Date: 20010102
Dockets: 1999-3612-EI, 1999-3613-CPP, 1999-4881-EI, 1999-4883-CPP
BETWEEN:
FARR FARMS TRANSPORT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
Dockets: 1999-4884-EI, 1999-4888-CPP
FARR FARMS TRANSPORT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
HENRY NEMETH,
Intervenor.
Reasons for Judgment
Porter, D.J.T.C.C.
[1] These appeals were heard on common evidence, by consent of the parties, on July 6 and 7, 2000 at Regina, Saskatchewan.
[2] By Notice of Assessment dated May 19, 1999, the Appellant was assessed inter alia for employment insurance premiums and Canada Pension Plan contributions for the 1997 taxation year in respect of the individuals listed in Schedule ‘A' attached to and forming part of these Reasons for Judgment. The Notice of Assessment was in error as it incorrectly indicated the assessment for employment insurance premiums and Canada Pension Plan contributions as Federal and Provincial tax. However, that is not a consideration in these appeals.
[3] By Notice of Assessment dated May 19, 1999, the Appellant was assessed inter alia for employment insurance premiums and Canada Pension Plan contributions for the 1998 taxation year in respect of the individuals listed in Schedule ‘B' attached to and forming part of these Reasons for Judgment.
[4] By Notice of Assessment dated May 19, 1999, the Appellant was assessed inter alia for employment insurance premiums and Canada Pension Plan contributions for the period January 1, 1999 to February 28, 1999 in respect of the individuals listed in Schedule ‘C' attached to and forming part of these Reasons for Judgment.
[5] By letter dated July 28, 1999, the Appellant appealed to the Minister for a reconsideration of the said 1997, 1998 and 1999 assessments.
[6] In response to the appeal, the Minister by letter dated November 4, 1999 decided to confirm each of the assessments on the basis that each of the individuals named in the respective schedules "D" for 1997, "B" for 1998, and "E" for 1999 attached to these Reasons, was employed by the Appellant under a contract of service and was thus an employee.
[7] The Minister also specifically made a separate decision dated October 7, 1999 that one Matthew Huston was employed in insurable and pensionable employment under the Employment Insurance Act (the "EI Act") and Canada Pension Plan (the "Plan") for the period March 23, 1998 to January 11, 1999 as he was employed by the Appellant under a contract of service.
[8] The Minister also specifically made a separate decision dated October 7, 1999 that one Dallas Lowe was employed in insurable and pensionable employment under the EI Act and the Plan for the period December 5, 1998 to March 3, 1999 as he was employed by the Appellant under a contract of service.
[9] Each of the decisions were said to be issued pursuant to section 93 of the EI Act and section 27 of the Plan.
[10] The Appellant has now appealed to this Court from each of these decisions of the Minister.
The Law
[11] The manner in which the Court should go about deciding whether any particular working arrangement is a contract of service and thus an employer/employee relationship or a contract for services and thus an independent contractor relationship, has been clearly laid out by the Federal Court of Appeal in Wiebe Door Services Ltd. v. M.N.R., 87 DTC 5025. The test to be applied has been further explained by that Court in Moose Jaw Kinsmen Flying Fins Inc. v. M.N.R., 88 DTC 6099. There are, following these cases, numerous decisions of this Court, some of which have been cited by counsel, which demonstrate how these appellate guidelines have been applied. In the Moose Jaw Kinsmen Flying Fins Inc. case, above, the Federal Court of Appeal said this:
"[Analysis]
"The definitive authority on this issue in the context of the Act, is the decision of this Court in Wiebe Door Services Ltd. v. The Minister of National Revenue, 87 DTC 5025. MacGuigan J. speaking on behalf of the Court, analyzed Canadian, English and American authorities, and, in particular, referred to the four tests, for making such a determination enunciated by Lord Wright in City of Montreal v. Montreal Locomotive Works Ltd., [1974] 1 D.L.R. 161 at 169-70. He concluded at page 5028 that:
Taken thus in context, Lord Wright's fourfold test [control, ownership of tools, chance of profit, risk of loss] is a general, indeed an overarching test, which involves "examining the whole of the various elements which constitute the relationship between the parties". In his own use of the test to determine the character of the relationship in the Montreal Locomotive Works case itself, Lord Wright combines and integrates the four tests in order to seek out the meaning of the whole transaction.
