Date: 20010607
Dockets: 2000-4444-EI, 2000-4445-CPP
BETWEEN:
DATACO UTILITY SERVICES LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor Judgment
Porter, D.J.T.C.C.
[1] These appeals were heard on common evidence by consent of the parties on the 22nd of February 2001 at Calgary, Alberta.
[2] By Notices of Assessment dated the 5th and 6th of April 2000, respectively, the Appellant was assessed for both employment insurance premiums and Canada Pension Plan contributions as follows:
Year Assessment Amount
1999 Employment Insurance Premiums $13,221.64
2000 Employment Insurance Premiums $ 200.30
1999 Canada Pension Plan contributions $13,347.72
2000 Canada Pension Plan contributions $ 239.74
These assessments were made with respect to the workers outlined in Schedule "A" to these Reasons.
[3] In May and June 2000, the Appellant appealed these Assessments to the Minister of National Revenue (the "Minister") who, by letter dated August 16, 2000, confirmed the assessments, subject to a small variation with respect to one worker relating to Canada Pension Plan contributions. The reasons for the variation have no relevance to this appeal. The reasons given by the Minister for his decision to confirm the assessments were as follows:
"It has otherwise been decided to confirm the balance of the assessment for the following reason: Although the workers were not employed under a contract of service and therefore not Dataco Utility Services Ltd.'s employees, they were employed in insurable and pensionable employment as they were placed in employment by Dataco Utility Services Ltd. to perform services for and under the direction and control of TransAlta Utilities and EPCOR and were remunerated by Dataco Utility Services Ltd. for the performance of those services."
The decision was issued pursuant to section 93 of the Employment Insurance Act (the "EI Act") and section 27 of the Canada Pension Plan (the "Plan") respectively, and is based on paragraph 5(1)(a) of the EI Act and paragraph 6(g) of the Employment Insurance Regulations (the "EI Regulations") and paragraph 6(1)(a) and section 12 of the Plan, and section 34 of the Canada Pension Plan Regulations (the "CPP Regulations").
[4] The Appellant has appealed to this Court from the decision of the Minister that the workers who, it is agreed by all parties, were independent contractors, were placed in employment by the Appellant, to perform services for and under the direction and control of TransAlta Utilities and EPCOR as a placement or employment agency and were thus, included in insurable and pensionable employment by virtue of paragraph 6(1)(a) of the EI Act, EI Regulations and section 34 of the CPP Regulations.
The Regulations
[5] It is to be noted that the wording in the two statutory schemes (EI and CPP), is somewhat different. One is therefore not necessarily inclusive of the other, although there is a certain commonality. The Regulations in question read as follows:
"6(g) Employment Insurance Regulations
...
6. Employment in any of the following employments, unless it is excluded from insurable employment by any provision of these Regulations, is included in insurable employment:
...
(g) employment of a person who is placed in that employment by a placement or employment agency to perform services for and under the direction and control of a client of the agency, where that person is remunerated by the agency for the performance of those services.
Section 34 Canada Pension Plan Regulations
34(1) Where any individual is placed by a placement or employment agency in employment with or for performance of services for a client of the agency and the terms or conditions on which the employment or services are performed and the remuneration thereof is paid constitute a contract of service or are analogous to a contract of service, the employment or performance of services is included in pensionable employment and the agency or the client, whichever pays the remuneration to the individual, shall, for the purposes of maintaining records and filing returns and paying, deducting and remitting contributions payable by and in respect of the individual under the Act and these Regulations, be deemed to be the employer of the individual.
(2) For the purposes of subsection (1), "placement or employment agency" includes any person or organization that is engaged in the business of placing individuals in employment or for performance of services or of securing employment for individuals for a fee, reward or other remuneration."
[6] It is to be noticed that "placement agency" or "employment agency" is defined to include certain situations in the CPP Regulations. That definition is not all inclusive. There is no definition of the term in the EI Regulations.
