Savard v. M.N.R., docket 97-639-UI

Date: 19971124

Docket: 97-639-UI

BETWEEN:

ALPHONSE SAVARD,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Prévost, D.J.T.C.C.

[1] This appeal was heard at Rimouski, Quebec, on October 30, 1997.

[2] It is an appeal from a decision by the Minister of National Revenue (the "Minister") dated March 27, 1997, that the appellant's employment with the Municipality of Grand-Métis, the payer, from May 15 to October 23, 1993, from May 9 to October 8, 1994, from May 3 to October 14, 1995, and from June 3 to September 6, 1996, was not insurable because it did not meet the requirements of a contract of service.

[3] Paragraph 5 of the Reply to the Notice of Appeal reads as follows:

[TRANSLATION]

5. In rendering his decision, the respondent relied in particular on the following facts:

(a) the payer is a municipality of 300 inhabitants, including seasonal residents; (A)

(b) the payer is responsible for less than 18 km of roadway; (D)

(c) the appellant was a municipal inspector; (ASA)

(d) his duties included issuing and signing building permits, monitoring work to ensure it was up to standard, inspecting septic tanks, acting on citizens’ complaints, verifying the roadway and making minor repairs thereto and ensuring the waterways were not blocked; (ASA)

(e) the appellant had to be available 24 hours a day, year round; (D)

(f) the payer kept no record of his hours of work; (D)

(g) only the result counted for the payer; (D)

(h) the appellant used his own vehicle; (ASA)

(i) he used his own trailer or that of the payer; (D)

(j) he paid the operating costs of his vehicle and trailer; (DAD)

(k) if the appellant was unable to perform his duties, he had to find a replacement; (DAD)

(l) the appellant had to pay the cost of his replacement; (D)

(m) during each of the periods in issue in 1993, 1994 and 1995 (23, 22, and 24 weeks respectively), the appellant received remuneration during 12 weeks; (D)

(n) in each of those years, he needed 12 weeks of insurable employment to qualify for unemployment insurance benefits; (D)

(o) the period in issue in 1996 consisted of 14 weeks; (NK)

(p) in 1996, he needed 14 weeks of insurable employment to qualify for unemployment insurance benefits; (D)

(q) during the weeks when he received no remuneration, both before and after the periods in issue, he nevertheless rendered services to the payer; (D)

(r) during the periods in issue, there was no genuine contract of service between the appellant and the payer. (N)

[4] In the above passage from the Reply to the Notice of Appeal, the Court has indicated as follows, in parentheses following each subparagraph, the comments made by counsel for the appellant at the start of the hearing :

(A) = admitted

(D) = denied

(ASA) = admitted subject to amplification

(DAD) = denied as drafted

(NK) = no knowledge

Appellant's Evidence

According to Claudette Michaud, Secretary-Treasurer of the Municipality of Grand-Métis

[5] Grand-Métis has a population of 300 inhabitants living year round in 125 residences and 300 tourists living in approximately 100 cottages during the summer.

[6] In 1993, the Government of Quebec handed 11.7 kilometres of roadway over to the municipality to maintain.

[7] At that time, Grand-Métis had only a municipal inspector on call whose services cost from $400 to $500 a year, and he did not want to take on responsibility for this maintenance.

[8] Two candidates applied for the position and the appellant was selected.

[9] In his application (Exhibit A-1) dated April 15, 1993, he wrote that he was offering his services "to maintain and repair our road system . . . repair asphalt, shoulders, fences, culverts, and signage and have gravel roads graded".

[10] Article 219 of the Municipal Code (Exhibit A-2) reads as follows:

219. Every local corporation in the month of March of every second year, must appoint:

(1) a rural inspector for every rural division in the municipality;

(2) as many public pound-keepers as it deems necessary;

(3) an inspector for each road division, or a municipal inspector, subject, however, to articles 221 and 223.

