Date: 20010607
Dockets: 2000-4444-EI, 2000-4445-CPP
BETWEEN:
DATACO UTILITY SERVICES LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor
Judgment
Porter, D.J.T.C.C.
[1]
These appeals were heard on common evidence by consent of the
parties on the 22nd of February 2001 at Calgary,
Alberta.
[2]
By Notices of Assessment dated the 5th and
6th of April 2000, respectively, the Appellant was
assessed for both employment insurance premiums and Canada
Pension Plan contributions as follows:
Year
Assessment
Amount
1999
Employment Insurance Premiums
$13,221.64
2000
Employment Insurance Premiums
$ 200.30
1999
Canada Pension Plan contributions $13,347.72
2000
Canada Pension Plan contributions $ 239.74
These assessments were made with respect to the workers
outlined in Schedule "A" to these Reasons.
[3]
In May and June 2000, the Appellant appealed these Assessments to
the Minister of National Revenue (the "Minister")
who, by letter dated August 16, 2000, confirmed the assessments,
subject to a small variation with respect to one worker relating
to Canada Pension Plan contributions. The reasons for the
variation have no relevance to this appeal. The reasons given by
the Minister for his decision to confirm the assessments were as
follows:
"It has otherwise been decided to confirm the balance of
the assessment for the following reason: Although the workers
were not employed under a contract of service and therefore not
Dataco Utility Services Ltd.'s employees, they were
employed in insurable and pensionable employment as they were
placed in employment by Dataco Utility Services Ltd. to perform
services for and under the direction and control of TransAlta
Utilities and EPCOR and were remunerated by Dataco Utility
Services Ltd. for the performance of those services."
The decision was issued pursuant to section 93 of the
Employment Insurance Act (the "EI Act")
and section 27 of the Canada Pension Plan (the
"Plan") respectively, and is based on
paragraph 5(1)(a) of the EI Act and paragraph
6(g) of the Employment Insurance Regulations (the
"EI Regulations") and
paragraph 6(1)(a) and section 12 of the Plan,
and section 34 of the Canada Pension Plan Regulations (the
"CPP Regulations").
[4]
The Appellant has appealed to this Court from the decision of the
Minister that the workers who, it is agreed by all parties, were
independent contractors, were placed in employment by the
Appellant, to perform services for and under the direction and
control of TransAlta Utilities and EPCOR as a placement
or employment agency and were thus, included in insurable and
pensionable employment by virtue of paragraph 6(1)(a) of
the EI Act, EI Regulations and section 34 of the
CPP Regulations.
The Regulations
[5]
It is to be noted that the wording in the two statutory schemes
(EI and CPP), is somewhat different. One is
therefore not necessarily inclusive of the other, although there
is a certain commonality. The Regulations in question read
as follows:
"6(g) Employment Insurance Regulations
...
6.
Employment in any of the following employments, unless it is
excluded from insurable employment by any provision of these
Regulations, is included in insurable employment:
...
(g)
employment of a person who is placed in that employment by a
placement or employment agency to perform services for and under
the direction and control of a client of the agency, where that
person is remunerated by the agency for the performance of those
services.
Section 34 Canada Pension Plan Regulations
34(1) Where any individual is placed by a placement or
employment agency in employment with or for performance of
services for a client of the agency and the terms or conditions
on which the employment or services are performed and the
remuneration thereof is paid constitute a contract of service or
are analogous to a contract of service, the employment or
performance of services is included in pensionable employment and
the agency or the client, whichever pays the remuneration to the
individual, shall, for the purposes of maintaining records and
filing returns and paying, deducting and remitting contributions
payable by and in respect of the individual under the Act and
these Regulations, be deemed to be the employer of the
individual.
(2) For the purposes of subsection (1), "placement or
employment agency" includes any person or organization that
is engaged in the business of placing individuals in employment
or for performance of services or of securing employment for
individuals for a fee, reward or other remuneration."
[6]
It is to be noticed that "placement agency" or
"employment agency" is defined to include certain
situations in the CPP Regulations. That definition is not
all inclusive. There is no definition of the term in the EI
Regulations.
[7]
Bonner, T.C.J. in the case of Computer Action Inc. v.
