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Citation: 2004TCC153
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Date: 20040218
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Docket: 2003-3908(EI)
2003-3909(CPP)
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BETWEEN:
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OK NORTHERN COMPUTER 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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REASONS FOR JUDGMENT
Beaubier, J.
[1] These appeals were heard together
on common evidence at Kelowna, British Columbia on February 10,
2004. James L. Condon, manager of the Appellant, testified. The
Respondent called the alleged employee, Kerry Slater.
[2] Paragraphs 6 to 9 inclusive of the
Reply to the Notice of Appeal in 2003-3908(EI) outlines the
matters in dispute. They read:
6. The Rulings
division of the Canada Customs and Revenue Agency received a
request from Human Resources Development Canada for a
determination as to whether Kerry Slater (the "worker")
was employed by the Appellant in insurable employment. The
Rulings division issued a decision dated July 15, 2003 that the
Worker was employed by the Appellant for the period from
September 8, 2002 to January 25, 2003 (the "Period")
under a contract of service within the meaning of paragraph
5(1)(a) of the Employment Insurance Act, S.C. 1996, c. 23
(the "EI Act").
7. The
Appellant filed an appeal on July 30, 2003 pursuant to section 91
of the EI Act on the basis that the Worker was not
employed in insurable employment.
8. The
Respondent decided that the Appellant employed the Worker under a
contract of service during the Period within the meaning of
paragraph 5(1)(a) of the EI Act and so notified the
Appellant by letter dated October 10, 2003.
9. In making
her decision the Respondent relied on the following assumptions
of fact:
a) the
Appellant operated a computer sales and computer training
business during the Period;
b) the
Appellant hired the Worker to teach computer training
courses;
c) the
Appellant provided the computers, the course material, the
training manuals and the computer lab space in which the training
courses took place;
d) the
Appellant was responsible for all the business operating
expenses;
e) the
Appellant set the times and dates that each training session was
run;
f) the
Appellant solicited the students for its training sessions;
g) the
Appellant set the cost of each course and collected the fees from
the students;
h) the
Appellant suffered the loss if a student did not pay the course
fees;
i) the
Appellant was responsible for resolving any of the student
concerns or complaints with respect to the training courses;
j) the
Appellant established the Worker's rate of pay at $25.00 per
hour;
k) the
Appellant paid the Worker for hours worked;
l) the
Worker could only send a replacement to teach the course with the
Appellant's approval;
m) the Appellant
would pay the replacement teacher;
n) the
Appellant supervised the Worker;
o) the Worker
did not have any chance for profit as she was paid a set hourly
rate; and
p) the Worker
did not incur any expenses in the performance of her duties;
B. THE
STATUTORY PROVISIONS UPON WHICH THE RESPONDENT RELIES AND THE
REASONS WHICH SHE INTENDS TO SUBMIT
9. She relies
on paragraph 5(1)(a) and subsection 2(1) and section 91 of the
EI Act, as amended.
[3] Assumptions 9(a), (e), (f), (g),
(h), (i), (j), (l) and (m) were not refuted.
[4] With respect to the remaining
assumptions in paragraph 9, the Court finds:
(b) The Appellant contracted with the
worker to lecture one computer training course and only paid for
lecture hours. All preparation and expenses for preparation,
except for certain course materials, were the responsibility of
Ms. Slater. The Appellant also instructed Ms. Slater to prepare a
new course, which Ms. Slater did on her own time and at her own
expense. However, the Appellant never instituted that course and
never paid her anything for her work, preparation or expenses.
All of this occurred pursuant to their contract.
(c) Is correct so far as it applies
within the Appellant's business premises. However anything
outside of the premises, or outside of actual course materials
which the Appellant provided, was Ms. Slater's
responsibility.
(d) Is not true. See (b) and (c).
(k) Is not true. The evidence is that
the Appellant did a great deal of work outside of the teaching
hours in-house. She was not paid for time spent outside of the
Appellant's in-house teaching hours.
(n) The Appellant did not supervise
Ms. Slater or other teachers. It relied on student complaints. If
there were enough complaints, a teacher might be required to redo
the course or the student would be given another course at a
reduced cost. Any extra teaching time that the teacher had to do
on the course was done without any extra pay from the
Appellant.
(o) and (p) are wrong. Ms. Slater could lose on her
preparation time spent, any materials she had to purchase for the
course she gave and if she had to teach for extra hours over
those set by the Appellant. In fact Ms. Slater was in the service
business, just like a lawyer or a doctor on a locum for a fixed
fee.
[5] In Wiebe Door Services Ltd. v.
M.N.R., 87 DTC 5025 a series of subjects was outlined as a
basis for the test: "Whose business is it?" In this
case Ms. Slater controlled the preparation and delivery of her
lectures; no one invigilated or evaluated her except the
students. The Appellant controlled the premises and certain fixed
hours of lecturing, but Ms. Slater might have to give extra
lectures or stay over before or after lectures on her own time.
The tools in the premises were the Appellant's; any used
outside the Appellant's premises or any other premises used
to prepare lectures were at the Ms. Slater's expense. Each
had a chance of profit or risk of loss although it was minimal
for each: if not enough students subscribed for a course to make
it profitable, the Appellant wouldn't hold the course, but
then the premises might be vacant; if it was too much work Ms.
Slater needn't teach it, and if it proved to be too onerous
or the students were too slow or demanding, Ms. Slater would
waste unpaid time that she could have sold elsewhere. Each had a
chance of profit or risk of loss; for both time is money. No one
was integrated into the other's business; each could and did
do without the other, and continued in business or work. Ms.
Slater did the same kind of work in the same period for another
Kelowna firm, Power Concepts. The Appellant had other teachers on
the same basis as Ms. Slater.
[6] These parties each had their own
businesses. They were symbiotic to each other. Ms. Slater was an
itinerant purveyor teaching computer courses who could even have
taught or coached students on her own. The Appellant was
essentially a broker with premises and put the students and
teachers together in various courses if enough students
subscribed for a course.
[7] Ms. Slater was in business for
herself. The appeals are allowed. The Appellant is awarded the
costs permitted under the Employment Insurance Act.
Signed at Saskatoon, Canada this 18th day of February,
2004.
Beaubier, J.
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