[11] The municipal council’s resolution hiring the appellant (Exhibit A-3), which is dated May 11, 1993, reads as follows:

[TRANSLATION]

It was moved by Councillor Adair Annett, seconded by Councillor Linda Lavoie and resolved unanimously that Alphonse Savard, 220 Route 132, Grand-Métis, be appointed municipal inspector for the period from May 15, 1993, to May 15, 1994.

(1) from May 15 to October 29, 1993, 12 days per month, that is two full weeks of work;

(2) from November 1, 1993, to April 1, 1994, on call;

(3) from April 4 to May 15, 1994, 12 days per month, that is two full weeks of work;

(4) to be paid at the rate of $8.00 an hour, for eight hours per day, payable for two weeks per month in accordance with the conditions set out in the contract.

[12] In short, he was a building and public health inspector as well as a rural inspector and road inspector, etc.

[13] The roads handed over by the government were not in good condition and he had to attend to them.

[14] Ms. Michaud prepared his pay cheques and made the appropriate entries in the municipality's books.

[15] The appellant attended the council’s meetings and reported on his activities.

[16] He did not have to attend to snow removal from the roads in winter because the municipality had a contractor who was responsible for that.

[17] He was hired not in order to qualify him for unemployment insurance benefits, but rather because the municipality genuinely needed him.

[18] All the council members called him when they needed his services, and Ms. Michaud did the same. Each councillor was responsible for a specific area, but the appellant was directly under the mayor's control.

[19] A list of the municipal tools provided to the appellant by the municipality (Exhibit A-4) was prepared on May 23, 1997, but they were already at his disposal during all the periods in issue.

[20] He supplied his own pick-up truck and paid for its gas. At the start of his employment, Ms. Michaud called the Mont-Joli unemployment insurance office to explain the situation and find out whether premiums were payable in respect of him, and was told that they were. She did so because she did not want to break the law.

[21] She signed his records of employment (Exhibit A-5) for and on behalf of the municipality.

[22] The payer has no paving equipment and the appellant retained the services of a contractor when necessary.

[23] The municipality has a trailer, as does the appellant, and they were both used in municipal works.

[24] The excerpt from the permit book (Exhibit I-1) clearly shows, for example, that four permits were issued in November 1993, but they were renovation permits for which the applicants generally went to see the appellant.

[25] The appellant had no time sheets as such to fill out, but he had work to do and had to do it. The councillors constantly checked his work.

[26] The appellant worked for 14 consecutive weeks in 1996 because the municipality had no community service work done and his presence was necessary at all times.

[27] He never reported for work on an emergency basis during weeks when he was not remunerated, but if he had done so, he could have billed the municipality for it.

[28] On August 22, 1996, Ms. Michaud signed a statutory declaration (Exhibit I-2), which reads as follows (page 1):

[TRANSLATION]

. . . Alphonse Savard mainly works every second week . . . has to be available on call for permits, inspections, emergencies and road work and to perform work even during the weeks when he is not paid . . . .

The following also appears in her declaration (page 2):

[TRANSLATION]

. . . In fact, 48 hours of work is entered in the payroll record in accordance with his contract, but he may work more than 48 hours or less than 48 hours . . . because we have no specific control over his work schedule . . . .

[29] The municipal office is in Ms. Michaud’s home. The municipality is zoned green and only four or five building permits have been issued since 1993.

[30] When a day labourer was hired to assist the appellant, the municipality paid him by the hour.

[31] Prior to 1996, the appellant supervised community service work. He was available and no citizens filed complaints against him.

[32] The municipality's budget is $125,000.

According to Réginald Charest, Mayor of the Municipality at the Relevant Times

[33] When the roads were transferred to the municipal corporation, someone had to see to them, and the Council wanted to hire only one person, the appellant, to attend to the roads, fences, ditches, dogs, etc.

[34] This was the first time that an employee was hired on this basis and [TRANSLATION] "we did not know how much time it would take to do the work".

[35] Mr. Charest saw the appellant three, four, five and sometimes even six or seven times a week, and the inspector also filed a detailed report of his activities with the municipal council every month.

