[OFFICIAL ENGLISH TRANSLATION]
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Citation: 2004TCC272
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Date: 20040427
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Dockets: 2003-2867(EI)
2003-2865(CPP)
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BETWEEN:
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RÉGINALD OUELLET,
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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
Justice
Angers
[1] These
two appeals, which were heard on common evidence, were from decisions rendered
by the Minister of National Revenue (the “Minister”) on
May 13, 2003. The Minister informed the Appellant that the work he had
carried out for Fletcher's Forestry Enterprises Ltd. (“Fletcher”) from August
28 to November 3, 2000, was not insurable employment because he was not
employed under a contract of employment within the meaning of paragraph 5(1)(a)
of the Employment Insurance Act (the “Act”). He also informed the
Appellant that this same employment was not pensionable employment for the same
reasons pursuant to paragraph 6(1)(a) of the Canada Pension Plan (the
“Plan”).
[2] The
Appellant is a logger and operates a skidder, which he owns. To obtain work
during the period at issue, he telephoned a Fletcher representative and offered
his services. During their initial meeting, it was agreed that his services
and skidder rental expenses would be paid separately and no written contract
was signed at that time. The Appellant would work on a team with
Réjean Robichaud. They both worked for 10 weeks, for a total of 500 hours.
Although Fletcher paid for Mr. Robichaud’s services, the Appellant asked to
work with him.
[3] Through
its foreman, Fletcher told the Appellant where to go to carry out his work.
The foreman then visited the worksite every two days to check how much wood had
been cut and to ensure that the Appellant was cutting in the right place. The
Appellant did not have a work schedule. He was given one hour for one and a
half or two cords which meant an average of 10 hours of work a day. However,
the Appellant and Mr. Robichaud were paid per cord or based on the amount of
wood cut.
[4] The
Appellant provided his skidder and covered the costs of operating and repairing
it. During the period at issue, Fletcher paid the Appellant between $759.20
and $1,150 in weekly advances and paid Réjean Robichaud directly. According to
Fletcher, at the end of the work period, the advances the Appellant was paid
and the remuneration Mr. Robichaud was paid were deducted from the remuneration
owing the Appellant.
[5] At
the hearing, the Appellant’s representative submitted two contracts as
evidence: a contract of employment between the Appellant and Fletcher; and a
rental contract certifying that Fletcher had rented the Appellant’s skidder.
Both contracts refer to the period at issue, but are not dated. The Appellant
admitted signing the contracts two years after the period at issue at the
request of his representative, Mr. Roland Rioux. When the Appellant hired the
latter, he asked Fletcher to draw up and sign both contracts at issue. The
Appellant did not know they existed until his representative asked him to sign
them.
[6] These
two contracts surfaced because of a news release issued on July 30, 1998 by the
Employment Insurance Eligibility Division at HRDC. The purpose of the release
was to clarify the policy on forestry workers who, in addition to providing a
contractor with services, rent their heavy machinery to this same contractor.
Emphasis was placed in the release on the fact that it is essential that the
contract of employment and heavy machinery rental contract be in writing. The
Appellant’s representative therefore thought it would be wise to obtain both
contracts in question, except they surfaced two years after the period at
issue. In my opinion, they have no evidentiary weight in the case at hand.
[7] An
overview of a contract of employment is provided in the news release in
question, but no specific instructions for drawing up this type of contract.
They are only guidelines and every situation is different.
[8] Ms
Joanne Robichaud is the Appeals Officer who conducted the investigation in this
case. She obtained her information from Fletcher and the Appellant. Based on
the information she received from Fletcher, there was no written contract.
According to Fletcher, the Appellant was told where he was supposed to cut the
wood and how he was supposed to cut it. The Appellant’s remuneration was calculated
according to the number of tonnes of wood he cut. He received advances for his
remuneration and for the rental of the skidder and an adjustment was made once
the wood had been measured at the plant. Fletcher paid Réjean Robichaud’s
salary, but this expense was deducted from the Appellant’s income. If the
skidder was not working, Fletcher would not assign the Appellant to other
work. No record was kept of hours of work and the foreman on the worksite was
only checking the amount of wood cut and the location.
[9] In
a recent decision, the Federal Court of Appeal set out the legal principles
governing the issue of the insurability of employment. In Livreur Plus Inc.
v. Canada, [2004] F.C.A. 267, Justice Létourneau summarized these
principles in his own words in paragraphs 18 and 19 of his judgment:
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."
[10] Since the contracts signed two years after the period at issue have
been dealt with, we must examine what the Appellant and Fletcher actually
agreed on at their initial meeting. A rate based on the number of tonnes of cut
wood was used to calculate the cost of renting the skidder, the Appellant’s and
his teammate’s remuneration. The weekly advances were estimates and it was all
subject to adjustment when the cut wood was finally measured. The teammate’s
salary was deducted from the Appellant’s income. The Appellant was responsible
for any expenses relating to the skidder and a major breakdown constituted a
work stoppage because, according to Fletcher, it did not have to assign the
Appellant other work.
[11] Fletcher’s foreman did not have to check or keep a record of work
hours. He was responsible only for ensuring that the Appellant cut in the
right place and that the amount justified the weekly advances. He was not
responsible for checking how the Appellant carried out his work. He was
therefore monitoring the result, not the Appellant. As Justice Létourneau
indicated in the above-noted Livreur Plus Inc., monitoring work results
or quality must not be confused with monitoring whether the worker responsible
for carrying them out has done so. He is therefore referring to Charbonneau
v. Canada, (1996) 207 N.R. 299 in which Justice Décary wrote:
Supervision of the work every second day and measuring
the volume every two weeks do not, in this case, create a relationship of
subordination, and are entirely consistent with the requirements of a contract
of enterprise. 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.
[12] Based on the facts, Fletcher was interested only in the amount of wood
cut, not in monitoring the worker. In fact, Fletcher could only assign the
Appellant and his teammate to work on the skidder. It is therefore difficult
to speak of subordination in circumstances such as these.
[13] The Appellant covered all expenses associated with using the skidder
and was responsible for any maintenance and repair. This type of agreement
clearly favours an interpretation of a contract of enterprise inasmuch as the
chance of profit or risk of loss are the Appellant’s alone. In the case at
hand, Fletcher did not have the option to assign other workers to the skidder.
[14] Based on the body of evidence, I find that the agreement between the
Appellant and Fletcher favours an interpretation of a contract of enterprise.
The Appellant’s remuneration was based on his work, that is, based on the
amount of wood, weighed using the plant’s scales, that the Appellant and his
teammate cut, regardless of the time it took or how the work was performed.
The Appellant ran all the risks and was not assigned to other duties.
[15] For these reasons, the appeals are dismissed.
Signed at Ottawa, Canada, the 27th
day of April, 2004.
Angers, J.
Certified true translation
Colette Beaulne
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