Date: 19990601
Docket: 98-924-UI
BETWEEN:
CITY OF MERRITT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
LANCE THATCHER,
Intervenor.
Reasons for Judgment
Mogan, J.T.C.C.
[1]
The issue in this appeal is whether the Intervenor, Lance
Thatcher, was engaged in insurable employment as a result of his
being a part-time firefighter for the City of Merritt in the
Province of British Columbia. On July 20, 1998, Revenue Canada
ruled that Lance Thatcher was employed as a firefighter under a
contract of service and that his employment by the city of
Merritt was insurable. The City of Merritt has appealed to this
Court from that ruling and Lance Thatcher has intervened in
the City's appeal.
[2]
In its Notice of Appeal, the Appellant took the position that the
Intervenor was not an employee of the City. In the Reply to the
Notice of Appeal, the Respondent conceded the appeal on the basis
that the Intervenor was not employed by the Appellant in
insurable employment pursuant to paragraph 5(1)(a) of
the Employment Insurance Act, S.C. 1996, c. U-I (the
"EI Act") but was in excepted employment
within the meaning of paragraph 5(2)(h) of the
E.I. Act and Regulation 7(e). In his Notice
of Intervention, the Intervenor claims to be an employee of the
Appellant. In the Reply to the Notice of Intervention, the
Respondent again concedes the appeal and states that the
Intervenor was not employed by the Appellant. From the pleadings
as summarized above, it can be seen that the Appellant and
Respondent are on common ground in opposing the Intervenor's
claim to employment status.
[3]
At the commencement of the hearing, there were submissions by the
parties concerning whether the Intervenor had status to intervene
if the appeal was conceded and, if so, who had the onus of proof.
In the special circumstances of this case, I decided that the
Intervenor had status and had the onus of proof. The period under
review is December 1, 1996 to November 30, 1997.
[4]
The City of Merritt (population 8,000) is about 100 kilometres
south of Kamloops on the intersection of three or four highways.
It has a full-time salaried fire chief and approximately 30
volunteer firefighters who are divided into A Platoon and B
Platoon. Each platoon is on call alternate weeks. Only the
platoon on call would respond to a minor fire but, for a major
fire, all firefighters would be called out. Firefighters are
frequently called to motor vehicle accidents on provincial
highways beyond the Appellant's city limits.
[5]
The Intervenor became a volunteer firefighter in October 1996. He
and the other firefighters attend a training session for two
hours every Monday evening. Attendance at the training sessions
is not required but it is important to learn firefighting
procedures, rescue and first aid procedures and how to use the
standard equipment. During the period under review, the
Intervenor missed some but not many training sessions. He said
that the firefighters were taught to follow these priorities: (i)
save human life; (ii) suppress the fire; (iii) protect
surrounding property; and (iv) protect themselves.
[6]
Exhibit A-2 is a copy of the Appellant's by-law no. 1488 with
respect to its Fire and Rescue Department. Schedule "B"
to this by-law is a code of conduct with which every firefighter
is required to comply but the code does not provide any penalty
for non-compliance. Schedule "C" to the by-law shows
the remuneration to be paid to members of the Appellant's
Fire and Rescue Department according to their rank, years of
service, and subjects completed in the certification program
operated by the Justice Institute of British Columbia Fire
Academy Volunteer Firefighters. The remuneration is expressed in
dollars per hour and, for example, an ordinary firefighter's
remuneration is set on the following scale:
|
Position
|
Basic
|
5 years +
5 subjects
or 10 subjects
|
10 years +
5 subjects
or 15 subjects
|
10 years +
10 subjects
or 20 subjects
|
|
Firefighter
|
$10.50
|
$11.00
|
$11.50
|
$12.00
|
Schedule "C" has the following three footnotes which
establish certain limits on the remuneration:
2.
The Merritt Fire and Rescue Department members shall receive
remuneration based on a minimum two-hour call out for all calls
from 10 p.m. to 7 a.m.
3.
Summer Weekend Standby shall commence in May (Victoria Day
Weekend), until September (Labour Day Weekend) of each year.
Remuneration for summer weekend standby shall be paid at a rate
of $20.00 per day, per man. Maximum standby staff not to exceed
five (5) members.
4.
Rescue calls will only be paid when the response is inside
municipal boundaries.
[7]
As a volunteer firefighter, the Appellant wears a pager all of
the time. He is not required to respond to a call on his pager.
