Date: 20010726
Dockets: 2001-64-EI,
2001-65-CPP
BETWEEN:
HEATH STEELE MINES TRANSITION ADJUSTMENT COMMITTEE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor Judgment
Hamlyn, J.T.C.C.
[1] The appeal relates to whether Kelly Sherrard [hereinafter "Ms. Sherrard"] was employed by Heath Steele Mines Transition Adjustment Committee [hereinafter the "Appellant"] in an insurable and pensionable manner for the period October 19, 1998 to January 17, 2000.
[2] The Appellant is an organization funded equally by the Province of New Brunswick and Noranda Mines, Heath Steele Division [hereinafter the "Mines"]. The existence of this organization was to provide the Mines' employees with assistance in finding other work, retraining, and writing resumes, prior to and following the closing of the Mines.
[3] It is submitted by the Appellant, that Ms. Sherrard was an independent contractor who provided services to the Appellant. Ms. Sherrard worked independently with virtually no supervision by the Appellant and a contract outlining such a relationship existed between the parties.
[4] It is submitted and assumed by the Minister that the Appellant was directed by a committee of twelve members. Prior to the period in question, Ms. Sherrard was one of the members of the said committee, acting as an employee of Career Edge, an internship program for new graduates. As an employee of Career Edge, Ms. Sherrard was placed on the Mines' Human Resources section and some of her duties were similar to the duties performed for the Appellant during the period in question. At the end of her internship with Career Edge, Ms. Sherrard was hired as Resource Co-ordinator at the Appellant's Resource Centre. Ms. Sherrard's duties consisted of researching the Internet for job opportunities, publishing a news letter every two months, informing the Mines' employees of training programs and helping them with their job search and their resumes. Ms. Sherrard was required to attend committee meetings and to report to the committee chairman on a regular basis. Ms. Sherrard was paid $12.00 an hour for 35 hours each week and received holiday pay, sick leave and paid vacation. Ms. Sherrard worked on premises supplied by the Appellant and was provided with all the equipment and supplies that she required to carry out her duties. The Appellant controlled Ms. Sherrard's hours of work and had the right to control her activities. Hence, it was submitted that there was a contract of service between Ms. Sherrard and the Appellant.
[5] In response to the Minister's assumptions the Appellant's evidence was Ms. Sherrard was never an employee of Heath Steele Mines Transition Adjustment Committee nor was she a voting member of the committee[1]. That the services she performed for the Appellant were performed independently without supervision and without instruction and that she scheduled, controlled and managed her work. If she required a replacement she engaged and paid her own replacement subject to the competency approval of the Appellant.
[6] The question of compensation according to the Appellant was set at $840.00 every two weeks calculated on the basis of a 35-hour week at $12.00/hour. However, the working hours were not rigid and were changed to suit the Appellant, their client and Ms. Sherrard's needs.
[7] According to the Appellant's evidence, the instructions the Appellant received came from the Chairman of the committee, Mr. DesBrisay, and not the Committee.
[8] The contractual relationship between the parties was defined by two relatively identical documents titled Memorandum of Agreement (exhibits A-1 and R-2). The documents identify the relationship of Ms. Sherrard to the Appellant as an independent contractor. The documents describe the services that Ms. Sherrard provided as that of a coordination service. Ms. Sherrard was free to assume other contract work that did not interfere with the work of the committee.
[9] During the contractual negotiations the Appellant's chief witness, Mr. DesBrisay, stated that Ms. Sherrard was originally offered employment for the provision of her services to the Appellant as an employee of the United Steelworkers of America [hereinafter "U.S. of A."]. The evidence went further to say she refused this offer because she preferred to be paid as an independent contractor. The next witness was Kelly Enright, the financial secretary of the U.S. of A., who stated that Mr. DesBrisay was authorized to make the offer on behalf of the union.
[10] Ms. Sherrard in evidence denied that any such offer had been made and that if she had been offered employment with the union she would have taken it. The Memorandum of Agreement does not appear to have been executed by both parties. However, Ms. Sherrard confirmed receipt of the agreement and confirmed the acceptance to perform the work and her acceptance of the rate of pay.
