Date: 20000926
Dockets: 1999-2248-EI, 1999-2249-CPP
BETWEEN:
MASTECH QUANTUM INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Weisman, D.J.T.C.C.
[1] These are appeals from a determination by the Respondent that Glenn Wallace was in insurable and pensionable employment while managing computer systems at Dofasco Inc. ("Dofasco") from January 1, 1996 to January 14, 1998.
[2] This matter calls into question the interpretation of paragraph 6.(g) of the Employment Insurance Regulations[1] and paragraph 34.(1) of the Canada Pension Plan Regulations[2], which provide as follows:
"6. Employment in any of the following employments, unless it is excluded from insurable employment by any provision of these Regulations, is included in insurable employment:
...
(g) employment of a person who is placed in that employment by a placement or employment agency to perform services for and under the direction and control of a client of the agency, where that person is remunerated by the agency for the performance of those services.
34.(1) Where any individual is placed by a placement or employment agency in employment with or for performance of services for a client of the agency and the terms or conditions on which the employment or services are performed and the remuneration thereof is paid constitute a contract of service or are analogous to a contract of service, the employment or performance of services is included in pensionable employment and the agency or the client, whichever pays the remuneration to the individual, shall, for the purposes of maintaining records and filing returns and paying, deducting and remitting contributions payable by and in respect of the individual under the Act and these Regulations, be deemed to be the employer of the individual."
[3] It is not disputed that Wallace was placed in employment at Dofasco by Silverside Computer Systems Inc., the Appellant's predecessor, on terms and conditions which are analogous to a contract of service, that Silverside was a placement or employment agency, and that Dofasco was a client of that agency.
[4] At issue is whether Silverside placed Wallace under the direction and control of Dofasco, and whether Wallace was remunerated by Silverside.
The direction and control issue:
[5] The Appellant argues that there is no evidence of any intent on the part of Silverside to place Wallace under the direction and control of Dofasco. It points to the governing Agreement between Dofasco and Silverside dated August 27, 1996 which provides inter alia: "The Client will be responsible for designating the nature of the services to be performed by a Subcontractor, and verifying that the result achieved by a Subcontractor is satisfactory; it being understood that a Subcontractor has the sole and absolute discretion as to the manner in which the services are to be performed".
[6] The Appellant also contends that Wallace was uniquely skilled in managing the archaic computer system then utilized by Dofasco to control its oxygen steel making furnaces. There was accordingly no one at Dofasco who could direct and control the manner in which he performed his services.
[7] Wallace testified on behalf of the Respondent. He described the extreme dangers inherent in a steel making operation. If any of his computer systems failed, hot liquid steel could escape, and injury and death result. As a consequence, he was subject to a variety of directions and controls by the safety-conscious Dofasco.
[8] Dofasco has three support teams which share two managers in common. Wallace is one of six members on team one which is involved in steel making. The other five members are full-time employees of Dofasco. Wallace has an office at Dofasco where he is required to wear steel boots, safety glasses, and long-sleeved shirts for his own protection. He reports to three different individuals and his work is overseen by the previously mentioned two managers, that he refers to as his "bosses". There is a list of people who must be consulted on all major decisions. He is apt to receive calls at home 24 hours per day, seven days per week. The quality of his work is subject to inspection by his team, his managers, and his client. The division of Dofasco known as Information Systems is his client, Steelmaking the business unit of Dofasco he works for. He described a variety of meetings that he is obliged to attend at Dofasco. They included safety meetings, project meetings, and client status meetings.
[9] One of Wallace's main functions at Dofasco is to produce status reports for the main computer systems he manages. These reports define what he worked on in the last 30 days, any problems, actions and requests, together with his plans for the next 30 days. If questions arise, his client consults his bosses who go over the reports with him. It is his position that everything he does is controlled by Dofasco. In his words: "I work on what they say I work on. I meet their demands."
[10] In my view, one must distinguish the manner in which Wallace performed the services he was uniquely qualified to perform, and which could not therefore be directed and controlled by Dofasco, from the conditions under which Wallace worked and the direction and control exercised over him by Dofasco as part of a team involved in a large, dangerous and multi-faceted operation.
[11] While no one at Dofasco was competent to direct and control the exercise of Wallace's computer expertise, the evidence is that he was deeply enmeshed in the interstices of a large and complicated bureaucracy at Dofasco. As a member of a team overseen by managers, within the Steelmaking business unit, servicing Information Systems as a client, he was just as much under Dofasco's direction and control as were any of its employees. While his bosses at Dofasco could not directly terminate his services, a complaint to Silverside could achieve the same result.
