Date: 20000621
Docket: 1999-2176-EI
BETWEEN:
NICOL GAUTHIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Charron, D.J.T.C.C.
[1] This appeal was heard at Montréal, Quebec, on April 26, 2000, to determine whether the appellant held insurable employment within the meaning of the Employment Insurance Act ("the Act") from July 28 to October 24, 1997, when he worked for the payer, Gauthier, Bouchard et Associés.
[2] By letter dated February 15, 1999, the respondent informed the appellant that the employment was not insurable because it was not governed by a contract of service between him and the payer.
Statement of the facts
[3] The facts on which the respondent relied in making his decision are set out as follows in paragraph 5 of the Reply to the Notice of Appeal:
[TRANSLATION]
(a) the payer was registered as a partnership on February 20, 1997; (admitted)
(b) the partners in the payer were Rosaire Bouchard, Jacques Bouchard and the appellant; (admitted)
(c) on March 1, 1997, the three partners signed an agreement to share expenses, liabilities and income equally; (admitted)
(d) the partnership operated a construction and renovation business; (admitted)
(e) Jacques Bouchard was a carpenter, Rosaire Bouchard was an apprentice carpenter and the appellant was a labourer; (admitted)
(f) the appellant worked for his own business during the period at issue. (denied)
[4] The appellant admitted all the subparagraphs of paragraph 5 of the Reply to the Notice of Appeal except those he denied or said he had no knowledge of, as indicated in parentheses at the end of each subparagraph.
Testimony of Nicol Gauthier
[5] The appellant is one of the three partners who registered a partnership under the firm name Gauthier, Bouchard et Associés on February 20, 1997 (Exhibit A-1). The hours worked by each partner were accumulated and shared equally among them when they obtained and performed a construction or renovation contract; this enabled each of them to collect employment insurance benefits when unemployed. Jacques Bouchard acted as foreman. The partners worked from 8:00 a.m. to 4:30 p.m., with half an hour for lunch. Jacques Bouchard received the complaints when work was done poorly or when someone was dismissed because of a lack of work. The appellant was a labourer and Rosaire Bouchard worked as an apprentice carpenter. Jacques Bouchard paid for the materials with the credit card of the payer, which had a bank account at the National Bank. The other two partners were not present at the hearing and refrained from testifying. The paycheques were Rosaire Bouchard's responsibility. He was the one who wrote the cheques.
Testimony of Mario Shink
[6] This individual, a Revenue Canada appeals officer, told the Court that Rosaire Bouchard had also appealed the respondent's decision but later discontinued his appeal.
Analysis of the facts in relation to the law
[7] The question that I must decide is whether the appellant was employed under a contract of service with the payer partnership at the time of the facts alleged above, namely from July 28 to October 24, 1997. It is important to note that that time period is subsequent to the enactment of the Civil Code of Québec (January 1, 1994).
[8] If I am to apply the tests stated by the Privy Council in City of Montreal v. Montreal Locomotive Works Ltd., [1947] 1 D.L.R. 161, I must, in order to determine that there was a contract of service, find that there was control, that the payer owned the tools and that the appellant had a chance of profit and no risk of loss. The contract originated in the province of Quebec, and its legal consequences must be analysed in light of the law applicable in that province.
[9] Although the Civil Code of Québec does not define partnership, article 2186 provides that the nature of partnership is as follows:
ART. 2186. A contract of partnership is a contract by which the parties, in a spirit of cooperation, agree to carry on an activity, including the operation of an enterprise, to contribute thereto by combining property, knowledge or activities and to share any resulting pecuniary profits.
[10] The appellant is therefore a partner in the payer, Gauthier, Bouchard et Associés.
[11] In view of the conclusion that Mr. Gauthier was a partner in the payer when he provided his services during the relevant period, could he have been an employee of the partnership at the same time? In other words, can a contract of employment exist between a partner and his or her partnership? The Civil Code of Québec defines a "contract of employment" as follows:
ART. 2085. A contract of employment is a contract by which a person, the employee, undertakes for a limited period to do work for remuneration, according to the instructions and under the direction or control of another person, the employer.
[12] Furthermore, he did not do his work according to the instructions and under the direction or control of "another person". Unlike a business corporation, a partnership is not considered to have a personality separate from that of its partners. The partnership's business is that of the partners. The partnership's assets belong to the partners. Mr. Gauthier was accordingly working for himself. His work was therefore not done according to the instructions and under the direction or control of another person as required by article 2085 of the C.C.Q. Consequently, there was no contract of employment between Mr. Gauthier and the payer.
[13] Judge Lamarre reached similar conclusions in Carpentier v. M.N.R., 95-1684(UI):
In view of the features associated with a contract of partnership both under the C.C.L.C. and under the C.C.Q. and the tests used by the courts to determine whether a contract of service exists, it seems clear to me that a partner cannot be an employee in his own partnership. Since as partner he participates in the decision-making of the partnership in pursuit of the common goal of the partnership and shares in profits and losses, he is automatically in control and therefore cannot at the same time act as a subordinate to himself, even if there are several partners.
[14] The same view is taken by Judge Teskey in J. & S. Young Ltd. v. M.N.R., [1990] T.C.J. No. 819, Judge Tardif in Godin v. M.N.R., 94-1384(UI), and Judge St-Onge in Pitre v. Canada, [1988] A.C.I. No. 743 (file Nos. 97-1737(UI) and 97-1738(UI)), as well as by authors A. Edward Aust and Lyse Charette in The Employment Contract, 2nd ed. (Cowansville: Éditions Yvon Blais, 1993), at page 26.
[15] For these reasons, the appeal is dismissed and the Minister's decision confirmed.
Signed at Ottawa, Canada, this 21st day of June 2000.
"G. Charron"
D.J.T.C.C.
Translation certified true on this 30th day of April 2001.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
1999-2176(EI)
BETWEEN:
NICOL GAUTHIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on April 26, 2000, at Montréal, Quebec, by
the Honourable Deputy Judge G. Charron
Appearances
For the Appellant: The Appellant himself
For the Respondent: Nicole Savard (Student-at-law)
JUDGMENT
The appeal is dismissed and the Minister's decision confirmed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 21st day of June 2000.
|
"G. Charron" |
D.J.T.C.C.
Translation certified true
on this 30th day of April 2001.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]