M.N.R, [1990] T.C.J. No. 101, said that the term should be
given its ordinary meaning and read in context:
"An organization engaged in matching requests for work
with requests for workers"
[8]
Tesky, T.C.J. in the case of Rod Turpin Consulting Ltd.(c.o.b.
Tundra Site Services) v. M.N.R., [1997] T.C.J. No.
1052, said this:
"The Appellant argues that it is not a placement agency,
but to look at it as a general contractor. This I cannot accept.
General contractors usually by the terms of their contracts with
clients, are responsible to the client to construct the project
contracted to be constructed in a good and workmanlike manner.
Here, in the only responsibility the Appellant had to Cominco was
to provide qualified workers as specified by Cominco.
The Appellant was acting as a placement agency in respect of
this worker. The Appellant was asked to provide a journeyman
electrician, which it did. It paid the electrician and charged
the wages to Cominco, together with a fee for
services."
[9]
In the case of Dyck v. Canada (Minister of National
Revenue-M.N.R.) and Bigknife Oilfield Operating Ltd. [1999]
T.C.J. No. 852, I held as follows:
"The position of the Minister is that Bigknife acted in
this situation as a placement or employment agency. The EI
Regulation in question was changed in 1997 and thus, previous
case law is not particularly helpful. However, the logic of
Teskey, J. in Rod Turpin Consulting Ltd. [...] seems
as relevant today as it was then. Bigknife was not a general
contractor. It was only responsible to supply qualified
personnel. There was no individual fees for the different people
who were engaged, but no doubt, that was all built into the
overall contract. It places Dyck, to the extent that he needed it
in providing his services under the direction and control of
Fletcher. They had the right to control his work. In my view, EI
Regulation 6(g) and CPP Regulation 34 do each apply in this
situation."
[10] I am of
the view that there is a fundamental principle to be grasped in
these cases which really should simplify the question for the
parties. It seems to me that the intention or the "pith and
substance" of the Regulations is to bring into the
basket of the two social schemes set up by Parliament, those
workers whether they are employees under a contract of service or
independent contractors under contracts for services, who simply
contract with entity A for a fee (or other recompense), to be
found or placed in work (employment) with or under the direction
and control of a third entity B. Thus, these workers do not
contract with entity A to do any work for entity A as part of the
latter's business. Further, entity A does not contract with
entity B to do any work for entity B other than to provide them
with personnel for which they collect a fee or other
remuneration.
[11] That
situation seems to me, to be absolutely and mutually exclusive of
any arrangement whereby a worker is engaged to perform services
for entity A in the course of the latter's business, or
where entity A has a contract with entity B to perform services
for entity B. In such a situation, entity A is not providing or
placing personnel, but carrying out its contractual obligation to
provide those services to entity B.
[12] Thus, the
first question to be asked is whether the worker is performing
services for entity A as part of the business of the latter,
albeit part of that business may be a contract for entity A to
provide a service for entity B, or whether entity A is simply
acquiring personnel as its very business with no contract to
undertake anything further than to pass the worker on to entity B
to undertake whatever the business of entity B might be. The
simple question to ask is whether entity A is under any
obligation to provide a service to entity B other than simply
provide personnel. Is it obligated to perform in some other way
than simply to make people available? If the answer is yes, it
clearly has business of its own as does any general contractor on
a building site and the worker is not covered by the
Regulations under either statute. If however, the answer
is no, that is, it is not obligated to carry out any service
other than to provide personnel, then clearly the worker in such
a situation is covered by the Regulations under both
statutes.
[13] The
question as I see it is not so much about who is the ultimate
recipient of the work or services provided as this will cover
every single possible subcontract situation, but rather who is
under obligation to provide the service. If the entity alleged to
be the placement agency is under an obligation to provide a
service over and above the provision of personnel, it is not
placing people, but rather performing that service and is not
covered by the Regulations.
[14] I refer
to the Federal Court of Appeal case of Vulcain Alarme Inc. v.
