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Citation: 2004TCC656
Date: 20041013
Docket: 2003-2232(EI)
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BETWEEN:
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AGNEAU DE L'EST INC.,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Angers, J.
[1] This is an appeal of a decision
the Minister of National Revenue (the "Minister") rendered on
April 16, 2003, to the effect that the employment of
Mr. Claude Barrette with the Appellant was insurable
employment from January 1 to October 18, 2002 because it met the
conditions of a contract of employment within the meaning of
paragraph 5(1)(a) of the Employment Insurance Act
(the "Act"). The Minister based the decision on the following
presumptions of fact, which were accepted or denied as
indicated:
a) the
Appellant, a corporation incorporated on February 14, 2001, acts
primarily as a lamb marketing agency with sheep producers;
[accepted]
b) the
Appellant delivers meat processed at the slaughterhouse to its
various customers located primarily in Quebec City and Montreal;
[accepted]
c) the
Appellant's sole shareholder and director is Marielle C.
Deschênes; [accepted]
d) the
Appellant's business hours are mainly from 9:00 a.m. to 5:00
p.m., from Monday to Friday; [accepted]
e) the
Appellant hired the worker as a truck driver on or about March
26, 2001; [accepted]
f) there
is no written contract of employment between the parties;
[accepted]
g) the
worker's duties involved travelling to the Luceville
slaughterhouse, loading the truck and delivering the goods to the
Appellant's various customers; [accepted]
h) when the
worker was hired, he held only a temporary drivers'
license. He therefore had to be accompanied by another
driver to carry out his duties; [accepted]
i) the
worker used the Appellant's only refrigerator truck and it had a
3-tonne capacity; [accepted]
j) the
Appellant paid the gas, insurance and maintenance costs for its
truck; [accepted]
k) the
Appellant was responsible for providing the worker with a rented
truck if its truck broke down; [accepted]
l) the
Appellant provided the worker with a Petro Canada credit card and
a debit card to enable the worker to purchase diesel and make
withdrawals when required for minor repairs;
[accepted]
m) the Appellant
provided the worker with a cellular telephone and a small tool
kit; [accepted]
n) the
Appellant based the worker's itinerary on orders from its
customers; [denied as written]
o) after each
trip, the worker had to provide the Appellant with a record of
his travel, a logbook, and the delivery slips signed by
customers; [denied as written]
p) the worker
was not required to work a fixed number of hours every
week. The number of hours varied depending on the
destinations the Appellant assigned; [denied as
written]
q) when
customers refused goods, the worker contacted the Appellant for
instructions; [denied]
r) the
worker was paid a lump sum every week; his remuneration varied
depending on the destination and was $240 for a return trip to
Montreal and $120 for a return trip to Quebec City; [denied as
written]
s) the
Appellant occasionally paid the worker a bonus to thank him when
there was a heavy workload; [denied as written]
t) the
worker paid hotel and meal expenses; [accepted]
u) starting in
June or July 2002, further to an agreement the Appellant entered
into with the Potager du Fleuve de Pointe-aux-Pères, the
latter added a vegetable delivery contract to the worker's
itinerary; [denied as written]
v) if he was
absent, the worker was personally unable to hire someone else to
replace him; [denied]
w) the Appellant
paid the worker's wage loss insurance premiums [denied]
and those for the truck's contents; [accepted]
x) during his
last week of employment, the worker agreed to train a new driver
for the Appellant's benefit;
y) the worker
filed a complaint with the Commission des Normes du Travail
[labour standards commission], claiming, among other things, his
notice, statutory holidays and vacation; [accepted]
[2] Agneau de l'Est Inc. acts as a
lamb marketing agency with sheep producers, and to this end, it
delivers animals from the slaughterhouse in Luceville, Quebec, to
its customers in Quebec City and Montreal. The Appellant hired
Mr. Claude Barrette as a driver on March 26, 2001. The
period at issue is between January 1 and October 18, 2002.
