Dockets: 2012-3576(EI)
2012-3577(CPP)
BETWEEN:
NAVEED BUTT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
1383016 ONTARIO INC. O/A HELP UNLIMITED
Intervenor.
____________________________________________________________________
Appeal heard on July 2, 2013, at Toronto, Ontario
Before: The Honourable
Mr. Justice Randall S. Bocock
Appearances:
|
For the
Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
Counsel for the
Intervenor:
|
Tony Cheung
Inna Koldorf
|
____________________________________________________________________
JUDGMENT
The appeal pursuant to subsection 103(1) of
the Employment Insurance Act (the “Act”) is dismissed and the
ruling of the Minister of National Revenue (the “Minister”) on the appeal made
to the Appellant under section 91 of the Act is confirmed.
The appeal pursuant to section 28 of the Canada
Pension Plan (the “Plan”) is dismissed and the ruling of the
Minister on the appeal made to the Appellant under section 27 of the Plan
is confirmed.
Signed at Ottawa, Canada, this 13th day of September
2013.
“R.S. Bocock”
Citation: 2013 TCC 284
Date: 20130913
Dockets: 2012-3576(EI)
2012-3577(CPP)
BETWEEN:
NAVEED BUTT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
1383016 ONTARIO INC. O/A HELP UNLIMITED
Intervenor.
REASONS FOR JUDGMENT
Bocock J.
I. Introduction
[1]
The Appellant, Naveed
Butt, appeals the determination of the Minister of National Revenue (the
“Minister”) that Mr. Butt was not an employee, but rather an independent
contractor for the period of December 23, 2010 to April 15, 2011.
II. Facts
[2]
Mr. Butt is a licensed
truck driver. In response to an advertisement he appeared at a temporary worker
placement agency named Help Unlimited on December 20, 2010. On that date he
completed an employee application form, underwent appropriate interviews,
safety orientation and was cleared for job placement. He started work a few
days later on December 23, 2010.
[3]
Help Unlimited itself
hired workers as both employees and independent contractors for identical tasks.
Contractors were required to use a numbered company as an intermediary between
the worker and Help Unlimited. The intermediary numbered company was also
required to register a business name and execute an indemnity undertaking in
favour of Help Unlimited relating to tax remittances, vehicle damage
deductibles and similar matters. This document also directed payment by Help
Unlimited of any remuneration to the personal holding company of the
independent contractor. As such, Help Unlimited required Mr. Butt to provide
Articles of Incorporation for his personal company (the “Company”) before
commencing remuneration as an independent contractor, evidence of its business registration
and the executed undertaking.
[4]
Mr. Butt suffered an
injury in April of 2011 and was placed on lighter duties. When he fully
returned to work, he requested to become an employee. With Help Unlimited’s
consent he did just that.
III. Issues
[5]
Although the main issue
is whether Mr. Butt was employee, sub-issues based upon undisputed legal
authority are as follows:
1)
was the use of the
intermediary company legally determinative of Mr. Butt’s status as an
independent contractor;
2)
what was the common intention
of the parties; and
3)
should the common intentions
of the parties not be clear, what is the result from the review of the operative
factors of the prevailing four-in-one test.
[6]
Some additional facts before
the Court are as follows:
1)
Mr. Butt was the sole
director and officer of his Company.
2)
He held no other job.
3)
He did execute the
undertaking prior to commencing work.
4)
Invoices were rendered
with respect to pay by the Company.
[7]
The initial application
form executed by both employees and independent contractors of Help Unlimited was
identical. The post-relationship confirmation of status letter received from
Help Unlimited by Mr. Butt on November 22, 2011, confirms that he was employed
by Help Unlimited notwithstanding the undertaking which identified his Company
and his status as an independent contractor.
[8]
With respect to the
intentions of the parties it is noted by the Court that there were no
complaints by the Appellant until mid-April as to his status of an independent
contractor. The Appellant consented to the requests of Help Unlimited: incorporated
a company, applied for a business information number and established a
corporate bank account. The Company received the cheques or direct deposits on
account of Mr. Butt’s wages until the middle of April 2011.
