Ferguson c. M.R.N.

Ferguson c. M.R.N. Court (s) Database Tax Court of Canada Judgments Date 2003-05-08 Neutral citation 2003 TCC 305 File numbers 2000-2300(EI) Judges and Taxing Officers François M. Angers Subjects Employment Insurance Act Decision Content Docket: 2000-2300(EI) BETWEEN: IRENÉE FERGUSON, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] ____________________________________________________________________ Appeal heard on common evidence with the appeals of Samuel Ferguson (2000-2301(EI)) and Steven Ferguson (2000-2302(EI)) on December 17, 2002, and March 17, 2003, at Bathurst, New Brunswick Before: The Honourable Judge François Angers Appearances: For the Appellant: The appellant himself Counsel for the Respondent: Stéphanie Côté ____________________________________________________________________ JUDGMENT The appeal from the decision of the Minister of National Revenue for the periods from July 3 to September 16, 1994, from June 19 to October 27, 1995, and from June 24 to October 4, 1996, is dismissed and the Minister's decision is confirmed in accordance with the attached Reasons for Judgment. Signed at Ottawa, Canada, this 8th day of May 2003. "François Angers" J.T.C.C. Translation certified true on this 25th day of June 2004. Sophie Debbané, Revisor Docket: 2000-2301(EI) BETWEEN: SAMUEL FERGUSON, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] ____________________________________________________________________ Appeal heard on common evidence with the appeals of IrenéeFerguson (2000-2300(EI)) and Steven Ferguson (2000-2302(EI)) on December 17, 2002, and March 17, 2003, at Bathurst, New Brunswick Before: The Honourable Judge François Angers Appearances: For the Appellant: The appellant himself Counsel for the Respondent: Stéphanie Côté ____________________________________________________________________ JUDGMENT The appeal from the decision of the Minister of National Revenue for the periods from August 8 to October 21, 1994, from July 24 to October 27, 1995, and from June 17 to September 20, 1996, is dismissed and the Minister's decision is confirmed in accordance with the attached Reasons for Judgment. Signed at Ottawa, Canada, this 8th day of May 2003. "François Angers" J.T.C.C. Translation certified true on this 25th day of June 2004. Sophie Debbané, Revisor Docket: 2000-2302(EI) BETWEEN: STEVEN FERGUSON, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] ____________________________________________________________________ Appeal heard on common evidence with the appeals of IrenéeFerguson (2000-2300(EI)) and Samuel Ferguson (2000-2301(EI)) on December 17, 2002, and March 17, 2003, at Bathurst, New Brunswick Before: The Honourable Judge François Angers Appearances: For the Appellant: The appellant himself Counsel for the Respondent: Stéphanie Côté ____________________________________________________________________ JUDGMENT The appeal from the decision of the Minister of National Revenue for the period from December 9, 1996, to January 10, 1997, is dismissed and the Minister's decision is confirmed in accordance with the attached Reasons for Judgment. Signed at Ottawa, Canada, this 8th day of May 2003. "François Angers" J.T.C.C. Translation certified true on this 25th day of June 2004. Sophie Debbané, Revisor Citation: 2003TCC305 Date: 20030508 Docket: 2000-2300(EI) 2000-2301(EI) 2000-2302(EI) BETWEEN: IRENÉE FERGUSON, SAMUEL FERGUSON, STEVEN FERGUSON, Appellants, and THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] REASONS FOR JUDGMENT Angers, J.T.C.C. [1] These appeals, heard on common evidence, are from the decisions of the Minister of National Revenue ("the Minister") concerning the insurability under the Unemployment Insurance Act ("the UIA") and the Employment Insurance Act ("the EIA") of the appellants' employment with J & S Lumber Co. Ltd. ("the payor corporation") during the periods described below. [2] The periods at issue in the case of the appellant Irenée Ferguson are from July 3 to September 16, 1994, from June 19 to October 27, 1995, and from June 24 to October 4, 1996. In reaching his decision, the Minister relied on the assumptions of fact set out in the Reply to the Notice of Appeal, each of which was admitted or denied by the appellant, as follows: [TRANSLATION] (a) the payor is a corporation that has been duly registered in the province of New Brunswick since 1982 and operates a business cutting and selling wood; (admitted) (b) the appellant's work was to cut wood in a lot assigned to him by the payor corporation; (denied) (c) the appellant worked with his son Samuel under the same identification number; (admitted) (d) in 1996, Steven, another son of the appellant, also worked under the same identification number; (denied) (e) the periods at issue do not entirely coincide with the periods worked by the appellant's sons; (admitted) (f) the wood cut by the appellant was not separated from the wood cut by his sons, and all the production reports for their identification number are in the appellant's