[7] Bonner, T.C.J. in the case of Computer Action Inc. v. M.N.R, [1990] T.C.J. No. 101, said that the term should be given its ordinary meaning and read in context:
"An organization engaged in matching requests for work with requests for workers"
[8] Tesky, T.C.J. in the case of Rod Turpin Consulting Ltd.(c.o.b. Tundra Site Services) v. M.N.R., [1997] T.C.J. No. 1052, said this:
"The Appellant argues that it is not a placement agency, but to look at it as a general contractor. This I cannot accept. General contractors usually by the terms of their contracts with clients, are responsible to the client to construct the project contracted to be constructed in a good and workmanlike manner. Here, in the only responsibility the Appellant had to Cominco was to provide qualified workers as specified by Cominco.
The Appellant was acting as a placement agency in respect of this worker. The Appellant was asked to provide a journeyman electrician, which it did. It paid the electrician and charged the wages to Cominco, together with a fee for services."
[9] In the case of Dyck v. Canada (Minister of National Revenue-M.N.R.) and Bigknife Oilfield Operating Ltd. [1999] T.C.J. No. 852, I held as follows:
"The position of the Minister is that Bigknife acted in this situation as a placement or employment agency. The EI Regulation in question was changed in 1997 and thus, previous case law is not particularly helpful. However, the logic of Teskey, J. in Rod Turpin Consulting Ltd. [...] seems as relevant today as it was then. Bigknife was not a general contractor. It was only responsible to supply qualified personnel. There was no individual fees for the different people who were engaged, but no doubt, that was all built into the overall contract. It places Dyck, to the extent that he needed it in providing his services under the direction and control of Fletcher. They had the right to control his work. In my view, EI Regulation 6(g) and CPP Regulation 34 do each apply in this situation."
[10] I am of the view that there is a fundamental principle to be grasped in these cases which really should simplify the question for the parties. It seems to me that the intention or the "pith and substance" of the Regulations is to bring into the basket of the two social schemes set up by Parliament, those workers whether they are employees under a contract of service or independent contractors under contracts for services, who simply contract with entity A for a fee (or other recompense), to be found or placed in work (employment) with or under the direction and control of a third entity B. Thus, these workers do not contract with entity A to do any work for entity A as part of the latter's business. Further, entity A does not contract with entity B to do any work for entity B other than to provide them with personnel for which they collect a fee or other remuneration.
[11] That situation seems to me, to be absolutely and mutually exclusive of any arrangement whereby a worker is engaged to perform services for entity A in the course of the latter's business, or where entity A has a contract with entity B to perform services for entity B. In such a situation, entity A is not providing or placing personnel, but carrying out its contractual obligation to provide those services to entity B.
[12] Thus, the first question to be asked is whether the worker is performing services for entity A as part of the business of the latter, albeit part of that business may be a contract for entity A to provide a service for entity B, or whether entity A is simply acquiring personnel as its very business with no contract to undertake anything further than to pass the worker on to entity B to undertake whatever the business of entity B might be. The simple question to ask is whether entity A is under any obligation to provide a service to entity B other than simply provide personnel. Is it obligated to perform in some other way than simply to make people available? If the answer is yes, it clearly has business of its own as does any general contractor on a building site and the worker is not covered by the Regulations under either statute. If however, the answer is no, that is, it is not obligated to carry out any service other than to provide personnel, then clearly the worker in such a situation is covered by the Regulations under both statutes.
[13] The question as I see it is not so much about who is the ultimate recipient of the work or services provided as this will cover every single possible subcontract situation, but rather who is under obligation to provide the service. If the entity alleged to be the placement agency is under an obligation to provide a service over and above the provision of personnel, it is not placing people, but rather performing that service and is not covered by the Regulations.
[14] I refer to the Federal Court of Appeal case of Vulcain Alarme Inc. v. The Minister of National Revenue, (1999) 249 N.R. 1 for an analogy, where the same principle is clearly set out in relation to whether a subcontractor becomes an employee in certain situations. Létourneau J.A. said this:
"A contractor who, for example, works on site on a subcontract does not serve his customers but those of the payer, that is the general contractor who has retained his services. The fact that Mr. Blouin had to report to the plaintiff's premises once a month to get his service sheets and so to learn the list of customers requiring service, and consequently the places where his services would be provided, does not make him an employee. A contractor performing work for a business has to know the places where services are required and their frequency just as an employee does under a contract of employment. Priority in performance of the work required of a worker is not the apanage of a contract of employment. Contractors or subcontractors are also often approached by various influential customers who force them to set priorities in providing their services or to comply with the customers' requirements."