[3] The Appellant has no salaried
employees. Ms. Marielle Deschênes, the Appellant's sole
shareholder, met with Mr. Barrette twice before hiring him.
She allegedly told him that she wanted to hire him as a
self-employed worker and that he had to pay his travelling
expenses, such as meals and lodging. She explained that he
would not receive vacation pay and that he would not be covered
by the CSST [Quebec worker's compensation commission].
[4] He was paid a set rate of $120 for
a trip to Quebec City and $240 for a trip to Montreal.
[5] The Appellant provided the truck
and paid truck-related expenses, such as gas, maintenance,
repair, and insurance on the truck and its contents. The
Appellant provided Mr. Barrette with truck unloading equipment
and a cellular telephone, as well as a credit card for purchasing
gas and a debit card for paying for certain repairs and making
occasional deposits. Mr. Barrette was also allowed to make
withdrawals for personal reasons as required. Borrowed
amounts were deducted from his fees. No agreement was
entered into concerning the appointment of a replacement if Mr.
Barrette was off work sick. Ms. Deschênes testified
that she would have found someone if this had occurred.
[6] When Mr. Barrette started his job,
he did not have the license required to drive this type of truck
and he therefore had to be accompanied by another driver. Ms.
Deschênes also taught Mr. Barrette the health and safety
regulations to be complied with when carrying these goods.
She also informed the worker that he would occasionally be asked
to pick up sugarbush equipment on his return trip. The
Appellant asked him to find what they call returns, in exchange
for which he would receive a bonus.
[7] Claude Barrette started his work
day on Tuesday at 6:00 a.m. He picked up the truck at the
Appellant's and then went to the slaughterhouse to load it.
The truck was loaded according to the deliveries. He also
had to follow some instructions from the Appellant's customers in
connection with their availability to accept deliveries. He
based all this preparation on transportation and shipping
slips. On the road, Mr. Barrette and the Appellant remained
in contact via the cellular phone. Mr. Barrette used the
cellular phone to inform the Appellant, among other things, of
repairs and delivery problems. Based on his instructions,
he occasionally sold lambs personally that customers had
refused. Mr. Barrette also communicated with the
Appellant's customers to verify, among other things, the delivery
times and tried to find "returns" to fill the truck.
[8] At first, Mr. Barrette found a
customer and brought back tires. He also brought back
sugarbush equipment in the spring, and once, the belongings of
Ms. Deschênes' son. He said he did not receive a
bonus that time. He started receiving bonuses when the
Appellant and Potages du Fleuve signed an agreement to carry
goods on return trips. Mr. Jean Yves Chamberland, Potages
du Fleuve, contacted Mr. Barrette to give him instructions on the
locations where goods were to be picked up. Mr. Barrette
received $10 for each pallet of goods he brought back.
Toward the end of the period at issue, Mr. Barrette found that he
was not paid enough for this extra work. He complained to
the Appellant, but continued for a while because he said Ms.
Deschênes needed this income. Mr. Chamberland
eventually found another carrier. The Appellant invoiced
Potages du Fleuve.
[9] When he returned from his delivery
trips, Mr. Barrette gave the Appellant his logbook and the credit
and debit cards. The logbook was subject to the Highway
Safety Code and to Transportation Commission regulations.
He had to indicate in this logbook the number of hours he spent
driving, working other than driving and in the sleeper.
Mr. Barrette also indicated where he was at each
stage. When Mr. Barrette arrived late because Ms.
Deschênes said he was having fun, she asked him to come
back earlier. The Appellant's debit card was also used to
check the expenses Mr. Barrette paid.
[10] Toward the end of the period at issue,
Mr. Barrette was having trouble filling out his tax return and
said that he preferred being paid on an hourly basis to simplify
his affairs. Further, his income had reached a point where he was
forced to charge the Goods and Services Tax (GST) on his
services. To avoid this, he signed an agreement with the
Appellant to the effect that she would pay him his travelling
expenses and fees separately. The other conditions remained
unchanged. Mr. Barrette allegedly tried to negotiate, but
for naught. The Appellant found a replacement. Mr. Barrette
worked with the latter for one week and was thanked for his
services. He then filed a complaint with the Commission des
normes du travail claiming notice, statutory holidays and
vacation. The result of this complaint is unknown.
