Ranger v. M.N.R., docket 95-2459-UI

Date: 19990115

Docket: 95-2459-UI

BETWEEN:

ROBERT RANGER,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

LES ATTACHES PREMIER LTÉE,

DIVISION DE CT INDUSTRIES,

Intervener.

Appeal heard on April 21, 1998, at Montréal, Quebec, by the Honourable Judge Alain Tardif

Reasons for judgment

Tardif, J.T.C.C.

[1] This is an appeal from a decision dated October 25, 1995.

[2] According to that decision, the work done by the appellant from May 1, 1994, to January 9, 1995, for a company carrying on business under the firm name “Les Attaches Premier Ltée” was not insurable because there was no employer-employee relationship between the company and the appellant.

[3] The appellant testified at length.

[4] Norbert Massé, territories manager for Les Attaches Premier Ltée, and Philippe Corbet and Camille Leblond, both of whom were independent agents during the period at issue, also testified.

[5] The testimonial evidence, which was supplemented by documentary evidence, showed that the company recruited its salespersons through newspaper advertisements and on the basis of references and/or word of mouth.

[6] Once recruited, the persons concerned, including the appellant, were asked to take intensive training over a period of three to five days. During that training, the company explained and described what was involved in the work, suggested some sales methods and offered real training as a salesperson. The company also described and explained its view of the nature of the guidance provided and of the contractual relationship between it and what it called independent agents.

[7] Following the descriptions, explanations and training period, the exact duration of which in the appellant’s case could not be determined, the parties signed a contract.

[8] Robert Ranger and the company entered into a contract, which was filed as Exhibit A-1 and entitled [TRANSLATION] “New Agent Compensation Plan”. It was identified by a number to which a territory was assigned, and the territory was also designated by a number. The contract (Exhibit A-1) was divided into various sections, with headings having to do with such things as general matters, the semi-monthly advance, the allowance for travel expenses, the monthly payment statement and, finally, promotion credits.

[9] The contract was signed by the appellant on April 22, 1994, and by the company on May 4.

[10] An independent agent agreement was appended to this document; it was a very explicit agreement supplemented by a Schedule A concerning products, the category of customers and territory boundaries.

[11] Following the few days of training and coaching, the salespersons, including the appellant, were left to themselves, although it was possible for them to obtain technical support services and the advice of experienced co-workers quickly, easily and often.

[12] The appellant received ongoing help from Philippe Corbet, then an independent agent for the same company. The evidence showed that Mr. Corbet was very available to the appellant and co-operated closely with him.

[13] After agreeing to the contractual requirements through his signature of the contract, the appellant began working. Following the training, the new salespersons, including the appellant, entered what was called a transitional phase for an indefinite period of time. During that period, which in this case lasted a few weeks, the appellant received two types of compensation: $12 a day to cover the expenses he incurred in the performance of his work as a salesperson and a recoverable advance on his potential commissions.

[14] To be entitled to the $12 per diem and the advance on his commissions, the appellant, like all the other salespersons in a similar position, had to complete a daily activity report indicating the number of sales calls he had made, the number of demonstrations he had given and, finally, the number of sales he had made and their dollar value.

[15] Once the transitional phase was over, there was less support and guidance and the salespersons had to take responsibility for themselves; the $12 per diem and the advances on commissions ended.

[16] The salespersons thereafter received only commissions, the percentage of which varied from item to item. In exchange for the commissions agreed on, they alone had to bear and pay all the expenses associated with the sales they made, including all vehicle operating costs (gasoline, oil, insurance, maintenance). As well, they alone paid all their meal expenses and all promotional and advertising expenses. They were solely responsible for the cost of calls and of the use of an office if they considered it useful to have one.

[17] The company made space available to the salespersons at its head office. They could go there and use that space for the purposes of their work.

[18] The salespersons had to pay the cost of replacing the demonstration tools, the initial supply of which was provided to them by the company.

[19] The evidence showed that the company provided the sample case and its contents, the descriptive catalogue of the available inventory and, finally, the order forms.

[20] The appellant said that he preferred working out of his home. In the morning, he went directly to the customers he had solicited. Most of the time, the orders were sent by mail, once again entirely at his own expense.

[21] The weight of the evidence clearly demonstrated that the work performed by the appellant as a salesperson involved a real risk of loss and a real chance of profit, the extent of which depended on his performance, his effectiveness and the amount of time he put in. In other words, the appellant could very well have worked and not earned any income or even incurred a loss if, for example, he had had to invest in promotion, use his car and make many long-distance calls. However, he could also hope to earn a substantial income if he was dynamic, enterprising, determined and shrewd.

