Tax Court of Canada Judgments

Date: 20000915

Dockets: 98-1184-UI, 98-1185-UI

BETWEEN:

EARLYBIRDS AWARDS INC.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Rowe, D.J.T.C.C.

[1]            The appellant, Earlybirds Awards Inc. (EBA) appeals from two decisions issued by the Minister of National Revenue (the "Minister") concerning the insurability of two workers. Counsel for the appellant and counsel for the respondent agreed the two matters would be heard together.

[2]            On August 5, 1998 the Minister issued a decision finding Dora Weninger to have been employed under a contract of service with the appellant from November 30, 1997 to February 24, 1998 and to have been in insurable employment during that period pursuant to the provisions of paragraph 5(1)(a) of the Employment Insurance Act (the "Act"). This decision is the subject of appeal 98-1184(UI).

[3]            On August 5, 1998 the Minister issued a decision finding Corey Mazurat to have been employed under a contract of service with the appellant from January 1, 1997 to April 30, 1997 and to have been in insurable employment during that period pursuant to the provisions of paragraph 5(1)(a) of the Act. This decision is the subject of appeal 98-1185(UI).

[4]            Prior to hearing any evidence, counsel for the appellant - on consent - filed various binders as exhibits, labelled as follows:

                Exhibit A-1 - vol 1 - tabs 1-14

                Exhibit A-2 - vol 2 - tabs 15-27

[5]            The above exhibits contain documents pertaining to the working relationship between the appellant and Dora Weninger.

                Exhibit A-3 - vol 1 - tabs 1-10

                Exhibit A-4 - vol 2 - tabs 11-19

                Exhibit A-5 - vol 3 - tabs 20-24

               

[6]            The above exhibits contain documents pertaining to the working relationship between the appellant and Corey Mazurat.

[7]            Counsel for the appellant filed - as Exhibit A-6 - a letter dated November 15, 1999 issued by Susan Wong, counsel for the respondent, confirming the authenticity of the various rulings reports issued by the Minister, the outcomes of the rulings, and the authenticity of the CPT-110 "Report on Determination or Appeal". However, the Minister was not prepared to admit the truth of statements made by parties interviewed by the Minister in the course of preparing those reports.

[8]            With respect to the binders, even though Exhibits A-1 and A-2 are labelled with the name of Dora Weninger as well as being further identified as volumes 1 and 2, reference to the actual exhibit number together with a tab reference with a page number, if necessary, is sufficient. Similarly, Exhibits A-3, A-4 and A-5 - binders labelled as relating to Corey Mazurat - although labelled as volume numbers 1, 2, and 3 will be referred to by the exhibit number with a tab (and page) reference.

[9]            Alfred Evans testified he is a resident of Kelowna and during the relevant period of these appeals was the President, Chief Executive Officer (CEO) and sole Director of the appellant. He explained that EBA is a corporation operating a 1-900 telemarketing business in Kelowna, British Columbia using the trade name, Evanly Rays Psychic Answers, to provide a psychic service via telephone to callers seeking advice. The business commenced in the spring of 1994, with 15 psychics providing readings. The current psychic workforce has been reduced to six. However, prior to a ruling by Revenue Canada issued at the request of Human Resources Development Canada (HRDC) to the effect that certain workers were employees engaged pursuant to a contract of service, Evans stated EBA had engaged the services of 50 persons to provide psychic readings and the payment - by EBA - for those services was approximately $50,000 per month. The telephone lines are provided by Telus (formerly BC Tel) and EBA operates 24 hours a day, 7 days a week, 365 days each year. The main regulator of the business is the Canadian Radio-Television and Telecommunications Commission (CRTC) but there are also rules established by a telephone network of which Telus is a member. The CRTC monitors tele-marketers at least twice per day by intercepting calls to listen to the conduct of the tele-marketer while talking to a caller. Evans explained the system in use at EBA permitted a computer program to search the files in order to determine if the caller fell into the category of a repeat caller/customer. In any event, the calls would be answered and a set script was read to all persons informing the persons of certain details including the minimum age requirement - 18 - and the cost of the call per minute. The CRTC had established a limit of $50.00 per call to each customer so if EBA charged $2.99 per minute, the maximum allotted time would be just under 17 minutes. Evans referred to numerous documents found in Exhibit A-1, tab 14 - relating to the 1-900 industry and the rules set out by Stentor, a corporation owned jointly by all telephone companies in Canada for purposes of making representations to the CRTC. In Exhibit A-2, tab 15, Evans referred to an agreement between EBA and Stentor which he referred to as constituting the core of the industry as it related to the provision of telephone lines by the contracting telephone company together with additional services including billing, complaint referrals, technical support and expertise. In the case of EBA, the provincial telephone company provided the lines and equipment and collected the amount due to EBA from the calling customer in accordance with an existing arrangement by which telephone companies share fees for facilitating the call. When a customer called a psychic-line number, the phone was answered by an employee of EBA and the caller was asked what service they wanted as they could choose between a Tarot card reading or conversation with a psychic. Because 30-40% of the callers are repeat customers, they will usually request a conversation with a specific psychic with whom they are familiar. If that person is not available, the caller is advised the psychic will call back as soon as they are able to do so. EBA advertised through many mediums including radio, television, print, appearances of psychics on talk shows, distribution of business cards, posters, participation in community events and personal appearances by psychics at local restaurants. EBA paid for advertising relating to corporate operations and the psychics paid for their own personal advertising. Evans stated certain callers will refuse to pay that portion of the telephone bill relating to the provision of a psychic service and all other 1-900 companies subscribed to a risk management service offered by telephone companies to block calls from telephone subscribers who were delinquent in paying for a call to a psychic line. However, EBA chose not to utilize this technology and established its own collection procedures. Each time a person called an EBA line, the call was transferred and became the subject of a live response read by the Manager - referred to within EBA - as the Pilot of a communication centre or Pilot station. The script - approved by the CRTC - was followed exactly in each instance by the Pilot who informed the caller of the name of the company, (EBA) and verified the caller was 18 or older, as well as stating the price per minute of the call and advising the caller he or she could hang up at a particular point in the scripted message and incur no charge but, by choosing to continue the call, billing at the set price per minute would begin three seconds later. An example of such a script was included in Exhibit A-2, tab 15, page 36 and it also contained a sample introduction for use by a psychic who may have been new at EBA. During the initial 36-second period during which the introductory matters were dealt with, there was no charge to the caller but EBA still had to pay the telephone company for the time utilized. In order that EBA could track the value of the various forms of advertising, callers were asked where they had seen the advertisement containing the particular 1-900 number they had used to contact EBA. An example of EBA advertising was contained in Exhibit A-2, tab 15, page 34. The Pilot would ask if the caller wished to speak to a particular psychic and may, on occasion, speak further with a person even after the mandatory, non-billable script reading had concluded. If a specific psychic was not available, the caller was asked if another psychic could assist and, if so desired, the call would then be transferred. The responding psychic would record the length of the call and its origin for purposes of obtaining payment from EBA. Evans stated that, unlike other companies offering psychic service, he insisted all psychics work out of the EBA premises and that all calls were answered live by a real person as opposed to answering machines or voicemail. Prior to beginning the business, he had carried out research by calling a variety of advertised psychic lines only to discover that, on occasion, his reading was interrupted by the sounds of children crying or dogs barking in the background. In the EBA office at Kelowna, and at the affiliate corporation in Calgary, there were two rooms used by the psychics, divided into smoking and non-smoking. Each room had individual work stations with a desk, telephone, raised partitions for soundproofing and some reference material. Some psychics used their own headsets and brought their own materials so as to better induce a clairvoyant trance. The function of the Pilot was to answer the phones and to match the needs of the caller/client to the service provider. The position of Pilot was remunerated by a fixed wage with the opportunity to earn a bonus and EBA had never disputed that persons fulfilling the function of Pilot were clearly employees engaged under a contract of service. Prior to the ruling which led to these appeals, EBA had employed 11 Pilots having the status of employee. The Pilots worked on shifts in order to provide continuous coverage to a business that never closed. Currently, EBA has two office staff who are employees and, prior to the said rulings, had 16 or 17 persons employed in various capacities such as reception, direct mailing, machine operators, printers, desktop publishers, all of whom worked from 9:00 a.m. to 5:00 p.m., Monday to Friday, for a salary or hourly wage commensurate with their skills. In addition, EBA utilized the services of computer programmers and bookkeepers who were independent contractors. Evans stated the worker - Dora Weninger - was not a director, officer or shareholder of EBA and her only provision of service to EBA was in her capacity as a psychic which Evans considered as having been performed pursuant to the terms of an agreement dated November 17, 1997 - Exhibit A-1, tab 4 - between her and EBA. EBA and Weninger entered into another agreement - in more or less the same form - on January 5, 1998 (Exhibit A-1, tab 6). Evans referred to an invoice dated November 30, 1997 - Exhibit A-1, tab 5A - in the sum of $50.63 - issued to EBA by Weninger based on her rate of 50 cents per minute for 102.19 minutes less a chargeback of $4.77 for having exceeded the time limit set by the CRTC on an individual call. This type of invoice was used by all of the psychics to submit accounts to EBA in order to receive payment for services. EBA utilized the services of Royal Bank Payroll Technologies in order to issue cheques to all workers. Evans referred to an example of a callsheet - Exhibit A-1, tab 7C, page 1 - completed by a psychic in the course of performing a shift. At page 2, there was a sheet attached indicating EBA had performed a cross-check by consulting the telephone bill issued to EBA by the phone company in order to verify that the calls billed by the psychic had actually been made and the invoice was accurate as to time billed. Dora Weninger used the name "Amber" while working as a psychic and many of the callsheets located in Exhibit A-1, tab 7, are completed by her using that name. Payments to Weninger were made by the Royal Bank Payroll Technologies and were designated as being made pursuant to a contract (Exhibit A-1, tab 8). Weninger wrote a letter of resignation dated February 10, 1999 (sic) - Exhibit A-2, tab 20 - to Evanly Rays Psychic Answers, one of the many trade names used by EBA, requesting a leave of absence for an undetermined length of time due to various stress and health issues she felt prevented her from continuing to work as a psychic. At that time, she requested EBA prepare a Record of Employment (ROE) and deduct her share of the necessary premiums incurred by her "employment status" and to calculate any vacation pay to which she might be entitled. The actual date of the letter was February 10, 1998.

