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Citation: 2003TCC73
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Date: 20030304
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Docket: 1999-4787(EI)
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BETWEEN:
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SAMUEL PINETTE,
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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
Deputy Judge Somers, T.C.C.
[1] This appeal was
heard at Sept-Îles,
Quebec, on January 20, 2003.
[2] The appellant
appeals from the decision of the Minister of National Revenue (the “Minister”)
according to which the employment held during the period at issue, namely, from
November 4 to 22, 1996, with Julien Régis, the payer, was not insurable on the
basis that there was no employer-employee relationship between him and the
payer.
[3] Subsection 5(1)(a)
of the Employment Insurance Act (the “Act”) reads as follows:
(a) employment in Canada by one or more employers, under any
express or implied contract of service or apprenticeship, written or oral,
whether the earnings of the employed person are received from the employer or
some other person and whether the earnings are calculated by time or by the
piece, or partly by time and partly by the piece, or otherwise;
[…]
[4] The burden of
proof lies with the appellant. He must establish, on a balance of
probabilities, that the Minister’s decision is unfounded in fact and in law.
Each case must be decided on its own merits.
[5] In reaching his
decision, the Minister relied on the following assumptions of fact, which the
appellant admitted, denied or had no knowledge of:
[Translation]
(a) The payer, Julien Régis, was the sole owner of a welding shop
that he operated under the name of “Ti-Kay Sikuman”; (admitted)
(b) the business is operated throughout the year; (admitted)
(c) business hours were from 8:00 a.m. to 8:00 p.m., 6 to 7 days a
week; (admitted)
(d) there were always one or two welders on site, namely,
Julien Régis and Yvan Ambroise; (admitted)
(e) the appellant claimed he was hired as a day labourer by the
payer whereas he did not work for the latter; (denied)
(f) the payer stated that he had no need of any labourers during
the period at issue and claimed he had hired the appellant so that he could
qualify for employment insurance benefits; (no knowledge)
(g) the appellant claimed he had received weekly remuneration of
$560 in cash, whereas he received nothing; (denied)
(h) on an undetermined date, the payer issued a record of
employment in the worker’s name indicating that he had worked from November 4
to 22, 1996, and that he had received weekly insurable earnings of $560; (no
knowledge)
(i) the record of employment is false; (denied)
(j) the parties entered into an arrangement for the sole purpose
of enabling the appellant to qualify for employment insurance benefits.
(denied)
[6] The payer was the
sole owner of a welding shop that he operated throughout the year under the
name of “Ti-Kay Sikuman”. Business hours were from 8:00 a.m. to 8:00 p.m., 6 to
7 days a week. There were always one or two welders on site, namely, Julien
Régis or Yvan Ambroise.
[7] The appellant
asked the payer to hire him because he needed three weeks’ work in order to
qualify for employment insurance benefits. According to the appellant, he
worked as a day labourer from 8:00 a.m. to 5:00 p.m., five days a week, for a
period of three weeks. According to him, his duties consisted of cleaning the
payer’s establishment, helping make a scoop for the tractor, making metal
fences for a cemetery and a stairway for the municipal garage.
[8] The appellant was
paid $560 a week for 40 hours’ work. The remuneration was paid in cash and no
receipt was issued for this salary.
[9] On
cross-examination, the appellant admitted that he needed three weeks of work to
qualify for employment insurance benefits. At the end of the three weeks, he
had accumulated enough weeks, he had had enough and terminated his employment.
[10] In his statutory
declaration, dated January 6, 1999, (Exhibit I-1), in reply to questions
concerning the appellant’s employment, the payer stated, among other things:
[Translation]
Q. For what
reasons did you hire Mr. Pinette for a period of three weeks between
November 4 and 22, 1996?
A. It was
probably because he needed more weeks. At that time, the Council was hiring
people, it paid them and I was the one who made them work.
Q. How was he
hired?
A. I don’t really
remember any more, but it was always the same thing, when they don’t have
enough weeks, they come see me.
Q. Why did you
need a day labourer for those weeks while there was no welder?
A. I didn’t
really need him, but I didn’t get a contract for .... (brush cutting) Yvan must
have been mistaken when he said that. I took him on so that he could get his
stamps.
Q. When his
employment terminated, did Mr. Pinette tell you that he wanted to stop working?
A. I don’t
remember that he told me that he was going to the wharf but I didn’t really
need him.
[11] The payer stated
that he did not remember whether the appellant had done any welding during his
period of employment and added that he had probably done some painting. The
payer admitted that he did not keep payroll records; therefore the hours were
not recorded.
[12] The payer stated
that he did not know whether he paid employment insurance premiums. He did not
produce any record books to determine his turnover for 1996 and did not prove
that he had the financial ability to hire the appellant just because the latter
needed more weeks of employment to qualify for employment insurance benefits.
[13] In another
statutory declaration, dated January 6, 1999, (Exhibit I-2), the payer stated,
among other things:
[Translation]
...The
schedules are also based on the weeks that are missing so they can get their
unemployment stamps...
[14] In Laverdière
v. Canada (Minister of National Revenue – M.N.R.), [1999]
T.C.J. No. 124, Judge Tardif of this Court, in a decision dated February 25,
1999, stated:
I
nonetheless believe that the work done by Mr. Laverdière during the said period
in 1992 was not performed under a genuine contract of service, inter alia for
the following reasons. First of all, only a genuine contract of employment can
meet the requirements for being characterized as a contract of service; a
genuine contract of service must have certain essential components, including
the performance of work; that performance must come under the authority of the
person paying the remuneration, which remuneration must be based on the
quantity and quality of the work done.
Any
agreement or arrangement setting out terms for the payment of remuneration
based not on the time or the period during which the paid work is performed but
on other objectives, such as taking advantage of the Act's provisions, is not
in the nature of a contract of service.
This assessment
applies to all the periods at issue involving the two appellants. The terms and
conditions of a genuine contract of service must centre on the work to be
performed, on the existence of a mechanism for controlling the performance of
the work and, finally, on the payment of remuneration that basically
corresponds to the quality and quantity of the work done.
[...]
This is the
case with any agreement or arrangement whose purpose and object is to spread
out or accumulate the remuneration owed or that will be owed so as to take
advantage of the Act's provisions. There can be no contract of service where
there is any planning or agreement that disguises or distorts the facts
concerning remuneration in order to derive the
greatest possible benefit from the Act.
[15] In the case under
consideration, the payer did not keep records of the hours worked. He did not
produce any documents that could establish his turnover and show his financial
ability to hire the appellant whose sole purpose was to obtain additional weeks
of insurable employment in order to qualify for employment insurance benefits.
[16] The appellant
worked for only three weeks, i.e., the exact number of weeks he needed.
Moreover, the appellant worked for the payer only on that occasion. No evidence
was adduced concerning the payment of a salary to the appellant; the payer did
not even know the number of hours worked by the appellant. The record of
employment signed by the payer does not reflect the reality.
[17] Therefore, there
was an arrangement between the payer and the appellant so that the latter could
enjoy the benefits of the provisions of the Act.
[18] For the above
reasons, there was no genuine contract of service within the meaning of
paragraph 5(1)(a) of the Act.
[19] Consequently, the
appeal is dismissed and the Minister’s decision is confirmed.
Signed
at Ottawa, Canada, this 4th day of March 2003.
D.J.T.C.C.
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