At page 5029 he said:
... 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.
At page 5030 he had this to say:
What must always remain of the essence is the search for the total relationship of the parties.
He also observed "there is no escape for the trial judge, when confronted with such a problem, from carefully weighing all the facts".
... like MacGuigan J. we view the tests as being useful subordinates in weighing all of the facts relating to the operations of the Applicant. That is now the preferable and proper approach for the very good reason that in a given case, and this may well be one of them, one or more of the tests can have little or no applicability. To formulate a decision then, the overall evidence must be considered taking into account those of the tests which may be applicable and giving to all the evidence the weight which the circumstances may dictate."
[12] The nature of the tests referred to by the Court can be summarized as follows:
a) The degree or absence of control exercised by the alleged employer;
b) Ownership of tools;
c) Chance of profit and risk of loss;
d) Integration of the alleged employee's work into the alleged employer's business.
[13] I also take note of the further words of MacGuigan J., in the Wiebe case, above, where he approved the approach taken in the English courts:
"Perhaps the best synthesis found in the authorities is that of Cooke J. in Market Investigations, Ltd. v. Minister of Social Security, [1968] 3 AR E.R. 732, 738-9:
"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."
[14] To this I would add the words of Décary, J.A. in Charbonneau v. Canada (M.N.R.) [1996] F.C.J. No. 1337, where speaking for the Federal Court of Appeal he said this:
"The tests laid down by this Court ... are not the ingredients of a magic formula. They are guidelines which it will generally be useful to consider, but not to the point of jeopardizing the ultimate objective of the exercise, which is to determine the overall relationship between the parties. The issue is always, once it has been determined that there is a genuine contract, whether there is a relationship of subordination between the parties such that there is a contract of employment ... or, whether there is ..., such a degree of autonomy that there is a contract of enterprise or for services. ... In other words, we must not pay so much attention to the trees that we lose sight of the forest. ... The parts must give way to the whole."
The Facts
[15] The Minister, in the Replies to the Notices of Appeal, is said to have relied upon the following assumptions of fact when coming to his decisions, namely:
"(a) the facts admitted above;
(b) the Appellant is in the transportation business;
(c) the Workers were hired to provide driving and operating services;
(d) the Appellant produced a detailed "independent contractor agreement";
(e) most of the Workers did not sign the "independent contractor agreement";
(f) the Appellant obtained and provided the customers and contracts;
(g) the Appellant provided a dispatcher who controlled and assigned the trips and loads;
(h) the Workers were in contact with the dispatcher on a daily basis;
(i) the dispatcher could track the vehicle at all times with a satellite tracking system;
(j) the Appellant was required to meet all delivery deadlines;
(k) occasionally the Workers were required to report to the Appellant's client;
(l) the Workers were paid $.27 or $.30 per mile, depending on the load;
(m) the Workers were paid monthly by cheque;
(n) the Workers were paid by the Appellant;
(o) the Workers were only paid mileage based on the shortest route from the supplier to the client;
(p) the Workers were paid even if the client did not pay the Appellant;
(q) the Appellant handled and controlled all of the revenue;
(r) the Appellant provided the tractor, trailer, supplies, fuel cards, calling cards, and toll cards;
(s) the Workers provided their own driver's license;
(t) the Appellant paid for all normal operating expenses including gas, oil, grease, washes, repairs, insurance, tolls, and registration and licensing of the vehicle;
(u) the Workers were responsible for any fines and repairs incurred due to their personal negligence;
(v) the Workers were required to comply with the Appellant's policies and guidelines;
(w) the Workers had to follow all government guidelines;
(x) the Appellant had to approve any major repairs required;
(y) each Worker was required to maintain a log book;
(z) the Workers were required to wash the vehicle on a regular basis;
(aa) the Workers were responsible for greasing and maintaining proper tire inflation on a weekly basis;
(bb) the Workers were required to report all accidents at the time of the accident;
(cc) the Appellant provided some training to the Workers;
(dd) occasionally the Appellant hired a replacement driver when a Worker was unavailable;
(ee) the Workers did not charge the Appellant G.S.T.;
(ff) the Workers' gross wages for the period January 1, 1997 to February 28, 1999, are detailed on Schedule "G", attached to and forming part of the Reply to the Notice of Appeal;
(gg) prior to July 1, 1997 the Workers were treated as employees by the Appellant;
(hh) the working conditions did not change after June 30, 1997."