[10]          Evans testified Corey Mazurat was not a director, officer or shareholder of EBA and that Mazurat had begun providing psychic services to EBA in the capacity of independent contractor, later moving on to fill the position of Pilot and then General Manager as of February 19, 1998. As a Pilot, and then General Manager, he was paid a monthly salary together with certain incentives and had the status of employee. On April 1, 1999 Mazurat left the employ of EBA. He had begun working at EBA and provided psychic readings pursuant to an initial contract between himself and EBA dated October 15, 1994 (Exhibit A-3, tab 8). Further contracts between Mazurat and EBA were signed on July 24, 1995 (Exhibit A-3, tab 9), August 30, 1996 (Exhibit A-4, tab 11), December 21, 1996 (Exhibit A-4, tab 12) and - finally - January 2, 1997 (Exhibit A-4, tab 14), covering the period at issue in the appeal as it relates to the status of Mazurat. Evans stated there were usually only minor changes contained in each new contract. In Exhibit A-3, tab 10, sub-tabs A through M, Evans identified various documents relating to the working relationship between Mazurat and EBA including invoices, caller information sheets (tracking sheets) and payroll records. Documents in Exhibit A-4, Tab 15, sub-tabs A to D, inclusive, refer to the period from January 1, 1997 to April 30. 1997. The agreement of January 2, 1997 (Exhibit A-4, tab 14) related to this period. Evans stated that since EBA began operating the business in May, 1994, all of the psychics had provided services on the basis of being independent contractors and that this practice had continued until the ruling was issued by Revenue Canada in April, 1998. Each contract with a psychic contained a provision identical or similar to that found on page 3, paragraph 2.01 of the contract dated October 15, 1994 (Exhibit A-3, tab 8) entered into by Mazurat and EBA in which EBA agreed to "pay Contractor a commission of fifty (.50) cents per minute for on-line services provided personally by the Contractor". Evans stated the commission was later amended to sixty cents per minute after midnight and other agreements in later years contained some additional provisions concerning the capacity of workers to provide services to other psychic-line operations or to carry on business on their own account. Some persons took advantage of those changes to the system. During the relevant periods covered by both appeals, Evans stated Weninger and Mazurat were free to choose their own hours of work and the psychics basically established their own schedule by means of a collective or consensual process using a sign-up sheet which was posted in the premises of EBA. An example of such a sheet is found in Exhibit A-2, tab 22 and it contains entries made by various psychics in their own handwriting. Overall, it was the responsibility of the Pilot/Manager to ensure there were enough psychics on duty to provide the service required by the demand from callers. Some psychics also did Tarot card readings and - subsequent to 1995 - some calls made to the 1-900 number which would ordinarily be handled by personnel at the Kelowna office were switched to an associate corporation of EBA in Calgary where a psychic there conducted the reading. At the EBA Kelowna premises, various workers - including Dora Weninger - arranged for other psychics to take over a particular shift and the psychics were generally able to make arrangements among themselves for a replacement. Any person not already working at EBA as a psychic could not be substituted without approval by EBA management. Prior to being taken on as a psychic at EBA, applicants had to perform three to five readings on people they did not know and the accuracy of their insight would be analyzed at the conclusion of the test readings. Evans stated people could be trained to read Tarot cards or to function as a Pilot but it was not possible to train someone how to be clairvoyant. All Tarot readings were performed - live - by EBA workers and many psychics had their own clientele in that between 25% - 40% of the callers were repeat customers who wished to speak to a particular psychic. While the CRTC set the maximum charge per call at $50.00, EBA was free to set the rate of $3.99 per minute. EBA also agreed to pay a minimum fee of $56.00 to any psychic handling a midnight shift but that basic fee was only required to be paid two or three times over several years as the commissions generated were almost always in excess of the guaranteed minimum. Evans explained that management could not control the activities of a psychic as each one had individual abilities and some would have to go into a trance-like state before they could deliver a valid reading to a caller. On occasion, a psychic would get up from the chair and desk and merely walk away or even leave the premises but not before transferring the call - if possible - to another psychic. EBA offered a 100% satisfaction guarantee to any first-time caller but the psychic handling the call would still earn his or her commission. If a call was transferred after a period of time, then the new psychic and the one first involved in the call could share - proportionately on a time basis - the fee. Evans referred to a Certificate of Incorporation - Exhibit A-2, tab 21A - dated January 26, 1990 pertaining to a corporation called Vacation Travel Certificate Marketing Ltd. On June 20, 1990 there was a name change to Vacation Travel Marketing Ltd. (Vacation Travel) and Evans held 51% of the shares in the corporation but was not a director or officer. The balance of the shares was held by Leslie Krogel who occupied the position of Director. Krogel had been a manager at EBA and - in the spring of 1995 - basically cloned the EBA system in Calgary using the new corporation which began doing business under the name of Innervision Crystal Connection (Innervision). The Innervision business then operated as an associate of EBA. Revenue Canada - on October 30, 1997 - issued a ruling - Exhibit A-1, tab 10A - with respect to the insurability of a worker named Maureen Kirby who provided services as a psychic during the period from September 1, 1996 to the date of the ruling. The ruling held that the employment of Kirby was not considered to have been insurable employment because she was not an employee performing services under a contract of service. Evans stated an official from Revenue Canada had attended at the Calgary office of Innervision and had spoken privately to various psychics as well as to himself and to Krogel. Evans referred to a further ruling - Exhibit A-7 - issued by Revenue Canada on March 6, 2000 relating to a psychic, Terry Bauer, for the period commencing June 1, 1999 during which Bauer had provided services to the corporation in Calgary doing business as Innervision and the effect of the ruling was that Bauer was not engaged in insurable employment with Vacation Travel because he was not performing services pursuant to a contract of service. A similar ruling - Exhibit A-8 - was issued by Revenue Canada pursuant to the Canada Pension Plan finding the employment of Bauer with Vacation Travel not to be pensionable employment. Evans stated the Rulings Officer had attended at the offices of Innervision and had spent approximately 8 hours in total observing the business and speaking privately with 8 or 9 separate psychics as well as speaking with Evans on the telephone on several occasions during conversations which lasted up to 30 minutes. Evans pointed to earlier rulings - Exhibit A-1, tab 9A - by Revenue Canada both dated March 30, 1995 in which it had been held that Treva Stubbs - a psychic working for EBA - as well as others working under similar terms and conditions were not employed in pensionable and/or insurable employment with EBA during 1994. Further, Evans referred to another ruling - Exhibit A-2, tab16J, pages 8, 9, 10 - dated October 28, 1997 relating to the services of a psychic, Edita Kavcic, during the period from September 1, 1996 to January 1, 1997. At the conclusion of the rulings report, the Rulings Officer - C. Drebit - held that Kavcic was not engaged in insurable employment with EBA because she was not performing services pursuant to a contract of service. Then, on August 18, 1997, Revenue Canada issued a ruling - Exhibit A-9 - pertaining to a worker - Diana Thompson - working at EBA during the period from May to September, 1996. In that instance, the ruling was that Thompson had been engaged in insurable employment with EBA because she was an employee performing services pursuant to a contract of service. Evans stated he had not been aware of that particular ruling until the day before the hearing of the within appeals but did not disagree with the finding contained therein as Diana Thompson was not working as a psychic but had been employed as a Pilot during the period covered by the ruling and this particular position was always filled by a worker having the status of employee. With respect to the rulings pertaining to psychics during various periods, Evans stated he was unable to see any distinction between the working conditions as the method of carrying on business remained the same whether it was EBA in Kelowna or Vacation Travel doing business as Innervision in Calgary, as it was basically a clone of the Kelowna operation. The psychics providing services to EBA during 1995, 1996 and 1997 were provided with T4A slips setting forth the amount paid (Exhibit A-2, tabs 23, 24, 25). With regard to the 1998 taxation year, EBA issued T4 slips to the psychics in order to conform with the ruling of Revenue Canada which held they were employees.

