Citation: 2005TCC248
Date: 20050418
Docket: 2004-4444(EI)
BETWEEN:
JACQUES LÉVESQUE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
NICOLE ST-JULES,
Intervener.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Dussault J.
[1] This is an appeal
against a decision of the Minister of National Revenue (the
"Minister") according to which Nicole St-Jules held insurable
employment in the service of the Appellant from September 4, 2000 to May 14,
2004.
[2] In determining that
the worker was employed by the Appellant under a contract of service, the
Minister based his decision on the hypotheses set out at paragraphs (a) to (r)
of paragraph 5 of the Response to Notice of Appeal. These paragraphs read:
(a) the Appellant
was a bus driver for the Montreal Transportation Commission;
(b) the wife of the
Appellant died in 1999;
(c) the Appellant
has two young children, Josiane, born in 1991 and Laurence, born in 1995;
(d) the worker was hired
as a caregiver for the children;
(e) during the
period at issue, the worker performed her services at the home of the
Appellant;
(f) the duties of
the worker consisted of looking after the children, taking care of them on
their return from school, preparing the meal and housekeeping;
(g) the worker
performed the services for the Appellant 4 to 5 days a week;
(h) the worker
generally worked from Monday to Thursday, but the days on which she worked
could vary depending on the days worked by the Appellant;
(i) the hours of
work of the worker were from 10.30-11.00 am to 5.00-5.30 pm;
(j) the worker
performed her services for the Appellant for approximately 32 hours a week;
(k) the worker was
paid $40 for each day's work;
(l) the worker was
paid by cheque every week;
(m) the worker was
required to notify the Appellant in the event of absence;
(n) in the event of
her absence, the worker was not responsible for finding a replacement;
(o) in performing
her duties, the worker used property and equipment belonging to the Appellant;
(p) the worker
incurred no expenses in the performance of her duties;
(q) there was no
possibility that the worker would incur a financial loss;
(r) the duties of
the worker corresponded to the needs of the Appellant.
[3] Subparagraphs (f),
(h), (i), (j) and (r) are denied. The Appellant provided explanations regarding
subparagraphs (g), (m) and (p).
[4] The Appellant and
Nicole St-Jules testified.
[5] The Appellant
stated that he never regarded himself as an employer and Ms. St-Jules
presented herself as a self-employed person. The Appellant explained that,
after the death of his wife, he had to find a caregiver for his children. Since
he trusted Ms. St-Jules, he hired her essentially to look after the children,
supervise their homework and lessons, prepare meals and see that the children
ate. The Appellant mentioned that his mother was also frequently at the house
at mealtimes.
[6] Since Ms. St-Jules
was not always available, because she was initially working elsewhere every
other Friday, the Appellant explained that he, on those occasions, used the
school day‑care facilities or his mother. He also stated that he had
changed his own work schedule one year in order to adjust to the availability
and schedules of Ms. St-Jules.
[7] The Appellant
confirmed that he paid Ms. St-Jules a set amount of $40 a day, but that she had
to pay for her own bus transportation.
[8] Exhibit A-1 is a
document showing the amounts paid to Ms. St‑Jules for each week of the
period at issue. Since the agreed remuneration was $40 a day, it is easy to
calculate the number of days worked each week. This number generally varies
from two to five days, but is more frequently three to five days a week.
However, the Appellant explained that Ms. St-Jules had not worked from mid‑June
to mid-August 2001 or from mid-December 2001 to the beginning of January 2002.
These periods of absence notwithstanding, the Appellant indicated that Ms.
St-Jules had worked 56 days in 2000 (from September 4 to December 31), 146
days in 2001, 271 days in 2002, 187 days in 2003 and 75 days in 2004 (from
January 1 to May 14).
[9] During cross‑examination,
the Appellant stated that Ms. St‑Jules was supposed to look after the
children at his home, that she was not able to look after other children, that
she informed or notified him if she anticipated activities outside the home
with the children and that she gave him a report after each day's work.
[10] In her testimony,
Ms. St-Jules stated that her schedule was flexible and that she generally
arrived at the home of the Appellant around 10.30 or 11.00 am and left around
5.30 or 6.00 pm. She said that initially, when the Appellant was working
evenings, she finished around 8 pm. Ms. St-Jules also explained that she had not
always been available, either because of health problems, because of
appointments with the doctor or to undergo medical tests.
[11] With regard to her
duties, Ms. St-Jules stated that she fetched the younger of the two children
from school, that she looked after them and showed them how to do their
lessons. She also said that she could go out with the children and take them to
the park. She stated that she reported to the Appellant like any good
caregiver.
[12] Ms. St-Jules
confirmed that she could not look after other children or find a replacement
for herself.