[15] The simple facts that subcontractors contracting with entity A are required to comply with the requirements of entity B does not per se place those persons under the direction and control of entity B any more than it makes entity B a customer of those persons.
The Facts
[16] The Minister in arriving at his decision, was said in the Reply to the Notice of Appeal signed on his behalf, to have admitted the following facts in the Notice of Appeal:
At no time were the workers under the indirect control of the Appellant.
With respect to the Appellant's assertion that the workers provided the resources necessary to complete the terms of their engagement:
(a) TransAlta Utilities provided the workers with the computer.
(b) TransAlta Utilities workers provided their own vehicle, clothing and cell phones.
(c) EPCOR workers provided a stool, screwdrivers, pliers and a vehicle.
[17] The Minister, in arriving at his decision, was further said in the Reply to the Notice of Appeal to have relied upon the following assumptions of fact:
"(a) the facts as admitted above;
(b) the Appellant was not related to the Workers;
(c) the Appellant has a contract with TransAlta Utilities to read electrical meters in the Wainwright service area;
(d) the Appellant has a contract with EPCOR to provide disconnect, reconnect, meter exchanges and service orders;
(e) the Appellant's business is not seasonal;
(f) the workers who provided services for TransAlta Utilities (the "TransAlta Workers") are:
Bonnie Adamson Virginia L. Judd
Raymond Bischke Lena Klause
Ralph Broderson Robert W. Landry
Howard Cardinal Ralph J. Leckie
Karen Casswell Leanne Lowen
Ken A. Coreman Linda Mindus
Mark Dool Kay Packer
John Doyle Dorothy Radford
Mardele Fitger Brandon Reese
Karolyn Frank-Jensen Brenda Scherger
Lorne A.A. Gibson Colyn Sejevick
Ian Grant Jason Smith
Dennis Harris Shawn Schweighardt
Gerald Lawrence Hefferman Raymond Tipler
Stuart Lynn Hurst Ken Tober
Leath Jonston Ken Van Rootselaar
(g) the workers who provided services for EPCOR (the "EPCOR Workers") are:
Richard Ferbey
Randall Galarneau
Regan Shields
(h) TransAlta Utilities:
(i) determined the routes that were to be read; and
(ii) scheduled the workers;
(i) EPCOR:
(i) determined what services were to be provided each day; and
(ii) provided daily instruction;
(j) the TransAlta Workers read meters in both rural and urban areas for TransAlta Utilities using electronic reading devices;
(k) Ken Coreman also provides services to TransAlta Utilities as a supervisor;
(l) Ken Coreman's duties include overseeing six workers, ensuring work is completed, contacting workers for routes, training new workers, hiring new workers and discussing problems with workers;
(m) the EPCOR Workers provide reconnects, disconnects, service orders and meter exchanges fore EPCOR;
(n) Randall Galarneau also provides services to EPCOR as a supervisor;
(o) Randall Galarneau provides supervisory services and oversees the two other EPCOR Workers;
(p) the TransAlta Workers use the meter readers to download schedule information from the TransAlta Utilities' computer system in the TransAlta Utilities' office;
(q) the TransAlta Workers are required to return the meter readers to the TransAlta Utilities' office at the end of each day;
(r) the TransAlta Workers' contract (the "TransAlta Contract) stipulates:
(i) the workers will provide meter reading services or other related services as defined by the Appellant from time to time as identified in Schedule A of the TransAlta Contract;
(ii) Schedule A of the TransAlta Contract indicates the workers will:
a) read meters in the service territory and surrounding area;
b) work closely with team members to meet TransAlta Utilities' service expectations (1 day ahead, on cycle day or 2 cycles behind);
c) work to achieve less than 2% can't read total and must obtain reading within agreed upon operating windows of TransAlta Utilities;
d) service orders are to be completed within 3 working days in order to meet TransAlta Utilities' expectations and operating window for completion; and
e) use TransAlta Utilities' signs and carry identification at all times;
(iii) the workers are paid on a piece work basis by the Appellant;
(iv) service rate adjustments are reviewed by the Appellant's operating manager and changes will be forwarded to the workers in writing with 10 working days notice;
(v) the workers are paid bi-weekly by direct deposit;
(vi) the workers will provide their own transportation;
(vii) the workers are responsible for the costs associated with their vehicle;
(viii) the Appellant will provide insurance and Worker's Compensation coverage; and
(ix) ten working days is required by either party to cancel the contract;