                In cross-examination, Alfred Evans stated EBA used various names in order to attract callers, including Universal Light, Millennium Psychic Solutions, Triple A Psychic Answers as well as Evanly Rays Psychic Alliance. These trade names had separate 1-900 numbers but all calls were answered at the EBA office in Kelowna. The direct-mail marketing was done out of the office and, during the relevant periods at issue in the within appeals, EBA operated out of premises located on Bernard Avenue in Kelowna which provided 27 work stations to be used by psychics. Some of the psychic lines operated by EBA carried with them a different rate-per-minute which could result in varying lengths per call before reaching the $50.00 maximum charge permitted by the CRTC. Evans was referred to a rulings report - Exhibit A-5, tab 21H - in which there was reference to the fact psychics could work out of their own homes. Evans responded by explaining that all psychics had to work out of the EBA office. He had mentioned to a Revenue Canada official that EBA was considering a process whereby a call could be transferred to their homes but it should have been apparent that all work done by the psychics during the relevant period had been performed at the EBA premises. Evans was referred to a rulings report - Exhibit A-2, tab 17H - prepared in relation to Diana Thompson wherein it had been mentioned she was free to set up facilities in order to work from her own home. Evans was also shown a rulings report - Exhibit A-2, tab 16J, page 9 - in which there was reference to Treva Stubbs having told the Rulings Officer that psychics could work at home but that the majority came in to the EBA premises. Evans explained that while psychics were providing service to EBA they had to do so only at the EBA premises but that some psychics also provided service to entities operating psychic lines - such as Jo-Jo Savard's Psychic Alliance - not associated with EBA and they did so out of their own homes. Regarding the agreement between EBA and Stentor - Exhibit A-2, tab 15, Evans stated the charges set out at page 37 were paid by EBA, including a set-up charge of $1,500.00 and usage charges of 10 cents per minute during the mandatory 18-second preamble required by the CRTC. Evans changed the preamble to 36 seconds and EBA paid for that time. On behalf of EBA, he recently declined an offer by Stentor to participate in a test-marketing program whereby the maximum rate per call would be increased to $200.00 and instead decided to involve EBA in a new system utilizing the Internet. In response to the requirements of Stentor, EBA set up a mechanism for handling complaints by means of a 1-800 number and he and Treva Stubbs dealt with the complaints. As a result, EBA had a low number of chargebacks - by the telephone company - because of refusal by customers to pay the portion of the phone bill relating to the psychic charges. The agreement - Exhibit A-1, tab 4 - between EBA and Dora Weninger was drafted by Evans after having consulted a solicitor. By utilizing the commission rate, most psychics earned an average of $12.60 per hour during 1998 but some individuals were able to earn more than $18.00 per hour. At paragraph 1.03 of the said agreement, the contractor/psychic could refuse work. While paragraph 2.01(b) permitted EBA to charge back certain amounts against earned commissions, Evans stated that was rarely carried out by EBA because company policy was to allow 12% of gross revenue as a bad debt allowance. When the telephone company sent money to EBA, it did so on the presumption the customer would pay the entire telephone account, including the charge for the psychic call. If payment for that call was not made, then the telephone company would later deduct that particular delinquent amount from its current payment to EBA. Refusal by a customer to pay the amount due from a call to any psychic line would never result in a disconnection of service by the telephone company. EBA utilized its own internal collection procedures and between that program and the 12%-of-gross allowance for uncollectible amounts, a psychic would probably have modest chargebacks for only two or three pay periods a year. A psychic had to submit a tracking sheet each day, as set forth in paragraph 2.03 of the agreement, and - at paragraph 3.04 - a contractor such as Dora Weninger agreed to abide by written directives from EBA pertaining to the method by which a psychic could carry on the business. EBA advertised in newspapers for persons interested in working as psychics. While working at EBA premises, there were surveillance cameras operating 24 hours per day monitoring the front area, hallway and access areas. In addition, EBA management monitored the calls from clients. EBA management instructed psychics not to offer medical advice or to provide negative readings. The psychics were free to advise people of their right to call back once the maximum 15-minute period had expired. EBA held three or four general meetings each year - on average - with all the psychics gathered at the EBA office. As for not appearing for a shift pursuant to a commitment made by way of an entry on a sign-up sheet, a psychic was expected to call the EBA office so that arrangements could be made for another psychic to cover that period. There were three separate 8-hour shifts but the actual working hours of psychics varied within those 8-hour blocks. On occasion, during a slow period, the workers would conduct a lottery and the winner could leave for the day. EBA took the position that the only recourse against a psychic was to issue the proper notice pursuant to the terms of a written contract. EBA provided the desk, chairs, timers, telephones, computer system and some reference material. EBA also paid a business license to the City of Kelowna. It was possible to a psychic to earn up to $1.00 per minute - instead of 50 or 60 cents - by taking out a 1-900 number and then entering into an arrangement whereby EBA managed that service for a fee. If a psychic carried out an advertising program inviting the general public to call that number with a specific extension, then any calls would produce $1.00 per minute. Many of the psychics used flyers and business cards to promote their business and sometimes EBA shared the costs. The psychics would receive their earned commissions even though EBA might have lost money during a particular month. Similarly, if workers did not come to work they would not have to pay any fee or expenses for that day. Evans stated Dora Weninger had her own psychic business - operated out of her home - when she was not providing service to EBA at the corporate premise. Corey Mazurat also carried out readings at restaurants in Kelowna. After the ruling was issued by Revenue Canada to the effect that psychics had the status of employees, he called a meeting to discuss the matter. At the meeting, all psychics - except one - wanted to be considered independent contractors and he requested them to provide - to Revenue Canada - statements to that effect if they wanted to have the ruling reconsidered. Evans stated that, according to his telephone records, he spoke to Melanie Bailey at Revenue Canada for less than 11 minutes about the working conditions pertaining to Dora Weninger and Corey Mazurat and he later complained about the process used to produce that ruling. There was a two-month delay in paying the psychics because the telephone company did not receive billing information from the processing centre for two weeks following which the account would be mailed out to the telephone subscriber and there would be a further period during which the customer could pay the telephone company. In the event a psychic continued to talk to a caller past the 15-minute maximum period, there was still an ongoing charge-per-minute paid by EBA to the telephone company and the relevant amount was deducted from any forthcoming commission payment to that psychic. EBA policy was not to permit any customer to spend more than $50.00 per day.

                Melanie Bailey testified - pursuant to a subpoena issued by counsel for the appellant - that she is a Canada Pension Plan/Unemployment Insurance/Employment Insurance Rulings Officer at Canada Customs and Revenue Agency (CCRA), formerly known as Revenue Canada. In the course of making the rulings regarding the workers Dora Weninger and Corey Mazurat, Bailey stated she spoke with Alfred Evans, CEO of EBA. Referring to her memorandum dated May 27, 1998 - Exhibit A-2, tab 16C - Bailey stated she had been aware of a previous ruling made in relation to Treva Stubbs in which another Rulings Officer had held she was not in insurable employment with EBA. She agreed that, in the course of making the rulings complained of by the appellant, she did not actually visit the EBA office in Kelowna and indicated such a procedure would be extremely rare unless it were done in the course of a payroll audit. While there is no policy against attending at the worksite while engaged in the rulings process, it is generally not done. Bailey was also aware of a previous ruling by C. Drebit finding an EBA psychic - Evita Kavcic - not to have been engaged in insurable employment. She stated she had reviewed that file and discussed the matter with Drebit who indicated the previous ruling in regard to Treva Stubbs was considered - by him - to have been binding. Bailey prepared the memorandum in response to a complaint - in the form of a letter - that had been sent in by Evans. During a telephone conversation with Evans, he had mentioned there were rulings issued by Revenue Canada in Calgary in relation to Innervision which he stated operated in the same manner as EBA and that those rulings had held certain psychics not to have been engaged in insurable employment. She did not review those rulings. The rulings in relation to Dora Weninger for EI and CPP - Exhibit A-1, tabs 1 and 2 were issued by K.J. Ritcey, Director-Taxation of the Penticton office, but were based on work done by her. Ritcey is the delegated authority by whom a ruling is issued and a stamp with his signature is affixed to the actual letter. Bailey identified the rulings report - Exhibit A- 10 - dated April 21, 1998, issued by her in relation to Corey Mazurat, as well as the rulings report - Exhibit A-11 - dated April 17, 1998, concerning Dora Weninger.

                In cross-examination by counsel for the respondent, Melanie Bailey stated she had been employed by Revenue Canada since 1992 and began working as a Rulings Officer in 1996. She took over a ruling which had been commenced by C. Drebit and had been transferred to her because Drebit also performed another function within the office. The file indicated Drebit had interviewed Corey Mazurat. Bailey stated previous rulings bind only a payor and worker until a new ruling is issued but the policy at Revenue Canada was to consider itself bound in terms of similar working relationships unless there was a change in facts or an earlier ruling had been based on erroneous information. Bailey stated it appeared as though C. Drebit had not been aware of a ruling by K. Dunn - of Revenue Canada - regarding the worker, Diana Thompson, for the period between May and September, 1996 which had found her to have been in insurable employment with EBA. As for speaking with Evans, Bailey stated she had spoken to him on the telephone and had taken three pages of notes during their two conversations. She had reviewed the facts as set out in the letter of Corey Mazurat - Exhibit R-1 - dated February 4, 1998, in which he had indicated he wanted the matter to be reconsidered as he was unsure as to his true status during the time he was working at EBA. Bailey stated she reviewed the facts and later issued the ruling dated April 21, 1998 in which she found Mazurat to have been in insurable employment with EBA. In her view, psychics had not worked at home since 1994 and there was no real opportunity for profit or risk of loss and the entire business of providing the psychic service was established and owned by EBA and, without the psychics, EBA had no business.

                Bernie Keays testified - pursuant to a subpoena issued by counsel for the appellant - that he was an Appeals Officer at CCRA and, in exercising his function, he reviewed rulings issued in relation to Dora Weninger and Corey Mazurat. Keays stated he spoke to Alfred Evans, Corey Mazurat and Dora Weninger on the telephone. He identified the document entitled Report On A Determination Or Appeal - CPT 110 - dated August 5, 1998 - Exhibit A-2 - tab 16G - prepared by him. In preparing his report, Keays had been aware of the ruling - Exhibit A-2, tab 16H - made in relation to Treva Stubbs finding she was not engaged in insurable employment with EBA during 1994 but he was not bound to follow it. He was also aware of a similar ruling regarding the worker, Edita Kavcic. Keays stated he had not known of the ruling regarding psychics working in Calgary under the name Innervision Crystal Connections or Innervision and does not recall Evans having referred to any such ruling in the course of their telephone conversation. He did not visit the EBA place of business in Kelowna as he did not regard it as necessary in order for him to render a decision.