The Minister of National Revenue, (1999) 249 N.R. 1 for an
analogy, where the same principle is clearly set out in relation
to whether a subcontractor becomes an employee in certain
situations. Létourneau J.A. said this:
"A contractor who, for example, works on site on a
subcontract does not serve his customers but those of the payer,
that is the general contractor who has retained his services. The
fact that Mr. Blouin had to report to the plaintiff's
premises once a month to get his service sheets and so to learn
the list of customers requiring service, and consequently the
places where his services would be provided, does not make him an
employee. A contractor performing work for a business has to know
the places where services are required and their frequency just
as an employee does under a contract of employment. Priority in
performance of the work required of a worker is not the apanage
of a contract of employment. Contractors or subcontractors are
also often approached by various influential customers who force
them to set priorities in providing their services or to comply
with the customers' requirements."
[15] The
simple facts that subcontractors contracting with entity A are
required to comply with the requirements of entity B does not per
se place those persons under the direction and control of entity
B any more than it makes entity B a customer of those
persons.
The Facts
[16] The
Minister in arriving at his decision, was said in the Reply to
the Notice of Appeal signed on his behalf, to have admitted the
following facts in the Notice of Appeal:
At no time were the
workers under the indirect control of the Appellant.
With respect to the
Appellant's assertion that the workers provided the
resources necessary to complete the terms of their
engagement:
(a) TransAlta Utilities provided the workers with the
computer.
(b) TransAlta Utilities workers provided their own vehicle,
clothing and cell phones.
(c) EPCOR workers provided a stool, screwdrivers, pliers and a
vehicle.
[17] The
Minister, in arriving at his decision, was further said in the
Reply to the Notice of Appeal to have relied upon the following
assumptions of fact:
"(a) the
facts as admitted above;
(b)
the Appellant was not related to the Workers;
(c)
the Appellant has a contract with TransAlta Utilities to read
electrical meters in the Wainwright service area;
(d)
the Appellant has a contract with EPCOR to provide disconnect,
reconnect, meter exchanges and service orders;
(e)
the Appellant's business is not seasonal;
(f)
the workers who provided services for TransAlta Utilities (the
"TransAlta Workers") are:
Bonnie
Adamson
Virginia L. Judd
Raymond
Bischke
Lena Klause
Ralph
Broderson
Robert W. Landry
Howard
Cardinal
Ralph J. Leckie
Karen
Casswell
Leanne Lowen
Ken A.
Coreman
Linda Mindus
Mark
Dool
Kay Packer
John
Doyle
Dorothy Radford
Mardele
Fitger
Brandon Reese
Karolyn
Frank-Jensen
Brenda Scherger
Lorne A.A.
Gibson
Colyn Sejevick
Ian
Grant
Jason Smith
Dennis
Harris
Shawn Schweighardt
Gerald Lawrence
Hefferman
Raymond Tipler
Stuart Lynn
Hurst
Ken Tober
Leath
Jonston
Ken Van Rootselaar
(g)
the workers who provided services for EPCOR (the "EPCOR
Workers") are:
Richard Ferbey
Randall Galarneau
Regan Shields
(h)
TransAlta Utilities:
(i)
determined the routes that were to be read; and
(ii)
scheduled the workers;
(i)
EPCOR:
(i)
determined what services were to be provided each day; and
(ii)
provided daily instruction;
(j)
the TransAlta Workers read meters in both rural and urban areas
for TransAlta Utilities using electronic reading devices;
(k)
Ken Coreman also provides services to TransAlta Utilities as a
supervisor;
(l)
Ken Coreman's duties include overseeing six workers, ensuring
work is completed, contacting workers for routes, training new
workers, hiring new workers and discussing problems with
workers;
(m) the
EPCOR Workers provide reconnects, disconnects, service orders and
meter exchanges fore EPCOR;
(n)
Randall Galarneau also provides services to EPCOR as a
supervisor;
(o)
Randall Galarneau provides supervisory services and oversees the
two other EPCOR Workers;
(p)
the TransAlta Workers use the meter readers to download schedule
information from the TransAlta Utilities' computer system in
the TransAlta Utilities' office;
(q)
the TransAlta Workers are required to return the meter readers to
the TransAlta Utilities' office at the end of each day;
(r)
the TransAlta Workers' contract (the "TransAlta
Contract) stipulates:
(i)
the workers will provide meter reading services or other related
services as defined by the Appellant from time to time as
identified in Schedule A of the TransAlta Contract;
