Somexpo Inc. c. M.R.N.

Somexpo Inc. c. M.R.N. Court (s) Database Tax Court of Canada Judgments Date 2004-12-21 Neutral citation 2004 TCC 819 File numbers 2003-230(EI) Judges and Taxing Officers Sylvio J. Savoie Subjects Employment Insurance Act Decision Content Docket: 2003-230(EI) BETWEEN: SOMEXPO INC., Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] Appeal heard on November 26, 2004, at Montréal, Quebec Before: The Honourable Deputy Judge S.J. Savoie Appearances: Agent for the Appellant: Claudine Boulanger Counsel for the Respondent: Antonia Paraherakis JUDGMENT The appeal is dismissed and the decision of the Minister is confirmed in accordance with the attached Reasons for Judgment. Signed at Grand-Barachois, New Brunswick, this 21st day of December 2004. "S. Savoie" Savoie D.J. Translation certified true on this 22nd day of March 2005. Colette Dupuis-Beaulne, Translator Citation: 2004TCC819 Date: 20041221 Docket: 2003-230(EI) BETWEEN: SOMEXPO INC., Appellant, And THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] REASONS FOR JUDGMENT D.J. [1] This appeal was heard at Montréal, Quebec, on November 26, 2004. [2] This is an appeal on the insurability of the employment of Nicole Laliberté (the Worker) while working for the Appellant during the period in question, from March 1 to 24, 2001, within the meaning of the Employment Insurance Act. [3] On November 26, 2002, the Minister of National Revenue (the "Minister") informed the Appellant of the decision that the Worker's employment was insurable because she held employment under a contract of service and there existed an employer-employee relationship between the Appellant and the Worker. The Appellant was also informed that the number of insurable hours was 11,181. [4] The Minister's decision was based on the following assumptions of fact: (a) The Appellant operates a promotion, sales, survey, and market research business. (admitted) (b) The Appellant hired the Worker to conduct surveys of grocery store customers. (admitted) (c) The Worker asked the grocery store customers to answer questions and recorded their answers and comments. (admitted) (d) The Worker also did promotion and sales at various kiosks, the boat show, and the home show. (admitted) (e) When the Worker did sales, she had to work at locations specified by the Appellant. (admitted) (f) The Appellant contacted the Worker and informed her of the type of work to be done and where it was to be carried out. (denied) (g) The Appellant signed an agreement with the Worker at the beginning of each contract with her. (denied) (h) The Worker was supervised by a representative of the Appellant; they communicated using walkie-talkies. (denied) (i) The Appellant gave the Worker basic training and a briefing at the start of the contract. (denied) (j) The Worker had to prepare and submit daily reports on her activities to the Appellant; occasionally, a report was required only at the end of the mandate, depending on the nature of the work to be done. (denied) (k) The Worker was paid an hourly wage, plus a commission when she sold items for the Appellant. (denied) (l) The hourly rate varied with each mandate. (denied) (m) During the period in question, the Worker worked for the Appellant at the following locations: (admitted) Charcuterie Noël 3 days Home Show 5 days IGA Leblanc 2 days Boat Show 2 days (n) The Appellant does not know the actual number of hours worked by the Worker. (admitted) (o) During the period in question, the Worker received $771.50 from the Appellant. (admitted) (p) As at January 1, 2001, minimum wage was $6.90. (admitted) [5] The Appellant stated that the Worker worked when and where she wanted. According to the Appellant, she was presented with a contract, which she would accept or refuse. The Appellant denied signing an agreement with the Worker at the start of each contract. [6] The Appellant stated that the walkie-talkie was a communication tool, not a work tool. [7] Furthermore, the Appellant stated that the Worker received general instructions only, not basic training and a briefing. [8] The Appellant also wanted to clarify that the report required from the Worker was merely her invoice. [9] The Worker's pay was set at an hourly rate or on a commission basis, depending on what had been negotiated between the parties. [10] Claudine Boulanger, witness for the Appellant, stated that the walkie-talkie was provided by the client at the Appellant's expense and that the work location was also provided. According to Ms. Boulanger, the Appellant proposed and the Worker was free to accept or refuse. This applied to the work location, wage, etc. According to this witness, the schedule was flexible and subject to the Worker's availability. [11] Exhibit I-1 (list of documents) filed at the hearing contains a series of documents outlining the Worker's employment conditions. This Court will return to this exhibit later in these Reasons. [12] The evidence has shown that all of these documents constitute an agreement between the parties, even though most of the documents are not signed. [13] The Worker stated that she had been hired by the Appellant, who proposed that she do promotion or conduct surveys on the Appellant's behalf at an hourly rate of $8 to $12, depending on the client