|
Citation: 2005TCC11
|
|
Date: 20050113
|
|
Docket: 2004-115(EI)
|
|
BETWEEN:
|
|
DANY CASTONGUAY,
|
|
Appellant,
|
|
and
|
|
|
|
THE MINISTER OF NATIONAL REVENUE,
|
|
Respondent.
|
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Bédard J.
[1] The Appellant is appealing from
the decision of the Minister of National Revenue (the "Minister")
according to which the Appellant did not hold insurable
employment during the periods at issue, that is, from February 1
to June 19, 1999, from January 31 to April 17, 2000, from
February 5 to June 16, 2001, and from February 4 to May 18, 2002,
with 9006-0674 Québec Inc. (the "Payor"), under a genuine
contract of service within the meaning of paragraph
5(1)(a) of the Employment Insurance
Act (the "Act").
[2] The facts on which the Minister
relied are described in paragraph 5 of the Reply to the Notice of
Appeal and are as follows:
(a) The Payor,
incorporated in 1994, has been operating a sugar bush with 18,000
taps since 1999; it has the necessary equipment for the
manufacturing of syrup;
(b) Since 1999, the
Payor's shares have been held equally by the brothers Jocelyn and
Claude Lagacé;
(c) The Payor only
produces syrup, it does not offer meals and is not open to the
public;
(d) Since 1999, the
Appellant has been the owner of a sugar bush with 4,000 taps all
connected by tubing;
(e) The Appellant's
sugar bush is adjacent to the Payor's sugar bush;
(f) The
Appellant only has one pumping station;
(g) From 1999 to
2002, the Appellant had the Payor boil his sap which charged him
55 cents per pound of syrup;
(h) Appellant is not
related to the Payor;
(i) The
Appellant argues that he tapped his trees every year towards the
end of February, over 2 or 3 days, even though his sugar bush has
4,000 taps;
(j) The Payor
had a separate meter to calculate the quantity of maple sap
obtained from the Appellant's sugar bush and it gave him a
percentage of the proceeds from the sale of maple syrup
corresponding to his part of the sap gathered;
(k) During the
periods at issue, the Payor hired the Appellant to work at its
maple bush;
(l) During the
production season, the Appellant's main duties with the Payor
were to monitor and repair the tubing and monitor relays in the
woods;
(m) According to Jocelyn
Lagacé, the Appellant spent the rest of his time working
at the Payor's sugar shack boiling sap and washing
reservoirs;
(n) The Appellant
had no work schedule to follow and his hours were not accounted
for by the Payor;
(o) The Appellant
began to render services for the Payor at least one month prior
to his being on the Payor's payroll with no earnings;
(p) The Appellant
put in hours of work at the beginning of each season before being
on the Payor's payroll;
(q) When he was on
payroll, the Appellant received a gross weekly salary of $702
regardless of the actual hours worked;
(r) According to his
records of employment, the Appellant supposedly worked
until June 19 in 1999, until June 17 in 2000, until June 16 in
2001 and until May 18 in 2002 while the Appellant remained in his
employment for only 1 or 2 weeks at the end of the sugaring
season, which usually ended at the end of April, to wash the
tubing;
(s) On December 27,
1999, the Payor issued a record of employment to the Appellant,
for the period from March 29 to June 19, 1999, showing
540 insurable hours and insurable earnings totalling
$8,424;
(t) On
November 25, 2000, the Payor issued a record of employment to the
Appellant, for the period from April 3 to June 17, 2000, showing
495 insurable hours and insurable earnings totalling
$7,722;
(u) On November 1,
2001, the Payor issued a record of employment to the Appellant,
for the period from April 2 to June 16, 2001, showing
405 insurable hours and insurable earnings totalling
$6,318;
(v) On October 18,
2002, the Payor issued a record of employment to the Appellant,
for the period from March 31 to May 18, 2002, showing
315 insurable hours and insurable earnings totalling
$4 ,914;
(w) The records of
employment issued by the Payor to the Appellant do not accurately
reflect the first day worked, the last day paid, the periods
actually worked or the hours actually worked by the Appellant
during the periods at issue;
(x) The parties came
to an arrangement so as to allow the Appellant to qualify for
unemployment insurance benefits.
[3] All the facts on which the
Minister relied were admitted except for the facts described in
subparagraphs (n), (o), (p), (q), (w) and (x) of paragraph 5 of
the Reply to the Notice of Appeal.