(ii)
Schedule A of the TransAlta Contract indicates the workers
will:
a) read meters in the service
territory and surrounding area;
b) work closely with team
members to meet TransAlta Utilities' service expectations (1
day ahead, on cycle day or 2 cycles behind);
c) work to achieve less than 2%
can't read total and must obtain reading within agreed upon
operating windows of TransAlta Utilities;
d) service orders are to be
completed within 3 working days in order to meet TransAlta
Utilities' expectations and operating window for completion;
and
e) use TransAlta Utilities'
signs and carry identification at all times;
(iii)
the workers are paid on a piece work basis by the Appellant;
(iv)
service rate adjustments are reviewed by the Appellant's
operating manager and changes will be forwarded to the workers in
writing with 10 working days notice;
(v)
the workers are paid bi-weekly by direct deposit;
(vi) the
workers will provide their own transportation;
(vii) the
workers are responsible for the costs associated with their
vehicle;
(viii) the Appellant
will provide insurance and Worker's Compensation coverage;
and
(ix) ten
working days is required by either party to cancel the
contract;
(s)
the EPCOR Workers provide nightly reports at the end of each day
at the EPCOR office;
(t)
the EPCOR Workers' contract indicates:
(i)
the workers will provide lock up services as defined by the
Appellant from time to time;
(ii)
the workers are paid on a piece work basis at predefined
rates;
(iii)
the workers will provide their own transportation;
(iv) the
workers are responsible for the costs associated with their
vehicle;
(v)
the workers will not hold the Appellant liable for any claims
arising in connection with the services; and
(vi) ten
working days is required by either party to cancel the
contract;
(u)
Ken Coreman receives and additional $150 per week for his duties
as a supervisor;
(v)
the predefined rates for the EPCOR Workers are $5.74 per meter
for disconnects and reconnects and $10.74 for service orders;
(w)
Randall Galarneau's predetermined rates are $2.87 and $5.37,
respectively;
(x)
Randall Galarneau receives an additional $600.00 per week for his
role as a supervisor;
(y)
the EPCOR Workers receive an additional $200.00 for evening
shifts when required to work this shift for EPCOR;
(z)
the TransAlta Workers provide the Appellant weekly with count
sheets and daily activity from the TransAlta reads;
(aa) the EPCOR
Workers provide the Appellant with count sheets;
(bb) all
Workers are paid bi-weekly;
(cc) all
Workers, except for one who is paid by cheque, are paid by direct
deposit;
(dd) with
respect to the TransAlta Workers, when the piece rate does not
equal $18.75 per hour or above, the Appellant will compensate the
worker up to that rate;
(ee) the rates
of pay are determined by the Appellant;
(ff)
the Workers are not entitled to vacation or sick pay;
(gg) the
Appellant does not provide an employee benefit plan;
(hh) the
TransAlta Workers are paid $100.00 for a 3-day training program
prior to providing services consisting of:
(i) rural map
reading;
(ii) how to read a
meter;
(iii) training on hand
held device;
(iv) training on safety
procedures;
(v) how to read TransAlta
Utilities' schedules;
(vi) how to stop meters;
(vii) training on drug growing
operations; and
(viii) how to adhere to TransAlta Utilities,
policy and procedures;
(ii)
the EPCOR Workers received a 2-day training program prior to
providing services consisting of safety procedures, customer
service and EPCOR's expectations and were paid $18.00 per
hour during the training;
(jj)
the Workers' hours varied depending on the schedule
requirements set out by the Clients;
(kk) the hours
worked by TransAlta Workers had to allow for them to access
TransAlta Utilities' place of business between 8:00 a.m. and
5:00 p.m.;
(ll)
the TransAlta Workers had a 3 to 4-day time limit in which to
complete assigned work;
(mm) the EPCOR
Workers' duties were assigned on a daily basis;
(nn) the EPCOR
Workers were expected to complete the work the day it was
assigned;
(oo) the
Clients determined the locations where services were provided by
the Workers;
(pp) the EPCOR
Workers were required to report to EPCOR every 5 to 6 tasks to
update them as to the status of tasks;
(qq) the
TransAlta Workers were not required to perform services
personally but any replacement worker would be authorized and
trained by the Appellant;
(rr)
any replacement worker would be covered by the Appellant's
insurance;
(ss) the
Appellant remunerated any replacement worker;
(tt)
the Workers could face termination if their work was done
incorrectly;
(uu) the