[12] I am unable to accept that Wallace was placed at Dofasco by Silverside free of anyone's direction and control. On the contrary, I find that Wallace was placed by Silverside at Dofasco under the direction and control of that client of the agency.
The remuneration issue:
[13] Mr. Mike Leacy, the Managing Director of the Appellant, testified on its behalf. During the period under review, Silverside was one of the Appellant's wholly-owned subsidiaries. For treasury reasons, it was decided to centralize the payroll function for all of the Appellant's subsidiaries, in its offices in Montreal, Quebec. Accordingly, at all material times, Wallace's remuneration was paid neither by Silverside nor by Dofasco, but by the Appellant.
[14] Paragraph 6.(g) of the Employment Insurance Regulations applies where the person who is placed in employment by a placement or employment agency is remunerated by that agency. Paragraph 34.(1) of the Canada Pension Plan Regulations applies where such a person's remuneration is paid either by the agency or its client. It is therefore the Appellant's position that Wallace was not in insurable or pensionable employment within the meaning of either of these Regulations.
[15] The Minister of National Revenue argues that this is an overly technical interpretation of the Regulations which can lead to results not intended by Parliament. Placement or employment agencies can avoid the application of these Regulations by the simple expedient of arranging for someone other than themselves or their clients to pay the remuneration of the individuals they place in employment. I am invited to find the Regulations applicable where remuneration is paid by an agent of the placement or employment agency or by someone on its behalf.
[16] The Appellant replies that had Parliament intended words such as "directly or indirectly" to be part of the Regulations, it would have included them.
[17] In my view, the Appellant's argument is persuasive. One does not have to look far for an example. Paragraph 5.(1)(a) of the Employment Insurance Act[3] itself provides as follows:
"5(1) Subject to subsection (2), insurable employment is
(a) employment in Canada by one or more employers, under any express or implied contract of service or apprenticeship, written or oral, whether the earnings of the employed person are received from the employer or some other person and whether the earnings are calculated by time or by the piece, or partly by time and partly by the piece, or otherwise;"
[18] The maxim expressio unius est exclusio alterius is applicable:
"An implied exclusion argument lies whenever there is reason to believe that if the legislature had meant to include a particular thing within the ambit of its legislation, it would have referred to that thing expressly. Because of this expectation, the legislature's failure to mention the thing becomes grounds for inferring that it was deliberately excluded.[4]"
[19] Since Wallace was not remunerated by Silverside or by Dofasco during the period under review, I find that he was not in insurable and pensionable employment within the meaning of the Regulations.
[20] If this result is not in accord with the intent of Parliament, that is for Parliament to redress, and not the courts.
[21] The appeals are allowed.
Signed at Toronto, Ontario, this 26th day of September 2000.
"N. Weisman"
D.J.T.C.C.
COURT FILE NO.: 1999-2248(EI)
STYLE OF CAUSE: Mastech Quantum Inc. and M.N.R.
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: August 30, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge N. Weisman
DATE OF JUDGMENT: September 26, 2000
APPEARANCES:
Counsel for the Appellant: Martin Sorensen
Jacques Bernier
Counsel for the Respondent: Kelly Smith-Wayland
COUNSEL OF RECORD:
For the Appellant:
Name: Jacques Bernier
Firm: Bennett Jones
Toronto, Ontario
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 1999-2249(CPP)
STYLE OF CAUSE: Mastech Quantum Inc. and M.N.R.
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: August 30, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge N. Weisman
DATE OF JUDGMENT: September 26, 2000
APPEARANCES:
Counsel for the Appellant: Martin Sorensen
Jacques Bernier
Counsel for the Respondent: Kelly Smith-Wayland
COUNSEL OF RECORD:
For the Appellant:
Name: Jacques Bernier
Firm: Bennett Jones
Toronto, Ontario
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-2248(EI)
BETWEEN:
MASTECH QUANTUM INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of Mastech Quantum Inc. (1999-2249(CPP)) on August 30, 2000, at Toronto, Ontario, by
the Honourable Deputy Judge N. Weisman
Appearances
Counsel for the Appellant: Martin Sorensen
Jacques Bernier
Counsel for the Respondent: Kelly Smith-Wayland
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 26th day of September 2000.
|
"N. Weisman" |
D.J.T.C.C.
1999-2249(CPP)
BETWEEN:
MASTECH QUANTUM INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of Mastech Quantum Inc. (1999-2248(EI)) on August 30, 2000, at Toronto, Ontario, by
the Honourable Deputy Judge N. Weisman
Appearances
Counsel for the Appellant: Martin Sorensen
Jacques Bernier
Counsel for the Respondent: Kelly Smith-Wayland
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 26th day of September 2000.
|
"N. Weisman" |
D.J.T.C.C.