Ethier c. M.R.N.

Ethier c. M.R.N. Court (s) Database Tax Court of Canada Judgments Date 2003-03-19 Neutral citation 2003 TCC 143 File numbers 2001-4604(EI) Judges and Taxing Officers Jerome F. Somers Subjects Employment Insurance Act Decision Content Docket: 2001-4604(EI) BETWEEN: SYLVAIN ÉTHIER, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] ____________________________________________________________________ Appeal heard on February 24, 2003, at Montreal, Quebec Before: The Honourable Deputy Judge J. F. Somers Appearances: For the Appellant: The Appellant himself For the Respondent: Antonia Paraherakes (Student-at-Law) ____________________________________________________________________ JUDGMENT The appeal is dismissed and the Minister's decision is upheld in accordance with the attached Reasons for Judgment. Signed at Ottawa, Canada, this 19th day of March 2003. "J. F. Somers" D.J.T.C.C. Translation certified true on this 15th day of March 2004. Shulamit Day-Savage, Translator Citation: 2003TCC143 Date: 20030319 Docket: 2001-4604(EI) BETWEEN: SYLVAIN ÉTHIER, Appellant, and MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] REASONS FOR JUDGMENT Somers, D.J.T.C.C. [1] This appeal was heard at Montreal, Quebec, on February 24, 2003. [2] The Appellant appealed from the decision of the Minister of National Revenue (the "Minister") that the employment with the Payor, Observez L'Essentiel Inc., during the period at issue, from September 5 to December 11, 1999, was insurable because there was an employer-employee relationship between the Payor and the Appellant. [3] Subsection 5(1) of the Employment Insurance Act (the Act) reads, in part, as follows: 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; . . . [4] The burden of proof is on the Appellant, who must establish on the balance of probabilities that the Minister's decision is unfounded in fact and in law. Each case stands on its own merits. [5] In rendering his decision, the Minister relied on the following presumptions of fact outlined in paragraph 25 of the Reply to the Notice of Appeal, which the Appellant admitted, denied or said that he had no knowledge of: [Translation] (a) the Payor was incorporated in October 1998; (no knowledge) (b) during the period at issue, the Payor's shareholders were Ms. Gaëtane Vermette and Mr. Walter Lamothe, each with 50% of the shares; (no knowledge) (c) the Payor was operating a business that specialized in training private investigators; (admitted) (d) during 1999, the Payor's billings were approximately $25,000; (no knowledge) (e) the Appellant is a Sûreté du Québec police officer; (admitted) (f) the worker's job was to give training courses to the Payor's clients on how to write investigation reports and take notes on crisis intervention and radio communications; (denied) (g) the Payor offered the Appellant a course to teach, specifying which days, and the Appellant could accept or refuse depending upon his availability; (denied) (h) if the Appellant refused, the Payor had to find someone else or change the course schedule as a function of the Appellant's availability; (denied) (i) for his teaching responsibilities, the worker received payment of $20 per hour; (admitted) (j) during the period, the worker also assisted in the revision of certain course modules offered by the Payor; (denied) (k) for this duty, the worker agreed upon a lump-sum amount with the Payor; (denied) (l) the courses were given on the Payor's premises, but the course preparation and corrections were conducted at the Appellant's home; (admitted) (m) the Payor supplied the teaching materials and photocopies; (denied) (n) the Appellant took attendance and informed the Payor; (admitted) (o) the Appellant billed the Payor for the hours worked; (admitted) (p) the Appellant was paid by cheque. (admitted) [6] The Payor was incorporated in October 1998 and the shareholders were Gaëtane Vermette and Walter Lamothe. The Payor operated a business that specialized in training private investigators. The Payor's billings for 1999 were approximately $25,000. [7] During the period at issue, the Payor retained the services of the Appellant to give training courses to his clients; the Appellant is a Sûreté du Québec police officer. [8] The Appellant testified that his job was to give training courses on how to write investigation reports and take notes on crisis intervention and on radio communications. The Appellant stated that a situation never arose in which it was necessary for the Payor to find a replacement or change the course schedule as a function of his availability. [9] In his notice of appeal, in paragraph (f), the Appellant stated: [Translation] If I could not give the course, it was postponed or it was given to another self-employed worker or another company. [10] The Appellant received remuneration of $20 per hour to teach a course. At the time at issue, the Appellant was responsible for preparing the courses without pay. According to the Appellant, the module was prepared by him and