[11] The issue in the case at hand is
whether Agneau de l'Est and
Mr. Claude Barrette were bound by a contract of
employment within the meaning of paragraph 5(1)(a) of the
Act.
[12] The Federal Court of Appeal provided
useful criteria in Wiebe Door Services Ltd. v. Minister of
National Revenue, [1986] 3 F.C. 553, for distinguishing
between a contract of employment and a contract for
services. The Supreme Court of Canada upheld these criteria
in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc.,
[2001] 2 S.C.R. 983, by summarizing the legal situation in
paragraphs 47 and 48 as follows:
Although there is no
universal test to determine whether a person is an employee or an
independent contractor, I agree with MacGuigan J.A. that a
persuasive approach to the issue is that taken by Cooke J. in
Market Investigations, supra. The central question is
whether the person who has been engaged to perform the services
is performing them as a person in business on his own account. In
making this determination, the level of control the employer has
over the worker's activities will always be a factor.
However, other factors to consider include whether the worker
provides his or her own equipment, whether the worker hires his
or her own helpers, the degree of financial risk taken by the
worker, the degree of responsibility for investment and
management held by the worker, and the worker's opportunity
for profit in the performance of his or her tasks.
It bears repeating that the above factors
constitute a non-exhaustive list, and there is no set formula as
to their application. The relative weight of each will depend on
the particular facts and circumstances of the case.
[13] In Charbonneau v. Canada,
[1996] F.C.J. No. 1337 (Q.L.), Mr Justice Marceau of the Federal
Court of Appeal points out that the factors at issue are
guidelines which it will generally be useful to consider, but not
to the point of jeopardizing the ultimate objective of the
exercise, which is to determine the overall relationship between
the parties.
[14] In a recent decision, the Federal Court
of Appeal restated the legal principles governing the issue of
the insurability of employment. In Livreur Plus Inc.
v. Canada, [2004] F.C.J. No. 267, Mr.
Justice Létourneau summarized these principles in
paragraphs 18 and 19 of his judgment as follows:
In these circumstances, the tests mentioned in Wiebe Door
Services Ltd. v. M.N.R., 87 D.T.C. 5025, namely the
degree of control, ownership of the work tools, the chance of
profit and risk of loss, and finally integration, are only points
of reference: Charbonneau v. Canada(Minister of
National Revenue - M.N.R.) (1996), 207 N.R. 299, paragraph 3.
Where a real contract exists, the Court must determine whether
there is between the parties a relationship of subordination
which is characteristic of a contract of employment, or whether
there is instead a degree of independence which indicates a
contract of enterprise: ibid.
Having said that, in terms of control the Court should not
confuse control over the result or quality of the work with
control over its performance by the worker responsible for doing
it: Vulcain Alarme Inc. v. The Minister of National
Revenue, A-376-98, May 11, 1999, paragraph 10, (F.C.A.);
D & J Driveway Inc. v. The Minister of National
Revenue, supra, at paragraph 9. As our colleague
Décary J.A. said in Charbonneau v. Canada
(Minister of National Revenue - M.N.R.), supra, followed in
Jaillet v. Canada (Minister of National Revenue -
M.N.R.), 2002 FCA 394, "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."
[15] The facts in the case at hand show
that Mr. Barrette's work was regular in the sense that he had to
make deliveries every week, on the same day, at the same time and
according to the sequence of orders received by Agneau de
l'Est and prepared by the slaughterhouse. The deliveries were
made in a purely logical fashion, but in keeping with the
requirements of Agneau de l'Est. The Appellant also had the
authority to require Mr. Barrette to deviate from his itinerary
to go pick up goods and materials for the return trip. Mr.