approached. The Worker maintains that she never negotiated the conditions set out in the "Directives pour le personnel de sondage" [survey staff instructions] (Exhibit I-1, tab i), which outline a specific schedule, the hours of work, the length of breaks, a set wage, and concrete instructions on where the Worker had to be and how she was to conduct the survey. She added that if ever she were absent, she had to notify either Ms. Théberge or Ms. Boulanger who supervised and selected her replacement. Exhibit I-1, tab D, contains the contract of employment, signed by the parties, in which the Worker confirms that she is aware of the "politiques maison" [in-house policies] (Exhibit I-1, tab E). This document outlines the professional conduct required by the Appellant and to which the Worker agreed to adhere. Through this document, she also acknowledges that she has completed the self-employed worker form and understands its scope. The Worker testified that she had always been a salaried worker. She said she understands the difference between a self-employed worker and a salaried worker but does not know why she decided to sign the document. The Worker added that she conducted surveys for the Appellant and that to do this work, she was provided with tools: the walkie-talkie, pencils, and the questionnaire prepared by the Appellant. She also did promotion for the Escale Nautique at the Montréal boat show using the promotion model reproduced at tab F of Exhibit I-1. Her work schedule for this promotion is reproduced on the second page of tab F. Tab G, Exhibit I-1, contains a two-page document entitled "Étude de Produit" [product description], which explains the product, that the Worker has to review in order to promote the product. Tab I, Exhibit I-1, contains a document entitled "Directives pour le personnel de sondage" [survey staff instructions]. According to the Worker, she never negotiated its content with the Appellant, as the Appellant claims. [14] The Worker testified that she had not negotiated her wage, which was set at $8 to $12 an hour, depending on the client (contract). She stated at the hearing that on one occasion, she received $10 from the Appellant, instead of the agreed $12, because she had not finished. She confirmed that she had the right to accept or refuse contracts. In reference to tab I of Exhibit I-1, the Worker stated that the schedule, length of breaks, instructions, etc. were determined by the Appellant and were non-negotiable. [15] The Worker stated during the hearing that it is possible that she was told she would be a self-employed worker. [16] The Act defines the concept of insurable employment. In that regard, I now reproduce paragraph 5(1)(a) of the Act: INSURABLE EMPLOYMENT 5. (1) Subject to subsection (2), insurable employment is (a) employment in Canada by one or more employers, under any express or implied contract of service or apprenticeship, written or oral, whether the earnings of the employed person are received from the employer or some other person and whether the earnings are calculated by time or by the piece, or partly by time and partly by the piece, or otherwise; However, application of the Act in specific cases is subject to case law, which has defined the criteria. These were decided in Wiebe Door Services Ltd. v. Canada(Minister of National Revenue - M.N.R.), [1986] 3 F.C. 553: Case law has established a series of tests to determine whether a contract is one of service or for the provision of services. While not exhaustive the following are four tests most commonly referred to: (a) The degree or absence of control, exercised by the alleged employer. (b) Ownership of tools. (c) Chance of profit and risks of loss. (d) Integration of the alleged employee's work into the alleged employer's business. [17] In Charbonneau v. Canada (Minister of National Revenue - M.N.R.), [1996] F.C.J. No. 1337, the Federal Court of Appeal, having reviewed Wiebe Door, supra, specified the scope of these criteria and explained their use in the following passage: The tests laid down by this Court in Wiebe Door Services Ltd. v. M.N.R. - on the one hand, the degree of control, the ownership of the tools of work, the chance of profit and risk of loss, and on the other, integration - are not the ingredients of a magic formula. They are guidelines which it will generally be useful to consider, but not to the point of jeopardizing the ultimate objective of the exercise, which is to determine the overall relationship between the parties. The issue is always, once it has been determined that there is a genuine contract, whether there is a relationship of subordination between the parties such that there is a contract of employment [...] or, whether there is not, rather, such a degree of autonomy that there is a contract of enterprise or for services [...]