Date: 20010718
Dockets: 2000-4821-EI,
2000-4984-EI
BETWEEN:
SHIRLEY HIPSON,
CLARK & PARTNERS
Appellants,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor
Judgment
Somers, D.J.T.C.C.
[1]
These appeals were heard on common evidence in Montreal, Quebec,
on June 14, 2001.
[2]
The Appellants are appealing from a decision made by the Minister
of National Revenue (the "Minister") that the
employment held by Shirley Hipson, the Appellant, with Clark
& Partners, the Payor, during the period from July 14, 1999
to April 11, 2000, was insurable employment because she was
working under a contract of service and the relationship was one
of employer-employee.
[3]
Paragraph 5(1)(a) of the Employment Insurance 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;
..."
[4]
The burden of proof is on the Appellants. They 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 arriving at his decision the Minister relied on the following
allegations of fact which were admitted.
"a)
The Payor was a new private law firm offering legal services to
the public. (admitted)
b)
Me Eric Clark and Me Andrew Penhale were
the associates in this firm. (admitted)
c)
The Appellant was a consultant in office management services and
was registered under the name of "Harris Office Management
Services". (admitted)
d)
On or about July 14, 1999, the Appellant signed a contract with
the Payor. (admitted)
e)
The contract was signed between the Payor and "Harris Office
Management Services" to provide office services by the
Appellant. (admitted)
f)
The Appellant provided services to the Payor under a written
agreement during the first two months and under a verbal
agreement during the rest of the litigation period.
(admitted)
g)
The contract specified that the Appellant had to work 7 hours per
day, 5 days a week; after approximately 4 months, the Appellant
worked only 3 days per week for the Payor. (admitted)
h)
The Payor required that the Appellant rendered services during
the regular office hours since one of the obligations of the
Appellant was to answer the phone. (admitted)
(i)
At the beginning, the appellant worked on administrative tasks
and after a few months she worked as secretary-receptionist: she
answered the phone, provided bookkeeping and other administrative
tasks. (admitted)
j)
During the litigation period, the Appellant performed her duties
in the Payor's office and used all the equipment of the
Payor. (admitted)
k)
The Appellant received a fixed salary of $25 per hour; she
submitted a bill of the hours worked on a bi-weekly basis to the
Payor. (admitted)
[6]
The Payor was a private law firm which retained the services of
Shirley Hipson to act as a secretary-receptionist, by
answering the phone, providing bookkeeping and other
administrative work.
[7]
Shirley Hipson, operating under the registered name of Harris
Office Management Services signed an agreement with the Payor
(Exhibit A-1). The contract was for a duration of two months:
from July 14 to September 10, 1999 for a minimum of seven hours
per day, five days a week at $25 per hour and was to be
re-negotiated after September 10, 1999.
[8]
According to Shirley Hipson, she was hired to do some secretarial
work for the Payor. She testified that she received directions
from Caroline Schatz, an employee of the Payor. Her duties
consisted in answering the phone, attending to the accounts,
photocopying and all other duties consistent with work performed
in a law firm.
[9]
She submitted invoices (Exhibit I-2), which were paid by the
Payor, claiming various amounts for office clerical and
secretarial work. She had to inform Caroline Schatz of the
type of work performed.
[10] Shirley
Hipson registered her business name operating under a sole
proprietorship on March 3, 1999 (Exhibit I-1). She admitted not
having an employee. However, she sold Avon products and also did
some work for her husband, Brian P. Hipson, who operated a
management company.
[11] In a
letter (Exhibit I-5) dated May 16, 2000 to the Chief of Appeals,
Canada Customs and Revenue Agency, Shirley Hipson described her
factual arrangement with the Payor.
[12] Case law
has established a series of tests to determine whether a contract
is a contract of service or for the provision of services. The
Federal Court of Appeal, in the case of Wiebe Door Services
Ltd. v. M.N.R., 87 D.T.C. 5025, set out four tests most
commonly referred to, in order to make the proper distinction.
The tests are:
a)
The degree or absence of control exercised by the alleged
employer;
b)
ownership of tools;
c)
chance of profit and risk of loss;
d)
integration of the alleged employee's work in the alleged
employer's business.
[13] The
parties above cannot conclude a contract and simply decide that
the contract is one for the provision of services. It is the
whole of the circumstances relevant to the work performed which
determine whether or not it is self-employment or an
employer-employee relationship.
Control
[14] The
Appellant was under the direct supervision of Caroline Schatz, an
employee hired by the Payor. Even if the lawyers were not always
present in the office, the Appellant was still under the control
of the Payor. It is not so much the immediate control of the
Payor or of another authorized person that is the determining
factor but it is the right to exercise a control. Even though the
Appellant had a certain flexibility in setting her hours or
vacations, she had to perform her duties at a minimum of seven
hours per day, five days a week. Considering these facts there
was a sufficient amount of control to conclude that the Appellant
was employed under a contract of service.
Ownership of tools
[15] The
Appellant performed her duties with the facilities offered by the
Payor. Being so, the Court must conclude to the existence of a
contract of service.
Profit and loss
[16] The
Appellant was paid on an hourly basis at a rate of $25. She
submitted invoices setting out the number of hours worked plus
the overtime. There being no chance of profit or risk of loss, it
was a contract of service that existed between herself and the
Payor.
Integration
[17] The
Appellant worked regular hours at the office of the Payor
performing duties related to work in a law partnership. Those
duties were essential for the good operation of the law firm.
Being integrated in the operation of the legal office reflects a
contract of service.
[18] Taking
into consideration all of the circumstances, the Court is of the
opinion that the Appellant worked during the period in question
for the Payor under a contract of service. The Appellant, Shirley
Hipson, was engaged by the Payor in insurable employment within
the meaning of the Employment Insurance Act.
[19] The
appeals are dismissed.
Signed at Ottawa, Canada, this 18th day of July 2001.
"J.F. Somers"
D.J.T.C.C
.COURT FILE
NO.:
2000-4821(EI)
STYLE OF
CAUSE:
Shirley Hipson and M.N.R.
PLACE OF
HEARING:
Montreal, Quebec
DATE OF
HEARING:
June 14, 2001
REASONS FOR JUDGMENT BY: The
Honourable Deputy Judge J.F. Somers
DATE OF
JUDGMENT:
July 18, 2001
APPEARANCES:
Counsel for the Appellant: Eric L. Clark
Counsel for the
Respondent:
Claude Lamoureux
COUNSEL OF RECORD:
For the
Appellant:
Name:
Eric L. Clark
Firm:
Clark & Partners
Montreal, Québec
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
2000-4984(EI)
STYLE OF
CAUSE:
Clark & Partners and M.N.R.
PLACE OF
HEARING:
Montreal, Quebec
DATE OF
HEARING:
June 14, 2001
REASONS FOR JUDGMENT BY: The
Honourable Deputy Judge J.F. Somers
DATE OF
JUDGMENT:
July 18, 2001
APPEARANCES:
Counsel for the Appellant: Eric L. Clark
Counsel for the
Respondent:
Claude Lamoureux
COUNSEL OF RECORD:
For the
Appellant:
Name:
Eric L. Clark
Firm:
Clark & Partners
Montreal, Québec
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-4821(EI)
BETWEEN:
SHIRLEY HIPSON,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal
of Clark & Partners (2000-4984(EI)) on June 14,
2001 at Montreal, Québec, by
the Honourable Deputy Judge J.F. Somers
Appearances
Counsel for the
Appellant:
Eric L.
Clark
Counsel for the
Respondent:
Claude Lamoureux
JUDGMENT
The
appeal is dismissed and the decision of the Minister is 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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