                In cross-examination by Susan Wong, counsel for the respondent, Keays stated he sent out questionnaires - including the one at Exhibit A-1, tab 3B, signed by Alfred Evans as President of EBA. A questionnaire was also mailed out to Dora Weninger but no completed form was returned to Revenue Canada. Questionnaires sent to Corey Mazurat and to EBA - Exhibit A-3, tab 3B - were completed and returned. In the course of carrying out his duty as an Appeals Officer, Keays stated he never discusses the file with a Rulings Officer and considers it highly inappropriate to ever do so.

                Corey Mazurat testified he had never been a director, officer or shareholder of EBA but had begun providing his services - as a psychic - to EBA commencing September 10, 1994 and continued thereafter until December 10, 1997. Subsequently, he worked as a Pilot/Manager which involved transferring calls to various psychics and he performed that role at EBA until August, 1998 at which point he returned to working as a psychic until leaving EBA in April, 1999. He stated he wrote the letter - Exhibit R-1 - to Revenue Canada in order to accomplish a de-registration of his Goods and Services Tax (GST) number because he had been assessed a penalty for unpaid amounts of GST. He had attended at the GST office in Kelowna and received some advice as to how to cancel his GST number by a process of de-registration. In his mind, when he wrote the letter dated February 4, 1998, he regarded himself as an independent contractor. Mazurat agreed he had signed various contracts with EBA, including the ones dated July 24, 1995, August 30, 1996, December 21, 1996 and January 2, 1997. The agreement dated December 21, 1996 was an addendum which dealt with chargebacks occurring as a result of callers not paying for the psychic call portion of their telephone bill. Mazurat understood EBA had set a figure of 12% of gross revenue as an acceptable bad-debt ratio and that any excess delinquency could - at the discretion of EBA - be passed on to the psychics who would each become responsible to pay an equal portion of that amount by way of deduction from future commissions. He was not sure why so many different contracts had been signed. He had obtained a GST registration number and thought GST had been included in the commission of fifty cents per minute so he did not concern himself with any separate calculation for the tax and noted it had been deducted from one of his cheques sent as payment for a billing period between September 10th and October 9th, 1994 (Exhibit A-3, tab 10A). Mazurat completed the tracking sheet and EBA staff prepared invoices based on the entries made by him from the daily sheets after having verified - from telephone company records - the minutes billed by him during a pay period. A system was in place whereby a psychic could obtain an advance up to 25% of commissions earned to a particular date and it was secured by a Promissory Note, an example of which was located in Exhibit A-4, tab A, page 2. While working at EBA, Mazurat stated he was aware of CRTC rules and that while there was a maximum of $50.00 per call, EBA could establish a per-minute rate. EBA set a time limit of 15 minutes per call. From time to time, EBA offered bonuses or incentives and he had received one or two which were in the form of a $40-$50 payment. In the event the 15-minute limit was breached, the psychic was charged 35 cents per minute by EBA and he was subject to a large number of chargebacks which - although it did not amount to a lot of money - was still significant to him. Mazurat referred to his T1 General Income Tax Returns for the years 1994 to 1998, inclusive - Exhibit A-5, tab 23A to E, inclusive indicating average earnings of over $20,000 per year at EBA. He filed his returns on the basis of being a self-employed person and included the T4A slip provided by EBA. Apart from his connection with EBA, Mazurat did not carry on any other business as a psychic, although he could have done so. At EBA, he chose the hours he wanted to work and, if he could not attend at a scheduled time, then he would find another EBA psychic to replace him. He did not have any training as a psychic but had gained experience in that field of expertise. He carried out modest advertising for his services as a psychic. The majority of his clientele had been established by EBA and only about 10%-12% of his calls were repeat callers specifically requesting to speak to him. The office was provided by EBA and he brought his own books, pens, papers and cards to work but did not deduct these as a business expense. EBA did not instruct him on how to perform a psychic reading but did stress that it was necessary to observe the 15-minute time limit per call. While working as a Pilot/Manager for EBA, he was definitely in the category of employee but that position did not afford the freedom enjoyed while providing services as a psychic which he considered to be delivered in his role as an independent contractor pursuant to a series of written agreements between himself and EBA. As a Pilot, he worked up to 50 hours per week over different shifts but as a psychic he had the freedom to choose his hours of work which permitted him to attend school during 1996. As a psychic, there were some slow days that did not produce much revenue as either there were not a lot of callers or he was unable to connect with the people on a one-to-one basis and they would hang up after only three or four minutes. If there was no rapport being developed between himself and a caller, he would attempt to transfer the call to another psychic so that there could be a commission earned by that person. With regard to observing the 15-minute limit on calls, he used a timer or his own wristwatch to remind him a call was approaching the limit.

                In cross-examination by Charlotte Coombs, counsel for the respondent, Corey Mazurat stated he had registered for GST after observing a deduction in the sum of $102.00 from his first commission cheque following which he spoke to the EBA accountant and was advised to obtain a GST number. He understood that if it turned out he earned less than $30,000 per year he would not have to either collect or remit any GST. He had seen an advertisement in a Kelowna newspaper searching for psychics and numerologists. He attended at the EBA office and spoke to Treva Stubbs and then performed a reading for her in the presence of two other persons. He stated while he was working at EBA as a psychic, he had never been made aware of the potential to earn $1.00 per minute by having a specific extension number. Mazurat agreed he had not added GST to his invoices, one of which was referred to him for examination (Exhibit A-4, tab 14A). Since there were always vacant cubicles from which to work at any time, he was free to choose his hours of work and even if not scheduled to work in accordance with a sign-up sheet, a psychic could usually drop in to the EBA office and the Pilot would transfer overflow calls to them. On other occasions, a psychic could report to work two hours early and be included - immediately - on the roster for that shift. He always felt he could leave when he chose and the workers decided among themselves who could leave during a slow period. There was a waiting period of 90 days before EBA paid him his commission. He had no other customers other than those calling EBA and he never billed any callers directly. His only personal advertising carried the number of EBA. In writing a letter dated July 21, 1998 to Bernie Keays - Exhibit A-3, tab 5 - he wanted to re-iterate that he did not want the independent contractor relationship between himself and EBA overturned. He had not been aware his contracts with EBA required him to perform - personally - the psychic services but the matter of using a non-EBA psychic as a replacement never arose. Subsequent to the April, 1998, ruling having been issued by Revenue Canada, he was still working at EBA and was aware many people wrote letters to Revenue Canada in support of their view that they were independent contractors. (Exhibit A-4, tab 18) Following the ruling, a meeting was called by Alfred Evans during which he asked the psychics if they wanted to dispute the finding and all but one person agreed to do so. The overwhelming majority of the workers wanted to be independent contractors and to have the right to deduct certain business expenses and to avoid the cost of paying premiums for employment insurance. Mazurat also read Tarot cards and agreed it was understood among psychics they would not forecast horrendous events while talking to a caller.

                In re-examination, Mazurat referred to a sign-up sheet - Exhibit A-2, tab 22 - and explained that psychics entered their name in an appropriate space which would indicate when they were willing to work. From this information, EBA would post a schedule - effective for one week - on a board.

                In response to a question from the Bench, Mazurat stated that if a psychic intended to be absent for three or four weeks that this person would advise EBA management to that effect. The system of scheduling was very fluid and the graveyard shift would be operated by two or three people while the day shifts could have between 6 and 10 psychics working at the same time.

                James Drayton Laramie testified he works as the Office Administrator for Vacation Travel in Calgary. He was never a director, officer or shareholder of EBA but worked - as a psychic - for EBA between May 2, 1995 and July 12, 1996. Then, he worked as a Manager until the spring of 1998 at which time he returned to work as a psychic until January, 1999 when he moved to Calgary to take on the position of Manager of Pilots for Vacation Travel carrying on business as Innervision. While working as a psychic, he considered himself to have been an independent contractor. He had to abide by CRTC rules and other policy set by EBA such as avoiding use of profanity and adhering to the 15-minute time limit per call. He was paid a commission of 50 cents per minute with an additional 10 cents per minute if he worked after midnight. He was aware of the system of chargebacks by EBA for exceeding the 15-minute limit and the accumulated total - at 35 cents per minute - ranged from $10-$50 per month. He reported his income on the basis of being self-employed and retained receipts for purchases of a headset, books, cards, guides and advertising. He also operated "Drayton's Dreams", a psychic service for which he charged a minimum rate of $40.00 for a reading which, if prolonged, could amount to a maximum of $75.00. He performed this service from his own home or at homes of his clients. He carried on this activity while also providing psychic services to EBA. In the spring and again in the late fall of 1998, he also provided service to a business entity operating as Intel Psychics. Calls were forwarded by Intel in Vancouver to his residence in Kelowna. As for working at EBA, Laramie stated he felt free to choose his own hours of work and had undertaken research over the years in order to learn about clairvoyant capabilities. He agreed a person could be taught how to read Tarot cards but not how to be clairvoyant as that ability is either present or it is not. At his own expense, he distributed flyers, handed out business cards and did benefits at various businesses in Kelowna. He also placed an inexpensive advertisement in a small newspaper in Alberta. He was aware he could have subcontracted out his psychic duties to others if they met EBA standards but did not do so as the majority of his clients came through EBA as a result of corporate advertising. The balance of his readings were the result of repeat calls and from word-of-mouth referrals. He did not charge any GST to EBA when preparing invoices for payment. In the event he was not " connecting " with a caller he would ask the Pilot to transfer the call to another psychic and forego any commission. He wanted to have the freedom to choose hours of work and to use his own material while performing readings. The chargebacks by EBA for overtime minutes per call were done on a bulk basis proportionate to the number of minutes billed in that period by each psychic and - overall - the pay structure suited his needs.

