Pavlin v. M.N.R.

Pavlin v. M.N.R. Court (s) Database Tax Court of Canada Judgments Date 2005-10-27 Neutral citation 2005 TCC 692 File numbers 2005-444(EI) Judges and Taxing Officers William E. MacLatchy Subjects Canada Pension Plan Decision Content Docket: 2005-444(EI) BETWEEN: YURI PAVLIN, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. ____________________________________________________________________ Appeal heard on common evidence with the appeal of Yuri Pavlin (2005-445(CPP)) on October 6, 2005 at Toronto, Ontario Before: The Honourable W.E. MacLatchy, Deputy Judge Appearances: For the Appellant: The Appellant himself Counsel for the Respondent: P. Michael Appavoo ____________________________________________________________________ JUDGMENT The appeal is dismissed and the decision of the Minister is confirmed in accordance with the attached Reasons for Judgment. Signed at Toronto, Ontario, this 27th day of October 2005. "W.E. MacLatchy" MacLatchy, D.J. Citation: 2005TCC692 Date: 20051027 Dockets: 2005-444(EI) 2005-445(CPP) BETWEEN: YURI PAVLIN, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. REASONS FOR JUDGMENT MacLatchy, D.J. [1] These appeals were heard on common evidence on October 6, 2005 at Toronto, Ontario. [2] The Appellant was an apprentice tool and die maker engaged by 816580 Ontario Inc. operating as Precision Tool & Die, hereafter referred to as the "Payor". [3] An internal request for a ruling was received to determine whether the Appellant was employed under a contract of service, while engaged by the Payor, for the period from January 1, 1999 to December 31, 2000, within the meaning of the Employment Insurance Act (the "Act") and the Canada Pension Plan (the "Plan"). The Rulings Officer, from the Toronto West Tax Services Office, ruled that the Appellant was employed under a contract of service and therefore the Appellant's employment was insurable and pensionable. [4] The Appellant appealed the ruling to the Respondent. By letter dated October 19, 2004, the Respondent informed the Appellant that it had been determined that his engagement with the Payor, during the period in question, was insurable and pensionable employment for the reason that the Appellant was employed pursuant to a contract of service. [5] The Appellant was forthright in giving his testimony and admitted that most of the assumptions relied on by the Respondent as lettered in paragraph 6 of the Replies to the Notices of Appeal were true and correct except in some minor areas. The Appellant was an apprentice engaged by the Payor whose business was the design and manufacture of tool and die. As an apprentice he was routinely under supervision and was continuing to learn the trade. During the period in question the Appellant had completed the training needed to enable him to pass the licensing examination but time was not available to try the exam. The Appellant was paid $18 per hour as an apprentice while a licensed tool and die maker would earn about $30 per hour at that time. He worked at the Payor's shop or at a client of the Payor but under the Payors' control. His work was reviewed by the Payor and he was required to file invoices of his hours on a weekly or bi-weekly basis. He generally was at the plant of the Payor and accordingly used the expensive machines supplied by the Payor that were needed in order for him to perform his tasks. He worked for no one else during the period in dispute and carried no liability insurance nor did he operate any other business during that time. He did not argue, when asked for invoices indicating his working hours, because he implied that the business was cutthroat and if he was an annoyance he would be immediately terminated. [6] The question to be answered is whether the Appellant was engaged by the Payor in insurable and pensionable employment within the meaning of the EI Act and the Plan for the specified period and whether he was engaged pursuant to a contract of service or not. [7] The tests directed by the Federal Court of Appeal in Wiebe Door Services Ltd. v. M.N.R., 87 D.T.C. 5025 and as modified by the Supreme Court of Canada in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983 are helpful to attempt to determine the parties' relationship. [8] The Appellant was an apprentice and thus under supervision at all times even though he had proven skills in his field of endeavour. He worked at the plant of the Payor on the Payor's work and paid hourly by the Payor. He had to perform his services personally and could not hire his own replacement. He worked the hours the Payor directed and he worked solely for the Payor. He was subject to discipline by the Payor for slow or improper work and was subject to dismissal at the whim of the Payor. The test of control falls in favour of an employer/employee relationship. [9] The tools used by the Appellant were mostly those provided by the Payor. The Appellant had his own small tools but required those of the Payor to properly perform his work, all of which were large and expensive. The test of tools indicates an employer/employee relationship. [10] There is no question that the Appellant worked at a preset hourly rate of pay set by the Payor. He could not profit in the venture or in any business of his own as he was still an apprentice. He did not suffer any loss other than if he did not measure up he could lose his job. This test also favours an employment arrangement. [11] The Appellant was a part of the business of the Payor and was not in business for himself. He was hired only on an hourly basis by the Payor and was working only for the Payor. [12] The Appellant believed he was an employee of the Payor and acted as an employee and not as an entrepreneur. [13] The Court finds that based on the evidence produced at trial and on a close examination of all of the aspects of the relationship between the Appellant and the Payor the Appellant was an employee of the Payor during the subject period having been engaged pursuant to a contract of service and accordingly the employment of the Appellant was both insurable and pensionable under the EI Act and the Plan. [14] The appeals are dismissed. Signed at Toronto, Ontario, this 27th day of October 2005. "W.E. MacLatchy" MacLatchy, D.J. CITATION: 2005TCC692 COURT FILE NO.: 2005-444(EI) and 2005-445(CPP) STYLE OF CAUSE: Yuri Pavlin and M.N.R. PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: October 6, 2005 REASONS FOR JUDGEMENT BY: The Honourable W.E. MacLatchy, Deputy Judge DATE OF JUDGMENT: October 27, 2005 APPEARANCES: For the Appellant: The Appellant himself Counsel for the Respondent: P. Michael Appavoo COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Ontario