[9]
When Mr. Butt returned
to work in his personal capacity in April 2011, Help Unlimited assented to his
request to become an employee. TD-1 forms as an employee were completed in May
of 2011. Throughout, the Workplace Safety and Insurance Board premiums were
paid by Help Unlimited, the temporary agency provided no “supervision” of Mr.
Butt’s work and Mr. Butt initiated calls to Help Unlimited when he wanted work.
[10]
At the Hearing, Mr.
Butt testified on his own behalf, but did not attend after a break in order to
make submissions by way of argument at the Hearing. He was given 14 additional
days after the Hearing date to do so. He made no such submissions.
a) Use of Holding Company
[11]
Mr. Butt’s proposition
is, with respect to the use of his Company, that he was compelled to execute
the undertaking and did not properly understand the document. With this
particular proposition the Court cannot agree. Mr. Butt’s actions after
December 20, 2010 and prior to his being paid for work were clear and
definitive. He carried out all the business steps requested, readily accepted
the additional amount paid as an independent contractor of one dollar per hour.
It was only when he became injured, in mid-April 2011, that he determined his
status was unacceptable.
b) Intention of the
Parties
[12]
As to whether this use
of the Company as an intermediary is determinative, it is not uniformly
determinative, but leads the Court to an examination of the intention of the
parties. To examine the intention of the parties, one must examine the other
documents, namely: the original application which seems to suggest that Mr.
Butt was to be an employee, the confirmation letter, executed undertaking
together with the steps taken of incorporating the Company, opening a Company
bank account and the directing of payment of remuneration to his Company.
[13]
Mr. Butt suggests that
the intention may be clearly indicated from the original application and the post-relationship
confirmation letter. Again, with this interpretation the Court cannot agree.
Whatever intention existed prior to getting the job is superseded by the clear
agreement between the parties at the time of commencing work whereby Mr. Butt would
be an independent contractor. To further buttress this evidence of the meeting
of the minds, it is clear that Mr. Butt undertook and executed without question
the proactive and cumbersome steps to incorporate a holding company, have it
licensed, obtain the business information number, a goods and services number
and, ultimately. to direct cheques to the corporate bank account.
[14]
It should be noted as
well that the Court finds that it was of no consequence to Help Unlimited as to
whether its workers were employed by it or retained as independent contractors.
Help Unlimited accepted both interchangeably. Moreover, this very case, it did
both with the same person upon request of the same person. It is clear to the
Court that had the intention of Mr. Butt been at the time he commenced work
with Help Unlimited to be an employee then he certainly would have been established
in that status. The clear undisputed evidence before the Court is that Help
Unlimited had no preference one way or another. Accordingly, the testimony by
its manager was on balance disinterested.
[15]
As to Mr. Butt’s
motivation, it is likely that the additional one dollar per hour of
remuneration may have played a factor, but again motivation is not to be
commingled with intention. It is clear that the intention of the parties in
December of 2010 and January, February and March of 2011 was that Mr. Butt be
an independent contractor.
[16]
Clear legal authority instructs
that the insertion of a company where a contract would otherwise exist directly
between an employer and an employee is sufficient evidence of a contract for
service and not a contract of service (TBT Personnel Services Inc. v Canada, 2011 FCA 256, [2011] FCJ No. 1340). More simply put, the use of the personal
company is evidence of intention to create a independent contractor relationship
and not that of an employee.
[17]
The facts before the
Court are clear in respect of the existance of the Company, its having executed
the undertaking and the clear steps taken by Mr. Butt in ensuring that he put
in place that business structure for the purposes of becoming a worker of Help
Unlimited. These facts provide a common intention between the parties that
there would be a legal relationship, business structure and corporate intermediary
for the purposes of establishing and supporting a relationship of independent
contractor.
[18]
For the reasons stated
above, the intention of the parties was clear at the outset and there is no
need to examine the four-in-one test which would otherwise be required under
the authority of TBT. Simply, during the material time there was no
direct contractual relationship between the person of Mr. Butt and Help
Unlimited. This structure reflected the common intention of the parties prior
to mid-April 2011 that Mr. Butt be, through his Company, an independent
contractor.
[19]
For these reasons the
Appeal is dismissed.
Signed at Ottawa, Canada, this 13th day
of September 2013.
“R.S. Bocock”
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