TransAlta Workers were required to display TransAlta Utilities
signage on their vehicle and wear an identification tag;
(vv) the EPCOR
Workers were required to display EPCOR signage on their vehicle
and wear an identification tag;
(ww) the EPCOR Workers
were required to attend safety meetings;
(xx)
TransAlta Utilities dealt directly with the TransAlta Workers in
response to complaints about the workers;
(yy) EPCOR
referred EPCOR Worker complaints to Randall Galarneau to deal
with;
(zz)
EPCOR would respond directly if the EPCOR Workers had
problems;
(aaa) all the Workers were
required by their contract to:
(i) return
equipment and property provided to them; and
(ii) have a cellular
telephone;
(bbb) to perform their duties,
the Workers required small hand tools, work clothes, safety
boots, outdoor wear, snow shoes, binoculars, snowmobiles (if
necessary), lock de-icier, screwdrivers and any resources needed
to access the Clients' customer's property;
(ccc) during the 1999 and
2000 years, the Workers received remuneration from the Appellant
as outlined in ... Schedules A and B which form part of the
Notice of Appeal;
(ddd) the Appellant placed the
Workers in employment to perform services for the Clients;
(eee) the Workers were
under the direction and control of the Clients;
(fff) the
Appellant remunerated the Workers."
[18] The
Appellant was, in the whole, said to agree with these assumptions
of fact, save and except items (h)(ii), (i), (k), (n), (s), (dd),
(jj), (kk), (ll), (qq), (ss), (vv), (xx), (zz), (ddd), and
(eee).
[19] Evidence
was given by John Edwards, Vice-president of the Appellant, and
Kenneth Coreman, one of the workers in a supervisory position. I
have no difficulty in accepting their evidence. They were
credible witnesses. The issue here is not to be resolved so much
around what the facts were as the interpretation to be placed
upon those facts. John Edwards explained how the Appellant
entered into contracts with TransAlta and EPCOR (the
"Utility Companies") to provide meter reading
services throughout Alberta as well as, in the case of EPCOR,
meter lock-off services in the situation of unpaid
accounts. There was entered into evidence a copy of the contract
between TransAlta and the Appellant (Exhibit A-1) and the copy of
the Purchase Order (Exhibit A-2), evidencing the contract between
EPCOR and the Appellant. There was further entered into evidence
a typical contract between the Appellant and a worker, evidencing
a contract for services with an independent contractor. The
latter point is not an issue in this appeal.
[20] Of
significance was the question of complaints about TransAlta
workers (10(xx)). The evidence revealed and I accept that
TransAlta did not discipline or deal with workers directly. In
accordance with paragraph 5.1(a) of the contract, it dealt
directly with the Appellant's Account Project Manager, who
then dealt with the complaint accordingly. It was an in-house
matter and that is an important point. The Minister was incorrect
in his assumption in this respect.
[21] That
apart, all of the discrepancies between the assumptions of fact
made by the Minister and the evidence really make no difference.
On the whole, I accepted the evidence as it was given at the
hearing of the appeal.
[22] Turning
now to the contract with TransAlta, it can be seen that the
Appellant was obligated, amongst other things, to provide
services as follows:
"WHEREAS the Contractor agrees to provide, and TransAlta
agrees to accept certain meter reading and associated services
(the "Services") on the terms and conditions set
forth in this Agreement: ...
‘Basic Services' means manually obtaining
meter readings (scheduled and unscheduled); checking for missing
meter seals, replacing and reporting the replacement of any such
seals to the Project Manager; informing the Project Manager of
unusually high consumption of electricity by any customer;
informing the Project Manager of damaged meters and any
abnormalities pertaining to TransAlta's distribution
system; resetting and resealing all demands for each customer;
and such other services as may be designated as Basic Services by
both parties from time to time and specifically excludes
automatic meter reading;
...
‘Optional Services' means collections,
meter connects, meter disconnects and such other services as are
proposed and offered by the Contractor;
...
‘Services' means Basic Services and
Optional Services collectively.
...
2.2
Implementation Plan and Schedule
The Contractor agrees to commence performing the Services in
areas designated by TransAlta in accordance with the schedule
designed by the Project Manager.