[36] He had to obtain the council's authorization when he had purchases to make.

[37] The municipality was required by law to have a municipal inspector and, by employing him every second week, except in winter, it extended the period in which it had someone in its service, which suited the Council and everyone else.

[38] The purpose of this employment was never to provide the appellant with insurable weeks. The employment was simply necessary.

[39] The fact that the worker supplied his pick-up truck was part of the agreement and this spared the municipality having to pay vehicle expenses.

[40] There was never anything urgent about the appellant's work and everything really could wait for the following week. During the busy period, in the weeks when he was not remunerated, the appellant issued perhaps one or two renovation permits a week.

[41] Claudette Michaud is very conscientious and she inquired with the unemployment office before deducting unemployment insurance premiums from the appellant's wages.

[42] On August 23, 1996, Mr. Charest also made a statutory declaration (Exhibit I-3), which reads as follows (page 2):

[TRANSLATION]

. . . I made a proposal concerning his job application and the related pay conditions . . . . The purpose of entering into an annual contract of service . . . was that we would not be under an obligation to keep him in our employ, as the law requires with respect to a municipal employee hired in that capacity . . . . Alphonse Savard must be available and must respond to requests 24 hours a day, 12 months of the year . . . .

[43] No time sheets were necessary because the appellant did what he had to do and had to be given some leeway.

[44] On September 11, 1996, Mr. Charest signed a second statutory declaration (Exhibit I-4), which reads as follows (page 1):

[TRANSLATION]

. . . I admit that the payroll records for 1993, 1994 and 1995 were kept in accordance with the contracts awarded . . . . I admit that they are not consistent with the actual situation where hours of work are concerned because Alphonse Savard was available at all times, working a variable schedule every or virtually every week . . . .

[45] The contracts with the appellant were entered into in the best interests of the municipality.

[46] Outside the period in issue, Alphonse Savard might have worked at most five hours a year issuing a few renovation permits and occasionally calling a contractor at Mr. Charest’s request when urgent work had to be done.

According to the Appellant

[47] He concurred with the testimony of the mayor and the secretary-treasurer.

[48] There were some jobs that had to be done by two people: asphalt repairs requiring signals, and unblocking ditches. Either he had help through community service work or the municipality hired a day labourer for him at minimum wage.

[49] His pick-up truck was his means of transportation and his residence was only a kilometre and a half from the municipal garage.

[50] The following clause in his contract does not mean much:

[TRANSLATION]

It is understood that, should the municipal inspector be unable . . . to complete his mandate . . . he undertakes . . . to have a duly authorized agent, to whom he shall grant the power to act for and on behalf of the inspector, complete his mandate at his own expense without seeking a remedy against the municipality . . . .

[51] Outside the periods in issue, he received one call in winter informing him that the snow had not been ploughed, and he called the contractor to resolve the situation. He also issued a few renovation permits, but that took only five minutes in each case.

[52] The municipal councillors had his schedule of weeks worked and each supervised him in his or her own area.

[53] He may have earned about $5,000 a year for this work.

[54] He obviously travelled to perform the necessary inspections and to maintain the roads. He put up signs to indicate the cottages and painted them as necessary.

[55] He was the municipal council's mandatary and had to comply with its decisions.

[56] On April 29, 1993, he wrote a letter to the council (Exhibit I-5) stating inter alia:

[TRANSLATION]

. . . From May to November 1993, I have estimated the work at 12 days per month for an amount of $768.00 and a total of $4,608.00 for six months, which represents $8.00 an hour and eight hours a day.

This amount will be billed twice a month at $384.00 per invoice . . . .

[57] On September 13, 1996, he also signed a statutory declaration (Exhibit I-6), although the text was very hard to read. The Court found the it virtually illegible but was nevertheless able to make out the following (page 2):

[TRANSLATION]

. . . According to the contract, my salary is annual, but I am paid for a very specific period . . . .