[16] The assumptions of fact are virtually the same in each appeal, although the total amount of pay differed for each driver.
[17] Evidence was given by Jeffrey James Farr who was the major shareholder of the Appellant and was responsible for overseeing his trucking operations. In addition, Douglas McCullough gave evidence as the dispatcher for the Appellant and a former truck driver for it. Debbie Lynn Darroch was the office manager of the company and gave evidence as did four truck drivers, Marvin Dreghici, Henry Nemeth (the Intervenor), James Seed and Steve Ralston.
[18] In effect, the Appellant, by the evidence it led, agreed with certain assumptions of fact relied upon by the Minister, namely (a), (b), (c) (although the term "hiring" was in dispute); (d), (f), (g), (h) (although Jeffrey James Farr claimed this was on an as needed basis, the remainder of the evidence satisfied me that the assumption was correct); (i), (j), (k), (l), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (aa), (bb), (cc) (the evidence revealed virtually none); (dd), (ff) (varied on the individual appeals) and (hh).
[19] The Appellant disagreed with items (e) (the evidence before me was that all drivers sign such contracts and I accept that evidence); (ee) (there was some evidence that a number of drivers did charge GST and use business names); and (gg) (this was at the root of the issue between the parties).
[20] It was clear to me from the evidence that although there might have been some minor discrepancies between the manner in which the various drivers went about their business, on the whole the terms of work were the same. Bad faith was imputed to Henry Nemeth by the representatives of the Appellant, but quite frankly, I found him to be an honest witness when giving his evidence. His evidence did not differ greatly from the other drivers who testified and their credibility was not an issue. Futhermore, he admitted that he was confused as to his situation in the face of the written terms of the contract and did not know what the status was. His evidence was factual and I find credible, despite an ongoing dispute he has with the Appellant over money.
[21] It was apparent from the evidence that the trucking business of the Appellant grew originally out of the family farm operation. It was initially set up to service their own farming needs, but later evolved into a full-scale trucking operation. Jeff Farr and other members of his family bought and owned the trucks. They leased them to the Appellant corporation. They operated them at cost (including the capital cost) and only made money when they were paid off and they came to sell the vehicles.
[22] Up until June 1997, Jeff Farr had acted as the dispatcher. In that year, they hired a full-time dispatcher. He introduced them to the idea of the contracts. They had a large review of their operation and switched their existing drivers, who had previously been regular employees, over to this new system. They also switched the business to hauling long-haul freight. Doug McCullough was the second dispatcher hired by the Appellant.
[23] The evidence was clear that every driver was required to enter into the form of contract which had been drawn up. If they refused, they were not hired. Although they were given an opportunity to read the contract, the evidence was that this was done in a most perfunctory manner and sometimes the drivers just did not read them at all. I accept, however, that they were all told that they were independent contractors and responsible for their own statutory deductions. They all agreed and if they were not comfortable with that, felt that they had no choice.
[24] The system, which was established, as I have been able to understand it from the evidence, on which there is not really any great divergence by the various witnesses, was that after being engaged they would take their directions from the dispatch. It was dispatch which arranged the loads with customers through its corporate bank and then assign them to the individual drivers. The drivers had the right to accept or refuse a load, but it was clear from the evidence that if they refused for no good cause, they were let go, such as occurred with James Seed. Steve Ralston made it clear that it was not advisable to refuse a load. Thus, in reality, the drivers were assigned a load and were expected to take it. At their destination, they were assigned another load. Only one example was given of a driver finding his own load in California and it was in doubt in my mind whether that had prior approval of the Appellant or not. Nonetheless, it was the exception to the rule.
[25] The dispatch operated a satellite tracking system and thus knew where the trucks were at any time. The drivers were required to check in with dispatch daily prior to 10:00 a.m. and at any other time that they needed something. There was some question as to whether the check-in was a requirement, but after listening to the drivers, I was satisfied that it indeed was a requirement imposed upon them by the Appellant.
[26] The dispatch contracted with the customers of the Appellant for a time of pick up and delivery and made it clear to the drivers that they had "better meet those deadlines". Again, this was an expectation laid on the drivers. The mileage between points, on the basis of which they would be paid, was already established by computer at the time of the assignment. Within those parameters and the restrictions placed upon their driving times by regulation in the United States and in Canada, they were free to pick their routes and establish their rest and meal times as they saw fit.