ARTICLE III - SERVICES
3.1
Services
a)
The Contractor shall provide Basic Services to TransAlta in a
competent and professional manner from and after the Effective
Date at such frequency as is determined by TransAlta.
b)
The Contractor shall provide those Optional Services as are
offered and requested by TransAlta within sixty (60) days'
after receipt of written notice from TransAlta of its desire to
receive any such Optional Services.
c)
The Contractor acknowledges that the Services shall be performed
at the direction of the Project Manager and that the Project
Manager may, from time to time, conduct such inspections or make
such inquiries as the Project Manager considers to be appropriate
to determine the adequacy of the Services being provided by the
Contractor.
3.2
Safety
The Contractor shall conduct his activities in relation to the
services using proper and appropriate safety practices and
procedures, and agrees that all accidents and/or incidents
resulting in any injury to any person or damage to any property
occurring in connection with the Services shall be reported
immediately to the Project Manager. The Contractor will follow
all TransAlta's safety policies and procedures.
...
ARTICLE IV - COST OF SERVICE
4.1
Rates
a)
TransAlta agrees to pay the Contractor for the Basic Services in
accordance with the rates set out in Schedule
"A".
b)
One fee per meter, which includes up to 6 registers and 2 demand
resets.
4.2
Invoicing and Payment
The Contractor shall deliver to TransAlta invoices and
vouchers together with a satisfactory progress report on a
monthly basis. These invoices and vouchers shall be presented no
later than 30 days from date of service. Within 30 days after the
date of the invoice, TransAlta shall pay the Contractor the
stated charges, exclusive of any applicable sales and or service
taxes and other similar taxes, all of which shall be for the
account of TransAlta. Failure to meet terms and conditions within
thirty (30) days may result in a five (5%) percent penalty.
4.3
Cost of Rereads
The cost of re-reading a meter will be the responsibility of
the Contractor if the initial reading was incorrect due to the
fault of the Contractor or any employee or agent of the
Contractor. The cost of re-reading a meter shall be paid in
accordance with Schedule "A" hereto if the initial
reading was incorrect due to the fault of TransAlta's
equipment malfunction or if TransAlta asks for a reread where the
initial reading was correct.
ARTICLE V - THE CONTRACTOR COVENANTS,
REPRESENTATIONS AND WARRANTIES
5.1
General Covenants and Representations
The Contractor covenants, represents and warrants to TransAlta
that:
a)
it shall provide the Basic Services in accordance with
TransAlta's regularly scheduled billing intervals;
b)
it shall maintain a reading accuracy at the utility standards of
1 error/1,000 reads and shall provide a re-read at no charge if
the reading is incorrect;
c)
the data that the Contractor collects and the invoices that are
produced by the Contractor shall be accurate save to the extent
that any errors are the result of inaccurate information provided
to the Contractor by TransAlta, its servants, agents and
employees;
d)
it will ensure that the Contractor's Account Project
Manager will become involved on any and all customer complaints
related to meter reading services, will investigate the problem
and will provide additional meter reading support when
required;
e)
it shall take responsibility for any key and/or special
instructions for access given to the Contractor by TransAlta or a
customer and shall sign for any such keys once per year;
f)
it shall conduct and ensure its employees conduct all activities
in relation to the Services using proper and appropriate safety
practices and procedures and shall immediately report all
accidents or incidents resulting in any injury to any person or
damage to any property occurring in connection with the Services
to the Project Manager.
...
5.2
Personnel
The Contractor hereby covenants and agrees that:
a) the
Contractor shall provide a sufficient number of personnel to
enable timely and proper execution and completion of the Work.
All such personnel shall be competent, literate in the language
of the Contract and qualified by education, training, experience
and in all other respects capable of carrying out the tasks to
which each is assigned. At TransAlta's request, Contractor
shall reassign, replace or remove personnel who, in
TransAlta's sole discretion, do not meet the above
requirements or which have committed a violation of
TransAlta's safety, security or site regulations or
procedures. At TransAlta's sole discretion, it may require
the removal of a contract employee who in TransAlta's
opinion is causing excessive and/or serious impact to
TransAlta's public image or customer satisfaction.