[58] It is quite clear that, if he had had to find a replacement, the municipality would have paid his replacement.

[59] If he did a job taking three hours or more at a time when he was not receiving a salary, he definitely billed the payer accordingly.

[60] His employment was a summer job, and a contractor performed snow removal in winter.

[61] He was always pleased to issue renovation permits because [TRANSLATION] "it is a way to be of service to people and it only takes five minutes" of his time in each case.

[62] In Grand-Métis, there are houses that were built more than 100 years ago, and they of course need to be renovated.

[63] The municipal assessors use the permits to adjust the real estate assessment roll accordingly.

[64] His gas expenses for his work were not great and, in any case, he would have driven around the municipality even if he were not working.

[65] The respondent called no witnesses.

Arguments

According to Counsel for the Appellant

[66] In unemployment insurance matters, each case clearly stands on its own merits.

[67] The municipality employed the appellant as it did in order to save money, and its citizens were well served.

[68] At the outset, he worked every second week during the busy period, and he worked 14 consecutive weeks in 1996 when there was no more community service work.

[69] The secretary-treasurer explained the situation to the unemployment office at the start and was told that the employment was insurable.

[70] He was a good employee and no complaints were filed against him by citizens.

[71] The municipality definitely had a power of control over him, which it exercised through the mayor, the councillors and even the secretary-treasurer.

[72] The list of tools provided by the payer (Exhibit A-4) is impressive; in short, the appellant supplied only his truck and trailer, which did not travel many kilometres because there was so little roadway to inspect.

[73] He was integrated into the payer because the Municipal Code requires that such an inspector be hired.

[74] He had no chance of profit or risk of loss.

[75] The municipality's obligation was discharged through this annual contract, although it was scaled down to meet actual needs, and although the appellant could serve year round, he did so only very, very rarely.

[76] The contract of employment was clearly not prepared by legal advisors and, since the municipality drafted it, it must be interpreted against the municipality.

According to Counsel for the Respondent

[77] No one's good faith is in question and work was definitely performed.

[78] However, it is necessary to determine whether there was a contract of service or a contract for services.

[79] Exhibits A-1 and I-5 are far more consistent with a contract for services.

[80] An ordinary employee does not have to provide a motor vehicle and a trailer and pay the costs thereof, or find a replacement if he is not available.

[81] There was little control and only the result counted.

[82] The appellant had no schedule to meet and could be called upon to work outside the periods in issue.

[83] He risked losses by paying the expenses of his pick-up truck and trailer.

[84] Subparagraph (e) cited above was denied, but the mayor said that the appellant had to be available 24 hours a day, year round.

[85] Subparagraph (f) was denied, but it is clear that no real record was kept of the appellant's hours of work.

[86] Subparagraph (g) was denied, but it appears that this was indeed the case.

[87] As stated in subparagraph (i), the appellant used his own trailer or that of the municipality.

[88] Having regard to subparagraph (j), it was admitted that the appellant paid the operating costs of his vehicle and trailer.

[89] If the appellant had had to find a replacement at a higher wage, he would have had to compensate the replacement accordingly.

[90] Although the appellant had no knowledge of subparagraph (o), he did say at the hearing that the period in 1996 comprised 14 weeks.

According to Counsel for the Appellant, in Reply

[91] Counsel for the respondent has looked for minor imperfections that support his argument, whereas an agreement is always the law as between the parties.

[92] While it is true that the letter dated April 29, 1993 (Exhibit I-5) refers to a budget, it is in fact a salary budget. The first paragraph of this letter reads as follows:

[TRANSLATION]

I hereby submit the salary budget for the maintenance of our road system and for the inspector for the six-month period.

[93] The contract of employment did not provide that the appellant had to be available 24 hours a day every day of the year.

Analysis and Conclusion

[94] The municipality’s population doubles in the summer, which is the period of municipal works, except for snow removal, and it was normal for the appellant's services to be required mainly, if not almost entirely, during that fine period.