. In other words, we must not pay so much attention to the trees that we lose sight of the forest - a particularly apt image in this case. [...] Control [18] The evidence shows that the Worker was supervised. Furthermore, the Appellant found a replacement for her, as needed. The work schedule was determined by the Appellant in terms of the dates, times, and locations of work. The document prepared by the Appellant, "Politiques maison Somexpo Inc." [in-house policies, Somexpo Inc.] (Exhibit I-1, tab E), reproduced below, clearly defines the actual relationship between the parties. [TRANSLATION] IN-HOUSE POLICIES SOMEXPO INC. CALL BACK: Mandates are awarded on a first come, first served basis. We allow 24 hours for call backs, after which we will no longer consider your candidacy for the mandate, unless otherwise specified. TRAINING: Basic training is required per block, in addition to a briefing per client mandate. Training is never paid, unless otherwise specified. LATENESS: Any lateness must be reported by phone and included in the sales or activity report. Lateness demonstrates a lack of professionalism and is very poorly regarded. PLEASE ARRIVE EARLY. ABSENCE: Notify us as soon as possible so that we can attempt to find a replacement. All absences must be justified by a valid reason. COMPETITION: Although you are permitted to work on contract for another employer, Somexpo does not authorize you to work for a competitor in sales and research. You are also prohibited from directly or indirectly soliciting Somexpo clients for employability reasons without prior authorization. FEES: Fees are payable fifteen business days after the end of the mandate. Rates vary depending on mandates and blocks. SALES OR ACTIVITY REPORTS: Reports must be duly completed and signed at the end of each day or mandate, depending on the specifics of each block. If you do not have a sales or activity report, contact us immediately (838-7240). SUBMISSION: exhibition = daily, to supervisor survey = day after mandate, by special mail (provided) or directly to office perfume = day after mandate, by fax (838-7290) or regular mail research = next day, to our offices The time spent completing and submitting the reports is not part of the time included in the mandate and recognized by the client but remains an integral part of your mandate (unless otherwise specified). TO BE INCLUDED IN REPORT: name, date, mandate, hours worked, lateness, breaks, meal times, and any other details, irregularities, comments, or remarks. ANY DELAY IN SENDING US THE REPORTS will delay payment of your fees by an additional 3 weeks. CODE OF CONDUCT: Compliance with dress code - Meticulous appearance - Well spoken - Team spirit - Diplomacy - Courtesy - Flexibility - Dynamism - Positive Attitude - Professionalism - Punctuality - Attendance - Sense of responsibility - Pride in achievement OUR MOTTO: WHEN THE CLIENT IS HAPPY, EVERYBODY WINS! WELCOME TO SOMEXPO INC. [19] Upon reading this excerpt, one would be hard-pressed to imagine that an independent contractor would agree to work under such conditions, i.e., training requirements, notification of lateness, requirement to arrive early, not permitted to work for a competitor, reports, code of conduct, including a dress code, physical appearance, punctuality, attendance, courtesy, etc. [20] The questionnaires used by the workers were prepared by the Appellant and had to be followed to the letter. [21] The facts in this case, analyzed in view of this criterion, support the concept of insurable employment, beyond any doubt. Ownership of tools [22] Other than her vehicle, the Worker used the tools provided by the Appellant, including the work location, facilities, walkie-talkie (occasionally), pencils, etc. The Worker did not provide any tools and did not incur any expenses for the Appellant. [23] Based on this criterion, the evidence also shows that the Worker was not working in her own business. Chance of profit and risk of loss [24] It was determined that the Worker was paid a commission one time only. She did not incur any risk in providing services for the Appellant and at no time did she invest any money in the Appellant's business. Integration [25] In terms of who owns the business for which the Worker is working, the indisputable conclusion is that it is the Appellant's business. Therefore, the work done by the Worker was fully integrated into the Appellant's business. [26] First Choice Communications Inc. v. Canada(Minister of National Revenue - M.N.R.), [2003] T.C.J. No. 618, examined a situation very similar to the case at hand: ...Communications hired Adeoye for $10 per hour to conduct telephone surveys for a client. Adeoye signed an agreement whereby she would work as an independent contractor and submit invoices. She was provided with space and a telephone. She was given a telephone script and a list of numbers to call. She had to make a minimum number of calls each day. There were bonuses available for superior performance. Adeoye was only hired to work for a few weeks. Appeals dismissed. ...Exhibit A-1 - in which both parties had agreed she would provide her services on the basis she was an independent contractor. The hourly rate was $10 ...each worker was expected to complete 300 calls per working day, ...The client - CHQM - provided Communications with a script for workers to follow when making a call but they were not supervised or instructed otherwise how to carry out their tasks. ...No workers were required to incur any work-related expenses. ...At the outset, applicants were informed the work would not last more than three weeks. ...Via the Internet, she became aware of the appellant's advertisement in which interested parties were invited to telephone a