[27] They were paid on the basis of so much per mile, which increased with the number of miles driven.
[28] It is clear that the dispatch attempted to accommodate the drivers with respect to their request to go to particular places with their families at holiday times, e.g. Orlando, Florida at Christmas time. However, these were requests and it was not available to a driver just to take his truck and go to these places without specific approval from the dispatch. Similarly, the drivers were not free just to take on loads for other companies. All their loads had to be approved through dispatch.
[29] All the truck expenses were paid by the Appellant. The drivers were only responsible for their own personal expenses such as meals or accommodation, but I understood that they slept mostly in the cabs of their trucks. They had to pay their own fines and penalties for speeding or being overweight or for not keeping accurate log books of their driving times. They also were required to pay for any damage caused through their negligence to the trucks. Examples given were broken side extenders which cost in the region of $1,000.00 each to replace. Apart from that all expenses were paid by the Appellant and the drivers had no outlay of their own. It was mentioned that a driver who damaged his truck through negligence and had low mileage could be in a loss situation at the end of the month, but again, that seemed to be very much the exception rather than the rule. Only one example was given of a driver who failed to return after an accident.
[30] All repairs, other than minor ones, which the drivers carried out themselves, were paid for and approved in advance by the Appellant.
[31] The Appellant did not pay for helpers to load or unload trucks. However, it seemed from the evidence that helpers were generally not required.
[32] There was some evidence that two or three of the drivers charged GST and used business trade names. There was no evidence of their being incorporated or having registered their business names. Further, there was no evidence of any of these drivers carrying on any other work activities, save and except for the driving for the Appellant.
[33] There was considerable discussion in the evidence about parking the trucks. Mostly, they seem to have been parked at the premises of the Appellant, but there was apparently no strict requirement to this effect as some drivers parked their trucks elsewhere when they came back to the home base. It certainly seemed to me that the Appellant had the right to tell the drivers where to park when at their home base, even though it may not have exercised that right.
[34] The contracts were standard in form. They bore the title "Independent Contractor Agreement". The relevant parts of the contract are as follows:
"5. The Contractor has agreed to become associated with the Company as an independent contractor for the purpose of providing driving and operating services to customers of the Company;
1.01 The Company shall retain the services of the Contractor to provide driving and operating services to customers of the Company according to the provisions of this agreement starting the 9th Day of March, 1998 and thereafter on a trip by trip basis, provided, however, that this agreement may terminate at any time upon either the Contractor or the Company giving 48 hours' notice to the other party.
2.01 The Company shall be responsible for the provision of a transport tractor (Class 8 trucks) (as more particularly described in Clause 5.01) and equipment, supplies, operating procedures, facilities and contracts to allow the Contractor to drive competently and professionally.
3.01 It shall be the Contractor's responsibility to drive competently and to follow operating procedures in providing services to the Company's customers in the delivery of the transportation services.
3.02 The Contractor agrees and acknowledges that such duties and responsibilities required to be performed shall be within the highest standards of driving and operating transport tractors (Class 8 trucks).
4.01 The Contractor shall provide driving and operating services to the Company's customers as directed by the Company from time to time...
4.02 It is mutually acknowledged and agreed that the times and places of performance by the Contractor of driving and operating services pursuant to this agreement shall be dependent upon the Company arranging for and maintaining contracts with customers of the Company for transportation services.
4.03 In order to ensure that the Company is able to fulfill its obligations to its customers and to fulfill its contractual obligations to arrange for the provision of transportation services to customers of the Company, the Contractor agrees to provide driving and operating services as directed from time to time by the Company. It is mutually acknowledged and agreed that the Contractor shall be entitled to provide driving services to others and to contract with other transportation companies provided that such other activities do not conflict with the undertaking of the Contractor to be available for the provision of services to the customers of the Company or other organizations as herein provided.
7.01 The Contractor is an independent contractor, not an employee of the Company, and accordingly the Company shall not withhold nor be entitled to withhold any amount for the payment of the Contractor's income tax, pension plan payments, unemployment insurance benefit payments, insurance payments including life or disability insurance payments or payments of any other kind whatsoever, whether for statutory obligations or private benefit plans, and both parties acknowledge and agree that each is individually responsible for any and all such payments on their own behalf. The Company and the Contractor agree that, because the Contractor is an independent contractor, the Company shall not be required to comply with employer/employee labour legislation.