...
d)
Neither Contractor nor its employees,
Subcontractors or agents shall The Locator is
not and any employees utilized by the Locator are not, nor shall
it or they, as applicable be deemed to be, at any time,
employees of TransAlta. The parties agree that Contractor shall
be an independent contractor in the performance of the terms and
conditions of this Contract and that no master and servant
relationship is to be created between Contractor or any employees
or agents utilized by Contractor and TransAlta and
further that no employee benefits available to employees of
TransAlta shall accrue to Contractor or any employees or
agents used by Contractor.
...
5.3
Equipment
The Contractor shall provide any and all vehicles, tools,
equipment and material required to perform the work and provide
services pursuant to this Agreement.
The meter reading equipment utilized by the Contractor shall
be or, be comparable to Itron hand held data collection
units.
...
ARTICLE VI - TRANSALTA COVENANTS,
REPRESENTATIONS AND WARRANTIES
6.1
TransAlta covenants and agrees that it shall:
a)
pay all sums that shall become due and owing pursuant to this
contract in accordance with the terms and conditions hereof;
...
c)
cooperate with the Contractor in optimizing routing to meet
TransAlta's meter reading frequency requirements;
..."
[23] The
Purchase Order with EPCOR reveals a contractual obligation of the
Appellant to:
"provide meter services on behalf of EPCOR Technologies
Inc. for the City of Calgary."
These services are set out on pages 4 and 5 of the Order as
follows:
"Meter
Repair
8.90
Non
Standard
8.90
Evening
Reconnect
16.40
Residential
Recalls
10.85
Commercial
Recalls
14.46
Meter Reading
Hours
28.50
Commercial Stop
Mtrs/Lockouts
14.46
Residential Stop
Mtrs/Lockouts
10.85
Illegal
8.90
Load
Limiters
10.34"
[24] Thus, it
can be seen that in each case, the Appellant is not required to
provide personnel to the Utility Companies. Rather, it is
required to provides services relating to the reading and
operation of the various meters installed on the premises of the
respective customers of the Utility Companies. Clearly, the
contract in each case is a contract for services with an
independent contractor, the Appellant. Whether the Appellant was
to use its own employees or further subcontract with other
independent contractors by way of contracts for services, was
clearly of no concern to the Utility Companies. Whilst the latter
had certain policies, procedures and standards which it required
the Appellant's personnel to adopt in the performance of
their duties, that was by way of contract with the Appellant.
That point should not be overlooked. The personnel used by the
Appellant to provide the services were not required to report to
the Utility Companies in order to take directions from them.
Those personnel, whether they were employees or subcontractors
with the Appellant, were required to follow the directions given
to them by the Appellant to provide the services which they had
contracted to provide for the Appellant, in accordance with the
conditions that the Appellant had accepted in the master
contracts with the Utility Companies. I do not see that they were
in any way under the direction and control of the Utility
Companies. The only right to control, held by the Utility
Companies, came by virtue of their contract with the Appellant.
The fact that the master contracts called for certain things to
be done in certain ways, at certain times and allowed the Utility
Companies a veto (so to speak) over any particular individual
performing that service, did not transform the basic nature of
the contract from a contract for services into a placement of
personnel under the direction and control of the Utility
Companies by a placement agency. The workers' commitment was
very much established by their contracts with the Appellant
(Exhibit A-3), not anything flowing to them directly from the
Utility Companies. The Appellant in turn was obligated to meet
its commitments to the Utility Companies. Thus, those
requirements were part and parcel of the contracts themselves in
both cases.
[25] As was
said by Mr. Justice Létourneau in the Vulcain
Alarme case (above), a contractor, who for example works on a
site as a subcontractor, does not serve his customers but those
of the payor. The Utility Companies were the customers of the
Appellant. The Appellant contracted with those customers to
provide certain services needed in the course of their business.
Those customers did not become customers of the workers engaged
by the Appellant. They had no privity of contract and no direct
working relationship with the workers. This is totally different
from a situation which would exist if the contract between the
Utility Companies and the Appellant simply called for a number of
people to be provided, who would then attend upon the Utility
Companies and receive all their direction from and provide their
services directly to the Utility Companies. This latter
situation, where the Appellant would not be required to provide
any services, but just personnel, would be clearly four-square
within the ambit of the Regulations. It would be analogous
to the situation which prevailed in the cases above, Computer
Action Inc., Rod Turpin Consulting Ltd. and
Dyck/Big Knife Oilfield Operating Ltd.
