[OFFICIAL ENGLISH TRANSLATION]
Date: 20011114
Docket: 2000-2709(EI)
BETWEEN:
RÉAL DELISLE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Somers, D.J.T.C.C.
[1] This appeal was heard at
Montréal, Quebec, on September 19, 2001.
[2] In a letter dated January 4, 2000,
the appellant asked the Minister of National Revenue (the
"Minister") to rule on whether he had held insurable employment
during the period at issue, that is, from May 18 to June 5, 1999,
when he was employed by 9049-8833 Québec Inc., the
payer.
[3] In a letter dated January 4, 2000,
the Minister informed the appellant of his decision to recognize
that the employment at issue was insurable, since the appellant
was considered to have been employed under a contract of
service.
[4] On February 7, 2000, the payer
appealed from that decision to the Chief of Appeals, arguing that
the appellant had never been one of its employees.
[5] On May 31, 2000, the Minister
reconsidered his decision and determined that the employment was
not insurable because it did not meet the conditions for a
contract of service.
[6] The burden of proof is on the
appellant. He has to show on the balance of evidence that the
Minister's decision is unfounded in fact and in law. Each
case stands on its own merits.
[7] In making 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 is a
company operating under the company name "La Renaissance";
(admitted)
(b) The payer was
incorporated on May 15, 1997; (admitted)
(c) The payer holds
and manages a number of multi-residential buildings;
(admitted)
(d) The payer
employs 5 custodians, 1 office employee and one rental agent, who
was hired only for the lease renewal period; (admitted)
(e) The payer had to
invest $1.7 million to renovate 21 of its buildings; (no
knowledge)
(f) For the
various kinds of work required to renovate its buildings, the
payer had to do business with a number of trades during a
specific period; (admitted)
(g) The appellant
was among the professionals who participated in the said work;
(admitted)
(h) The appellant
was in charge of the project to repair cracks; (denied)
(i) The
masonry work performed by the appellant consisted in repairing
the brickwork; (denied)
(j) The
appellant and the payer agreed that the work had to be done as
part of a major renovation project set up for a definite term;
(denied)
(k) The appellant
received no training from the payer; (denied)
(l) The
appellant was not required to do the work personally;
(denied)
(m) The appellant had no
supervisor and was not required to report to anyone; (denied)
(n) Only the final
result mattered to the payer; (denied)
(o) The appellant
had no work schedule to follow; (denied)
(p) The appellant
tallied up his working hours himself; (admitted)
(q) In order to be
paid, the appellant invoiced the payer; (denied)
(r) The appellant
received $15 per hour invoiced, an amount which was payable by
cheque; (admitted)
(s) The appellant
provided his own tools. (admitted)
[8] The payer, incorporated on May 5,
1997, is a company operating under the company name "La
Renaissance". The payer holds and owns a number of
multi-residential buildings.
[ 9] The payer employs five custodians, an
office employee and a rental agent, who was hired only for the
lease renewal period.
[10] The payer had to invest $1.7 million to
renovate 21 of its buildings. For the various kinds of work
required to renovate its buildings, the payer had to do business
with a number of trades during a specific period. The appellant
was one of the professionals who took part in the work.
[11] According to the appellant, he was
hired to make renovations on a number of the payer's buildings.
The appellant was a bricklayer by trade and was the only one in
that trade to perform this work for the payer for a three-week
period.
[12] The payer provided the appellant with
the materials he needed to do his work and sometimes provided him
with a helper. The work consisted in repairing the bricks. No
deadline was set for completing the work; the appellant thought
that the work had to be done within a month and a half.
[13] The appellant received no training from
the payer since he had approximately 30 years' experience. During
the period at issue, the appellant worked by himself and had no
employee working for him. According to the appellant, he went to
the payer's office to get instructions from the superintendent
regarding the places where he was to work. The appellant was not
supervised by the payer whose only interest was the final
result.
[14] The appellant worked exclusively for
the payer during the period at issue; he worked from 8:00 a.m. to
4:00 p.m., five days a week and was paid $15 an hour. According
to the appellant, he was unemployed before the period at issue
and found employment elsewhere after that period.
[15] The appellant provided no materials but
used his own tools. The appellant stated that the payer had set
his salary at $15 an hour. He added that he filled out time
sheets, which were provided by the payer. The appellant received
two cheques from the payer for $360.00 and $1,522.50, issued on
May 27, 1999, and June 10, 1999, respectively (Exhibit I-2). When
the appellant learned from the payer that he was considered a
self-employed worker, he broke off his contractual relationship
with the payer.
[16] The appellant admitted that he had
formed a company 20 years ago under the name of J.M.R. Delisle
Inc. A journeyman competency certificate was issued to
J.M.R. Delisle Inc. - employer - by the Commission de la
construction du Québec on April 15, 1996; the said
certificate states that the expiry date is May 1, 1997,
(Exhibit I-1). The appellant told the Court that his company
had not operated since June 30, 1998.