8.01 The Contractor hereby agrees and covenants as follows:
a) That he/she will comply with all of the policies of the Company as well as the guidelines of the customers of the Company.
b) That he/she will pay and be responsible for the payment of all income taxes, pension plan payments, unemployment insurance benefit payments, insurance payments including life and disability insurance payments or payments of any other kind whatsoever on a timely basis;
c) That he/she will, subject to complying with Highway Traffic legislation, meet all delivery deadlines unless there is an event that makes it impossible to meet the deadline or unless he/she has received approval from the Company.
d) That he/she will, at all times, maintain in good standing a valid driver's/operator's licence appropriate for driving and operating the Company's transport tractors (Class 8 trucks) and equipment. The Contractor agrees to provide, upon request, proof that he/she is meeting all requirements to maintain his driver's/operator's licence in good standing including, among other things, medical certificates, abstracts and log books.
e) That he/she will not at any time drive or operate the Company's transport tractor (Class 8 trucks) while under the influence of alcohol or a drug except as may be specifically authorized by a Medical Doctor if said medication does not impair driving,
f) The he/she will be responsible for all damage to the Company's transport tractor (Class 8 trucks) and/or the trailer resulting from personal negligence in operating, as determined by the Company, such as doors being damaged or tire damage resulting from Contractor driving with frozen brake drums.
g) Under no circumstances will the Contractor argue with or otherwise cause to upset, shipping or receiving personnel, refer all discussions regarding loading or unloading to dispatch.
h) The Contractor must not make decisions in regards to obligating the Company for payment of damages or shortage claims. If the Contractor does obligate the Company the amount will be charged back to the Contractor. Only dispatch or management can obligate the Company to pay for anything.
i) All accidents of any nature, must be reported immediately to the Company and all reports must be completed at the time of the accident. A statement must accompany the Contractors accident/incident report. Failure to report or conceal any accident/incident or discrepancy, will be grounds for termination of this contract.
j) The Contractor is responsible for fines on overweight loads resulting from not scaling their loads to make sure the weight was legal.
The Contractor is responsible for fines resulting from incomplete manifests when crossing borders.
APPENDIX ‘A'
a) That he/she will be responsible to wash the Company's transport tractor (Class 8 truck) and the trailer on a regular basis so degradation of the equipment does not occur.
b) That he/she will be responsible to grease and maintain fluid levels on Company's transport tractor (Class 8 truck) and on the trailer on a weekly basis.
c) That he/she will be responsible to check and maintain proper tire inflation pressures on the Company's transport tractor (Class 8 truck) and on the trailer on a weekly basis.
d) That he/she will be responsible to keep a maintenance log on the Company's transport tractor (Class 8 truck) and on the trailer for all Repairs and Maintenance performed."
[35] It is to be noted from this that although the drivers were entitled to provide driving services to others (4.03), they could only do so to the extent that it did not conflict with the requirements of the Appellant. It can also be seen that the Appellant imposed a considerable number of obligations on the drivers as to how they should go about their duties and their responsibilities, vis-à-vis the trucks.
[36] Those are the salient facts that I drew from the evidence.
Application of the 4 Part Test to the Facts
[37] At the outset, it can be said that it was the intent of the parties, or at least the Appellant, to set up the drivers as independent contractors. That was the label put upon the contracts and the arrangement the contracts purported to establish. The perfunctory fashion in which the contracts were provided to the drivers, along with a take-it-or-leave-it attitude, leaves considerable room for doubt as to the true intentions of the drivers. Nevertheless, to put the position of the Appellant at its highest, I accept that these were the agreements in place, signed by the Appellant and the various drivers.
[38] The Court, however, is not bound so much by the expressed intent of the parties or by the label they choose to put upon their contract, as by the true substance of the arrangement that they in fact set up. The intent having been expressed in the written agreement, in the absence of clear evidence that the substance was not the same as the intent or the label, the Court should probably be inclined to give considerable deference to the expressed wishes of the parties. If, however, the substance of the arrangement clearly derogates from the expressed intention or label, then clearly it is the substance of the arrangement to which the Court must give consideration.