                In cross-examination by Susan Wong, Mazurat stated that while working the midnight shift he never had to rely on the guaranteed minimum payment in the sum of $56.00. He had created Drayton's Dreams as a sole proprietorship prior to joining EBA and had never employed any workers in that enterprise. Even though the contracts with EBA specifically required the psychic services to be performed personally by the Contractor, he still thought there was an ability to subcontract that service provided that EBA approved. In referring to a Statement of Business Activities - Exhibit A-16 - Laramie agreed the sum of $11,085.00 included therein was generated from working at EBA in 1995 and that this represented the bulk of his income. This continued to be the case until he started working as a Pilot at which point he was paid on the basis of being an employee. For his 1998 taxation year, he was advised by EBA to report all income earned from EBA as employment income. In reporting income for his 1997 taxation year, he had claimed some motor vehicle expenses incurred in travelling to the homes of his clients in order to perform readings.

                In re-examination, Laramie estimated he could bill about 30 minutes per hour - on average - which represented at least $15.00 per hour in income.

                Eufemia Torrenueva testified she worked for EBA as a psychic and used the name, Faye. She identified a letter - Exhibit A-20 - dated April 28, 1998 that she wrote to Revenue Canada indicating she wanted the ruling to be changed so she would be regarded as an independent contractor. She stated she had never been a director, officer or shareholder of EBA and that she had signed various contracts dated, as follows: December 9, 1994 - Exhibit A-21 - July 21, 1995 - Exhibit A-22 - and December 27, 1996 - Exhibit A-23 - which had amended an earlier agreement. She identified her business card - Exhibit A-24 - displaying the name Gypsy Rose Faye and the EBA 1-900 number together with some attached sheets of advertising - paid for by her - which included her own residence telephone number. She prepared a GST Registration Form - Exhibit A-25 - and filed her income tax returns for the years 1995 - Exhibit A-26; 1996 - Exhibit A-27; 1997 Exhibit A-28; and 1998 - Exhibit A-29 on the basis of having business income as a self-employed person. She began working as a psychic at EBA on December 9, 1994 and still works there in Kelowna. She was paid a commission of fifty cents a minute with a bonus of 10 cents for working after midnight and she was familiar with the method of EBA charging back 35 cents per minute for exceeding the 15-minute limit and such deductions cost her - on average - about $35.00 per month. Between 1995 and 1998, inclusive, she earned a total of $78,819.79 while working as a psychic at EBA and all income was reported as self-employed business income. While providing services to EBA, she also operated a business under the name Gypsy Rose Faye and charged the sum of $25.00 per reading which she performed at her own home or at a client's residence. She obtained a business license from the City of Kelowna and was permitted to work for other psychic agencies. She was able to choose her hours of work and performed the services personally. She had studied Tarot, numerology, channeling and dream interpretation for over 30 years but received no training from EBA. She estimated between 80%-90% of her clients came through EBA but she had about 15%-20% repeat callers. She provided her own tapes, crystals, and a timer which she deducted as a business expense. In the event she transferred a call to another psychic, she was not paid for the time she had spent prior to switching the caller. She knew EBA charged GST on the calls and throughout her association with EBA considered herself to be an independent contractor free to come and go at her own discretion and to cancel scheduled shifts if she chose. While working at EBA, she was able to increase her own clientele and had the ability to deduct certain expenses against income.

                In cross-examination by Susan Wong, Torrenueva stated she was always aware the contract with EBA required her to provide the services personally. She joined EBA in order to expand her own customer base and the psychic business - at that time - was undergoing a boom period. Because EBA had a business establishment, she was able to devote more time to being a psychic. She registered for GST because, in addition to earning money as a psychic, she also sold Amway products. In 1995, she agreed nearly all of her income - as a psychic - came from EBA and that only $400.00 - from a total of nearly $25,000 - was produced from non-EBA readings. In 1996 and 1997, all of her income earned from the provision of psychic services came from EBA. In 1998, out of nearly $30,000 in income, less than $500.00 was reported as having been earned by performing private readings.

                Terry Bauer testified he resides in Calgary, Alberta and holds no office nor does he have any equity in EBA. On May 16, 1994 he began working as a psychic at EBA and continued until May 6, 1996 when he took on the position of Pilot/Manager. He left EBA in September, 1996 but returned to work in March, 1997 and stayed until July 26, 1999 when he moved to Calgary to work at Vacation Travel, doing business as Innervision. He entered into a contract (undated) with EBA - Exhibit A-30 - in 1994 and signed another agreement - Exhibit A-31 - on July 22, 1995. On November 3, 1995, he signed another agreement - Exhibit A-32 - using the name of Psyart Enterprises (sometimes PsyArt or Psy Art Enterprises), a sole proprietorship owned by him. On January 6, 1998 he entered into another agreement - Exhibit A-33 - with EBA, again using the name Psyart and then signed yet another contract - Exhibit A-34 - dated November 1, 1998 using Psyart as the Contractor referred to in the document. He applied for a GST number and in the registration form - Exhibit A-35 - used the name Psyart Enterprises to describe the name of the business and indicated he was the President. He filed his 1994 income tax return - Exhibit A-36 - on the basis of having earned self-employed business income and continued to do so when filing tax returns for 1995 - Exhibit A-37; 1996 - Exhibit A-38; and 1997 - Exhibit A-39. He advertised the services of PsyArt Ent. listing himself as CEO and provided his home telephone number. He also used another form of advertising in which he stated he was a member of the Evanly Rays Psychic Group and displayed the 1-900 used by EBA (Exhibit A-40). While working as a psychic at EBA, Bauer stated there were no deadlines or priorities and the selling price per minute was set by EBA within the overall cap established by the CRTC. He was paid a commission of fifty cents per minute and was subject to the chargeback if his calls exceeded the limit. When performing a private reading - as the proprietor of Psyart - he charged $50.00 and performed the service either at his own residence or in the homes of his clients. He did not have a business license for his sole proprietorship. He also provided psychic services to other psychic companies during the period he worked at EBA. In the event he had to substitute someone for a shift, it was never an outsider but was a psychic drawn from the pool already working at EBA. He took a training course in reading Tarot cards but considered his own clairvoyance to be an inherent gift. EBA provided the telephones and furniture but he used his own runes, crystals and Tarot cards, the cost of which he deducted as a business expense. He charged GST to EBA and always considered himself to be an independent contractor while working as a psychic.

                In cross-examination by Charlotte Coombs - counsel for the respondent - Bauer stated he decided to use the name Psyart and when filing his income tax return - Exhibit A-36 - for his 1994 taxation year, in the Statement of Business Actvities included therein, used the address of EBA as the address of his own business. In that year, he deducted the sum of $1,344.36 as automobile expenses which consisted entirely of the cost of driving to and from his personal residence to the EBA office. In his income tax return for his 1995 taxation year - Exhibit A-37 - he again used the address of the EBA office in Kelowna as the address where his self-employed income had been generated and used the name Psy-Art Enterprises to describe his business. In filing his income tax return for the 1996 taxation year, Bauer - now working as a Manager at EBA with the status of employee - reported his income for the year - earned earlier as a psychic - as business income. Bauer stated that all but $500.00 of that income would have been the result of services provided to EBA. In 1997, his reported business income in his tax return - Exhibit A-39 - was in the sum of $7,419.36, the exact amount set forth in the T4A issued to him by EBA. Following the ruling issued by Revenue Canada in 1998, Bauer stated he wrote a letter to Revenue Canada in which he supported the view that he and other psychics at EBA were independent contractors.

                In re-examination, Terry Bauer stated when he first began working at EBA in 1994, he would just show up at the premises even though not scheduled to do so and would be assigned overflow calls by the Pilot.

                Treva Stubbs testified that - since 1996 - she has been employed as the General Manager of EBA but is not an officer or shareholder. Prior to assuming her current position, she worked as a psychic at the EBA office, starting in 1994. She entered into an agreement with EBA dated May 15, 1994 - Exhibit A-42 - and began working pursuant to a system that paid her a fifty cent per minute commission on calls handled by her. The chargebacks for exceeding the 15-minute limit sometimes cost her as much as $100.00 per month. In 1994, she earned in excess of $36,000 at EBA and also did private readings at a charge of $20 - 25 but this did not produce much income. She did not provide her services to other psychic companies but was free to do so and any substitute was arranged for by using someone already working at EBA. In such case, no prior approval from EBA was required. She had no special training in clairvoyance and regarded herself as being clairsentient - able to feel another's emotions - and considered this to be a natural gift. Her business cards - Exhibit A-43 - displayed the number and trade name of EBA and were paid for by her through a deduction from her commissions. Initially, 90% of the callers came through the EBA advertising efforts but she was later able to develop a clientele of repeat callers which amounted to as much as 40% of her overall revenue. She had not bothered to register for GST because she had not expected to generate more than $30,000 per year in revenue. Referring to the circumstances surrounding the ruling - Exhibit A-1, tab 9B - issued on March 30, 1995 finding her not to have been in insurable employment with EBA during 1994, Treva Stubbs stated two officials from Revenue Canada had earlier attended at the EBA office in order to observe the nature of the work being performed and they had also interviewed the psychics. In her own view at the time, she considered herself to be an independent contractor having freedom to choose working hours and to have the right to deduct work-related expenses. The sign-up sheet was used by the Pilot/Manager to prepare a schedule for the forthcoming week and some psychics used different names in order to identify themselves if they were using a special extension number. After becoming General Manager, she was aware of several psychics who used the extension method of generating revenue of $1.00 per minute. Any advertisements placed by psychics in connection with that service were paid for by them but they still had to be approved by EBA to ensure they complied with CRTC regulations. EBA used a variety of names and some investors owned a particular 1-900 number which was used in certain advertisements and EBA handled the calls on its equipment and charged a fee - between $1.09 and $1.29 per minute - to service the call. The telephone system was capable of identifying the entity or business name to which the call was directed. EBA owned the name, Evanly Rays and all other names were merely serviced by EBA for a fee. Some psychics were willing to incur a chargeback fee of 35 cents per minute for breaching the 15-minute limit because it could lead to the caller phoning again which could produce income for another 15 minutes at a later time. The industry average relating to bad debts - incurred as a result of people not paying the charge for the psychic call appearing on their monthly phone bill - was about 30% initially but later declined to 24%. EBA used the method of assigning 12% of gross revenue as an allowable delinquent factor beyond which all psychics were charged back a proportionate share against earned commissions.