Conclusion
[26] In
conclusion, I hold that the Appellant was not a "placement
or employment agency" within the meaning of that terms in
the Regulations, under either the EI Act or
the CP Plan. I further hold that they did not:
"place [persons] in employment to perform services for
and under the direction and control of a client ...."
(EI Act)
and also did not:
"place [persons] in employment with or for performance
of services for a client." (Plan)
[27] The
workers were clearly engaged to provide services to the Appellant
to enable it to in turn carry out its contractual obligations to
provide a number of services to the Utility Companies. They were
no more placed under the direct control of the Utility Companies
than if they had been subcontractors on a building site on which
the Appellant was the general contractor and the Utility
Companies the owner. At the end of the day, in answer to the
question "was the Appellant in the business of simply
providing personnel to the Utility Companies?", or
"was it providing services to the Utility
Companies?", the answer is clearly that it was providing
services. The situation of the workers was accordingly not
covered by the respective Regulations. They were not in
either insurable or pensionable employment.
[28] The
appeals are allowed. The decision of the Minister and the
assessments are vacated in accordance with these reasons.
Signed at Calgary, Alberta, this 7th day of June 2001.
"Michael H. Porter"
D.J.T.C.C.
Schedule "A"
Bonnie
Adamson
Virginia L. Judd
Raymond
Bischke
Lena Klause
Ralph
Broderson
Robert W. Landry
Howard
Cardinal
Ralph J. Leckie
Karen
Casswell
Leanne Lowen
Ken A.
Coreman
Linda Mindus
Mark
Dool
Kay Packer
John
Doyle
Dorothy Radford
Mardele
Fitger
Brandon Reese
Karolyn
Frank-Jensen
Brenda Scherger
Lorne A.A.
Gibson
Colyn Sejevick
Ian
Grant
Jason Smith
Dennis
Harris
Shawn Schweighardt
Gerald Lawrence
Hefferman
Raymond Tipler
Stuart Lynn
Hurst
Ken Tober
Leath
Jonston
Ken Van Rootselaar
COURT FILE
NO.:
2000-4444(EI)
STYLE OF
CAUSE:
Dataco Utility Services Ltd. and M.N.R.
PLACE OF
HEARING:
Calgary, Alberta
DATE OF
HEARING:
February 22, 2001
REASONS FOR JUDGMENT
BY:
The Honourable Deputy Judge M.H.Porter
DATE OF
JUDGMENT:
June 7, 2001
APPEARANCES:
Counsel for the
Appellant:
David W. Ross
Counsel for the
Respondent:
James Yaskowich
COUNSEL OF RECORD:
For the
Appellant:
Name:
David W. Ross
Firm:
McCarthy Tetrault
Calgary, Alberta
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.:
2000-4445(CPP)
STYLE OF
CAUSE:
Dataco Utility Services Ltd. and M.N.R.
PLACE OF
HEARING:
Calgary, Alberta
DATE OF
HEARING:
February 22, 2001
REASONS FOR JUDGMENT
BY:
The Honourable Deputy Judge M.H.Porter
DATE OF
JUDGMENT:
June 7, 2001
APPEARANCES:
Counsel for the
Appellant:
David W. Ross
Counsel for the
Respondent:
James Yaskowich
COUNSEL OF RECORD:
For the
Appellant:
Name:
David W. Ross
Firm:
McCarthy Tetrault
Calgary, Alberta
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-4444(EI)
BETWEEN:
DATACO UTILITY SERVICES LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal
of Dataco Utility Services Ltd. (2000-4445(CPP)) on
February 22, 2001 at Calgary, Alberta, by
the Honourable Deputy Judge Michael H.
Porter
Appearances
Counsel for the
Appellant:
David W. Ross
Counsel for the
Respondent:
James Yaskowich
JUDGMENT
The
appeal is allowed and the assessment is vacated in accordance
with the attached Reasons for Judgment.
Signed at Calgary, Alberta, this 7th day of June 2001.
D.J.T.C.C.
Email this Content