He may for any reason choose to ignore a pager call and his
failure to respond will not affect his status as a firefighter.
If he does choose to respond, he will be paid at his standard
hourly rate from the time he responds until the time when the
officer in charge will tell him to stand down. The Intervenor
stated that, on average, about 10 or 12 volunteers would respond
to a call but, if a call came in the middle of an ordinary
working day (Monday to Friday), only two or three volunteers may
respond. According to footnote 4 in Schedule "C"
(quoted above), volunteers are paid for rescue calls only when
the response is within the City boundaries. Accordingly, there is
generally a lower response from volunteers when a rescue call is
from outside the City.
[8]
Exhibit A-3 contains some statistics. In 1997, there were 64
rescue calls and 133 fire calls. The Intervenor estimated that he
would have responded to about 50 fire calls and fewer than 10
rescue calls. There is an association of Volunteer Firefighters
for the City of Merritt. The secretary-treasurer of the
association maintains a response sheet showing which firefighters
have responded to each call and the length of time when a
responding firefighter was on duty at a particular call. The
response sheets also show attendance at the Monday evening
training sessions. The response sheets for each month are sent to
City Hall. Someone at City Hall adds up the hours of service for
all firefighters in a particular month; applies the corresponding
hourly rate for each firefighter; and computes an aggregate
amount owing with respect to all volunteer firefighters for that
particular month
[9]
The Appellant then issues one cheque in the aggregate amount for
that month payable to the City of Merritt Fire/Rescue Department
which is the name of a bank account held by the Association of
Volunteer Fire Fighters. The Association actually issues the
monthly pay cheques to the volunteer firefighters but deducts an
annual amount ($300) as the membership fee for each firefighter
to belong to the Association. At the end of each year, for income
tax purposes, the Appellant issues a T-4 form to each firefighter
based on the information in the response sheets which are
prepared by the secretary-treasurer of the Association.
[10] Richard
Finley, the Fire Chief for the City of Merritt, testified as a
witness for the Appellant. He has been Fire Chief since March
1991. He has been involved in a discipline procedure but, during
his term, no volunteer firefighter has ever been dismissed. If
one had been dismissed, he would have done it. With respect to
footnote 3 to Schedule "C" (quoted above), he stated
that having a few firefighters on weekend standby during the
summer was to ensure that somebody would be available to respond
to an emergency weekend call.
[11] Exhibit
R-1 is a document dated March 22, 1999 (one month prior to the
hearing of this appeal) setting out the "Leave of Absence
Provisions" for the Merritt Fire/Rescue Department. It
contains seven short policy statements with respect to the terms
on which leave will be granted. The first four items are as
follows:
1.
As an active member of the Merritt Fire/Rescue Department the
executive would like to see a requirement that members attend a
minimum of 75% practices and a reasonable amount of fire calls.
(Rescue calls outside the City Limits are exempt.)
2.
The Platoon Officer or alternate may grant a leave up to one
month but not exceeding 2 times in a one-year period.
3.
The Chief may grant a leave from 1 to 6 months.
4.
No member shall be allowed more than 6 months leave within a
3-year period.
Fire Chief Finley stated that Exhibit R-1 was drafted because
the Association wanted some form of established policy concerning
leave. The former policy was supposed to be that a person would
be discharged if he missed three training sessions in a row and
three calls in a row but no person had ever been discharged under
the former policy.
[12] In order
for the Intervenor to succeed, he must satisfy two conditions:
(i) that he was employed as a firefighter by the Appellant
under an express or implied contract of service; and (ii) if he
was so employed, that his employment was not excluded from
insurable employment under subsection 5(2) of the EI
Act.
[13] In my
opinion, the Intervenor cannot succeed in this appeal because he
cannot satisfy either condition. When a person is employed under
a contract of service, that person has some obligation to respond
to the needs of the employer. This is part of the "control
test" concerning whether the payor has some control over the
worker. On the facts of this case, the Appellant had no control
over the Intervenor as to whether the Intervenor would respond to
a particular call. This is an important factor because the only
purpose of the Merritt Fire/Rescue Department is to respond to
emergencies as they arise: either putting out a fire or rescuing
a person in distress or doing both at the same time.
Notwithstanding the emergency nature of the Department's
purpose, the Intervenor at his own convenience could elect either
to respond to a call from the Department or to ignore such a
call; and the excise of his election either way would have no
effect on his continuing status as a volunteer firefighter.