                In cross-examination by Susan Wong, Treva Stubbs agreed she did not carry out many private readings while employed at EBA as she did not have the funds to carry out her own advertising and all calls had to be taken at the EBA premises. She worked a lot of hours - sometimes 7 days a week - and was able to earn a substantial amount of money in 1994. Some of the psychic lines owned by an investor charged as much as $4.99 per minute.

                Dora Weninger was called as a witness by Counsel for the respondent and testified she lived in Kelowna and currently worked as a desktop publisher but had worked for EBA as a psychic within the relevant period from November 30, 1997 to February 24, 1998 and thereafter until January, 1999. On February 25, 1998 she applied for employment insurance benefits - while working at EBA - because she had not yet received any cheques in payment of commissions earned, due to the holdback period. Initially, she had sought social assistance from the provincial government but an official there had referred her to HRDC with the advice to apply for employment insurance benefits. Until commencing work at EBA, she had never been paid for her psychic services. In October, 1997 she took a Tarot-reading course from James Laramie at EBA. Later, he interviewed her and informed her that if she wished to qualify as a psychic she had to perform three test readings with strangers. She passed the test and on November 30, 1997 worked one day to see whether or not she would be able to perform the work as she was not confident in her ability to read Tarot cards. However, she did not work again until January 10, 1998. Earlier, she had been injured in a motor vehicle accident and sitting for long periods caused her pain so she took some time off in order to recuperate. She began feeling better in January, 1998 and telephoned James Laramie to see if she could return to work and he agreed. At the EBA premises there were two rooms separated by sliding glass doors and each area had 10 cubicles equipped with desks and phones. She purchased her own headset and brought Tarot cards and crystals to work but was told by Corey Mazurat not to bring a laptop computer. The calls were initially answered by a Pilot who read the mandatory greeting and then a call was passed on to the next psychic on the list. If a call came in on a line for which the charge was $4.99 per minute, then the call would last only 9 minutes before the $50.00 maximum - including tax - was reached. Weninger stated a sign-up sheet was placed on the counter each Monday morning and - for the next two months - she completed the form indicating she would work Monday to Friday from midnight to 8:00 a.m. each week. Later, she worked from 8:00 a.m. to 8:00 p.m. for two months, averaging about 50 hours per week. Three psychics handled the midnight shift and 8 were working during the day and evenings. If there was a shortage of workers on a particular shift, EBA staff would begin phoning people to request they come to work and she felt obligated to comply. Weninger stated the invoice for her services - Exhibit A-1, tab 7A - was prepared by EBA staff. During the course of a shift, she would make entries in a sheet - Exhibit A-1, tab C - recording the "time on - time off" for each call including a calculation of total minutes and comments pertinent to the conversation. She did not apply for a GST registration number. At some point, she discovered the workers could obtain an advance based on 25% of commissions earned to date. Weninger referred to an invoice relating to a pay period of September, 1998 - Exhibit R-2 - in which certain minutes were billed at the regular rate of fifty cents, others at fifty-five cents - based on repeat callers - some at sixty cents for working after midnight with a bonus of five cents per minute if callers specifically requested to speak to Amber - the name used by Weninger. In that pay period, she had the sum of $13.78 deducted from her pay as a result of chargebacks for exceeding the time limit on calls. In addition, her proportionate share of bad debts amounted to $58.30. On three occasions in February, 1998, she was paid the minimum payment of $56.00 for working the midnight shift. On occasions when she was unable to attend work, she telephoned the on-duty Pilot who arranged for a substitute but in the latter part of 1998 she had to find her own replacement - within the group of EBA psychics - to cover a shift. She always considered it necessary to obtain the permission of the Pilot in order to leave during a shift. Staff meetings were held at the EBA office and, while there was no written direction requiring psychics to attend, Weninger stated she was told by various Pilots that she should be present and she would usually comply except if she were just finishing off a graveyard shift. During an evening shift - if it had been quiet - the names of workers wanting to go home would be placed in a hat and one name would be drawn entitling that person to leave work. At one meeting, Alfred Evans mentioned he was concerned certain psychics might be "stealing" EBA clients and stated that psychics providing services to EBA were not permitted to perform private readings to any of the persons who had called the EBA lines. Weninger - in any event - had done no private readings while working at EBA and did not perform services for any other psychic lines. James Laramie had informed her - following the completion of the Tarot course for which she paid a fee of $25.00 - that if she left EBA within a 3-month period in order to work for another psychic company she would have to pay the actual cost of the course which was valued at $600.00. She understood a term in the written contracts (Exhibit A-1, tab 4 and Exhibit R-3) permitted her to refuse work but "office gossip" was that it would be unwise to turn down opportunities to handle an available shift. She also understood the initial contract dated November 17, 1997 required her to perform the services personally. After the ruling was issued by Revenue Canada, there was a meeting called by EBA management and Alfred Evans handed out a sheet - Exhibit R-4 - setting out some details the psychics should consider when drafting a letter to Revenue Canada. She wrote a letter dated April 28, 1998 to Melanie Bailey, Rulings Officer - Exhibit A-2, tab 16F - in which she asserted that she was self-employed and had a business license to that effect. In that letter, she indicated she contracted her services to EBA on her own terms and billed EBA for her services in the same manner as she would for personal clients that she visits in their homes or those that attend at her residence. Weninger stated that at the time of writing this letter she had been influenced by a private conversation held between herself and Alfred Evans in which he told her that sending such a letter might help to "straighten out the problem" and that the psychics - including her - might well owe thousands of dollars in back income tax if they could no longer be regarded as independent contractors. She later undertook additional research into the issue of self-employed versus employee status and came to believe she had been an employee all along. On that basis, she proceeded to seek relief pursuant to the Employment Standards Act of British Columbia and the Employment Standards Tribunal upheld an earlier ruling declaring her to have been an employee of EBA from November, 1997 until January 31, 1999 (Counsel for the appellant advised the Court this decision is currently under appeal).

                In cross-examination, Dora Weninger confirmed she had never been a director, officer or shareholder in EBA. On November 27, 1997, she had worked one day as a psychic for EBA and then took a leave of absence until January 10, 1998. After leaving EBA in January, 1999, she began working for another psychic line and earned the sum of $8.00 an hour plus a bonus and then began working as a Pilot. Weninger was referred to an invoice - Exhibit A-1, tab 5A - and a call tracking sheet - Exhibit A-1, tab 5C - and agreed she had made the entries on the sheet which were then used to prepare the invoice submitted for payment of earned commissions. She signed a contract - Exhibit A-1, tab 4 - dated November 17, 1997, but had not seen the contract - Exhibit A-1, tab 6 - dated January 5, 1998 (not signed by her) except during the proceedings before the Employment Standards Tribunal. She regarded the earlier contract as being in force throughout her time at EBA as no notice of termination had ever been sent to her. Initially, she was not aware of details surrounding GST and the requirements for registration but later became aware that if revenue was less than $30,000 per year there was no need for her to obtain a GST number. The invoice covering the month of September, 1998 - Exhibit R-2 - is the only one she can recall in which her pay had been deducted an amount attributable to her proportionate share of bad debts because the delinquencies had exceeded the allowable limit set by EBA management. Subsequent to the ruling in 1998 to the effect that she was an employee of EBA, she received a T4 slip stating the amount of her earnings. Prior to starting work at EBA, she had obtained a business license from the City of Kelowna which an official issued to her under the category of public stenographer because that seemed to be the closest description to her intended activities which was to offer psychic readings, sell certain oils and other related products. She did not produce any revenue from this venture. As for working for other psychic companies, the only mention of that arose when James Laramie reminded her that if she left EBA within three months to work for a competitor she would be charged the full value of the Tarot reading course and not merely the nominal sum of $25.00 she had already paid. She agreed neither Evans or Stubbs had ever informed her she was not allowed to work for another psychic line. Her experience was gathered over the years by reading palms and studying crystals - merely as a hobby - and then by researching oriental fortune telling and runes. She had purchased Tarot cards, books, crystals and pyramids for decoration in her cubicle at work but EBA provided the desk and phone. EBA did not instruct her on the manner in which she should perform a psychic reading but they asked her to attempt to keep the caller on line for 15 minutes and to maintain a positive reading by - for example - not telling people they were going to die. Only rarely did she transfer a caller to the Pilot for assignment to another psychic. For purposes of the sign-up sheets, she used the name, Amber. During the summer of 1998, her recollection is that on two occasions she was camping and received a call on her cell phone from the EBA Pilot asking her to come to work. Usually, she entered her name on the sheet for 12-hour shifts from 8:00 a.m. to 8:00 p.m. and when it was slow - especially during a graveyard shift - the psychics had created the concept of the lottery to see which one could leave early. At the time, she thought the need to notify the Pilot was a matter of courtesy. Her letter to Revenue Canada dated April 28, 1998 - Exhibit A-2, tab 16F - stated she was not required by EBA to take the Tarot reading course and that the courses were advertised and were open to the public. In another letter dated December 12, 1998 - Exhibit A-2, tab 18, directed to Revenue Canada - Appeals Office - she set out - at page 4 - a list of tools owned by her and used in the course of her work as a psychic with values assigned which - in total - amounted to approximately $1,000.00. Weninger stated that by the end of December, 1998 she had begun to believe her working relationship with EBA was more likely to place her in the category of employee instead of an independent contractor. She recalls receiving the sheet - Exhibit R-4 - setting out contractor requirements but does not recall specifically the source. A vote was taken at a general meeting in April, 1998 and she voted together with all other psychics - except two - to present information to Revenue Canada which would support a reconsideration of their status and - instead - find they were independent contractors. She obtained additional information on the subject by attending at the local HRDC office. She did not discuss the matter with other psychics as most of them blamed her for having created the situation - by applying for welfare and then being advised to apply for EI benefits - which began the process which ultimately led to the ruling. All she had wanted in the first place was to obtain some funds to tide her over until she could receive her first commission cheque. After the ruling had been issued, Treva Stubbs advised her that a change in status could result in additional income tax having to be paid on earned income. Weninger stated that once income tax and other deductions were made following the ruling, her disposable income was greatly reduced. On February 16, 1999 she signed a document - Exhibit R-3 - setting out details of work and the pay schedule.