[39] Control: The aspect of control or supervision has to rest primarily on the right to control or supervise, whether or not it was actually exercised. Clearly, the more professional and skilled any worker might be, the less need there is in any particular case for the person paying him or her to actually exercise control or supervision. Clearly here, the drivers were professional drivers entrusted with vehicles worth tens, if not hundreds of thousands of dollars. Their day-to-day driving did not need to be supervised. However, there were elements of control present. They could only take the trucks where and when dispatch assigned them. They could not take or use the trucks for any other purpose. They were tracked by satellite. They really, in practical terms, were unable to refuse loads or else they faced losing their employment. They had to check in daily. They had to get approval for substantial repairs. They had to grease and wash the trucks regularly. They had to be available for the company which limited their working for others. They had to pick up and deliver within deadlines passed on to them by the Appellant from its customers. They could be terminated upon 48 hours notice. All these factors indicate a complete lack of independence from the control of the Appellant. The fact that they chose their own routes between two points already specified over which the mileage had already been settled, and decided when to take their rests and breaks did not derogate from that element of control. The Appellant clearly held the hand that fed the drivers and could withdraw it at very short notice. They clearly, as was apparent from the evidence of the drivers, had to toe the line.
[40] This aspect of the test both from the point of view of actual control and the right to control, points clearly to an employer/employee status, that is to say a contract of service.
[41] Tools and Equipment: There is really very little evidence that the drivers provided anything other than their ability to drive and their Class "A" licenses, which I do not consider to be tools in the sense those words are used in the jurisprudence. Some may have had a few personal tools along. However, the major piece of equipment was the truck which, along with the satellite tracking system and the cell phones, were provided by the Appellant. The drivers clearly had no significant investment in any equipment which entitled them to claim money for their services. They had skills and the equipment was basically provided by the Appellant. This aspect of the test also, in my view, points to a contract of service and not a contract for services with each of the drivers.
[42] Profit and Loss: The drivers were able to earn more if they drove more miles. The more they drove, the more they made and at a certain point, the rate per mile increased. However, that is not profit in the entrepreneurial sense, which is the criteria established by the Appellate Courts in these types of cases. They had time limits within which they were required to work and thus, nothing they did affected any profit they might make other than their driving more miles. In a sense, that was payment by the piece.
[43] Similarly, there was no downside for them unless they negligently damaged the trucks. That, it seemed, was the same situation before 1997 when clearly they were treated as employees. Thus again, there was no downside for them in any entrepreneurial sense. It was not as if there might be a profit or loss which could be anticipated at the end of each trip, depending upon any number of variables according to which the drivers were expected to take the risk. It was a set amount per mile, subject to their paying fines and penalties in the real world for infractions of the law and paying for the cost of any damage negligently caused. Again, this total lack of entrepreneurial risk clearly points, in my view, to a contract of service. A contract with a truly independent contractor would leave some room for the ups and downs of the trade to affect the amount made or lost. This seems to me to be a hallmark of a contract for services, which was lacking in the case at hand.
[44] Integration: I have to look at this aspect of the test from the point of view of the individual drivers and not the Appellant. It would be rare that the Payor did not have a business. The question which has to be asked is, "whose business is it?" in relation to the work being performed by the drivers. Were they in fact operating their own separate individual business when they were driving, or was their work truly part and parcel of the business itself of the Appellant? In other words, were they working on the inside of the Appellant's business integrated into it, or were they simply providing services for it from the outside during the course of operating their own respective businesses? The fact that they had only one person for whom they worked is certainly relevant but not a determinative factor. It is not to say that an independent contractor might not have only one client or customer. Indeed that might be quite common in the high tech age of today. However, it is a relevant fact to consider here. None of these drivers operated their own trucks or apparently drove for anybody else. Indeed, they had to be available on a priority basis to work for the Appellant. There is quite frankly, not a shred of evidence that any of them were doing anything in the way of carrying on their own businesses. Indeed, the whole arrangement seems to have been thrust upon them by the Appellant, causing some of the drivers, who gave evidence, considerable confusion in their minds. Apart from the two or three drivers who had a business name and charged GST, of which the evidence is most scant, there is virtually nothing to suggest that any of them were in business on their own account in any entrepreneurial sense of the word. If they had not driven, the company would simply have found other drivers and the drivers would have been left with nothing.
[45] In my view, there is nothing in the evidence which points to these arrangements truly being contracts for services as they purported to be. Everything points, in reality, to their work being fully integrated into the business of the Appellant under contracts of service.