(s) the EPCOR Workers provide nightly reports at the end of each day at the EPCOR office;
(t) the EPCOR Workers' contract indicates:
(i) the workers will provide lock up services as defined by the Appellant from time to time;
(ii) the workers are paid on a piece work basis at predefined rates;
(iii) the workers will provide their own transportation;
(iv) the workers are responsible for the costs associated with their vehicle;
(v) the workers will not hold the Appellant liable for any claims arising in connection with the services; and
(vi) ten working days is required by either party to cancel the contract;
(u) Ken Coreman receives and additional $150 per week for his duties as a supervisor;
(v) the predefined rates for the EPCOR Workers are $5.74 per meter for disconnects and reconnects and $10.74 for service orders;
(w) Randall Galarneau's predetermined rates are $2.87 and $5.37, respectively;
(x) Randall Galarneau receives an additional $600.00 per week for his role as a supervisor;
(y) the EPCOR Workers receive an additional $200.00 for evening shifts when required to work this shift for EPCOR;
(z) the TransAlta Workers provide the Appellant weekly with count sheets and daily activity from the TransAlta reads;
(aa) the EPCOR Workers provide the Appellant with count sheets;
(bb) all Workers are paid bi-weekly;
(cc) all Workers, except for one who is paid by cheque, are paid by direct deposit;
(dd) with respect to the TransAlta Workers, when the piece rate does not equal $18.75 per hour or above, the Appellant will compensate the worker up to that rate;
(ee) the rates of pay are determined by the Appellant;
(ff) the Workers are not entitled to vacation or sick pay;
(gg) the Appellant does not provide an employee benefit plan;
(hh) the TransAlta Workers are paid $100.00 for a 3-day training program prior to providing services consisting of:
(i) rural map reading;
(ii) how to read a meter;
(iii) training on hand held device;
(iv) training on safety procedures;
(v) how to read TransAlta Utilities' schedules;
(vi) how to stop meters;
(vii) training on drug growing operations; and
(viii) how to adhere to TransAlta Utilities, policy and procedures;
(ii) the EPCOR Workers received a 2-day training program prior to providing services consisting of safety procedures, customer service and EPCOR's expectations and were paid $18.00 per hour during the training;
(jj) the Workers' hours varied depending on the schedule requirements set out by the Clients;
(kk) the hours worked by TransAlta Workers had to allow for them to access TransAlta Utilities' place of business between 8:00 a.m. and 5:00 p.m.;
(ll) the TransAlta Workers had a 3 to 4-day time limit in which to complete assigned work;
(mm) the EPCOR Workers' duties were assigned on a daily basis;
(nn) the EPCOR Workers were expected to complete the work the day it was assigned;
(oo) the Clients determined the locations where services were provided by the Workers;
(pp) the EPCOR Workers were required to report to EPCOR every 5 to 6 tasks to update them as to the status of tasks;
(qq) the TransAlta Workers were not required to perform services personally but any replacement worker would be authorized and trained by the Appellant;
(rr) any replacement worker would be covered by the Appellant's insurance;
(ss) the Appellant remunerated any replacement worker;
(tt) the Workers could face termination if their work was done incorrectly;
(uu) the TransAlta Workers were required to display TransAlta Utilities signage on their vehicle and wear an identification tag;
(vv) the EPCOR Workers were required to display EPCOR signage on their vehicle and wear an identification tag;
(ww) the EPCOR Workers were required to attend safety meetings;
(xx) TransAlta Utilities dealt directly with the TransAlta Workers in response to complaints about the workers;
(yy) EPCOR referred EPCOR Worker complaints to Randall Galarneau to deal with;
(zz) EPCOR would respond directly if the EPCOR Workers had problems;
(aaa) all the Workers were required by their contract to:
(i) return equipment and property provided to them; and
(ii) have a cellular telephone;
(bbb) to perform their duties, the Workers required small hand tools, work clothes, safety boots, outdoor wear, snow shoes, binoculars, snowmobiles (if necessary), lock de-icier, screwdrivers and any resources needed to access the Clients' customer's property;
(ccc) during the 1999 and 2000 years, the Workers received remuneration from the Appellant as outlined in ... Schedules A and B which form part of the Notice of Appeal;
(ddd) the Appellant placed the Workers in employment to perform services for the Clients;
(eee) the Workers were under the direction and control of the Clients;
(fff) the Appellant remunerated the Workers."