[95] As there are clearly only a few roads in the municipality's territory, it was normal for the municipal corporation not to want to supply the appellant with a motor vehicle for the few kilometres he would have to travel in the performance of his duties.

[96] The appellant's duties were more varied than those described in subparagraph (d) cited above: he was also required, inter alia, to issue and sign renovation permits.

[97] The contract of employment did not provide that the appellant had to be available 24 hours a day, year round, and only the mayor could decide otherwise.

[98] While it may be true that no paper record was kept of the appellant's hours of work, the mayor supervised him, as did the six councillors, each in his or her own area; the secretary-treasurer did so, as did all the citizens who needed his services and were satisfied with them. In addition, not only was there a power of control, but that power was actually exercised. The Court therefore does not believe that only the result counted for the payer.

[99] It is true that the appellant used his own vehicle and trailer and paid the costs thereof, but they were used very little. Besides, the appellant said, and his testimony was not contradicted, that if he had not travelled around the municipality's territory as he did in the performance of his duties, he would nevertheless have done so for his own pleasure. Lastly, the Court has already held that a logger could supply his own chain saw without being penalized and the same principle must apply in the instant case.

[100] The fact that the appellant had to find a replacement if he were unable to perform his duties was obviously a stipulation by the municipality and must moreover be interpreted against it, particularly since it is not clear that it could delegate its power of appointment specifically provided for in the Municipal Code. The appellant is quite right to say that this clause does not mean much and that, if he had had to find someone to replace him, the municipality would have had to pay his replacement.

[101] The busy periods were determined by the calendar and the Court is satisfied that, as the mayor and the secretary-treasurer said, the agreement in question was not entered into in order to qualify the appellant for unemployment insurance benefits. Counsel for the respondent admitted that the three witnesses were in good faith. The Court found that they were all decent people who were always anxious to do good work in the service of the population of Grand-Métis.

[102] The contract of employment was obviously unusual, but it was what the municipality needed and municipal officials should be congratulated for framing it as they did.

[103] The appellant's salary was very reasonable and has helped the Court reach the conclusion set out below.

[104] The answer given to the secretary-treasurer by the unemployment insurance office is of course not binding on the Minister. However, the Court is satisfied that this initiative was taken because Claudette Michaud did not want to break the law.

[105] The Court is satisfied with the evidence that only four or five building permits have been issued since 1993 and that renovation permits were issued outside the periods in issue because the appellant did so to be of service and because it took very little of his time.

[106] Furthermore, the Court has no difficulty believing the secretary-treasurer’s statement that no emergency ever arose during the weeks when the appellant was not remunerated and that, if any had, he could have billed the municipality for it. This is also consistent with the testimony of the mayor and the appellant.

[107] It seems clear that a municipal inspector's hours of work are not recorded to the minute or second because his work mainly involves responding to the needs of the public.

[108] It seems normal that the records of employment were prepared in accordance with the contract of employment, and the secretary-treasurer had no other choice. However, everything was done in the best interests of the municipality.

[109] The mayor was very specific: outside the periods in issue, the appellant could not have worked more than five hours a year for the municipality, and this factor is determinative of the conclusion below. This was above all else a service to the public that he enjoyed rendering as a good citizen.

[110] Moreover, the appellant confirmed this.

[111] He also said that he was the municipal council's mandatary and that he had to comply with its decisions.

[112] It is true that in unemployment insurance matters, each case stands on its own merits.

[113] While it is true that Exhibit I-5 refers to a budget, it is a salary budget, and this does not support the respondent's argument in any way.

[114] Loggers also risk losses if their chain saws break down, but their employment has nevertheless been ruled insurable.

[115] It is true that an agreement may be the law as between the parties provided it is not illegal, and nothing in the instant case shows that the agreement was illegal.

[116] For these reasons, the Court allows the appeal and reverses the subject decision.

"A. Prévost"

D.J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 2nd day of September 1998.

Stephen Balogh, Revisor