                In rebuttal, Alfred Evans testified he had never seen the sheet concerning requirements for an independent contractor - Exhibit R-4 - until just before this hearing commenced. Evans noted that the type of font used to print the document is not included in the software used by EBA. As for the letter dated April 28, 1998 - Exhibit A-2, tab 16F - written by Weninger to Revenue Canada, he did not compel her to write the letter and she gave him a copy of it and he forwarded it - along with others written by other psychics - to the Appeals Officer. He also worked out of the Calgary office of Vacation Travel - the associated company - as did Treva Stubbs - and the two businesses were operated 7 days a week, 24 hours a day. It was not possible for them to be in a position to grant or withhold permission to a psychic to leave a shift or to be absent for a day. He stated he had never prepared two different pay cheques - one on the basis of a worker being an employee and the other as an independent contractor - as alleged at some point by officials at Revenue Canada - in order to demonstrate the difference in the psychics net pay once income tax and other deductions had been taken. He regarded this allegation as "outrageous" and noted there had been no document produced in support. None of the content of the letters written to Revenue Canada by the psychics was dictated by him and he did not change or edit any of them.

                Counsel for the appellant submitted that, while EBA had the necessary telephone lines and equipment, the actual delivery of the psychic service to individuals was - for the most part - controlled by the CRTC, through regulation. There had been previous rulings that Treva Stubbs and Edita Kavcic - both psychics - had been independent contractors while providing services to EBA and similar rulings had been obtained in relation to psychics working under the name of Innervision in Calgary under circumstances nearly identical to those at the EBA operation in Kelowna. These rulings were not appealed which made them binding on the parties. Counsel referred to the various contracts signed by Dora Weninger and Corey Mazurat and to the manner in which the parties governed themselves pursuant to the terms thereof. In Counsel's view of the evidence, there was very little control exercised over the psychics except that which was reasonably part of the written agreements and the workers used their own tools and were able to affect - to some extent - profit and loss by taking advantage of using a special extension number and by avoiding the chargebacks created by exceeding the 15-minute time limit on calls.

                Counsel for the respondent submitted the control which purported to flow from the terms of the written contracts included the requirement that the psychics had to personally deliver the service. There was a set rate of pay offered and no negotiation took place between the psychics and EBA. The final work schedule was in the hands of EBA management and the tools required to perform the revenue-earning activity belonged to EBA. Counsel pointed to the infrastructure which was the property of EBA, including the method of advertising, servicing the callers and collecting the revenue. The services of the psychics were integral to the operation of the business and nearly all of their income came from EBA. On balance, counsel submitted it had not been demonstrated by the appellant that the decisions of the Minister were incorrect and, as a result, both should be confirmed.

                In Wiebe Door Services Ltd. v. M.N.R., [1986] 2 C.T.C. 200, the Federal Court of Appeal approved subjecting the evidence to the following tests, with the admonition that the tests be regarded as a four-in-one test with emphasis on the combined force of the whole scheme of operations. The tests are:

                1. The Control Test

                2. Ownership of Tools

                3. Chance of Profit or Risk of Loss

                4. The integration test

Control:

                The evidence disclosed that - for the most part - the psychics were able to choose their own hours of work by entering their preferences for days and particular shifts on the sign-up sheet. However, the actual schedule was prepared by the Pilot/Manager - an employee of EBA - from the information contained in that document and his responsibility was to ensure there would be adequate coverage at all times in order to cope with the demand. The workers established their own lottery system whereby one of them could leave work early during a slow period. The actual manner in which the work was carried out during the conversation with a caller was governed by the need to comply with CRTC rules and also to conform with EBA policy not to use profanity or to issue predictions of events carrying dire consequences. Ironically, communicating the one prediction absolutely guaranteed to be true - the death of the caller - was forbidden. Since the caller had earlier been advised GST applied to the service, at least 50% of the adage concerning the inevitability of death and taxes had been satisfied. In accordance with the nature of the service being offered, EBA management understood there would be times during which the psychics were not able to connect or adequately relate to callers for various reasons. In such an event, the psychics advised the Pilot who transferred the call to another psychic. If a psychic felt the entire shift was not going well, then he or she was free to leave but the Pilot was always advised of the intended departure. Alfred Evans, CEO of EBA, as a result of his research prior to starting the company, insisted that all calls be answered live and that all psychic readings take place on EBA premises from the soundproof cubicles in the office. In the modern workplace, a significant percentage of workers - especially those under 35 - have more than one job. As a result, employers have become more flexible in permitting people to choose hours of work and to advise an employer of their availability on certain days or weekends. The departure from daily adherence to the strict concept of supervision common to the master and servant relationship - from which the status of employee pursuant to a contract or service springs - does not transform a pleasant, easy-going working relationship into one whereby people are dealing with each other as independent contractors. In the within appeals, the service had to be performed personally and the ultimate scheduling was in the hands of EBA management.

Tools:

                The psychics were permitted to bring certain materials to work and to use them in the course of offering psychic readings to callers. Some purchased their own headset but that was a matter of preference. The desks, chairs, cubicles, various supplies, reference books and materials and most important of all, the telephones and lines were supplied and owned by EBA. The method by which the calls were answered, identified, billed and the system by which revenue was collected from the caller through the agreement between EBA and the telephone company, were all administered by EBA staff using company-owned computers and software. EBA paid for the set-up of the system which permitted the calls to be serviced appropriately. The items used by the workers - including Dora Weninger - (who seemed to have acquired the most paraphernalia over the years) were personal in nature much like favourite hand tools used by a carpenter or mechanic and were not required by EBA to perform the actual function at the core of the working relationship.

Chance of Profit or Risk of Loss:

                In the within appeals, counsel for the appellant referred to the system whereby psychics were charged the sum of thirty-five cents for each minute that a call exceeded the 15-minute time limit as well as the mechanism EBA employed for deducting a proportionate share of bad debts from the income of each employee. First, the deduction of amounts for bad debts was done unilaterally by EBA - if the company chose to do so - but this procedure was rarely utilized. The chargeback for the excess minutes is not unlike a penalty clause contained in a contract whereby a plumber or contractor agrees to a certain completion date failing which a certain sum of money is forfeited as a result of non-compliance with a time deadline or some other condition. However, that presupposes the relationship between the parties is governed by a contract for services as it is not possible to create the status of independent contractor by imposing conditions which - if the working relationship is truly that of employer/employee - are illegal. The Employment Standards Act, RSBC, chap. 113, at section 21 states:

"21 (1) Except as permitted or required by this Act or any other enactment of British Columbia or Canada, an employer must not, directly or indirectly, withhold, deduct or require payment of all or part of an employee's wages for any purpose.

(2) An employer must not require an employee to pay any of the employer's business costs except as permitted by the regulations."

                Regrettably, it is not uncommon for restaurant owners to require waiters to pay for broken dishes or to subject them to a pay deduction if some patron skips out without paying but that is not permitted by law. Similarly, the gas station attendant sitting inside the building cannot be made liable for the loss if someone at a self-serve station fills up the tank and then drives off without paying. Those losses - like the bad debts of EBA - are the cost of doing business. EBA accepted that - in part - by setting the level of 12% of gross revenue as the allowable limit which the company would absorb without resorting to contribution from the psychics on a proportionate basis. The differential in the pay after midnight and the guarantee of a minimum payment of $56.00 are not hallmarks of a provision of service by an independent contractor. The evidence did not support the EBA position that there was this glorious opportunity to earn $1.00 per minute by using a special advertised extension number. Even the psychics who testified they were in favour of being regarded as independent contractors were not aware of the ability to generate additional income in this manner while working during the relevant period. There was a strict policy statement issued by EBA that psychics were not to perform private readings for any person for whom initial contact had been made through a call to an EBA telephone line. Any services performed by psychics - after concluding a shift at EBA - were no different than those of a mechanic employed at a car dealership who earns extra money by doing mechanical work for his neighbours or friends after hours. Workers can be employees for one or more enterprises and still operate their own business during free time. The analysis must be concerned with the chance of profit or risk of loss as it pertains to the service being provided which is central to the working relationship under examination. In the within appeals, I fail to see how any psychic could benefit from sound management of the task any more than any other employee who is paid on a commission or piece-work basis. There is no opportunity for loss - in the true entrepreneurial sense - which could have occurred if EBA had charged a psychic a flat rate for use of the cubicle and equipment rather than paying a set rate per minute established unilaterally by EBA. Any bonuses or incentives were devised by EBA and the amount of reward was set by it. The psychics were paid their commissions based on the accumulated minutes of psychic readings and were not legally bound to suffer any loss as a result of any part of the overall operation of the business. Since first-time callers were guaranteed a 100% refund if they were not satisfied at the end of the reading, that potential loss was borne by EBA and the particular psychic was still paid the appropriate per-minute rate.