[18] The Appellant was, in the whole, said to agree with these assumptions of fact, save and except items (h)(ii), (i), (k), (n), (s), (dd), (jj), (kk), (ll), (qq), (ss), (vv), (xx), (zz), (ddd), and (eee).
[19] Evidence was given by John Edwards, Vice-president of the Appellant, and Kenneth Coreman, one of the workers in a supervisory position. I have no difficulty in accepting their evidence. They were credible witnesses. The issue here is not to be resolved so much around what the facts were as the interpretation to be placed upon those facts. John Edwards explained how the Appellant entered into contracts with TransAlta and EPCOR (the "Utility Companies") to provide meter reading services throughout Alberta as well as, in the case of EPCOR, meter lock-off services in the situation of unpaid accounts. There was entered into evidence a copy of the contract between TransAlta and the Appellant (Exhibit A-1) and the copy of the Purchase Order (Exhibit A-2), evidencing the contract between EPCOR and the Appellant. There was further entered into evidence a typical contract between the Appellant and a worker, evidencing a contract for services with an independent contractor. The latter point is not an issue in this appeal.
[20] Of significance was the question of complaints about TransAlta workers (10(xx)). The evidence revealed and I accept that TransAlta did not discipline or deal with workers directly. In accordance with paragraph 5.1(a) of the contract, it dealt directly with the Appellant's Account Project Manager, who then dealt with the complaint accordingly. It was an in-house matter and that is an important point. The Minister was incorrect in his assumption in this respect.
[21] That apart, all of the discrepancies between the assumptions of fact made by the Minister and the evidence really make no difference. On the whole, I accepted the evidence as it was given at the hearing of the appeal.
[22] Turning now to the contract with TransAlta, it can be seen that the Appellant was obligated, amongst other things, to provide services as follows:
"WHEREAS the Contractor agrees to provide, and TransAlta agrees to accept certain meter reading and associated services (the "Services") on the terms and conditions set forth in this Agreement: ...
‘Basic Services' means manually obtaining meter readings (scheduled and unscheduled); checking for missing meter seals, replacing and reporting the replacement of any such seals to the Project Manager; informing the Project Manager of unusually high consumption of electricity by any customer; informing the Project Manager of damaged meters and any abnormalities pertaining to TransAlta's distribution system; resetting and resealing all demands for each customer; and such other services as may be designated as Basic Services by both parties from time to time and specifically excludes automatic meter reading;
...
‘Optional Services' means collections, meter connects, meter disconnects and such other services as are proposed and offered by the Contractor;
...
‘Services' means Basic Services and Optional Services collectively.
...
2.2 Implementation Plan and Schedule
The Contractor agrees to commence performing the Services in areas designated by TransAlta in accordance with the schedule designed by the Project Manager.
