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Citation: 2003TCC523
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Date: 20030812
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Docket: 2002-4757(EI)
2002-4758(CPP)
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BETWEEN:
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JOE DA PONTE,
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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
Somers, D.J.
[1] These appeals were heard on common
evidence in London, Ontario on May 26, 2003.
[2] The Appellant is appealing from a
decision made by the Minister of National Revenue (the
"Minister") that the employment of Michael Lloyd the
Worker, held with the Appellant during the period at issue from
July 13 to August 31, 2001 was insurable and pensionable pursuant
to paragraphs 5(1)(a) of the Employment Insurance
Act (the "Act") and 6(1)(a) of the
Canada Pension Plan (the "Plan")
respectively.
[3] Paragraph 5(1)(a) of the
Act reads as follows:
5. (1) Subject to subsection (2), insurable employment is
(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;
...
The wording of paragraph 6(1)(a) of the Plan is
to the same effect as that of paragraph 5(1)(a) of the
Act above.
[4] The burden of proof is on the
Appellant. He must show on a balance of probabilities that the
Minister erred in fact and in law in his decision. Each case
stands on its own merits.
[5] In making his decision the
Minister relied on the following assumptions of facts which were
admitted and denied by the Appellant:
(a) the Payer
operates a drywall business; (admitted)
(b) the Worker was
hired as "Drywall installer" under a verbal
agreement; (admitted)
(c) the Worker's
duties were to install drywall including measuring, cutting and
nailing; (admitted)
(d) the Worker
performed his duties at various job sites; (admitted)
(e) the Worker was
paid between $8.25 and $9.00 per hour by the Appellant;
(denied)
(f) the Worker
was paid by cheque, on a weekly basis by the Appellant;
(admitted)
(g) the Worker was
supervised by the Appellant; (admitted)
(h) the Appellant
provided all the material and the equipment while the Worker
provided only his own small tools; (denied)
(i) the Worker
worked, in general, 8 hours a day, 5 days a week;
(denied)
(j) the
Worker's hours of work were determined by the Appellant since
they were travelling together; (admitted)
(k) the Worker
received some training from the Appellant; (admitted)
(l) the
Appellant obtained the contracts; (admitted)
(m) the Appellant
guaranteed the work; (denied)
(n) the Appellant
was responsible to resolve customers' complaints;
(denied)
(o) the Appellant
had the right to terminate the Worker's services;
(admitted)
(p) the Worker had
to perform his services personally; (denied)
(q) the Worker's
services were integral to the Appellant's operations.
(denied)
[6] The Payer operates a drywall
business. The Worker was hired as a drywall installer under a
verbal agreement after the Payer placed an ad searching for a
worker.
[7] On receiving the Worker's
resume, the Appellant contacted him to set up an interview. As
stated in his letter dated May 25, 2003 addressed to this Court,
the Appellant explained to the Worker the terms of the working
agreement by which he was to be a subcontractor and thus not
eligible for unemployment or CPP benefits (Exhibit A-1).
[8] The Worker's duties were to
install drywall including measuring, cutting and nailing. The
Appellant was a subcontractor at various job sites.
[9] According to the Appellant, the
Worker was paid 10 cents per square foot which would average to
about $9.00 per hour. The Appellant paid the Worker by cheque on
a weekly basis as it appears on the duplicates of cheques filed
as Exhibit A-2.
[10] The Appellant admitted that he
supervised the Worker during the performance of his duties.
[11] The general contractor supplied the
materials but according to the Appellant, the Worker had some
small tools such as a tape, a small nail pouch and other small
tools.
[12] The hours of work varied depending on
the work at various job sites.
[13] The general contractor attended to the
clients' complaints.
[14] The hours were determined by the
Appellant since the Worker travelled with him.
[15] The Appellant admitted that the Worker
received some training from him. He also admitted that the Worker
performed his work at various job sites. He recognized that the
Worker did not have much experience and was unreliable.
[16] The Worker testified that he was not a
contractor or subcontractor. He stated that he had filled out
about 50 job applications as a general labourer. He noticed a job
ad at the employment office, applied for it and was contacted by
the Appellant.
[17] The Worker stated he was paid $10 per
hour and not by the piece. The Worker added the only tools he had
were safety boots, a tool belt and maybe a tape, but he did not
supply a hammer, screw gun, chalk line or a knife.
[18] The Worker stated he did not guarantee
the work and did not have to respond to clients'
complaints.
[19] A contract of service necessarily
implies that the employee works for the profit of the employer.
The essential characteristics of a contract of service include
features involving the nature of the services to be provided; the
fixed periodic wage; the pre-arranged working hours and specific
directions as to the work to be done.
[20] In determining whether the parties have
established an employer/employee relationship, the total
relationship of the parties must be considered. The test to be
used to distinguish a contract of service from a contract for
services is a four-in-one test with emphasis on the
combined force of the whole scheme of operations.
[21] Case law consistently admits four basic
factors in distinguishing a contract of service from a contract
for services. In the case of Wiebe Door Services Ltd. v.
M.N.R., 87 DTC 5025, the Federal Court of Appeal enumerated
the four basic tests:
1. The degree of
control.
2. Ownership of tools.
3. Chance of profit and
risk of loss.
4. Integration.
[22] Control: Control is always a
factor to be considered in determining if the worker is an
employee or an independent contractor. In the case at hand, the
Payer supervised the Worker as both of them worked together at
all times and even travelled together to go to the various job
sites. The Payer had the right to terminate the Worker's
services. There was complete control over the Worker's
performance. Considering this factor the Worker was under a
contract of service.
[23] Tools: The general contractor
supplied the materials. The Worker had only small tools, not
enough to perform the duties associated with the installation of
drywall. On this criteria there was a contract of service between
the Worker and the Appellant.
[24] Chance of profit and loss: There
was conflicting evidence as to the remuneration established
between the Payer and the Worker. The Payer stated the Worker was
paid by the piece while the latter stated he was paid $10.00 an
hour. The Worker stated that he did not own a business of his
own. He was looking for a job as a general labourer. He submitted
approximately 50 applications for work. He noticed the
Payer's advertisement and applied for the job. The Payer
admitted that the Worker was not experienced. The Worker could
not be considered as a contractor as he did not own a vehicle.
The Worker was paid on a weekly basis. There was no evidence that
he made a profit or suffered a loss. By this criteria, the Worker
should be considered as an employee.
[25] Integration: It was the
Payer's business and not that of the Worker. The relationship
between the clients and the contractor or subcontractor was the
Payer. The general contractor or the Payer responded to the
clients' complaints. The Worker performed the services
himself. The evidence has shown that the Worker's performance
was integrated into the Payer's business.
[26] In applying all the criteria as
enumerated in the Wiebe Door (supra) case, there
existed a contract of service between the Worker and the
Appellant.
[27] The Worker was engaged by the Appellant
in insurable and pensionable employment within the meaning of
paragraphs 5(1)(a) of the Act and 6(1)(a) of
the Plan for the period in question as there was a
contract of service between them.
[28] The appeals are dismissed and the
decision of the Minister is confirmed.
Signed at Ottawa, Canada, this 12th day of August 2003.
Somers, D.J.
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