Lebel c. M.R.N.

Lebel c. M.R.N. Court (s) Database Tax Court of Canada Judgments Date 2004-08-19 Neutral citation 2004 TCC 569 File numbers 2004-1235(EI) Judges and Taxing Officers Paul Bédard Subjects Canada Pension Plan Decision Content [OFFICIAL ENGLISH TRANSLATION] Docket: 2004-1235(EI) BETWEEN: LINDA LEBEL, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent, and CAROL LEBEL, Intervener. ____________________________________________________________________ Appeal heard on August 12, 2004 at Hâvre-Aubert, Quebec Before: The Honourable Judge Paul Bédard Appearances: For the Appellant: The Appellant herself Counsel for the Respondent: Agathe Cavanagh For the Intervener: No one appeared ____________________________________________________________________ JUDGMENT The appeal is dismissed and the decision of the Minister is affirmed in accordance with the attached Reasons for Judgment. Signed at Ottawa, Canada, this 19th day of August, 2004. "Paul Bédard" Bédard J. Certified true translation Colette Dupuis-Beaulne [OFFICIAL ENGLISH TRANSLATION Citation: 2004TCC569 Date: 20040819 Docket: 2004-1235(EI) BETWEEN: LINDA LEBEL, Appellant, And THE MINISTER OF NATIONAL REVENUE, Respondent, And CAROL LEBEL, Intervener. REASONS FOR JUDGMENT BédardJ. [1] The question at issue is relatively simple: the Minister of National Revenue (the "Minister") is of the opinion that the Appellant, in her capacity as a babysitter, was not employed under a contract of service, within the meaning of paragraph 5(1)(a) of the Employment Insurance Act (the "Act"), by the Payer, Carol Lebel, and accordingly did not hold insurable employment for the period commencing on June 1, 2003, and ending on September 5, 2003. [2] The facts on which the Minister based his decision are set out at paragraph 5 of the Reply to Notice of Appeal and are as follows: a) the Appellant is the sister of the Payer; b) the Payer looked after a 13-month old child as a babysitter; c) the Payer also rented a cabin and two houses to tourists during the summer; d) during the period at issue, the Appellant had two jobs with the Payer; e) the Appellant was hired by the Payer to babysit the child 3 days a week, from Tuesday to Thursday; f) in addition, the Appellant did housekeeping for the Payer in the tourist accommodation on Saturdays and Sundays, between the departure and arrival of the guests; g) the Appellant looked after the child at her residence or in her trailer; h) the Payer brought the child around 7.55 am and picked it up at around 5.00 pm; i) the Appellant was able to engage in other activities while babysitting the child; j) the Payer had no control over the time and efforts of the Appellant as a babysitter; k) the Appellant was paid at a rate of $9.00 an hour for each of her jobs; l) the Appellant worked approximately 27 hours a week as a babysitter and 13 hours a week in charge of housekeeping in the tourist accommodations; m) the Appellant would invoice the Payer for her services to obtain her remuneration; n) the Appellant provided her residence, together with snacks and meals, as part of her babysitting duties; o) the Payer did not reimburse the Appellant's expenses while she was acting as babysitter; p) the Appellant assumed the expenditures in the context of her employment as a babysitter; q) on September 18, 2003, the Payer issued a record of employment to the Appellant for the period beginning on June 1, 2003, and ending on September 5, 2003, which showed 560 insurable hours and total insurable remuneration of $5,040.00 for the two jobs of babysitter and housekeeper; r) according to her own invoices, the Appellant worked for the Payer as a babysitter for 379 hours for remuneration of $3,411.00 and as a housekeeper for 180 hours for remuneration of $1,620.00, for a total of 559 hours and remuneration of $5,031.00. [3] It should be noted that the Appellant has admitted all the facts set out at paragraph 5 of the Reply to Notice of Appeal, with the exception of those set out at paragraphs j), m), o) and p), and that her evidence is based essentially on her testimony, since the Payer did not appear to testify. Analysis The law [4] It should be emphasized that the contractual relationship between the Appellant and the Payer must be interpreted in accordance with the statutes of the Province of Quebec. [5] In the Civil Code of Quebec, there are separate chapters dealing with the "contract of employment" (articles 2085 to 2097) and the "contract of enterprise or for services" (articles 2098 to 2129). [6] Article2085 states that a contract of employment: [...] is a contract by which a person, the employee, undertakes for a limited period to do work for remuneration, according to the instructions and under the direction or control of another person, the employer. [7] Article2098 states that a contract of enterprise or for services: [...] is a contract by which a person, the contractor or the provider of services, as the case may be, undertakes to carry out physical or intellectual work for another person, the client, or to provide a service, for a price which the client binds himself to pay. [8] Article2099 goes on to say that: The contractor or the provider of services is free to choose the means of performing the contract and no relationship of subordination exists between the contract of the provider of services and the client in respect of such performance. [9] We can say that the fundamental difference between a contract for services and a contract of employment is the absence, in the former case, of a relationship of subordination between the provider of services and the contractor and the presence, in the latter case, of the right of the employer to direct and control the employee. Pratte J. of the Federal Court of Appeal added the following clarification in Gallant v. M.N.R.