Barrette also had to ensure that certain health and safety
standards were complied with. He had to contact Agneau de
l'Est to obtain authorization to have certain repairs done or
to request instructions when deliveries were refused. On at
least one occasion, he sold goods that had been refused after
receiving instructions to this effect. The Appellant did not pay
him extra for this. Instructions of this kind, as well as
those requiring Mr. Barrette to return earlier from his
trips, are in my opinion examples of the authority found in a
contract of employment which involves a relationship of
subordination.
[16] In the case at hand, Mr. Barrette was
supposed to report to Agneau de l'Est before and after each
trip. He was the only delivery driver and could not be
replaced. In fact, if he had been unable to report to work
one morning, Agneau de l'Est would have looked after finding
a replacement. Mr. Barrette either had to find returns
himself or do those found by Agneau de l'Est, such as that
with Potage du Fleuve. He also had to bring back loads for Ms.
Deschênes' children. Mr. Barrette was provided with
all these instructions during these trips, meaning that he had to
travel more, which took him longer. The fact that he was
paid in certain cases does not change the fact that he had to
follow the instructions he was given.
[17] It is clear to me in the case at hand
that Mr. Barrette did not have the freedom a self-employed worker
normally has. The fact that he was asked to train his
replacement before he was laid off and to return earlier from his
trips should be added to the comments above.
[18] In my opinion in the case at hand,
Agneau de l'Est never surrendered its authority to intervene
and regulate Mr. Barrette's work. The Appellant at all
times maintained and exerted control over Mr. Barrette's comings
and goings and the latter had to follow the instructions
received. This is how a subordinate relationship
works. He had no control over the way he could provide his
services; he did not set his own work schedule; and his comings
and goings were governed by Agneau de l'Est and its
customers.
[19] Agneau de l'Est owned the truck and
assumed all the costs involved in using it. The tools the
worker used to carry out his duties, that is, the equipment for
unloading the truck and the cellular telephone, were provided by
Agneau de l'Est. Mr. Barrette had no chance of profit or risk
of loss, except the travelling expenses he had to cover.
This therefore supports the hypothesis that the parties had a
contract of employment.
[20] In terms of integration, Mr. Barrette
was the only driver for Agneau de l'Est. He had report to
work every week, at the times scheduled for making the
deliveries. These deliveries, which were made based on an
itinerary drawn up according to the requirements of Agneau de
l'Est, were key to its success. Mr. Barrette's
work was an integral part of the Appellant's activities.
[21] I must take into account in my analysis
of the facts in this case the desire of both parties to treat Mr.
Barrette as a self-employed worker. I am not, however,
bound by what the parties agreed if the evidence provided leads
to an opposite determination. In Le Livreur Plus Inc. v.
M.N.R., [2004] F.C.J. no 267 (Q.L.),
Mr. Justice Létourneau wrote the following:
[17] What the parties stipulate as to the nature of their
contractual relations is not necessarily conclusive, and the
Court may arrive at a different conclusion based on the evidence
before it: D & J Driveway Inc. v. The Minister of National
Revenue, 2003 FCA 453. However, if there is no ambiguous
evidence to the contrary, the Court should duly take the
parties' stated intention into account: Mayne Nickless
Transport Inc. v. The Minister of National Revenue,
97-1416-UI, February 26, 1999 (T.C.C.). Essentially,
the question is as to the true nature of the relations between
the parties. Thus, their sincerely expressed intention is still
an important point to consider in determining the actual overall
relationship the parties have had between themselves in a
constantly changing working world: see Wolf v. Canada,
[2002] 4 F.C. 396 (F.C.A.); Attorney General of Canada v. Les
Productions Bibi et Zoé Inc., 2004 FCA 54.
[22] In my opinion and based on an analysis
of the facts provided, the real nature of the relationship
between the parties in the case at hand is a contract of
employment. Consequently, the appeal is dismissed.
Signed at Ottawa, Canada, this 13th day of October
2004.
Angers, J.
Translation certified true
on this 20th day of January 2005.
Wendy Blagdon, Translator
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