REASONS
FOR JUDGMENT
Hogan J.
I. Introduction
[1]
These are appeals from determinations made by
the Minister of National Revenue (the “Minister”) that Leo Giesbrecht
(the “Worker”) was an employee of Renald L. Saindon (the “Appellant”) during
the period from February 7, 2011 to May 5, 2012.
[2]
The Appellant argues that the Worker was an
independent contractor providing services to him in the course of a business
carried on by the Worker for his own benefit.
II. Factual Summary
[3]
The Appellant operated a trucking business,
using for that purpose two trucks which he owned.
[4]
The business was operated as a proprietorship on
a year-round basis.
[5]
The evidence shows that the Appellant entered
into agreements with Flying Eagle Transport (“Flying”) and Day & Ross
Transport for the supply of a truck and driver.
[6]
The Worker was hired to work as the driver of
the truck that the Appellant supplied to Flying.
[7]
The Worker received his instructions from
Flying’s dispatchers.
[8]
The evidence shows that the Worker could not
hire a helper or a replacement driver.
[9]
The Appellant paid all of the costs associated
with the operation of the truck by the Worker save for tickets for road and
safety infractions committed by the Worker.
[10]
At times when there were no deliveries or pick ups
to be made with the Appellant’s truck under the Flying contract, Flying would
assign the Worker warehouse duties.
[11]
The Worker earned a set wage of $17.00 per hour.
The Appellant charged Flying $48.00 per hour for the trucking services and paid
the Worker at his hourly rate. Flying paid the Appellant $17.00 per hour for
the Worker’s warehouse duties and the Appellant in turn paid the Worker.
III. Analysis
[12]
The case law is clear with regard to the legal
test that should be applied to determine whether an individual is an employee
or self-employed.
[13]
The leading case on this issue is Wiebe Door
Services Ltd. v. M. N. R.,
a decision which was confirmed by the Supreme Court of Canada in 671122
Ontario Ltd. v. Sagaz Industries Canada Inc.
The question is always whether or not the worker “is
performing [the services] as a person in business on his own account”. Sagaz summarizes as
follows the test enunciated in Wiebe Door and the factors that need to
be weighed in determining the nature of a work relationship:
47 . . . In making
this determination, the level of control the employer has over the
worker’s activities will always be a factor. However, other factors to consider
include whether the worker provides his or her own equipment, whether
the worker hires his or her own helpers, the degree of financial risk
taken by the worker, the degree of responsibility for investment and management
held by the worker, and the worker’s opportunity for profit in the
performance of his or her tasks.
48 It bears repeating that the above factors constitute a
non-exhaustive list, and there is no set formula as to their application.
The relative weight of each will depend on the particular facts and
circumstances of the case.
[Emphasis added.]
[14]
In addition to these factors, the subjective
intention of the parties also needs to be considered. Where one can establish a
common intent of the parties with regard to the type of working relationship
they wished to establish, this intent must be considered in the Court’s
analysis of the foregoing factors.
[15]
It is important to bear in mind, however, that
the intention of the parties is only relevant to the extent that it is
reflected in the facts of the case. The subjective intention of the parties is
not determinative in itself. Justice Mainville of the Federal Court of Appeal has
provided the following clarification:
37 . . . the legal
status of independent contractor or of employee is not determined solely on the
basis of the parties declaration as to their intent. That determination must
also be grounded in a verifiable objective reality.
[16]
Connor Homes
further confirms that the analysis involves a two-step process. First, the
intention of the parties must be ascertained in order to determine what kind of
relationship they wished to create. In the light of that intent, the second
step is to analyze the facts of the case to determine whether the objective
reality of the situation is reflective of the intent. In this second
step, the Court must apply the four Wiebe Door factors,
namely: (i) control, (ii) ownership of tools, (iii) chance of profit and
(iv) risk of loss, to determine whether the factual reality reflects the
subjective intention of the parties. These factors constitute a non-exhaustive
list. The relative weight of each factor will depend on the particular facts
and circumstances of the case.
[17]
From the evidence, it is clear that the
Appellant desired to employ the Worker as an independent contractor. The Worker
appears not to have accepted this status. In any event, the parties’ intention
is not determinative of the issue. Their intention must also be consistent with
the objective reality of their relationship determined through a balancing of
the factors noted in paragraph 16 of these reasons.
Control
[18]
The evidence shows that the Worker received
instructions from Flying’s dispatchers with respect to the goods to be
transported using the Appellant’s truck. In my opinion, this constitutes
control exercised by Flying pursuant to a delegation of authority by the
Appellant to Flying. I infer from the evidence as a whole that Flying, the
Appellant’s client, could complain to him if the Worker failed to carry out his
duties properly. The Appellant could take disciplinary action against the
Worker by simply barring him from driving the truck for Flying. It is well
established that it does not matter whether control has in fact been exercised.
What matters is that the Appellant could have exercised control. I surmise
that the Worker would have had to obey the Appellant, failing which his right
to drive the truck could have been suspended. The control factor weighs in
favour of a finding that there was an employee-employer relationship.
Ownership of Tools
[19]
The Appellant’s truck was essential for the
performance of the Worker’s duties. No other tool was really required for that
purpose. When the Appellant decided to sell his truck the Worker became
unemployed.
Chance of Profit
[20]
The Worker was paid a fixed hourly wage for his
services. The Appellant charged a greater amount to Flying for the supply of a
driver and a truck. The opportunity for profit was limited to the number of
hours worked by the Worker. While the Worker was given some warehouse duties
directly by Flying, compensation in respect of the
performance thereof was paid by Flying to the Appellant, who seconded the
Worker to Flying for the provision of the warehouse services. The warehouse
duties were also remunerated on an hourly basis at the same $17.00 hourly rate set
by the Appellant for the Worker’s truck driving.
Risk of Loss
[21]
The Worker did not incur any operating costs. He
was responsible only for tickets issued to him for road and safety contraventions.
He had no capital invested in a business. This factor weighs in favour of the
existence of an employee-employer relationship.
[22]
On balance, the application of the Wiebe Door
factors favours a finding that the Worker was an employee. The Worker was not
in business for himself.
IV. Conclusion
[23]
For these reasons, the appeals are dismissed.
Signed at Ottawa, Canada, this 23rd day of May 2014.
“Robert
J. Hogan”
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