Integration:

                This test has often been described as the one most difficult to apply.

At p. 206 of his judgment in Wiebe, supra, MacGuigan, J.A. stated:

"Of course, the organization test of Lord Denning and others produces entirely acceptable results when properly applied, that is, when the question of organization or integration is approached from the persona of the "employee" and not from that of the "employer," because it is always too easy from the superior perspective of the larger enterprise to assume that every contributing cause is so arranged purely for the convenience of the larger entity. We must keep in mind that it was with respect to the business of the employee that Lord Wright addressed the question "Whose business is it?"

Perhaps the best synthesis found in the authorities is that of Cooke, J. in Market Investigations, Ltd. v. Minister of Social Security, [1968] 3 All E.R. 732 at 738-39:

                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.

There is no escape for the trial judge, when confronted with such a problem, from carefully weighing all of the relevant factors, as outlined by Cooke, J."

                It is clear from the evidence that the psychics generated revenue as a result of the sophisticated infrastructure established by EBA. The entire apparatus was the brainchild of Alfred Evans, who functioned throughout as the operating mind of the corporation. The contract with Stentor and the telephone company had been entered into by EBA. The capacity of Telus and its predecessor to track the minutes and to bill its own subscriber on behalf of EBA and then to transfer funds to EBA once the bill had been sent out or to deduct at a later time any non-payment from a telephone subscriber for using the psychic service was beyond the capacity of the workers, including Dora Weninger and Corey Mazurat. EBA had a staff responsible for administering the calls, calculating the amounts due to the psychics, and it had a separate division within the business which generated large amounts of advertising in the form of brochures, flyers, print and radio ads as well as coordinating other forms of publicity. At all times, the business being advertised - through a variety of names - was that of EBA. Any personal business cards handed out by psychics - that did not relate to private readings in their own homes or at their client's residence - had only one number displayed, that of EBA. The testimony of the witnesses established the overwhelming percentage of calls were produced as a result of the organized, well-run mechanism owned by EBA. The fact the psychics came to regard repeat callers as their own clients ignores the fact that the people - while asking for a specific psychic - still called a line owned by EBA, and the call was transferred by the EBA Pilot to the psychic - if available - or to another, if not. The billing was still done by EBA, as was the collection of revenue from the telephone company. Nearly all of their income was generated by providing psychic or Tarot card readings to people who called the EBA lines. The income produced privately was very small throughout the periods during which various psychics worked at EBA. It was apparent EBA considered the callers as clients of the company as psychics were forbidden to perform private readings for any person who had initially made contact by calling the EBA lines. So much for expanding the clientele; this was one of the reasons given by Eufemia Torrenueva for joining EBA as she thought it could broaden the base of potential clients. Much of the understanding by the psychics that they were independent contractors stemmed from the flexibility in the work schedule and in considering any repeat callers to form part of their own "business". In reality, it was no different than a customer at a restaurant asking to be seated in the section being serviced by a particular waiter or a person seeking continuity of style and/or satisfactory result by making an appointment - at a salon - with a specific hair stylist. The workers were not able to control their own destiny nor - obviously - to predict their ultimate status within the terms of the working environment at EBA. The fact that, when filing income tax returns, some workers chose to take deductions from so-called business income that would be rejected by a Revenue Canada auditor - after about 10 seconds scrutiny - does not assist in transforming an employee into an entrepreneur. When, after considering all the evidence, one asks the question - whose business is it - the answer is clearly this. It was the business of EBA and the services of the psychics were absolutely integral to the business and represented the very essence of the activity undertaken by means of a complicated business structure requiring EBA to have entered into contractual relationships with others - including the provincial telephone company and Stentor - the national organization composed of all telephone companies in Canada - and to bear the burden of carrying on the business in compliance with CRTC regulations.

                There is no doubt the workers Dora Weninger and Corey Mazurat entered into written contracts with EBA pursuant to which they were to provide their personal services as psychics. The only reason to continually have the psychics sign new contracts - especially Mazurat- when the existing contract was still in force was - in my view - to keep fresh in the minds of the workers that they were - indeed - independent contractors providing services pursuant to a written agreement. In any event, people are not free to assign a status or characterization to their working relationship unless it is supported by the facts. In the case of The Minister of National Revenue v. Emily Standing, 147 N.R. 238, Stone J.A. at pp. 239-240 stated:

                "There is no foundation in the case law for the proposition that such a relationship may exist merely because the parties choose to describe it to be so regardless of the surrounding circumstances when weighed in the light of the Wiebe Door test."

                In Wiebe, supra, at p. 205 of his judgment, MacGuigan J.A. stated:

                "I interpret Lord Wright's test not as the fourfold one it is often described as being but rather as a four-in-one test, with emphasis always retained on what Lord Wright, supra, calls "the combined force of the whole scheme of operations", even while the usefulness of the four subordinate criteria is acknowledged."

                It is sometimes difficult for people - both payors and workers - to accept that they are not free to choose their own status. It is even more difficult for workers and business people to have any sense of security they are doing the right thing in having mutually chosen an acceptable method by which one will give - and the other will receive - a service in return for payment. Then, someone - like Dora Weninger - later decides to pursue benefits available only to a person having status as an employee - having earlier reaped the rewards of certain monetary or tax advantages attributable to a putative entrepreneur. The situation for all parties concerned does not get any better when there are a series of conflicting rulings - albeit over different periods and concerning other workers - when the circumstances surrounding the supply of service by all workers are - for the most part - nearly identical to the one which eventually becomes the subject of an appeal before the Tax Court of Canada. However, in fairness to the Rulings Officers and Appeals Officers, they are deciding each case on information provided to them and there was - in my opinion - reliance placed on the so-called ability of the EBA psychics to work at home - for EBA - and this was not the case, at all. In fact, the opposite was true as any psychic service provided by any worker to EBA had to be done at the EBA premises in accordance with corporate policy. Often, a small change in facts will produce a different result, as any reader of cases within this area of jurisprudence will - to his or her disappointment - quickly discover. Unfortunately, I do not see any way around this problem, barring a change in legislation which would permit some form of opting-out for certain services within a limited period pursuant to specific circumstances. In these cases, appellants often express the view that the modern workplace is not well served by existing legislation but that is for the legislators to consider during the ongoing process of modernizing the national scheme as was done recently by amendments permitting each hour of employment to be insurable, obviously in recognition of the fact there are millions of people earning income from a combination of three or four part-time jobs. The desire for a flexible work schedule and a pleasant work environment, free of rigid chain-of-command models within a strict hierarchy marked by titles and strange numerical and/or alphabetical prefixes - used to denote rank or supervisory positions - often leads people to assume such a friendly place cannot be consistent with a traditional employer/employee relationship and that they must, therefore, be self-employed within the context of a larger entrepreneurial landscape, especially if they have signed a contract purporting to recognize that status. It is disconcerting when they bump up against the wall of jurisprudence that has been erected by the ongoing process of interpreting the legislation and to be told they have been working for several months - or even years - under what is tantamount to a false premise, however innocently commenced and thereafter pursued in good faith. Not having been blessed with any psychic powers, I do not foresee any change in the system and it will continue to aggravate, confuse and confound those who seek clarity and certainty concerning the human resource component of modern business.

                The decisions issued by the Minister pertaining to the workers Dora Weninger and Corey Mazurat are correct and are hereby confirmed. The appeals are dismissed.

Signed at Sidney, British Columbia, this 15th day of September 2000.

"D.W. Rowe"

D.J.T.C.C.

COURT FILE NO.:                                                 98-1184(UI)

                                                                                                98-1185(UI)

STYLE OF CAUSE:                                               Earlybirds Awards Inc. and M.N.R.

PLACE OF HEARING:                                         Vancouver, British Columbia

DATE OF HEARING:                                           June 14, 2000

REASONS FOR JUDGMENT BY:      The Honourable Deputy Judge D.W. Rowe

DATE OF JUDGMENT:                                       September 15, 2000

APPEARANCES:

Counsel for the Appellant: Arthur J. Lee

Counsel for the Respondent:              Charlotte Coombs

                                                                                Susan Wong

COUNSEL OF RECORD:

For the Appellant:                

Name:                      Arthur J. Lee

Firm:                        Lew and Lee

                                                                                                Vancouver, British Columbia

For the Respondent:                             Morris Rosenberg

                                                                                Deputy Attorney General of Canada

                                                                                                Ottawa, Canada

98-1184(UI)

98-1185(UI)

BETWEEN:

EARLYBIRDS AWARDS INC.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Appeals heard together on June 14, 2000 at Vancouver, British Columbia, by

the Honourable Deputy Judge D.W. Rowe

Appearances

Counsel for the Appellant:                             Arthur J. Lee

Counsel for the Respondent:                         Charlotte Coombs

                                                                   Susan Wong

JUDGMENT

          The appeals are dismissed and the decisions of the Minister are confirmed in accordance with the attached Reasons for Judgment.

Signed at Sidney, British Columbia, this 15th day of September 2000.

"D.W. Rowe"

D.J.T.C.C.