[17] In addition, another journeyman
competency certificate was issued by that same Commission, on
June 22, 1999, but this time in the appellant's name. The expiry
date indicated is July 1, 2000. (Exhibit I-1).
[18] Guy Dufour, the union representative,
told the Court that he had visited the payer's work site on three
occasions during the period at issue. He said that the appellant
could not be unionized in that trade because he owned a company
and it was an "employer". He further added that the hourly wage
for a unionized employee in that field was $23.78.
[19] A competency certificate was issued to
the appellant as a union member by the Commission de la
construction du Québec (Exhibit I-1) on June 22, 1999. The
appellant stated that this card was not a renewal.
[20] Jean-Pierre Perron, the director and
sole shareholder of the payer, stated that he owned 366 housing
units and that he had only 12 employees, including a secretary, a
rental agent and five custodian couples. Mr. Perron noted that
the appellant did not hold a competency card issued by the
Commission de la construction du Québec.
[21] The renovation work began in September
1998 and ended in September 1999, and the costs amounted to
$1,600,000. The payer had 38 items to renovate and hired a number
of trades for this purpose. To co-ordinate the work, the payer
hired a superintendent who in turn engaged the services of the
subcontractors.
[22] The appellant was the only
subcontractor and he filed a [translation] "salary complaint"
with the Commission de la construction du Québec against
9049-8833 Québec Inc. - Projet Renaissance (Exhibit
A-1).
[23] Mr. Perron stated that no training was
given to the appellant by the superintendent who told the
appellant only the places and items to be renovated in the
buildings. The brick repair work lasted only three weeks.
[24] The payer did not monitor the working
hours of the some 60 persons who worked on the project at various
times. Mr. Perron admitted that he provided the bricking
materials but only to get a better price from the supplier. The
appellant provided materials worth only $22.50.
[25] Mr. Perron stated that he was not a
contractor, but only the owner of the buildings, and that is why
he engaged the services of various tradespersons for periods that
were determined by need.
[26] Mario Shink, an appeals officer with
the Canada Customs and Revenue Agency, stated that the Minister's
decision was reviewed only after speaking with Jean-Pierre
Perron, the sole shareholder of the payer. Mr. Shink noted that,
during the period at issue, the appellant did not have a
competency card as a union member. The appellant apparently told
him that he had his own company but that the company did not have
any contracts.
[27] To distinguish properly a contract of
service from a contract for services, all of the various elements
making up the relationship between the parties must be examined.
The case law has consistently relied on four basic elements in
making the distinction.
[28] In Wiebe Door Services Ltd. v.
M.N.R., [1986] 3 F.C. 553, the Federal Court of Appeal listed
the following four tests: (a) the degree or absence of control
exercised by the payer; (b) ownership of tools; (c) chance of
profit and risk of loss; and (d) the degree of integration of the
employee's work into the employer's business.
Control
[29] The payer hired a superintendent to
co-ordinate the work. The services of subcontractors in various
trades were engaged to perform specific work. The superintendent
did not supervise the appellant's work and gave him no
instructions regarding how he was to perform his work. The
superintendent only told the appellant the locations where he was
to do the repair work or renovations. The appellant himself
determined his hours of work. On these facts, the Court may
conclude that the appellant was a self-employed worker.
Ownership of the tools
[30] The payer provided the materials for
the simple reason that it could get a better price from the
suppliers. The appellant provided some of his tools valued at
approximately $400. In determining the nature of the contract,
this is not a decisive element.
Chance of profit or risk of loss
[31] The appellant was paid $15 an hour; he
submitted his hours worked to the superintendent and a cheque was
given to him. There was no chance of profit or risk of loss since
the payer provided the materials.
Integration
[32] The payer hired a number of persons
from various trades. The payer was not in the business of
renovating buildings. The buildings belonged to the payer and it
had to invest $1,700,000 million in order to renovate its
buildings. The payer hired about 10 people to administer and
manage the residential units in its buildings. The appellant's
work with the payer lasted only three weeks.
[33] The services provided by the appellant
to the payer were for a short period, that is, three weeks. It
should be noted that the appellant had his own company, which,
according to him, was not in operation. Moreover, the appellant
was not a union member during the period at issue; he obtained
his competency card after the work was completed. On the basis of
these facts, the Court finds that the appellant was a
self-employed worker.
[34] Control and integration are the two
decisive elements in determining the nature of a contract of
service. It is necessary to look at the overall relationship
between the parties. The appellant's work was not an integral
part of the operations of the payer's business. The purpose of
doing the renovations was to put the units in a condition in
which they could be rented. Renting the units was the payer's
objective, not constructing or renovating them.
[35] Having regard to all of the
circumstances, the appellant and the payer were not bound by a
contract of service within the meaning of paragraph
5(1)(a) of the Employment Insurance Act.
[36] The appeal is dismissed and the
decision of the Minister is confirmed.
Signed at Ottawa, Canada, this 14th day of November 2001.
D.J.T.C.C.
Translation certified true
on this 13th day of February 2003.
Sophie Debbané, Revisor
Email this Content