[1]: [...] The distinguishing feature of a contract of service is not the control actually exercised by the employer over his employee but the power the employer has to control the way the employee performs his duties. [My emphasis.] We must accordingly first attempt to determine whether or not there was a relationship of subordination between the Appellant and the Payer. [10] In Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553, MacGuigan J. of the Federal Court of Appeal spoke at length of the criterion of control and acknowledged that the right to specify the way in which the work is to be performed and to give direction to the employee regarding the way in which the work is to be performed is an element that is fundamental to the exercise of control over the work of the employee. In Vulcain Alarme Inc. v. Canada (Minister of National Revenue - M.N.R.), [1999] F.C.J. No. 749, Létourneau J. of the Federal Court of Appeal also affirmed that the basis of control is the ability to give instructions regarding the way the work of the employee must be performed. In the case at bar, in light of the evidence, we must determine whether the Payer gave or could give instructions to the Appellant regarding the way in which she was to do her work. That said, control of the result or the quality of the work must not be confused with control of its performance by the worker responsible for the work. Rare are the employers who do not ensure that the work is performed in accordance with their requirements. [11] However, when the evidence does not allow us to discern clearly whether or not a relationship of subordination exists, I am of the opinion that we must then examine the contractual relationship in light of the other factors set out by the Federal Court of Appeal in Wiebe Door, supra, and restated by the Supreme Court in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983, in other words, integration, ownership of the tools required to perform the work, the opportunity for profit and the risk of loss. These factors can indicate the existence of a contract of service. [12] The review of the facts, in light of these criteria, will normally enable us to confirm the existence or absence of a relationship of subordination; in other words, in case of doubt, a more comprehensive approach is required. [13] Lastly, I would add that it may be very useful to examine the intention of the parties when they signed the contract, especially when the question is ambiguous, i.e., when the relevant factors indicate both possible conclusions at the same time. I believe that the way in which the parties viewed their agreement must then prevail, except if they were mistaken about the true nature of their relationship. To be sure, the Court will not take the stipulation of the parties regarding the nature of their contractual relationship into account if it must conclude otherwise, based on the evidence submitted to it. However, in the absence of unequivocal or contrary evidence, the Court must certainly take the stated intention of the parties into account. [14] Did the Appellant perform her work under the direction or control of the Payer? Did the Payer give or could he give orders to the Appellant? [15] It is appropriate to recall that the contractual relationship between the Appellant and the Payer must of necessity be interpreted in accordance with the laws of the Province of Quebec. Articles 2085, 2098 and 2099 of the Civil Code of Quebec state that the fundamental distinction between a contract of service and a contract for services is the absence, in the case of the former, of a relationship of subordination between the provider of the services and the client, and the presence in the second case of the right of the employer to direct and control the employee. In other words, did the Payer give or could he give instructions to the Appellant regarding the way in which she was to perform her work? [16] In this case, the evidence has revealed: i) that the Appellant was looking after the Payer's child. The child was 13 months old. Without exception, she looked after the child three days a week from Tuesday to Thursday; ii) that the Payer took the child to the residence of the Appellant at around 7.55 am and fetched her at around 5 pm; iii) that the Appellant looked after the child in her residence or in her trailer. The trailer was located by the shore and was in a way the Appellant's summer cottage. She testified that she frequently took the child to the trailer simply because it was more pleasant to be at the shore during the summer; iv) that the Appellant, while babysitting the child, could perform other tasks; v) that the Appellant had received no instructions from the Payer about the way in which she was to perform her work; vi) that the Appellant noted the number of hours of babysitting worked; vii) that the Appellant was paid at the rate of $9 an hour, even though she provided the residence, snacks and meals while performing her babysitting duties. In her testimony, the Appellant admitted that the Payer did not reimburse her the expenses related to these snacks and meals. [17] The evidence has thus clearly shown that there was not, between the Appellant and the Payer, a relationship of subordination which is the very essence of a contract of service. In fact, the evidence revealed that the Appellant had received no instructions from the Payer regarding the way in which she was to perform her work. The Appellant even decided where she would look after the child. She was able to do other things. The Appellant had to demonstrate on the balance of probabilities that the Minister was wrong on this point. In my view, she simply failed to discharge the onus that was upon her. [18] Although we must not give too much weight to the other factors set out in the case law, specifically the ownership of tools and the opportunity for profit and the risk of loss, in view the nature of the services rendered, the requirements of the services and the paucity of tools used, I am obliged to conclude that these factors do not indicate the existence of a contract of service. In the case at bar, the Appellant did not look after the child at the Payer's residence, but at her own residence, and she assumed the risk of loss since she was paid by the hour and was responsible for the cost of meals and snacks. [19] For these reasons, I conclude that the employment of the Appellant was not insurable during the period at issue. Signed at Ottawa, Canada, this 19th day of August 2004. "Paul Bédard" Bédard J. Certified true translation Colette Dupuis-Beaulne. CITATION: 2004TCC569 COURT FILE NO.: 2004-1235(EI) STYLE OF CAUSE: Linda Lebel and M.N.R. PLACE OF HEARING: Hâvre-Aubert, Quebec DATE OF HEARING: August 12, 2004 REASONS FOR JUDGMENT BY: The Honourable Judge Paul Bédard DATE OF JUDGMENT: August 19, 2004 APPEARANCES: For the Appellant: The Appellant herself For the Respondent: Agathe Cavanagh For the Intervener: No one appeared SOLICITOR OF RECORD: For the Appellant: Name: Firm: For the Respondent: Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada For the Intervener: Name: Firm: [1] [1986] F.C.J. No. 330 (Q.L.)