[22] Where it is difficult to draw a clear line is in respect of the relationship of subordination. According to the explanations given by the appellant, he was always closely and continuously supervised by one or more representatives of the company paying the commissions. I noted several times that the appellant had a very personal view of his work. His perception and understanding of things no doubt explain the fact that he always felt that he was subordinate, supervised and controlled in performing his work.

[23] The appellant, a disciplined, methodical man, explained that he filled out a daily activity report the entire time he was a salesperson; I noted a few times that the appellant had his own understanding of certain facts, which were described very differently by the three witnesses from the intervener company.

[24] Can it be concluded that the appellant’s understanding and perception are conclusive? I do not think so, especially since the appellant obviously had a clear interest in interpreting the facts as he did during his testimony, although he was basically honest. This is the case as regards the nature of the legal relationship. If the evidence had been made up only of the appellant’s testimony, the Court would have had to reach a conclusion based on evidence that reflected a subjective version of the terms and conditions under which the work was performed.

[25] The appellant’s interpretation becomes much less persuasive when the facts are assessed along with the whole of the evidence available; indeed, his version then becomes both questionable and ambiguous. The weight of the evidence showed that the salespersons were very independent in performing their work. They alone controlled how their schedules were organized; they were totally autonomous. They did not have to ask for permission from anyone to go on leave or vacations. They could do business with other companies; they were not limited or exclusively bound to the business of Les Attaches Premier Ltée.

[26] Camille Leblond’s testimony was significant in this regard; he said that he ran his own business with the primary objective of ensuring that all of his customers were satisfied. To achieve that goal, he did not hesitate to sell them other products or to broaden his range of services and products not offered by Les Attaches Premier Ltée. He also indicated that the company accepted the idea that the salespersons could offer other products. According to Camille Leblond, the company had no requirement of exclusivity as regards the salespersons’ time and services.

[27] Admittedly, the appellant did not consider himself autonomous, free and independent in performing his work as a salesperson. In his mind, he was doing his sales work as an employee carrying out his employer’s orders according to precise and definite requirements.

[28] However, the weight of the evidence demonstrated that that interpretation was probably justified and motivated by his experience during the weeks of training or in a former job where he was an employee.

[29] As he saw it, he was not running his own business and was subject to the authority of the company’s representatives in a very specific way as regards sales procedures and various reports. The evidence showed that that dependence and subordination were based much more on his perception of things than on reality.

[30] The Court could also see that the appellant confused objectives with suggestions and instructions, support with subordination, and assistance and guidance with supervision and control. The Court must rule on the basis of all the available evidence, which in this case is made up of the testimony of a number of people and the relevant documents.

[31] All of the witnesses certainly had an interest in describing the work at issue according to their own assessment, view and interpretation, although they were all very honest. It is not unusual for there to be different views of a legal relationship even when it arises from the same facts.

[32] The Court must do everything it can to identify objective information that allows distinctions to be drawn between reality and the subjective assessments of the persons directly concerned.

[33] It is natural for witnesses to describe their work as they see it. It is also possible for witnesses to describe the same work very differently while at the same time being honest and in good faith. In such cases, it is up to the Court to rule based on the objective information and facts available and to draw the conclusion dictated by the weight of the evidence.

[34] In the case at bar, it is my view that the documentary evidence supports the position that the salespersons, including the appellant, were independent, self-employed sales contractors. That in itself would not be conclusive, since the courts have often pointed out that the nature of a contract of employment is to be determined on the basis of the facts and circumstances surrounding the performance of the work at issue.

[35] In this regard, the Court has no reason to exclude the testimony of Mr. Massé, Mr. Corbet and Mr. Leblond from the evidence. Their testimony confirms the documentary reality in the record. The weight of both the testimonial and the documentary evidence strongly shows that the work done by the appellant during the period at issue was not performed under a contract of service. Les Attaches Premier Ltée recruited independent salespersons. The persons concerned had to receive special training. During the training period, there was supervision that was, in certain respects, comparable to that which generally characterizes a contract of service. However, I do not think that the facts relating to that period should be relied on, since it was a special, transitional period of very short duration. Moreover, during a training period, the trainee is not required to meet usual performance requirements, and earnings are not based on work done but are essentially an allowance to provide support and encouragement. After their training, the salespersons were independent, self-employed workers.

[36] For these reasons, I am dismissing the appellant’s appeal.

Signed at Ottawa, Canada, this 15th day of January 1999.

“Alain Tardif”

J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 16th day of September 1999.

Erich Klein, Revisor