Conclusion
[46] When I look, at the end of the day, not just at the individual trees all of which bear the hallmark of contracts of service, but also at the whole forest, I see only a picture of an employment situation and not that of independent contractors. In my view, there was not sufficient independence from the Appellant on the part of the drivers to say that they were engaged by way of contracts for services.
[47] It seems to me from the cases coming before the Court, that all too often in the trucking industry, but also in other fields, the parties think that all they have to do is agree to be independent contractors and not make statutory deductions, in order to make that happen. Clearly, wherever they are getting their advice, they are misinformed. It is unfortunate because as here, the employers often face substantial assessments many years later, when they are not in a position to recover from their workers. This puts them in a highly disadvantageous position. They have a remedy and that is to set the arrangement up properly and obtain a ruling from the Minister in each case ahead of time. Unfortunately, too few of them choose to do that.
[48] In the result, the appeals are dismissed and the decisions of the Minister are confirmed.
Signed at Calgary, Alberta, this 2nd day of January 2001.
"Michael H. Porter"
D.J.T.C.C.
SCHEDULE A
CARTIER, NORMAN
COZAC, PETER
FARREL, JAMES
FRANK, MICHAEL
HARRIS, CHRIS
ISFAN, DOUG
LEIBEL, JOANNE
LEWIS, HARVEY
MCEWEN, WADE
NEAULT, ROY
SANFORD, DON
THOMPSON, ROGER
YAKEL, JASON
SCHEDULE B
ASHWORTH, JAMES
BECHARD, HECTOR
BELANGER, KEN
BULYAKI, JOSEPH
CARTIER, NORMAN
COZAC, PETER
DAVIS, JAMES
DRAGHICI, MARVIN
FLOREK, KEVIN
GESSNER, ERIC
HARRIS, CHRIS
HUSTON, MATTHEW
ISFAN, DOUG
KINRADE, SCOTT
LALIBERTE, MICHEAL
LEIBEL, JOANNE
LOWE, DALLAS
MARTIN, GERD
MCCULLOUGH, DOUG
MCEWEN, WADE
MCNABB, JOHN
MUXLOW, DALE
NEAULT, ROY
NEMETH, HENRY
SAKUNDIAK, WALTER
SANFORD, DON
TUDHOPE, BRIAN
WILLOCK, LYLE
YAKEL, JASON
SCHEDULE C
BECHARD, HECTOR
BELANGER, KEN
COCKBURN, MICHAEL
DRAGHICI, MARVIN
FLOREK, KEVIN
GESSNER, ERIC
GIROUX, GARY
KINRADE, SCOTT
LALIBERTE, MICHAEL
LEIBEL, JOANNE
LOWE, DALLAS
MARTIN, GERD
MCCULLOUGH, DOUG
MCEWEN, WADE
MCNABB, JOHN
NEMETH, HENRY
RALSTON, STEVEN
ROYLE, TED
SEED, JAMES
YAKEL, JASON
SCHEDULE D
CARTIER, NORMAN
COZAC, PETER
FARREL, JAMES
FRANK, MICHAEL
GRAHAM, DOUGLAS
HARRIS, CHRIS
ISFAN, DOUG
LEIBEL, JOANNE
LEWIS, HARVEY
MCEWEN, WADE
NEAULT, ROY
SANFORD, DON
THOMPSON, ROGER
YAKEL, JASON
SCHEDULE E
BECHARD, HECTOR
BELANGER, KEN
COCKBURN, MICHAEL
DRAGHICI, MARVIN
FLOREK, KEVIN
GESSNER, ERIC
KINRADE, SCOTT
LALIBERTE, MICHAEL
LEIBEL, JOANNE
LOWE, DALLAS
MARTIN, GERD
MCCULLOUGH, DOUG
MCEWEN, WADE
MCNABB, JOHN
NEMETH, HENRY
RALSTON, STEVEN
ROYLE, TED
SEED, JAMES
YAKEL, JASON
COURT FILE NO.: 1999-3612(EI) and 1999-4881(EI)
STYLE OF CAUSE: Farr Farms Transport Ltd. and M.N.R.