certain number. ...During the day, the workers received two 15-minute breaks and one 30-minute break - when announced by Chantal - who also recorded the time of Adeoye's arrival and departure and the number of hours worked. ... Exhibit R-3 - printed on Communications' letterhead, setting out the code of conduct to be observed by workers. In said sheet, Adeoye pointed to a section dealing with dress codes - including a description of what constituted proper and/or inappropriate business wear ... [27] In view of this situation, Rowe D.J. of this Court deemed that the Worker's employment was insurable. [28] After outlining his reasons, Rowe D.J., supra, referred to this relevant excerpt from Minister of National Revenue v. Emily Standing, [1992] F.C.J. No. 890: ...There is no foundation in the case law for the proposition that such a relationship may exist merely because the parties choose to describe it to be so regardless of the surrounding circumstances when weighed in the light of the Wiebe Door test ... [29] Another similar situation was reported in Crop Inc. v. Canada(Minister of National Revenue - M.N.R.), [2002] T.C.J. No. 333: [...] The appellant's chief clients are government agencies, banks and telecommunications companies. [...] The appellant asks its surveyors to conduct surveys between 1:00 p.m. and 9:00 p.m. from Monday to Friday, between 9:00 a.m. and 5:00 p.m. on Saturday and between 12:30 p.m. and 5:00 p.m. on Sunday. [...] The worker's job could be summarized as follows: she would leave a questionnaire at the doors determined by the appellant together with her telephone number and that of the appellant; she would call back after a week and, when the questionnaire had been completed, she would retrieve it and mail it to the appellant by express mail or deliver it if the deadline so required. [...] The worker had to return all of the completed questionnaires to the appellant; one sheet indicated the hours she had worked and another sheet showed how many kilometres she had driven in the course of her work. [...] The worker had to perform the work given to her by the appellant by herself; she had an identification card identifying her with the appellant. [...] The worker was compensated at $10.50/hour; [...] [30] In this case, as in First Choice Communications Inc., supra, Watson D.J. of this Court rendered a decision recognizing the Worker's insurable employment. [31] Tardif J. of this Court reached the same conclusion in another similar case, Martin v. Canada(Minister of National Revenue- M.N.R.), [1999] T.C.J. No. 224: [...] During the period in issue, the appellant was employed by the payer to promote the credit card issued by The Bay. The appellant supplied only a pencil and "liquid paper", while the payer supplied the forms to be completed by the customers and the store supplied a work table and bonus gifts. [...] Following a brief training period, the solicitors were scheduled and placed in various stores to begin solicitation efforts with a view to having credit cards issued for the store where they worked. [...] [...] We are not dealing here with self-employed workers or independent contractors, in particular for the following reasons: - the payer or its representative directed the soliciting and decided in which store it was to be done; - a work schedule setting the number of days and number of hours had to be met; - the solicitors, including the appellant, had to comply with a code of conduct with regard to the persons solicited; - the quality of the work done was reviewed daily and subject to remarks and comments which the solicitors had to take into account or risk losing their jobs. In performing his work, the appellant had to dress well and use appropriate language. [...] The solicitors or credits hosts supplied none of what they needed to perform the work. They could of course increase their income through dynamism and enthusiasm in doing their work, but incurred no loss if their performance was disappointing. They did not operate their own businesses, but were an essential component of the business which paid them solely on a commission basis. [32] The Appellant had the onus of proving, on a balance of evidence, that the Minister's presumptions were false. It did not do so. [33] After analyzing the evidence in light of the legislation and case law, specifically the above-cited cases from this Court, this Court must conclude, as did judges Tardif, Watson, and Rowe, in identical situations, that the Worker, during the period in question, held insurable employment and that her insurable hours total 11,181. [34] Consequently, the appeal is dismissed and the decision of the Minister is confirmed. Signed at Grand-Barachois, New Brunswick, this 21st day of December 2004. "S. Savoie" Savoie D.J. Translation certified true on this 22nd day of March 2005. Colette Dupuis-Beaulne, Translator CITATION: 2004TCC819 COURT FILE No.: 2003-230(EI) STYLE OF CAUSE: Somexpo Inc. and M.N.R. PLACE OF HEARING: Montréal, Quebec DATE OF HEARING: November 26, 2004 REASONS FOR JUDGMENT BY: The Honourable Deputy Judge S.J. Savoie DATE OF JUDGMENT: December 21, 2004 APPEARANCES: For the Appellant: Claudine Boulanger, agent For the Respondent: Antonia Paraherakis COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada