P.S. Sidhu Trucking Ltd. v. M.N.R.

P.S. Sidhu Trucking Ltd. v. M.N.R. Court (s) Database Tax Court of Canada Judgments Date 2005-09-23 Neutral citation 2005 TCC 630 File numbers 2004-3814(CPP) Judges and Taxing Officers Donald G.H. Bowman Subjects Employment Insurance Act Decision Content Dockets: 2004-3814(CPP) 2004-3815(EI) BETWEEN: P.S. SIDHU TRUCKING LTD., Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. ____________________________________________________________________ Appeals heard on September 12, 2005 at Whitehorse, Yukon. Before: The Honourable D.G.H. Bowman, Chief Justice Appearances: Agent for the Appellant: Paramjit Sidhu Counsel for the Respondent: Pavanjit Mahil ____________________________________________________________________ JUDGMENT The appeal pursuant to subsection 103(1) of the Employment Insurance Act and the appeal pursuant to subsection 28(1) of the Canada Pension Plan for the period from February 6, 2003 to March 25, 2003 are dismissed. Signed at Ottawa, Canada this 23rd day of September 2005. "D.G.H. Bowman" Bowman, C.J. Citation: 2005TCC630 Date: 20050923 Dockets: 2004-3814(CPP) 2004-3815(EI) BETWEEN: P.S. SIDHU TRUCKING LTD., Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. REASONS FOR JUDGMENT Bowman, C.J. [1] These appeals are from decisions of the Minister of National Revenue that Michelino Grieco (also known as Mike Grieco) was employed by the appellant in insurable employment for the purposes of the Canada Pension Plan and the Employment Insurance Act, during the period from February 6, 2003 to March 25, 2003. [2] The appellant operates a trucking business and employs drivers during most of the year. It employs drivers as employees and pays them an hourly rate. Mr. Sidhu, the president of the company, represented the appellant at trial. He did not dispute that the drivers were employees during most of the year. He contends that there is a difference in the period in question. The difference is that during a period of about 45 to 60 days in the winter, he provides trucks and drivers to Robinson Enterprises Ltd. ("RTL") to transport fuel to and from Hay River, N.W.T., or Yellowknife to RTL's diamond mine over the ice road.[1] [3] The ice road can be used only for a month or two in the winter when the lakes, rivers and ground are frozen sufficiently hard to permit the passage of large trucks. [4] For this period the appellant (described as the "contractor") and RTL entered into an agreement which read in part as follows: THE PARTIES AGREE AS FOLLOWS: I TERM OF AGREEMENT This Agreement shall commence the date first above and shall continue until April 15, 2003 unless terminated in accordance with Article VII or unless extended by mutual agreement of the parties hereto (the "Term"). II SERVICES During the Term, the Contractor shall provide RTL with equipment and/or personnel as listed below or as per attached Schedule B and Schedule C attached: 1. "Equipment" Make/Model KENWORTH T800 #106 Year 1998 S/N 1XKDDB8X9WR950903 2. "Personnel" Complete Name Grieco Michelino Driver's Licence # 121187 YUKON Neither the Equipment nor the Personnel shall be changed without RTL's consent. The Contractor is responsible for inspecting any trailers or other Equipment supplied by RTL for hauling prior to any trip and must report any damage. Unless damage is reported by the Contractor prior to a trip, the trailers shall be presumed to be in good condition and repair and without damage. Any damage howsoever caused during hauling and back hauling, shall be the responsibility of the Contractor. The Contractor is responsible for maintaining his own Equipment in good repair and fully operable condition in compliance with National Safety Code standards. the Contractor is responsible for all loading, transportation and unloading. III RELATIONSHIP OF PARTIES The Sub-Contractor is and independent Contractor and is solely responsible for management and control of its employees. Nothing contained in this Agreement or otherwise shall deem the Contractor or its employees to be employees of RTL. [5] There may have been other relevant terms in the agreement but the appellant did not put the entire agreement in evidence. [6] The appellant also entered into an agreement dated January 21, 2003 with Mike Grieco which read: This document serves as an agreement between Sidhu Trucking and: Operator: _____Mike Grieco____________________________________ Address: _____P.O. Box 215 201 Hanson ST.(WhitehorseY.T.)_____ Telephone #: 867/456-2586 in that Sidhu Trucking Ltd. will contact _____Mike Grieco________ for driving and/or hauling services as per agreed rate. It is agreed and understood that the Operator is responsible and liable for establishing their amount of Income Tax, Canada Pension, etc. and filing with Revenue Canada as requested by law. Sidhu Trucking Ltd. will endeavor to supply work to the operator, however, if there is no sufficient work, Sidhu Trucking Ltd. accepts and understands that the Operator may and will have to obtain work from other sources or companies at the time as operating with Sidhu Trucking Ltd. Operator must keep equipment clean, always in good working order, and serviced peroperly. Rate of Pay: 1. Fuel hauling on ice is 30% of payload rate, no traveling time, also room and board will not be paid 2. If somebody leaves the job early 3% will be deducted from 30% pay 3. To receive a bonus of 3% an operator must do ALL of the following: A) Satisfy R.T.L. B) Stay till the end of the ice haul C) The truck must earn $70,000.00 or more [7] The assumptions on which the decisions were based were: 5. In determining that Grieco was employed in pensionable employment with the Appellant during the Period, the Minister relied on the following assumptions of fact: a) the Appellant operates as a trucking business hauling fuel from Hay River, NWT or Yellowknife to Diamond Mines, a distance of approximately 300 kilometres; b) Grieco provided his services as a truck driver to the Appellant; c) the Appellant owned the truck driven by Grieco; d) the Appellant had a contract to provide a truck and Grieco to Robinson Enterprises Ltd ("RTL"); e) Grieco was not allowed to have passengers in the truck; f) Grieco reported to the RTL dispatcher; g) the RTL dispatcher gave Grieco instructions on where and when to pick up and deliver its load; h) Grieco was required to record his hours in a driver log book; i) the Appellant paid Grieco 30% of the gross truck revenues; j) the Appellant paid Grieco at the end of the contract; k) the Appellant was responsible for all costs incurred to maintain and repair the truck; l) Grieco incurred no expenses other than food, lodging and speeding tickets; m) the Appellant provided the communication equipment such as truck radio; n) the Appellant provided Grieco with a credit card for gas; o) Grieco was subject to termination for failure to follow RTL's policies and procedures; and p) the Appellant required Grieco's personal service. These assumptions were substantially correct. [8] Mr. Sidhu argues that Grieco was, during the period in which Grieco was driving the ice road to deliver fuel to RTL, Grieco was an independent contractor. He points to a number of factors which, he contends, distinguishes Grieco's relationship with the appellant from that which he had during the rest of the year. Among the factors to which Mr. Sidhu refers are: (a) Grieco was paid a percentage of the gross proceeds earned by the truck from the contract with RTL. (b) Grieco was, under the contract, free to take other work. (c) Grieco was, during this period, under the control of RTL and specifically RTL's dispatcher. [9] The determination of the question whether a worker is employed under a contract of service or a contract for services has occupied a great deal of judicial time and energy. The most recent authoritative pronouncement is 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983, which essentially adopts what was said by MacGuigan J. in Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553. I need not deal in detail with the four parts of the single test: control, ownership of tools, chance of profit/risk of loss and integration. [10] One must look at the overall relationship and make a judgement call in which each factor is assigned its relative importance in the context of the overall picture. I have concluded that Mr. Grieco was an employee of the appellant during the relevant period. The truck was owned by the appellant and the repairs and gas were paid for by the appellant. The appellant bore the risk of loss and had the chance of profit. It is true Mr. Grieco could marginally improve his income in the period by working longer hours, but this does not strike me as likely to make a significant difference. The integration test is, as is usual in these cases, of no assistance and is in any event difficult to understand or apply. Mr. Grieco was of course integral to the appellant's business operation but he would have been just as integral whether he was an employee or an independent contractor. [11] The control test is an important one. It is true that during the period in which Mr. Grieco was driving the ice road he was subject to the direction of RTL's dispatcher. This is because the employer, the appellant, delegated the power to direct the drivers to RTL under the contract between the appellant and RTL. Ultimate control remained with the appellant, who paid Mr. Grieco his remuneration. In making the drivers available to RTL the appellant exercised its control as employer. It did not relinquish its control over the drivers as employer. It merely exercised it in a way that reflected its business relationship with RTL. [12] A case that is very close to this is the decision of Justice Miller of this court in Bicz Transport Corp. v. Canada, [2001] T.C.J. No. 511 (Q.L.). I am in respectful agreement with Justice Miller's reasoning in that case. [13] There has been some recent jurisprudence in cases arising under the Quebec Civil Code in which the agreement of the parties is considered to have some bearing particularly in Wolf v. The Queen, [2002] 3 C.T.C. 3. I do not think that any useful purpose would be served by attempting to analyse and reconcile the three sets of reasons of Desjardins, Décary and Noël JJ. [14] The appeals are dismissed. Signed at Ottawa, Canada this 23rd day of September 2005. "D.G.H. Bowman" Bowman, C.J. CITATION: 2005TCC630 COURT FILES NOS.: 2004-3815(EI) & 2004-3814(CPP) STYLE OF CAUSE: P.S. Sidhu Trucking Ltd. and The Minister of National Revenue PLACE OF HEARING: Whitehorse, Yukon DATE OF HEARING: September 12, 2005 REASONS FOR JUDGMENT BY: The Honourable D.G.H. Bowman, Chief Justice DATE OF JUDGMENT AND REASONS FOR JUDGMENT: September 23, 2005 APPEARANCES: Agent for the Appellant: Paramjit Sidhu Counsel for the Respondent: Pavanjit Mahil COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: John Sims, Q.C. Deputy Attorney General of Canada Ottawa, Canada [1] This peculiarly Canadian expression is defined in the Canadian Oxford Dictionary as "a winter road built across frozen lakes, rivers, muskeg, etc.".