ARTICLE III - SERVICES
3.1 Services
a) The Contractor shall provide Basic Services to TransAlta in a competent and professional manner from and after the Effective Date at such frequency as is determined by TransAlta.
b) The Contractor shall provide those Optional Services as are offered and requested by TransAlta within sixty (60) days' after receipt of written notice from TransAlta of its desire to receive any such Optional Services.
c) The Contractor acknowledges that the Services shall be performed at the direction of the Project Manager and that the Project Manager may, from time to time, conduct such inspections or make such inquiries as the Project Manager considers to be appropriate to determine the adequacy of the Services being provided by the Contractor.
3.2 Safety
The Contractor shall conduct his activities in relation to the services using proper and appropriate safety practices and procedures, and agrees that all accidents and/or incidents resulting in any injury to any person or damage to any property occurring in connection with the Services shall be reported immediately to the Project Manager. The Contractor will follow all TransAlta's safety policies and procedures.
...
ARTICLE IV - COST OF SERVICE
4.1 Rates
a) TransAlta agrees to pay the Contractor for the Basic Services in accordance with the rates set out in Schedule "A".
b) One fee per meter, which includes up to 6 registers and 2 demand resets.
4.2 Invoicing and Payment
The Contractor shall deliver to TransAlta invoices and vouchers together with a satisfactory progress report on a monthly basis. These invoices and vouchers shall be presented no later than 30 days from date of service. Within 30 days after the date of the invoice, TransAlta shall pay the Contractor the stated charges, exclusive of any applicable sales and or service taxes and other similar taxes, all of which shall be for the account of TransAlta. Failure to meet terms and conditions within thirty (30) days may result in a five (5%) percent penalty.
4.3 Cost of Rereads
The cost of re-reading a meter will be the responsibility of the Contractor if the initial reading was incorrect due to the fault of the Contractor or any employee or agent of the Contractor. The cost of re-reading a meter shall be paid in accordance with Schedule "A" hereto if the initial reading was incorrect due to the fault of TransAlta's equipment malfunction or if TransAlta asks for a reread where the initial reading was correct.
ARTICLE V - THE CONTRACTOR COVENANTS,
REPRESENTATIONS AND WARRANTIES
5.1 General Covenants and Representations
The Contractor covenants, represents and warrants to TransAlta that:
a) it shall provide the Basic Services in accordance with TransAlta's regularly scheduled billing intervals;
b) it shall maintain a reading accuracy at the utility standards of 1 error/1,000 reads and shall provide a re-read at no charge if the reading is incorrect;
c) the data that the Contractor collects and the invoices that are produced by the Contractor shall be accurate save to the extent that any errors are the result of inaccurate information provided to the Contractor by TransAlta, its servants, agents and employees;
d) it will ensure that the Contractor's Account Project Manager will become involved on any and all customer complaints related to meter reading services, will investigate the problem and will provide additional meter reading support when required;
e) it shall take responsibility for any key and/or special instructions for access given to the Contractor by TransAlta or a customer and shall sign for any such keys once per year;
f) it shall conduct and ensure its employees conduct all activities in relation to the Services using proper and appropriate safety practices and procedures and shall immediately report all accidents or incidents resulting in any injury to any person or damage to any property occurring in connection with the Services to the Project Manager.
...
5.2 Personnel
The Contractor hereby covenants and agrees that:
a) the Contractor shall provide a sufficient number of personnel to enable timely and proper execution and completion of the Work. All such personnel shall be competent, literate in the language of the Contract and qualified by education, training, experience and in all other respects capable of carrying out the tasks to which each is assigned. At TransAlta's request, Contractor shall reassign, replace or remove personnel who, in TransAlta's sole discretion, do not meet the above requirements or which have committed a violation of TransAlta's safety, security or site regulations or procedures. At TransAlta's sole discretion, it may require the removal of a contract employee who in TransAlta's opinion is causing excessive and/or serious impact to TransAlta's public image or customer satisfaction.
...
d)
Neither Contractor nor its employees,
Subcontractors or agents shall The Locator is
not and any employees utilized by the Locator are not, nor shall
it or they, as applicable be deemed to be, at any time,
employees of TransAlta. The parties agree that Contractor shall
be an independent contractor in the performance of the terms and
conditions of this Contract and that no master and servant
relationship is to be created between Contractor or any employees
or agents utilized by Contractor and TransAlta and
further that no employee benefits available to employees of
TransAlta shall accrue to Contractor or any employees or
agents used by Contractor.
