Date: 20010718
Docket: 2000-1182-EI
BETWEEN:
ANH PHUONG HOANG TRONG,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Charron, D.J.T.C.C.
[1] This appeal was heard at
Montréal, Quebec, on April 19, 2001, to determine whether
the appellant held insurable employment within the meaning of the
Employment Insurance Act ("the Act") from
October 30, 1996, to October 17, 1997, when she was employed
by the payer, Les Aliments Dang Ngoc Inc.
[2] By letter dated December 7, 1999,
the Minister of National Revenue ("the Minister")
informed the appellant that her employment was not insurable
because there was no employer-employee relationship between her
and the payer during the period at issue.
Facts
[3] The facts on which the Minister
relied in making his decision are set out as follows in paragraph
5 of the Reply to the Notice of Appeal:
[TRANSLATION]
(a) the payer was
incorporated in December 1987; (admitted)
(b) until March
1997, the payer's shareholders were:
Buu Dang
Ngoc
25% of the shares
Chau Dang
Ngoc
25% of the shares
Dang
Ngoc
25% of the shares
Orlando
Filice
25% of the shares;
(admitted)
(c) the appellant is
the spouse of Buu Dang Ngoc and the sister-in-law of
Chau Dang Ngoc and Dang Ngoc; (admitted)
(d) the allotment of
shares changed on or about March 1, 1997, and from that point
Orlando Filice held 51 percent of the shares and the three Ngoc
brothers held 49 percent; (admitted aside from the date)
(e) the payer
operated a business that made Chinese and Vietnamese food;
(admitted)
(f) the work
allegedly done by the appellant involved entering data from
customer invoices and doing filing; (admitted)
(g) in reality, the
appellant did not provide any services to the payer; (denied)
(h)
on October 17, 1997, the payer gave the appellant a record of
employment for the period from October 30, 1996, to
October 17, 1997, indicating that she had 1,444 insurable
hours (admitted) and total insurable earnings of $11,901.60; (no
knowledge)
(i) the record
of employment is false; (denied)
(j) the payer
and the appellant made an arrangement so that the appellant could
qualify for employment insurance benefits. (denied)
[4] The appellant admitted the truth
of all the subparagraphs of paragraph 5 of the Reply to the
Notice of Appeal except those she denied, as indicated in
parentheses at the end of each subparagraph.
Testimony of Hoang Trong
[5] Ms. Hoang worked as a secretary
and prepared and filed customer invoices. She worked for the
payer from October 30, 1996, to October 17, 1997, with her
husband, and she kept her two-year-old child with
her. Her workday was from 10:00 a.m. until between 5:00 and 6:00
p.m., depending on when her husband left. Her workweek was 40
hours, for which she was paid $300. She was laid off on October
17, 1997 (Exhibit I-1) because she was pregnant. Her wages
were given not to her but to her husband because she had no bank
account, having arrived in Canada in 1991. Whenever she did not
finish her work, she took it home to finish it. Her husband drove
her to work by car. At work, she shared her husband's office.
On March 30, 1998, she gave a declaration to Mr. Bergeron, an
investigation and control officer, which she admits having signed
(Exhibit I-2). At question 4, she admitted that she
did not have a caregiver for her child; she therefore took him
with her and left him in his father's office. At
question 5, she said that she worked from noon to
6:00 p.m. She corrected this and said that she worked from
10:00 a.m. to 6:00 p.m. At question 7, she said that her
husband controlled her money.
Testimony of Nguyen Thi Ngoc Huong
[6] Ms. Thi was a manager for the
payer, Les Aliments Dang Ngoc Inc. She worked for the payer from
October 1996 to October 1997 and was in charge of the
bookkeeping, the invoicing, the payroll and the entire office.
She knows Ms. Hoang well because she is her
sister-in-law and because Ms. Hoang also worked
for the payer and came to the office every day, but for just a
few hours. Ms. Hoang worked at home in the evenings and at
the office five days a week prior to June 1997. After that
date, the payer moved to 933 St-Martin in Laval and
Ms. Hoang no longer came to the office very often because
she was pregnant. Ms. Thi paid the employees not by the hour
but by the week. Box 15A of Exhibit I-1 indicates that
Ms. Hoang worked 1,444 insurable hours, but that information has
been out of date since January 1997. However, it is true that her
total earnings were $11,901. She worked 40 hours a week, but her
hours were not monitored. It was Ms. Hoang who asked that a
record of employment be filled out for her. On March 6, 1998, Ms.
Thi met with an investigator and made a declaration, which she
signed (Exhibit I-3). On the third line of page 5 of the
document, she stated the following:
[TRANSLATION]
. . . I say that she came three times a week . . . that she
came two or three afternoons a week and worked a few hours,
obviously after June 1997, that is, in July 1997. . . .
Further on, she said:
[TRANSLATION]
. . . She worked 10 hours a week at the most. . . .
On page 6 of the declaration, Ms. Thi added:
[TRANSLATION]
. . . No matter how many hours she worked—whether it was
five hours or one hour in a week—the Caisse populaire . . .
Desjardins indicated 40 hours. . . .
Finally, on page 7, Ms. Thi finished off as follows:
[TRANSLATION]
. . . I admit all the same that she never worked. . . .