Analysis
[4] For the Appellant to receive
employment insurance, the work must be performed within the
framework of a genuine contract of service. In determining
whether a contract of employment is eligible, the following
criteria have been identified in the case law: the relationship
of subordination giving the payor a power of control over the
work performed for wages paid, the chance of profit and risk of
loss, ownership of the tools and integration.
[5] The application of these criteria
to the facts available obviously supports the conclusion
that the contract of employment is eligible. However, it is just
as important that there be a genuine contract of employment,
without which the exercise of applying the criteria is completely
useless. The first issue to be resolved here is whether the
contract binding the Appellant constituted a genuine contract of
employment. Was the employment in the case at bar a
façade?
Work performance
[6] What work did the Appellant perform during the period from
February 1 to June 19, 1999, from January 31 to April 17, 2000,
from February 5 to June 16, 2001, and from
February 4 to May 18, 2002?
[7] It should be noted that at the
hearing the Appellant admitted that he remained in his employment
with the Payor for only 1 or 2 weeks[1] at the end of the sugaring season,
which usually ended at the end of April, and that he washed the
tubing during that period.
[8] I note as follows:
(i) On December 27, 1999, the
Payor issued a record of employment to the Appellant, for the
period from March 29 to June 19, 1999, showing 540
insurable hours. According to the records of employment
(Exhibit A-2), the Appellant would have therefore worked 315
hours in May and June 1999, while he admitted to only working
about 68 hours[2] during those two months. It can therefore be concluded
that in May and June 1999, the Appellant did not perform any work
during the 247 hours indicated for this period of two months.
(ii) On November 25, 2000, the
Payor issued a record of employment to the Appellant, for the
period from April 3 to June 17, 2000, showing 495 insurable
hours. According to the records of employment (Exhibit A-2), the
Appellant would have therefore worked 315 hours in May and
June 2000, while he admitted to only having worked about 68 hours
during those two months. It can therefore be concluded that the
Appellant did not perform any work during the 247 hours indicated
for this period of two months.
(iii) On November 1, 2001, the Payor
issued a record of employment to the Appellant, for the period
from April 2 to June 16, 2001, showing 405 insurable hours.
According to the records of employment (Exhibit A-2), the
Appellant would have therefore worked 306 hours in May and
June 2001, while he admitted to only having worked about 68 hours
during those two months. It can therefore be concluded that the
Appellant did not perform any work during the 238 hours indicated
for this period of two months.
(iv) On October18, 2002, the Payor
issued a record of employment to the Appellant, for the period
from March 31 to May 18, 2002, showing 315 insurable hours.
According to the records of employment (Exhibit A-2), the
Appellant would have therefore worked 117 hours in May and
June 2002, while he admitted to only having worked about 68 hours
during those two months. It can therefore be concluded that the
Appellant did not perform any work during the 49 hours indicated
for this period of two months.
[9] The relevant parts of the
statutory declarations (Exhibit I-1 and I-2) of the Appellant and
Jocelyn Lagacé (one of the Payor's shareholders)
pertaining to the nature of the Appellant's work are worthy of
note:
[Translation]
. . . Concerning my periods of employment with Jocelyn
Lagacé, my records of employment do not accurately reflect
the first day of work. We agreed on banking the first days of
work because at the beginning of the season, owing to the length
of the day and the cold, it was impossible to work a full-time
week. Year after year, I would begin in mid-January cutting
fallen branches, performing repairs to continue through the
tapping in mid-February, covering leaks in March, April and
finish with the washing in mid-May. There were also years where I
would continue to fell for a few weeks. His sugar bush has 18,000
taps. Therefore, the first days of work indicated on all my
records of employment from the sugar bush of Jocelyn and Claude
Lagacé (9006-0674 Québec Inc.) are incorrect, they
should be in mid-January. As for the last days of work, the total
number of insurable hours and [error in the original] total
insurable amounts, they are correct.
. . . We agreed that he would put in hours at the beginning of
the season to compensate for the hours he would be spending in
his sugar bush tapping and covering leaks for example. He is the
one who kept track of his hours. I did not want to begin
monitoring all that. He could, in my opinion, work about a
hundred hours before being on the payroll. Over the years on a
few occasions, hours were accumulated because he only worked a
day and a half in his week for example. For the rest, he would be
ahead with the hours he would have to work in his own sugar bush.