...
5.3 Equipment
The Contractor shall provide any and all vehicles, tools, equipment and material required to perform the work and provide services pursuant to this Agreement.
The meter reading equipment utilized by the Contractor shall be or, be comparable to Itron hand held data collection units.
...
ARTICLE VI - TRANSALTA COVENANTS,
REPRESENTATIONS AND WARRANTIES
6.1 TransAlta covenants and agrees that it shall:
a) pay all sums that shall become due and owing pursuant to this contract in accordance with the terms and conditions hereof;
...
c) cooperate with the Contractor in optimizing routing to meet TransAlta's meter reading frequency requirements;
..."
[23] The Purchase Order with EPCOR reveals a contractual obligation of the Appellant to:
"provide meter services on behalf of EPCOR Technologies Inc. for the City of Calgary."
These services are set out on pages 4 and 5 of the Order as follows:
"Meter Repair 8.90
Non Standard 8.90
Evening Reconnect 16.40
Residential Recalls 10.85
Commercial Recalls 14.46
Meter Reading Hours 28.50
Commercial Stop Mtrs/Lockouts 14.46
Residential Stop Mtrs/Lockouts 10.85
Illegal 8.90
Load Limiters 10.34"
[24] Thus, it can be seen that in each case, the Appellant is not required to provide personnel to the Utility Companies. Rather, it is required to provides services relating to the reading and operation of the various meters installed on the premises of the respective customers of the Utility Companies. Clearly, the contract in each case is a contract for services with an independent contractor, the Appellant. Whether the Appellant was to use its own employees or further subcontract with other independent contractors by way of contracts for services, was clearly of no concern to the Utility Companies. Whilst the latter had certain policies, procedures and standards which it required the Appellant's personnel to adopt in the performance of their duties, that was by way of contract with the Appellant. That point should not be overlooked. The personnel used by the Appellant to provide the services were not required to report to the Utility Companies in order to take directions from them. Those personnel, whether they were employees or subcontractors with the Appellant, were required to follow the directions given to them by the Appellant to provide the services which they had contracted to provide for the Appellant, in accordance with the conditions that the Appellant had accepted in the master contracts with the Utility Companies. I do not see that they were in any way under the direction and control of the Utility Companies. The only right to control, held by the Utility Companies, came by virtue of their contract with the Appellant. The fact that the master contracts called for certain things to be done in certain ways, at certain times and allowed the Utility Companies a veto (so to speak) over any particular individual performing that service, did not transform the basic nature of the contract from a contract for services into a placement of personnel under the direction and control of the Utility Companies by a placement agency. The workers' commitment was very much established by their contracts with the Appellant (Exhibit A-3), not anything flowing to them directly from the Utility Companies. The Appellant in turn was obligated to meet its commitments to the Utility Companies. Thus, those requirements were part and parcel of the contracts themselves in both cases.
[25] As was said by Mr. Justice Létourneau in the Vulcain Alarme case (above), a contractor, who for example works on a site as a subcontractor, does not serve his customers but those of the payor. The Utility Companies were the customers of the Appellant. The Appellant contracted with those customers to provide certain services needed in the course of their business. Those customers did not become customers of the workers engaged by the Appellant. They had no privity of contract and no direct working relationship with the workers. This is totally different from a situation which would exist if the contract between the Utility Companies and the Appellant simply called for a number of people to be provided, who would then attend upon the Utility Companies and receive all their direction from and provide their services directly to the Utility Companies. This latter situation, where the Appellant would not be required to provide any services, but just personnel, would be clearly four-square within the ambit of the Regulations. It would be analogous to the situation which prevailed in the cases above, Computer Action Inc., Rod Turpin Consulting Ltd. and Dyck/Big Knife Oilfield Operating Ltd.
