that he is now contesting and criticizing.
[35] Was it not he who,
in Exhibit I‑4, formally declared that he worked for a considerable
number of insurable hours? In that document, the Appellant formally asserted
that he worked 1,450 hours and was paid $14,500, assertions that he later categorically
denied upon the review.
[36] Ms. Bélanger, who
was responsible for the file on the review, did indeed believe the Appellant
and allowed him to contradict his writing (Exhibit I‑4) even though
it was validly made, so, accordingly, she set aside the contents of the
document in question. Thus, the Appellant is seeking victory on every issue.
[37] The Appellant chose
to be the only witness to provide evidence with a view to discharging the onus
of proof that was upon him.
[38] Following the Court's
intervention on the issue of the Appellant's dual status, the Appellant
immediately seized the opportunity to argue that the work done outside the
periods reported in the ROEs was part of his duties as chairman of the board,
not as CEO.
[39] This last‑minute
interpretation was not supported by any document or testimony. It was cursory
and essentially oral. On the other hand, the Respondent tendered various
documents which showed beyond a shadow of a doubt the significance of the
Appellant's involvement in the cooperative's affairs outside the periods stated
in the ROEs.
[40] Even if the Court were
to assume that the evidence has shown that a part of this work fell within the Appellant's
mandate as chairman of the board of directors, the remainder of the duties that
he performed would still be so significant that it would show, on a balance of
probabilities, that the Appellant in no way ceased to work on the dates set out
in the ROEs, as he claimed he did in his oral evidence.
[41] The Appellant's testimony,
on which his case was solely based, seriously lacked credibility; I noticed
numerous significant variances between the explanations given on the
examination‑in‑chief and the explanations given on cross‑examination,
notably with respect to the substantial amount of work done at times other than
the periods in issue.
[42] Moreover, did he not
also acknowledge producing a false document so that he could withdraw $14,000
registered as an RRSP with the Fonds de solidarité?
[43] It has been shown on
a balance of probabilities that the Appellant clearly had such great influence
on the management of the cooperative's affairs that he was the undisputed lord
and master of the time, place and manner information contained in the ROEs.
[44] Outside the periods
in issue, he continued to do essentially the same work, with the exception of
the field work. He saw to it that the contracts obtained were fully carried out
so that the amounts due upon performance of the work would be paid.
[45] He was also
responsible for prospecting for customers and seeking new contracts for the
subsequent year.
[46] At the same time as
he did this essential work, he managed relationships with all stakeholders. In
this regard, the expense accounts associated with mileage claims say a great
deal about the significant time that he devoted to his duties.
[47] It has been shown,
on a balance of probabilities, that the Appellant clearly had an agreement with
the Payor which was to both parties' advantage.
[48] The effect of the
agreement on the employer was to reduce its payroll. As for the Appellant,
he received employment insurance benefits and was reimbursed for his expenses.
[49] As I have stated
many times, the Employment Insurance Act ("the Act") is
not a support measure for businesses. It is essentially a social measure
intended to help workers who truly lose their work definitively or for a time.
[50] The Appellant's
periods of employment in the case at bar had nothing to do with the periods
reported in the ROEs. Rather, there was an agreement that enabled the parties
to take advantage of the benefits under the Act and had nothing to do with a
true contract of service, which must meet three fundamental conditions in order
to exist:
·
remuneration
based on the work performed;
·
relationship
of subordination; and
·
actual
performance of the remunerated work.
[51] The burden of proof
was on the Appellant, but he has not proven the existence of a relationship of
subordination, and such a relationship is not presumed. Moreover, it has been
established, on a balance of probabilities, that the salary had nothing to do
with the duration of the work.
[52] For all these reasons, the appeal is
dismissed.
Signed at Ottawa, Canada, this
24th day of November 2006.
"Alain Tardif"
Translation
certified true
on this 12th day
of July 2007.
Brian McCordick,
Translator
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