Testimony of Roger Boucher
[7] Mr. Boucher was manager of the
payer's business and worked for the payer from October 1996
to October 1997. He was a travelling sales representative for the
payer. He worked from 7:00 a.m. to 5:00 p.m. and knew
Ms. Hoang. He saw her arriving at the office with her child
at about 2:00 p.m. According to this witness, the appellant lay
down with the child in the office of her husband, who was one of
the company's presidents; she stayed there and slept with the
child. The witness said that [TRANSLATION] "she just put in
an appearance and didn't work. We couldn't talk to her
because she didn't speak either English or French." Mr.
Boucher never her working even though she was being paid:
[TRANSLATION] "We saw her at the payer's office once a
week at the most".
Testimony of Michelle Nault
[8] Michelle Nault was an accounts
receivable clerk at the payer company. She worked from 8:30 a.m.
to 5:00 p.m. She knew Ms. Hoang and said that Ms. Hoang came
to the office for about half an afternoon a week with her child,
who was around a year old. When she arrived, she went into her
husband's office and spent the afternoon there. Sometimes she
visited her sister-in-law in the next office and then
left. She did not do anything in her husband's office.
Michelle Nault was told that Ms. Thi, Ms. Hoang's
sister-in-law, completed Ms. Hoang's record of
employment and that it was later revoked because it was
acknowledged that Ms. Hoang had not actually worked. She was
paid but hardly worked, and her wages were put into her account
by direct deposit.
Testimony of Jean-Guy Bergeron
[9] Jean-Guy Bergeron is an
investigation and control officer. After receiving an information
from Orlando Filice and Roger Boucher, he went to the payer's
head office and met with those two men. He obtained a statutory
declaration from Mr. Ngoc (Exhibit I-7), who told him
that his wife came to the office three times a week with her
baby, who was a year and a half old. When Ms. Hoang came to the
office, Mr. Ngoc and Ms. Hoang shared the childcare duties.
Mr. Filice told Mr. Bergeron that Ms. Hoang never worked at
the office. According to Ms. Thi, Ms. Hoang came to the office
with her baby on rare occasions and did not come to work. Ms. Thi
was the payer's controller and was in charge of preparing
records of employment and entering accounting data in the books.
She signed records of employment for periods that had not been
worked and those records were therefore fraudulent. As a result,
the board of referees requested that a $25,000 penalty be imposed
on her.
Testimony of Françoise Bienvenue
[10] Ms. Bienvenue, an objections officer,
said that the Caisse populaire de Vimont received a weekly direct
deposit from Les Distributions Alimentaires Dang Ngoc Inc. into
Mr. Ngoc's account (folio 32084) for Hoang Trong Anh Phuong.
The deposits covered the period from May 1997 to October 1997
(nine payments of $272.23 and 12 payments of $326.06) (Exhibit
I-8 dated November 17, 1999).
Analysis of the facts in relation to the law
[11] It must now be determined whether the
appellant's activities fall within the concept of insurable
employment, that is, whether or not there was a contract of
employment.
[12] The courts have established four
essential tests for identifying a contract of employment. The
leading case in this area is City of Montreal v. Montreal
Locomotive Works Ltd., [1947] 1 D.L.R. 161. Those tests are
as follows: (1) control; (2) ownership of the tools;
(3) chance of profit and risk of loss; and (4) degree
of integration—this last test having been added by the
Federal Court of Appeal in Wiebe Door Services Ltd. v.
M.N.R., [1986] 3 F.C. 553. This list is not exhaustive,
however.
[13] The evidence showed that the
appellant's work was not done under anyone's supervision
and that there was no relationship of subordination between her
and the payer.
[14] 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.
[15] Moreover, there is no room for other
considerations such as generosity or accommodation. It has often
been said that employment insurance is a social initiative to
assist those who truly lose their jobs and not a program of
grants to help businesses or to benefit recipients who distort or
modify the structure and terms of payment of the remuneration
they are owed for the work they perform.
[16] Any agreement or arrangement involving
the accumulation or spreading out of hours has the effect of
invalidating the contract of service, especially since it creates
a contractual relationship that is hardly or not at all conducive
to the existence of a relationship of subordination, which is an
essential component of a contract of service.
[17] The burden is on the appellant to prove
her entitlement, and she has not discharged that burden to the
Court's satisfaction. On the contrary, she has made false
representations.
[18] Therefore, the appeal is dismissed and
the Minister's decision confirmed.
Signed at Ottawa, Canada, this 18th day of July 2001.
D.J.T.C.C.
COURT FILE
NO.:
2000-1182(EI)
STYLE OF
CAUSE:
Anh Phuong Hoang Trong and M.N.R.
PLACE OF
HEARING:
Montréal, Quebec
DATE OF
HEARING:
April 19, 2001
REASONS FOR JUDGMENT BY: the Honourable
Deputy Judge G. Charron
DATE OF
JUDGMENT:
July 18, 2001
APPEARANCES:
For the
Appellant:
The Appellant herself
Counsel for the Respondent: Sophie
Alain
Marie-Aimée Cantin
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-1182(EI)
BETWEEN:
ANH PHUONG HOANG TRONG,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on April 19, 2001, at
Montréal, Quebec, by
the Honourable Deputy Judge G. Charron
Appearances
For the
Appellant:
The Appellant herself
Counsel for the Respondent: Sophie
Alain
Marie-Aimée Cantin
JUDGMENT
The
appeal is dismissed and the Minister's decision confirmed in
accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 18th day of July 2001.
D.J.T.C.C.
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