Conclusion
[26] In conclusion, I hold that the Appellant was not a "placement or employment agency" within the meaning of that terms in the Regulations, under either the EI Act or the CP Plan. I further hold that they did not:
"place [persons] in employment to perform services for and under the direction and control of a client ...." (EI Act)
and also did not:
"place [persons] in employment with or for performance of services for a client." (Plan)
[27] The workers were clearly engaged to provide services to the Appellant to enable it to in turn carry out its contractual obligations to provide a number of services to the Utility Companies. They were no more placed under the direct control of the Utility Companies than if they had been subcontractors on a building site on which the Appellant was the general contractor and the Utility Companies the owner. At the end of the day, in answer to the question "was the Appellant in the business of simply providing personnel to the Utility Companies?", or "was it providing services to the Utility Companies?", the answer is clearly that it was providing services. The situation of the workers was accordingly not covered by the respective Regulations. They were not in either insurable or pensionable employment.
[28] The appeals are allowed. The decision of the Minister and the assessments are vacated in accordance with these reasons.
Signed at Calgary, Alberta, this 7th day of June 2001.
"Michael H. Porter"
D.J.T.C.C.
Schedule "A"
Bonnie Adamson Virginia L. Judd
Raymond Bischke Lena Klause
Ralph Broderson Robert W. Landry
Howard Cardinal Ralph J. Leckie
Karen Casswell Leanne Lowen
Ken A. Coreman Linda Mindus
Mark Dool Kay Packer
John Doyle Dorothy Radford
Mardele Fitger Brandon Reese
Karolyn Frank-Jensen Brenda Scherger
Lorne A.A. Gibson Colyn Sejevick
Ian Grant Jason Smith
Dennis Harris Shawn Schweighardt
Gerald Lawrence Hefferman Raymond Tipler
Stuart Lynn Hurst Ken Tober
Leath Jonston Ken Van Rootselaar
COURT FILE NO.: 2000-4444(EI)
STYLE OF CAUSE: Dataco Utility Services Ltd. and M.N.R.
PLACE OF HEARING: Calgary, Alberta
DATE OF HEARING: February 22, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge M.H.Porter
DATE OF JUDGMENT: June 7, 2001
APPEARANCES:
Counsel for the Appellant: David W. Ross
Counsel for the Respondent: James Yaskowich
COUNSEL OF RECORD:
For the Appellant:
Name: David W. Ross
Firm: McCarthy Tetrault
Calgary, Alberta
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2000-4445(CPP)
STYLE OF CAUSE: Dataco Utility Services Ltd. and M.N.R.
PLACE OF HEARING: Calgary, Alberta
DATE OF HEARING: February 22, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge M.H.Porter
DATE OF JUDGMENT: June 7, 2001
APPEARANCES:
Counsel for the Appellant: David W. Ross
Counsel for the Respondent: James Yaskowich
COUNSEL OF RECORD:
For the Appellant:
Name: David W. Ross
Firm: McCarthy Tetrault
Calgary, Alberta
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-4444(EI)
BETWEEN:
DATACO UTILITY SERVICES LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of Dataco Utility Services Ltd. (2000-4445(CPP)) on February 22, 2001 at Calgary, Alberta, by
the Honourable Deputy Judge Michael H. Porter
Appearances
Counsel for the Appellant: David W. Ross
Counsel for the Respondent: James Yaskowich
JUDGMENT
The appeal is allowed and the assessment is vacated in accordance with the attached Reasons for Judgment.
Signed at Calgary, Alberta, this 7th day of June 2001.
|
"Michael H. Porter" |
D.J.T.C.C.
2000-4445(CPP)
BETWEEN:
DATACO UTILITY SERVICES LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of Dataco Utility Services Ltd. (2000-4444(EI)) on February 22, 2001 at Calgary, Alberta, by
the Honourable Deputy Judge Michael H. Porter
Appearances
Counsel for the Appellant: David W. Ross
Counsel for the Respondent: James Yaskowich
JUDGMENT
The appeal is allowed and the assessment is vacated in accordance with the attached Reasons for Judgment.
Signed at Calgary, Alberta, this 7th day of June 2001.
|
"Michael H. Porter" |
D.J.T.C.C.