ISSUES
I. Was Ms. Sherrard engaged in "insurable employment" within the meaning of paragraph 5(1)(a) of the Employment Insurance Act during the period in question?
II. Was Ms. Sherrard engaged in "pensionable employment" within the meaning of subsection 6(1) of the Canada Pension Plan Act during the period in question?
STATUTORY FRAMEWORK
[11] The relevant provisions of the Employment Insurance Act[2] are:
Types of 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;
[...]
[12] The relevant sections of the Canadian Pension Plan Act[3] are;
2(1)"employee"
"employee" includes an officer;
2(1) "employer"
"employer" means a person liable to pay salary, wages or other remuneration for services performed in employment, and in relation to an officer includes the person from whom the officer receives his remuneration;
2(1) "employment"
"employment" means the performance of services under an express or implied contract of service or apprenticeship, and includes the tenure of an office;
2(1) "excepted employment"
"excepted employment" means employment specified in subsection 6(2);
Pensionable employment
6. (1) Pensionable employment is
(a) employment in Canada that is not excepted employment;
ANALYSIS
[13] The distinction between an employee and an independent contractor is a fine line that is often difficult to distinguish. Consequently, jurisprudence has developed a number of tests to aid in this determination. In Wiebe Door Services Ltd. v. M.N.R.,[4] MacGuigan, J. reviewed the various tests applied by the courts and affirmed the comments of Cooke, J. in Market Investigations Ltd. v. Minister of Social Security, in which he stated:
The observations of Lord Wright, of Denning L.J., and of the judges of the Supreme Court in the U.S.A. suggest that the fundamental test to be applied is this: "Is the person who has engaged himself to perform these services performing them as a person in business on his own account?" If the answer to that question is "yes," then the contract is a contract for services. If the answer is "no" then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors, which may be of importance, are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk be taken, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task. The application of the general test may be easier in a case where the person who engages himself to perform the services does so in the course of an already established business of his own; but this factor is not decisive, and a person who engages himself to perform services for another may well be an independent contractor even though he has not entered into the contract in the course of an existing business carried on by him.[5]
[14] Hence, four primary tests must be examined by the Court when determining whether an individual is engaged as an employee or as an independent contractor: the degree of control and supervision, the risk of profits and losses, the ownership of tools, and the integration of the individual into the Appellant's business.
[15] It should be noted that no single test is determinative of the issue as they must be examined together in light of all the circumstances. This point was noted in Moose Jaw Kinsmen Flying Fins Inc. v. M.N.R.[6] in which the Federal Court of Appeal stated at page 6100 that:
[...] we view the tests as being useful subordinates in weighing all of the facts relating to the operations of the Applicant. That is now the preferable and proper approach for the very good reason that in a given case, and this may well be one of them, one or more of the tests can have little or no applicability. To formulate a decision then, the overall evidence must be considered taking into account those of the tests which may be applicable and giving to all the evidence the weight which the circumstances may dictate.
CONTROL AND SUPERVISION
[16] A classic explanation of the control test was seen in Wiebe Door, where MacGuigan J. stated at page 5027:
The traditional common-law criterion of the employment relationship has been the control test, as set down by Baron Bramwell in R. v. Walker (1858), 27 L.J.M.C. 207, 208:
It seems to me that the difference between the relations of master and servant and of principal and agent is this: A principal has the right to direct what the agent has to do; but a master has not only that right, but also the right to say how it is to be done.
[17] The Minister submitted that Ms. Sherrard was subject to a degree of control and supervision. Ms. Sherrard was required to attend meetings and regularly report to the chairman of the committee that directed the organization.
[18] I conclude Ms. Sherrard was under the supervised control of the Appellant, that reporting to Mr. DesBrisay was continuous when needed and direction from Mr. DesBrisay was given if needed. Ms. Sherrard did perform her duties without constant monitoring but direction and communication was always available by way of telephone or E-mail.