[13] The Appellant
maintains that Ms. St-Jules was a self-employed worker, that she introduced
herself as such, that she could have other activities and work elsewhere. When
she was not available, Ms. St-Jules simply notified him and he would make other
arrangements for childcare. According to him, she did not have permission to
ask him about this, and he was the one who had to adjust to Ms. St-Jules'
availability.
[14] The Appellant
acknowledged that he asked Ms. St-Jules for a report, and that she gave him
one, like any good caregiver, but that she was otherwise free when she was
looking after the children.
[15] Counsel for the
Respondent maintained that Ms. St-Jules was performing her duties at the home
of the Appellant under a contract of service. She emphasized specifically the
power of control and the control exercised by the Appellant with regard to the
performance of her duties. Counsel for the Respondent also noted that Ms.
St-Jules could not arrange for her own replacement, that she was required to
inform the Appellant if she was not available and that she had to report to him
what she had done.
[16] She recalled that
Ms. St-Jules looked after the children on a regular basis at the home of the
Appellant, without being required to provide anything, for a set salary of $40
a day and with no other expenses than her transportation costs.
[17] Counsel for the
Respondent cited the decisions in Mohr v. Canada (Minister
of National Revenue – M.N.R.), T.C.C., No. 97-481(UI), October 24,
1997, [1997] T.C.J. No. 1252 (Q.L.), Mayer v. Canada (Minister
of National Revenue – M.N.R.), T.C.C., No. 2004-286(EI), January 21,
2005, [2005] T.C.J. No. 34 (Q.L.), and Wells v. Canada (Minister
of National Revenue – M.N.R.), T.C.C., No. 86-607(UI), June 10, 1987,
[1987] T.C.J. No. 640 (Q.L.), to conclude that Ms. St-Jules performed her
duties under a contract of service. In these three decisions, the power of
control actually exercised by the employer, specifically through the children
clearly appears to have been a decisive factor.
[18] Counsel for the
Respondent also referred to several decisions which held that child care
services were not performed under a contract of service. These are the
decisions in Ferme Gendroline Enr. v. M.N.R., T.C.C., No. 87‑169(UI), October 27, 1987, [1987] T.C.J.
No. 910 (Q.L.), Hastie v. M.R.N., T.C.C., No. 1999‑3173(EI),
December 9, 1999, [1999] T.C.J. No. 864 (Q.L.), Blouin‑Poirier v. Canada
(Minister of National Revenue – M.N.R.), T.C.C., No. 98‑850(UI),
September 13, 1999, [1999] T.C.J. No. 596 (Q.L.), Randa v. Canada
(Minister of National Revenue – M.N.R.), T.C.C., No. 97‑1196(UI),
October 16, 1998, [1998] T.C.J. No. 940 (Q.L.) et Thériault v.
Canada (Minister of National Revenue – M.N.R.), T.C.C., No. 97‑442(UI),
March 13, 1998, [1998] T.C.J. No. 193 (Q.L.). The absence of control by the payor
and the wide margin of latitude left to the caregiver in the performance of her
duties are elements that are found in the majority of these decisions.
[19] Counsel for the
Respondent also referred to the decision of the Federal Court of Appeal in Gallant
v. M.N.R., No. A-1421-84, May 22, 1986, [1986] F.C.J. 330 (Q.L.), to
emphasize that, in a contract of service, the decisive factor is not the
exercise of control by the employer, but "rather the power the employer
has to control the way in which the employee performs their duties."
Analysis
[20] To say the least,
the decisions to which Counsel for the Respondent referred illustrate the
inherent difficulty in distinguishing precisely between a contract of service
or employment and a contract for services in situations where services are
performed in the home which have no relationship to the activities of the
payor. The exercise becomes even more difficult when the payor is not even on
the premises, as is the case with childcare.
[21] It is important to
mention that, since June 1, 2001, the legislator has specifically provided in
subsection 8.1 of the Interpretation
Act
for a referral to the private law of the province where the litigation
originates when it is necessary to go back to concepts that fall within the
purview of the civil law of the province. The wording of section 8.1 is as
follows:
8.1 Both the common law and the civil law are equally authoritative and
recognized sources of the law of property and civil rights in Canada and,
unless otherwise provided by law, if in interpreting an enactment it is
necessary to refer to a province's rules, principles or concepts forming part
of the law of property and civil rights, reference must be made to the rules,
principles and concepts in force in the province at the time the enactment is
being applied.
[22] A contract of
employment is defined at article 2085 of the Civil Code of Quebec (C.C.Q.)
and the contract for services or contract of service is defined in articles 2098 and 2099 of the C.C.Q. These articles
read as follows:
2085. A contract
of employment is a contract by which a person, the employee, undertakes for a
limited period to do work for remuneration, according to the instructions and
under the direction or control of another person, the employer.
[...]
2098. A contract of enterprise or for services is a
contract by which a person, the contractor or the provider of services, as the
case may be, undertakes to carry out physical or intellectual work for another
person, the client or to provide a service, for a price which the client binds
himself to pay.
2099. A contract
of enterprise or for services is a contract by which a person, the contractor
or the provider of services, as the case may be, undertakes to carry out
physical or intellectual work for another person, the client or to provide a
service, for a price which the client binds himself to pay.
[23] In Sauvageau Pontiac Buick GMC ltée v. Canada, T.C.C., No. 95‑1642(UI),
October 25, 1996, [1996] T.C.J. No. 1383 (Q.L.), Archambault J., in referring
to the decision of the Supreme Court of Canada in Quebec Asbestos
Corp. v. Couture, [1929] S.C.R. 166, concluded, with regard
to these definitions, that the distinguishing feature was the presence or
otherwise of a relationship of subordination. Furthermore, it retained the
definition of this expression formulated by Pratte J. A. in Gallant. At
paragraph 12 of his decision, Archambault J. explained his reasoning as
follows:
12 It is clear from these provisions of the
C.C.Q. that the relationship of subordination is the primary distinction
between a contract of enterprise (or of services) and a contract of employment.
[See Note 2 below] As to this concept of a relationship of
subordination, I feel that the comments of Pratte J.A. in Gallant are
still applicable:
The distinguishing feature of a contract of service is not the
control actually exercised by the employer over his employee but the power the
employer has to control the way the employee performs his duties.
[24] Furthermore, in D & J Driveway Inc. v. Canada, F.C.A., No. A‑512‑02,
November 27, 2003 N.R. 381, [2003] F.C.J. No. 1784 (Q.L.), Létourneau
J. of the Federal Court of Appeal stated that an employer/employee relationship
is not necessarily present just because a payer can control the result of the
work. Létourneau J. formulated his reasons as follows at paragraph 9 of the
decision:
9 A contract of employment requires the existence of a relationship of
subordination between the payer and the employees. The concept of control is
the key test used in measuring the extent of the relationship. However, as our
brother Décary J.A. said in Charbonneau v. Canada (Minister of National
Revenue - M.N.R.), [1996] F.C.J. No. 1337, [1996] 207 N.R. 299, followed in
Jaillet v. Canada (Minister of National Revenue - M.N.R.), 2002 FCA 394,
control of the result and control of the worker should not be confused. At paragraph
10 of the decision, he wrote:
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.
[25] In the instant case,
did a relationship of subordination exist between Ms. St-Jules and Mr.
Lévesque, on the basis of which we can conclude that a contract of employment
existed? Several factors can be considered in order to detect the presence or
absence of a relationship of subordination. In her decision in Seitz v. Entraide populaire de
Lanaudière inc., Court of
Quebec (Civil Chamber), No. 705-22-002935‑003, November 16, 2001, [2001]
J.Q. No. 7635 (Q.L.), Monique Fradette J. of the Court of Quebec set out a
series of factors on the basis of which it could be determined whether a
relationship of subordination existed or not. She expressed herself on this
point in paragraphs 60 to 62 of the decision:
60 The caselaw requires, in order for there to
be a contract of service, the existance of a right of supervision and immediate
direction. The mere fact that a person gives general instructions about the way
in which the work is to be performed, or that he reserves the right to inspect
and supervise the work, is not sufficient to convert the agreement into a
contract of employment.
61 A series of factors developed by the
caselaw allows the Court to determine whether or not a relationship of
subordination exists between the parties.
62 The indicators of control are:
·
obligatory presence at a place of work
·
compliance with the work schedule
·
control of the absences of the employee for
vacations
·
the submission of activity reports
·
control of the quantity and quality of work
·
the imposition of ways in which the work is to
be performed
·
the power of sanction over the employee's
performance
·
source deductions
·
benefits
·
the status of the employee in their declaration
of earnings
·
the exclusive nature of services for the
employer
[26] However, I do not
consider that our analysis must stop simply because there are a number of
factors that support the conclusion that a relationship of subordination
exists. The exercise consists, according to the distinction established in the
C.C.Q., of identifying the overall relationship between the parties. The object
is thus to establish the proportion in which the factors that support the
conclusion that a relationship of subordination exists predominate over the
others. The relationship of subordination between the Appellant and Ms.
St-Jules could, in my view, be established by the following factors: the fact
that it was clearly established that Ms. St-Jules was required to go to the
residence of the Appellant to perform her duties, the fact that Ms. St-Jules
could not arrange for her own replacement and the fact that she looked after
the children, without being required to provide anything, for a set salary of
$40 a day.
[27] On the other hand,
in my view, some facts are not determinative. They are as follows: the fact
that Ms. St-Jules was required to submit a report after each day's work and the
fact that she notified Mr. Lévesque when she anticipated going outside the
house. Anyone who has ever looked after their children will say that it is entirely
normal and customary to ask a caregiver for a report at the end of the evening
or the day, just as it is normal to ask to be notified when the caregiver
anticipates going outside the house with the children. Not to do so would
reflect a degree of negligence on the part of the parents. The fact that
Mr. Lévesque asks for a report at the end of the day is merely a neutral
indicator that cannot be used to establish a relationship of subordination
between the Appellant and Ms. St-Jules. The Appellant was merely exercising a
degree of supervisory authority in view of the nature of the services provided
by Ms. St‑Jules, namely services which directly affected the welfare
of his own children. Even in daycare centres, the staff report to the parents.
[28] In examining the
overall relationship between the parties, we can also identify factors that
would indicate the absence of a relationship of subordination. Thus, Ms.
St-Jules was free to choose the ways in which she performed her duties when she
was looking after the children. The Appellant did not require her to perform
her duties in any specific way and does not seem to have been in a position to
control how she did so, other than by the results. Furthermore, her schedule
was flexible, and it even happened that she was not available on some days or
during more extensive periods because of health problems or for other reasons.
Ms. St-Jules could also have other activities and work elsewhere. When she was
not available, Ms. St-Jules notified the Appellant, who would make other
arrangements to look after his children. Ms. St-Jules did not have to ask him
for permission to do this. Paradoxically, it would appear that it was the
Appellant himself who was dependent on Ms. St-Jules. In fact, on several
occasions, the Appellant had to adjust his own plans based on the availability
of Ms. St-Jules.
[29] Furthermore, I note
that the Appellant had no way of controlling the absences of Ms. St-Jules, did
not withhold any source deductions and required no exclusivity on her part,
since she could work.
[30] I believe it is also
appropriate to attach a degree of importance to the intentions of the parties.
This is apparent in this case. The Appellant stated that he never regarded
himself as an employer and that Ms. St-Jules had presented herself as
self-employed. In Wolf v. Canada, [2002] ¸4 F.C. 396,
[2002] F.C.J. No. 375 (Q.L.), Décary J. had this to say at paragraphs 119 and
120 of his decision:
[119] Taxpayers may arrange their affairs in such a lawful way as they
wish. No one has suggested that Mr. Wolf or Canadair or Kirk Mayer are not
what they say they are or have arranged their affairs in such a way as to
deceive the taxing authorities or anybody else. When a contract is genuinely
entered into as a contract for services and is performed as such, the common
intention of the parties is clear and that should be the end of the search. [...]
[120] In our day and age, when a worker decides to keep his freedom to
come in and out of a contract almost at will, when the hiring person wants
to have no liability towards a worker other than the price of work and when the
terms of the contract and its performance reflect those intentions, the
contract should generally be characterized as a contract for services. If
specific factors have to be identified, I would name lack of job security,
disregard for employee-type benefits, freedom of choice and mobility concerns.
[My emphasis.]
[31] In the instant case,
there is no written contract. There was a very simple verbal agreement based on
trust in respect of a service that can be very demanding for a reliable person
whose primary concern is the welfare of the children. For Mr. Lévesque, whose
wife had recently died, his primary concern was to have the children looked
after, to find someone trustworthy who would look after them when he could not
do so himself because he was at work, in accordance with the availability of
that individual. I would add that the fact that a contract is written or oral
does not fundamentally change the nature of the contract. Thus, I feel that,
although they were formulated in a different context, the words of Décary J.
retain all their relevance in an analysis of the overall relationship between
the parties, when the aim is to determine the nature of a contract in respect
of services.
[32] Lastly, in St.
John's Ambulance v. Canada, F.C.A., No. A-685-02, October 13, 2004,
[2004] F.C.J. No. 1680 (Q.L.), Létourneau J. also stated that great importance
should be given to the intent of the parties:
[3] Although the stated intent of the parties or their mutual
understanding are not necessarily determinative of the nature of their
relationship, they are, however, entitled to considerable weight in the absence
of evidence to the contrary, such as a behaviour which betrays or contradicts
the said intent or understanding. Where the parties "have freely elected
to come together in separate business arrangements rather than one side
arbitrarily and artificially imposing that upon the other, so that in fact it is
a sham, parties should be left to their choice and that choice should be
respected by the authorities". We agree with this statement of Porter D.T.
C.J. in Krakiwsky v. Canada (Minister of National Revenue - M.N.R.),
2003 T.C.J. No. 364.
[33] In light of the foregoing,
I believe that there are more factors or elements that support the absence of a
relationship of subordination. My conclusion is thus that the Appellant and
Ms. St‑Jules were not bound by a contract of employment, but rather
by a service contract during the period at issue. As a result, the appeal is
allowed and the decision of the Minister is set aside.
Signed at Ottawa, Canada, this 18th day of April,
2005.
" R. Dussault"
Certified true
translation
On this 1st day of
February, 2006.
Garth McLeod,
Translator
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