Normally, I do my own repairs before the tapping period so that
tapping activities can start later and the process goes faster.
Once the repairs are made, it takes us up to 10 days to tap. I
normally finish the last week of March. The records of employment
issued to Dany Castonguay in 1999, 2000, 2001 and 2002 do not
therefore accurately reflect the first days of work, which should
be at the beginning of February (not in mid-January as you were
told by Dany Castonguay because it is too early). Although I
was aware that my first days of work were not accurately
reflected, the total wages paid and the total number of hours
were accurately reflected.
. . . In 1998, I hired Dany Castonguay because his 5,000 or so
taps were supposed to be ready but they were not. Seeing that he
needed to finish collecting his unemployment stamps, I hired him
anyway and had him fell so that he could finish collecting his
stamps. . . .
[10] In his testimony, the Appellant
essentially reiterated the statements made in his statutory
declaration. In fact, he testified that he accumulated hours,
that is to say that he worked a hundred or so hours for the Payor
for each of the years at issue, before being on the Payor's
payroll. He added that the hours so accumulated compensated
for the hours he did not work in May and June and that therefore
the total hours worked for each of the years at issue was
accurate. He also testified that he worked 45 hours per week,
Monday through Friday, from 7 a.m. to 7 p.m. Finally, he added
that during those working hours, he did not work in his own sugar
bush: his spouse and his father were therefore attending to his
sugar bush.
[11] The burden of proof lay with the
Appellant. First, he was to convince me that he worked
540 hours, 495 hours, 405 hours and 315 hours
for the Payor for the periods from February 1 to June 19, 1999,
from January 31 to April 17, 2000, from February 5
to June 16, 2001, and from February 4 to May 18, 2002,
respectively. It was not by making general, inaccurate, false
statements, often implausible and contradicted by the statements
of Mr. Lagacé that he could convince me, for the following
reasons:
(i) The Appellant submitted that
he began to work for the Payor as
of
mid-January. This statement was simply contradicted by Mr.
Lagacé's statement that the Appellant's employment began
at the beginning of February.
(ii) The Appellant submitted
that he worked a hundred or so hours for the Payor for each of
the years at issue before being on the Payor's payroll. I note
that he testified that the hours so accumulated compensated for
hours he did not work in May and June and that therefore the
total hours worked for each of the years at issue was accurate.
However, the evidence shows that in May and June 1999, the
Appellant only worked about 68 hours of the hours recorded
on the Payor's payroll. The number of hours he did not work
during those two months was therefore 247. Therefore, how can the
Appellant claim that the total hours worked for 1999 was
accurate? It is just as difficult, if not impossible, to conclude
that for the others years at issue, the total hours the Appellant
worked was accurate. In fact, the accumulation of a hundred or so
hours did not in any way compensate for the hours he did not work
in May and June of 2000 and 2001.
(iii) The Appellant testified that it
was one of the Payor's shareholders that kept track of his
working hours. Mr. Lagacé's statement in that respect was
as follows:
He is the one who kept track of his hours. I did not want to
begin monitoring all that.
(iv) It should also be noted that Mr.
Lagacé stated that the agreement binding him to the
Appellant was that the latter would put in hours of work at the
beginning of the season to compensate for the hours he would
spend in his own sugar bush tapping and repairing leaks. However,
the Appellant stated that during the weeks he was working, his
father and his wife would repair tubing leaks and that he would
tap his maples on weekends.
[12] I conclude that this employment was
merely a façade and that the Appellant and the Payor came
to an arrangement in order to allow the Appellant to receive
employment insurance benefits. I am of the opinion that the
contract binding the Appellant and the Payor did not constitute a
genuine contract of employment. In fact, the Appellant had to
prove that the contract of employment binding him to the Payor
met all the conditions set out in the Civil Code of
Québec. He therefore also had to prove that services
were in fact performed, one of the elements essential to the
existence of his contract of employment. The Appellant simply did
not discharge his obligation to prove on a balance of
probabilities that the contract binding him to the Payor was a
genuine contract of employment. In light of the foregoing, I do
not think there is any need to consider the other conditions set
out in the Civil Code of Quebec.
[13] For these reasons, the appeal is
dismissed.
Signed at Ottawa, Canada, this 13th day of January 2005.
Bédard J.
Translation certified true
on this 12th day of April 2005.
Daniela Possamai, Translator
Email this Content