[19] In terms of subordination, the Memorandum of Agreement reserved to the Appellant the right to terminate the agreement at any time without prior notice.
PROFIT AND LOSS
OWNERSHIP AND PROVISION OF TOOLS AND WORK LOCATION
INTEGRATION
[20] The question of risk of profit and loss, ownership of tools and integration are resolved from the evidence.
[21] Ms. Sherrard's workweek was a guaranteed payment of $420/week regardless of required work. She was not in a position of risk. However, if she needed a replacement she paid for the replacement.
[22] The Appellant provided the work location as well as all equipment and supplies necessary for Ms. Sherrard to perform her duties.
[23] It is also evident that the services provided by Ms. Sherrard were for the purposes and objectives of Heath Steele Mines Transition Adjustment Committee and that Ms. Sherrard's duties were an integral part of the organization as its whole purpose was to assist employees in finding other work, retraining, and writing resumes.
[24] All these factors lead to the conclusion that Ms. Sherrard was providing a contract of service to the Appellant.
CONCLUSION
[25] It is clear the intention of the Appellant was to engage Ms. Sherrard as an independent contractor. It is also clear that Ms. Sherrard knew this was the intention of the Appellant, however, did not accept the intention but in any event took the position.
[26] The analysis of the reviewed four primary tests and the weighing of all the factors leads to the conclusion that Ms. Sherrard, notwithstanding the Appellant's intention, was engaged in a contract of service. Kelly Sherrard was employed in insurable and pensionable employment while engaged by the Appellant for the period October 19, 1998 to January 17, 2000 within the meaning of the Employment Insurance Act and the Canada Pension Plan Act.
DECISION
[27] The appeal is dismissed.
Signed at Ottawa, Canada, this 26th day of July 2001.
"D. Hamlyn"
J.T.C.C.
COURT FILE NO.: 2001-64(EI)
STYLE OF CAUSE: Heath Steele Mines Transition Adjustment Committee and
The Minister of National Revenue
PLACE OF HEARING: Moncton, New Brunswick
DATE OF HEARING: July 19, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge D. Hamlyn
DATE OF JUDGMENT: July 26, 2001
APPEARANCES:
Agent for the Appellant: R.B. DesBrisay
Counsel for the Respondent: Simon Nicolas Crépin
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2001-65(CPP)
STYLE OF CAUSE: Heath Steele Mines Transition Adjustment Committee and
The Minister of National Revenue
PLACE OF HEARING: Moncton, New Brunswick
DATE OF HEARING: July 19, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge D. Hamlyn
DATE OF JUDGMENT: July 26, 2001
APPEARANCES:
Agent for the Appellant: R.B. DesBrisay
Counsel for the Respondent: Simon Nicolas Crépin
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-64(EI)
BETWEEN:
HEATH STEELE MINES TRANSITION ADJUSTMENT COMMITTEE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard together with the appeal of Heath Steele Mines Transition Adjustment Committee (2001-65(CPP)) on July 19, 2001, at Moncton, New Brunswick, by
the Honourable Judge D. Hamlyn
Appearances
Agent for the Appellant: R.B. DesBrisay
Counsel for the Respondent: Simon Nicolas Crépin
JUDGMENT
The appeal is dismissed and the decision of the Minister is confirmed.
Signed at Ottawa, Canada, this 26th day of July 2001.
|
"D. Hamlyn" |
J.T.C.C.
2001-65(CPP)
BETWEEN:
HEATH STEELE MINES TRANSITION ADJUSTMENT COMMITTEE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard together with the appeal of Heath Steele Mines Transition Adjustment Committee (2001-64(EI)) on July 19, 2001, at Moncton, New Brunswick, by
the Honourable Judge D. Hamlyn
Appearances
Agent for the Appellant: R.B. DesBrisay
Counsel for the Respondent: Simon Nicolas Crépin
JUDGMENT
The appeal is dismissed and the decision of the Minister is confirmed.
Signed at Ottawa, Canada, this 26th day of July 2001.
|
"D. Hamlyn" |
J.T.C.C.