[14] The
negligible amount of control is apparent in the first item of
Exhibit R-1 (quoted above) which states in part:
" ... the executive would like to see a requirement
that members attend a minimum of 75% practices and a reasonable
amount of fire calls." ...
There is no evidence in the oral testimony of the Fire Chief
or the Intervenor or in any of the documents that a volunteer
firefighter was punished or penalized in any way for failure to
attend 75% of the practices or a reasonable number of fires,
whatever that reasonable number was.
[15] No person
could expect to earn a living as a volunteer firefighter in a
municipality as small as Merrit (population 8,000) because there
would not be enough emergency calls in any year on a pay-per-call
basis. According to Exhibit A-3, in the years 1996, 1997 and
1998, there were approximately 200 to 220 calls per year for fire
and rescue. If each call required three hours of service, there
would be an average of 630 hours of work per year for fire and
rescue. Having regard to the A Platoon and the B Platoon, a
firefighter could expect about 315 hours of work on call per
year earning about $3,200 plus time for practice sessions.
[16] The
Intervenor had a full-time job in 1997 and his activity as a
volunteer firefighter was performed in his spare time as far as
training sessions were concerned. It was only the emergency calls
which could intrude upon his full-time job and, if
necessary, he could ignore such calls. A person must have a basic
interest in an exciting challenge and the opportunity to help in
a crisis before that person would volunteer as a firefighter. The
training sessions are held in the evenings because the activity
itself cannot provide a livelihood. The municipality offers
remuneration as an incentive to attract volunteers and because of
the obvious public benefit from the services provided. The
activity of a volunteer firefighter is something like a
remunerated hobby. In my view, it is not employment under a
contract of service.
[17] If I
should be wrong in my conclusion that the Intervenor's
activity as a volunteer firefighter is not employment under a
contract of service, then I would conclude that it is excepted
employment under paragraph 5(2)(h) of the EI Act
and Regulation 7(e) which states:
7.
The following employments are excluded from insurable
employment:
...
(e)
employment of a person for the purpose of a rescue operation, if
the person is not regularly employed by the employer who employs
them for that purpose; ...
Having regard to the purposes of the Merritt Fire/Rescue
Department as described by the Intervenor and Fire Chief Finley,
one of the purposes of the Department was a rescue operation for
any person in distress. I would therefore conclude that, if the
Intervenor is employed by the Appellant in his status as a
volunteer firefighter, that employment is excluded from insurable
employment by paragraph 7(e) of the
Regulations.
[18] I am
supported in my conclusion by the decision of my colleague,
Teskey J., who decided in Town of Whitchurch-Stouffville
v. M.N.R., April 14, 1993 (not reported) that volunteer
firefighters in that Ontario town were not engaged in insurable
employment by the town. The appeal is allowed and the claim of
the Intervenor is denied.
Signed at Ottawa, Canada ,this 1st day of June, 1999.
"M.A. Mogan"
J.T.C.C.
COURT FILE
NO.:
98-924(UI)
STYLE OF
CAUSE:
City of Merritt and The Minister of
National Revenue and Lance Thatcher
PLACE OF
HEARING:
Kamloops, British Columbia
DATE OF
HEARING:
April 23, 1999
REASONS FOR JUDGMENT BY: The
Honourable Judge M.A. Mogan
DATE OF
JUDGMENT:
June 1, 1999
APPEARANCES:
Counsel for the Appellant: Kenneth R. Hauser
Counsel for the
Respondent:
Charlotte Coombs
For the
Intervenor:
The Intervenor himself
COUNSEL OF RECORD:
For the
Appellant:
Name:
Kenneth R. Hauser
Firm:
Kenneth R. Hauser Law Corporation
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
98-924(UI)
BETWEEN:
CITY OF MERRITT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
LANCE THATCHER,
Intervenor.
Appeal heard on April 23,1999, at Kamloops,
British Columbia, by
the Honourable Judge M.A. Mogan
Appearances
Counsel for the
Appellant:
Kenneth R. Hauser
Counsel for the
Respondent:
Charlotte Coombs
For the
Intervenor:
The Intervenor himself
JUDGMENT
The
appeal by the Appellant pursuant to subsection 103(1) of the
Employment Insurance Act is allowed and the decision of
the Minister on the appeal made to him under section 91 of the
Act vacated. The claim of the Intervenor is denied.
Signed at Ottawa, Canada, this 1st day of June, 1999.
J.T.C.C.
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