was not sold to the Payor. The module did not belong to the Payor and no one else but the Appellant could use it. [11] The Payor decided what courses to give to his clients and he provided the premises. However, course preparation and correction of work was done at the Appellant's residence and he was not paid for this part of the work. [12] The Appellant stated that he used the Payor's equipment and premises; when teaching his courses, the Appellant took student attendance and informed the Payor. [13] Appellant was required to take student attendance and inform the Payor. The students gave the Appellant performance evaluations. Mr. Schubert affirmed that the Payor paid for the course modules in lump sums. [14] Case law consistently recognizes four basic elements that distinguish a contract of service from a contract for services: 1) the degree and absence of control exercised by the employer; 2) ownership of the work tools; 3) chance of profit or risk of loss; and 4) the degree of integration of the employee's work into the employer's business. [15] In order to distinguish a contract of service from a contract for services, all the various elements of the relationship between the parties must be examined. Control [16] In Groupe Desmarais Pinsonneault & Avard Inc. v. Canada (Minister of National Revenue - M.N.R.), [2002] F.C.J. No. 572, Noël J. of the Federal Court of Appeal said the following: . . . the workers did their daily duties without supervision as equal partners, each specializing in [their] recognized fields. . . The workers had no fixed schedule but met informally when necessary . . . Each performed his daily duties independently. . . . Each of the four workers received a fixed annual salary. . . The question the trial judge should have asked was whether the company had the power to control the way the workers did their work, not whether the company actually exercised such control. The fact that the company did not exercise the control or that the workers did not feel subject to it in doing their work did not have the effect of removing, reducing or limiting the power the company had to intervene through its board of directors. We would add that the trial judge could not conclude there was no relationship of subordination between the defendant and the workers simply because they performed their daily duties independently and without supervision. The control exercised by a company over its senior employees is obviously less than that exercised over its subordinate employees. [17] In Hennick v. Canada (Minister of National Revenue - M.N.R.), [1995] F.C.J. No. 294, Desjardins J. of the Federal Court of Appeal expressed himself in the following terms: While it is true that the element of control is somewhat more difficult to assess in cases of professionals . . . her contract with the intervener did not specify how she was to teach, there were parameters she had to meet with regard to time which clearly constituted control. [18] In this case, the Payor determined the schedule of courses given by the Appellant as a function of his availability. [19] The Appellant had to fill out a student attendance sheet and the students provided assessments of his performance, which he submitted to the Payor. The students could lodge complaints against the Appellant. [20] According to the evidence, the Payor had control over the Appellant's work. Ownership of work tools [21] The premises and the main work equipment were the property of the Payor. Chance of profit or risk of loss [22] In Hennick, supra, Desjardins J., of the Federal Court of Appeal said: While it is true that the respondent's earnings would vary in relation to her hours of work, ultimately, however, profits or losses of the undertaking, as a whole, were borne by the institution itself. Integration [23] It was the Payor's business. The Appellant gave courses to the Payor's clients. The Appellant worked during the period at issue for the Payor's benefit. In Hennick, supra, Desjardins J. said: It is obvious that the status of a person cannot depend on her character as an individual. The test to be followed is an objective one which is determined on the facts of each case by weighing the relevant factors. On the whole, we are inclined to think that the work done by the respondent formed an integral part of the curriculum of the Conservatory. The business of teaching music was ultimately that of the intervener and not that of the respondent; she was but one of the instructors who contributed to the reputation of the institution. [24] On the balance of probabilities, the Appellant held insurable employment within the meaning of the Act during the period at issue since he was bound to the Payor by a contract of service within the meaning of paragraph 5(1)(a). [25] As a result, the appeal is dismissed and the decision of the Minister is upheld. Signed at Ottawa, Canada, this 19th day of March 2003. "J. F. Somers" D.J.T.C.C. Translation certified true on this 15th day of March 2004. Shulamit Day-Savage, Translator