name; (denied) (g) the payor corporation had no mechanism for ascertaining whether the appellant and his sons worked together, with help, or alone; (denied) (h) the appellant began working before the start of each of the periods at issue; (admitted) (i) during the 1994 period at issue, the appellant paid his 15-year-old son Kevin to help him cut wood and pile the cut wood; (denied) (j) in the production reports, the payor corporation did not take into account Kevin's work; (admitted) (k) the appellant decided as to when his name would be recorded on the payroll and notified the payor corporation thereof; (admitted) (l) the appellant decided as to when his pay would be recorded on the payroll and notified the payor corporation thereof; (admitted) (m) the appellant decided the amount that would be recorded on the payroll and notified the payor corporation thereof; (admitted) (n) the income amounts reported on the payroll, the Records of Employment and the T4 slips are not the same as the income amounts indicated on the payor corporation's production reports, as is shown in Appendix A; (denied) (o) the insurable earnings reported do not reflect the wood actually cut by the appellant; (denied) (p) the insurable earnings reported on the payroll, the Records of Employment and the T4 slips issued to the appellant are not the same as the insurable earnings actually paid to the appellant, as is shown in Appendix B; (denied) (q) the T4 slips and the Records of Employment issued to the appellant do not reflect the appellant's actual income; (denied) (r) the payor corporation had no control over the appellant's work; (denied) (s) the payor corporation did not know when the appellant worked; (denied) (t) the appellant and his sons cut wood for the payor corporation under a contract for services; (denied) (u) there was no contract of service between the appellant and the payor corporation; (denied) [3] The periods at issue in the case of the appellant Samuel Ferguson are from August 8 to October 21, 1994, from July 24 to October 27, 1995, and from June 17 to September 20, 1996. In reaching his decision, the Minister relied on the assumptions of fact set out in the Reply to the Notice of Appeal, each of which was admitted or denied by the appellant, as follows: [TRANSLATION] (a) the payor is a corporation that has been duly registered in the province of New Brunswick since 1982 and operates a business cutting and selling wood; (admitted) (b) the appellant's work was to cut wood in a lot assigned to him by the payor corporation; (denied) (c) the appellant worked with his father, Irenée, under the same identification number; (admitted) (d) in 1996, Steven, a brother of the appellant, also worked under the same identification number; (denied) (e) the periods at issue do not entirely coincide with the periods worked by the appellant's father and brother; (admitted) (f) the wood cut by the appellant was not separated from the wood cut by his father and brother, and all the production reports for their identification number are in the name of the appellant's father; (denied) (g) the payor corporation had no mechanism for ascertaining whether the appellant and his father or brother worked together, with help, or alone; (denied) (h) the appellant began working before the start of each of the periods at issue; (admitted) (i) during the 1994 period at issue, the appellant's father paid his 15-year-old son Kevin, another brother of the appellant, to help him cut wood and pile the cut wood; (denied) (j) in the production reports, the payor corporation did not take into account Kevin's work; (admitted) (k) in December 1996, the appellant worked with his brother Steven without his name being recorded on the payor corporation's payroll; (admitted) (l) the appellant decided as to when his name would be recorded on the payroll and notified the payor corporation thereof; (admitted) (m) the appellant decided as to when his pay would be recorded on the payroll and notified the payor corporation thereof; (admitted) (n) the appellant decided the amount that would be recorded on the payroll and notified the payor corporation thereof; (denied) (o) the income amounts reported on the payroll, the Records of Employment and the T4 slips are not the same as the income amounts indicated on the payor corporation's production reports, as is shown in Appendix A; (denied) (p) the insurable earnings reported do not reflect the wood actually cut by the appellant; (denied) (q) the insurable earnings reported on the payroll, the Records of Employment and the T4 slips issued to the appellant are not the same as the insurable earnings actually paid to the appellant, as is shown in Appendix B; (denied) (r) the T4 slips and the Records of Employment issued to the appellant do not reflect the appellant's actual income; (denied) (s) the payor corporation had no control over the appellant's work; (denied) (t) the payor corporation did not know when the appellant worked; (denied) (u) the appellant and his father cut wood for the payor corporation under a contract for services; (denied) (v) there was no contract of service between the appellant and the payor corporation; (denied) [4] In the case of the third appellant, Steven Ferguson, the period at issue is from December 9, 1996, to January 10, 1997. In reaching his decision, the Minister relied on the assumptions of fact set out in the Reply to the Notice of Appeal, each of which was admitted or denied by the appellant, as follows: [TRANSLATION] (a) the payor is a corporation that has been duly registered in the province of New Brunswick since 1982 and operates a business cutting and selling wood; (admitted) (b) the appellant's work was to cut wood in a lot assigned to him by the payor corporation; (denied) (c) the appellant worked under the same identification number as his father, Irenée; (denied) (d) Steven [sic], a brother of the appellant, had also worked under the same identification number; (denied) (e) the names of neither the appellant's father nor his brother were recorded on the payor corporation's payroll during the period at issue; (denied) (f) all the production reports for their identification number, including those for the period at issue, are in the name of the appellant's father; (denied) (g) the payor corporation had no mechanism for ascertaining whether the appellant and his father or brother worked together or alone; (denied) (h) during the period at issue, the appellant's brother Steven [sic] helped him cut wood, without his name being recorded on the payor corporation's payroll; (admitted) (i) the appellant had decided the amount that would be recorded on the payroll and had notified the payor corporation thereof; (admitted) (j) the appellant did not receive any payments from the payor corporation other than the amounts recorded on the payroll; (admitted) (k) the insurable earnings reported do not reflect the wood actually cut by the appellant; (denied) (l) neither the payor corporation nor the appellant know the quantity of wood the appellant actually cut, as is shown in Appendix A; (denied) (m) the payor corporation had no control over the appellant's work; (denied) (n) the payor corporation did not know when the appellant worked; (denied) (o) the appellant cut wood for the payor corporation under a contract for services; (denied) (p) there was no contract of service between the appellant and the payor corporation; (denied) [5] The three appellants testified. The appellant Irenée Ferguson testified that he worked for the payor corporation during the periods at issue and even prior to those periods. He cut wood at the locations assigned by the payor corporation; every day a representative came to the location where he was cutting wood. Although his son Kevin helped him, the appellant stated that he did not pay Kevin. Irenée Ferguson stated that the payor corporation paid him an advance of $400 per week but did not provide further details on this point. [6] The appellant Steven Ferguson confirmed that the payor corporation paid him an advance of $400 per week because he knew that every week he could cut a quantity of wood corresponding to that amount. He stated that he worked alone but that the wood he cut was recorded by the payor corporation under the identification number of his father, the appellant Irenée Ferguson. According to Steven Ferguson, his father's identification number was attributed to him because of an error by the employer. The payor corporation told him where to cut wood and its representative came to see him every day. [7] Steven Ferguson admitted that he did not know the quantity of wood he cut because he never received the scale record and because everything was recorded in his father's name. He stated that he signed a contract of service with the payor corporation through Walter McLaughlin but did not adduce a copy of that contract in evidence; apparently it was form TD1 used by the employer. [8] The appellant Samuel Ferguson also stated that he was employed by the payor corporation. He stated that he did not know why the wood he cut was recorded in his father's name. He stated that the payor corporation designated the location where wood was to be cut and that a representative of the payor corporation was present from morning until night to carry out checks. He acknowledged that, at the end of the period he worked, no final settlement was ever made between him and the payor corporation concerning the quantity of wood he cut. He blamed the payor corporation for that situation: he was supposed to receive an additional T4 slip for that settlement payment as well as an amended Record of Employment. [9] Each of the three appellants adduced in evidence a letter from the president of the payor corporation dated October 7 or 8, 1999, certifying that the appellants were employees of the payor corporation during the periods at issue. [10] The respondent called as witnesses Charles Albert, an investigation and control officer for the Minister of Human Resources, and Joanne Robichaud, an appeals officer for the Canada Customs and Revenue Agency (CCRA). Their testimony is quite revealing concerning the way the payor corporation operated the business and its relations with the appellants and the other forest workers. It should be noted that the payor corporation was the subject of an investigation and that there have been no fewer than 40 appeals. [11] The testimony of these witnesses, like that of the appellants, showed that a supervisor from the payor corporation was responsible for assigning the appellants to the wood cutting locations. However, according to Charles Albert, the supervisor travelled to the locations only two or three times per week in order to carry out checks and ensure that the safety rules were being observed. According to Charles Albert's testimony, forest workers including the appellants went to see Walter McLaughlin, a representative of the payor corporation, to seek work. After they were hired, their wages were set according to the quantity of wood they could each cut, and they were each paid an advance on the basis of that quantity. In the appellant's cases, the advance was set at $400 per week. According to Charles Albert's investigation, the appellants, like most of the forest workers, worked only the number of weeks required to qualify for unemployment insurance or employment insurance benefits, although the wood cutting season began in May and ended in November each year. [12] Still according to the witness Charles Albert, it was not possible for the supervisors to be present as often as the appellants claimed because the payor corporation's wood cutting locations were vast and there were only two supervisors. At each visit to a location, a supervisor could roughly estimate the quantity of wood cut and, on that basis, authorize the issuance of a paycheque to the forest worker. Thus it was impossible for the supervisor to know who actually cut the wood, when the wood was cut, and what was the exact quantity of wood cut. Final measurement of the wood was possible only on delivery to the mill. A number of forest workers cut wood under an identification number borrowed from someone else, as did the appellants Steven and Samuel Ferguson, who cut wood under the identification number borrowed from Irenée Ferguson, their father. [13] Charles Albert's investigation showed that, in these three cases, no final settlement was made between the appellants and the payor corporation concerning the quantities of wood cut in relation to the amount of the advances paid. [14] The witness Charles Albert obtained from the payor corporation the Records of Employment, payroll records, paycheques issued, and production reports of wood cut. Examination of these documents, all of which were adduced in evidence, allowed him to note that the Records of Employment did not reflect reality in terms of the figures indicated or the quantity of wood actually cut. The payor corporation did not take into account the hours or weeks worked by the appellants. According to certain documents, the appellants worked 40 hours per week, whereas in reality they were paid according to an estimate of the quantity of wood cut. According to the production reports, the wood was measured after the periods at issue; this situation does not allow the Court to determine exactly when the appellants cut the wood. Charles Albert noted that the figures indicated on the Records of Employment were higher than the amounts the employer paid to each of the appellants. He also noted that each of the appellants needed to accumulate a certain number of weeks worked in order to qualify for employment insurance benefits and that they had in fact worked the minimum number of weeks required. [15] Joanne Robichaud is an appeals officer for the CCRA. She examined the documents concerned and had telephone conversations with each of the appellants and with James Ferguson, the president of the payor corporation. During her conversation with James Ferguson, he admitted to her that the payor corporation had no control over the forest workers since it was unable to ascertain or record whether they cut the wood. He acknowledged that the forest workers cut only the quantity of wood they needed in order to qualify for employment insurance benefits, since they stopped cutting wood once they had accumulated the required number of weeks. He acceded to the forest workers' demands because that was the only way to get wood cut. James Ferguson also explained to Joanne Robichaud that the supervisors' presence was required only in order to ensure that the safety rules were observed and that the forest workers cut the wood in the locations assigned to them. [16] During her conversation with the appellant Irenée Ferguson, Joanne Robichaud learned that he shared the identification number assigned to him by the payor corporation with the two other appellants and that he used his own equipment to perform the work. He was unable to explain why there was a difference between the amounts he received and the amounts stated on the Records of Employment. On the basis of the information obtained from that conversation and her analysis of the documents, Joanne Robichaud concluded that for the three periods at issue there were a number of irregularities in the methods of paying the appellants, that the sharing of the identification number of the appellant Irenée Ferguson with the two other appellants did not make it possible to ascertain who had cut the wood or the quantity each of them had cut, and that the Records of Employment were erroneous. As well, the appellant Irenée Ferguson admitted that he received help cutting the wood from another son, Kevin. [17] In the case of the appellant Steven Ferguson, Joanne Robichaud reached the same conclusions. She also concluded that Steven Ferguson worked only five weeks, the number of weeks he needed in order to qualify for benefits, and that he certainly could not have cut an average of 25 cords of wood per week by himself during that period since he admitted that he had never done that type of work before. [18] The same irregularities were noted for the three periods at issue in the case of the appellant Samuel Ferguson. Samuel Ferguson used the identification number of the appellant Irenée Ferguson, with the result that the payor corporation did not know how much wood each of the appellants had cut or how much money each one had actually earned. Samuel Ferguson acknowledged that he began working before the pay period, with the result that the Record of Employment did not reflect reality. [19] At issue in this case, then, is whether the relations between the appellants and the payor corporation met the various tests that distinguish a contract of service from a contract for services. In Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553, the Federal Court of Appeal recognized four basic tests in making this distinction; in Sagaz Industries Canada Inc. v. 671122 Ontario Ltd., 2001 SCC 59, the Supreme Court of Canada confirmed these tests, which are as follows: (1) the degree of control exercised by the employer; (2) the ownership of the tools; (3) the chance of profit and risk of loss; and (4) the degree of integration. [20] In this case, control appears to be the most important test. The fact that the payor corporation told the forest workers where to cut the wood, roughly estimated the quantity of wood cut, and ensured that the forest workers observed the safety rules does not make it possible for me to find that control was exercised over the appellants. The hours and weeks worked were not recorded. The payor corporation did not know when the appellants actually worked and could rely only on the quantity of wood cut, without knowing who had actually cut that wood. The Records of Employment were false. In fact, the payor corporation was interested solely in the wood delivered. In Charbonneau v. M.N.R., [1996] F.C.J. No. 1337 (Q.L.), Décary J.A. of the Federal Court of Appeal stated that monitoring the result must not be confused with controlling the worker. On the basis of all the facts in this case, I find that the payor corporation did not exercise control over the appellants and that, in this regard, the argument of a contract for services is stronger. [21] In this case, the appellants owned their chainsaw. This test does not in itself prevent the appellants from being considered employees; it is therefore difficult to draw conclusive evidence on the basis of the ownership of the tools. Concerning the chance of profit and risk of loss, it is difficult to apply this test to the working conditions in this case since the appellants were interested solely in receiving their wage advance and never requested a final check. Such an arrangement makes it impossible to apply this test. [22] Where integration is concerned, the appellants' work was not integrated into the payor corporation's activities. In fact, there was no direct connection between the appellants' presence at the work location and the hours and weeks they worked on the one hand and the payor corporation's activities on the other hand since the appellants cut the wood as they pleased. This situation supports the contention of a contract for services rather than that of a contract of service. [23] Moreover, all the irregularities in the documentation suggests that it was the appellants and the other forest workers of the payor corporation who decided when they worked and for what length of time. The appellants failed to discharge the burden of proof on them in this case. [24] For all these reasons, I find that, during all the periods at issue, the appellants were not hired under a contract of service and therefore did not occupy insurable employment under paragraph 3(1)(a) of the UIA and paragraph 5(1)(a) of the EIA. The appeals are therefore dismissed and the decisions of the Minister are confirmed. Signed at Ottawa, Canada, this 8th day of May 2003. "François Angers" J.T.C.C. Translation certified true on this 25th day of June 2004. Sophie Debbané, Revisor