PLACE OF HEARING: Regina, Saskatchewan
DATE OF HEARING: July 6 and 7, 2000
REASONS FOR JUDGMENT BY: Honourable Deputy Judge Michael H. Porter
DATE OF JUDGMENT: January 2, 2001
APPEARANCES:
Counsel for the Appellant: Barry P. Nychuk
Counsel for the Respondent: Stacy Cawley
COUNSEL OF RECORD:
For the Appellant:
Name: Barry Nychuk
Firm: Richmond Nychuk
Regina, Saskatchewan
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 1999-3613(CPP) and 1999-4883(CPP)
STYLE OF CAUSE: Farr Farms Transport Ltd. and M.N.R.
PLACE OF HEARING: Regina, Saskatchewan
DATE OF HEARING: July 6 and 7, 2000
REASONS FOR JUDGMENT BY: Honourable Deputy Judge Michael H. Porter
DATE OF JUDGMENT: January 2, 2001
APPEARANCES:
Counsel for the Appellant: Barry P. Nychuk
Counsel for the Respondent: Stacy Cawley
COUNSEL OF RECORD:
For the Appellant:
Name: Barry Nychuk
Firm: Richmond Nychuk
Regina, Saskatchewan
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 1999-4884(EI)
STYLE OF CAUSE: Farr Farms Transport Ltd. and M.N.R.
and Henry Nemeth
PLACE OF HEARING: Regina, Saskatchewan
DATE OF HEARING: July 6 and 7, 2000
REASONS FOR JUDGMENT BY: Honourable Deputy Judge Michael H. Porter
DATE OF JUDGMENT: January 2, 2001
APPEARANCES:
Counsel for the Appellant: Barry P. Nychuk
Counsel for the Respondent: Stacy Cawley
For the Intervenor: The Intervenor himself
COUNSEL OF RECORD:
For the Appellant:
Name: Barry Nychuk
Firm: Richmond Nychuk
Regina, Saskatchewan
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
For the Intervenor:COURT FILE NO.: 1999-4888(CPP)
STYLE OF CAUSE: Farr Farms Transport Ltd. and M.N.R.
and Henry Nemeth
PLACE OF HEARING: Regina, Saskatchewan
DATE OF HEARING: July 6 and 7, 2000
REASONS FOR JUDGMENT BY: Honourable Deputy Judge Michael H. Porter
DATE OF JUDGMENT: January 2, 2001
APPEARANCES:
Counsel for the Appellant: Barry P. Nychuk
Counsel for the Respondent: Stacy Cawley
For the Intervenor: The Intervenor himself
COUNSEL OF RECORD:
For the Appellant:
Name: Barry Nychuk
Firm: Richmond Nychuk
Regina, Saskatchewan
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
For the Intervenor:
1999-3612(EI)
1999-4881(EI)
BETWEEN:
FARR FARMS TRANSPORT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeals heard on common evidence with the appeals of Farr Farms Transport Ltd. (1999-3613(CPP), 1999-4883(CPP), 1999-4884(EI) and 1999-4888(CPP)) on July 6 and 7, 2000, at Regina, Saskatchewan, by
the Honourable Deputy Judge Michael H. Porter
Appearances
Counsel for the Appellant: Barry Nychuk
Counsel for the Respondent: Stacy Cawley
JUDGMENT
The appeals are dismissed and the decisions of the Minister are confirmed in accordance with the attached Reasons for Judgment.
Signed at Calgary, Alberta, this 2nd day of January 2001.
|
"Michael H. Porter" |
D.J.T.C.C.
1999-3613(CPP)
1999-4883(CPP)
BETWEEN:
FARR FARMS TRANSPORT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeals heard on common evidence with the appeals of Farr Farms Transport Ltd. (1999-3612(EI), 1999-4881(EI), 1999-4884(EI) and 1999-4888(CPP)) on July 6 and 7, 2000, at Regina, Saskatchewan, by
the Honourable Deputy Judge Michael H. Porter
Appearances
Counsel for the Appellant: Barry Nychuk
Counsel for the Respondent: Stacy Cawley
JUDGMENT
The appeals are dismissed and the decisions are confirmed in accordance with the attached Reasons for Judgment.
Signed at Calgary, Alberta, this 2nd day of January 2001.
|
"Michael H. Porter" |
D.J.T.C.C.
1999-4884(EI)
BETWEEN:
FARR FARMS TRANSPORT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
HENRY NEMETH,
Intervenor.
Appeal heard on common evidence with the appeals of Farr Farms Transport Ltd. (1999-3612(EI), 1999-3613(CPP), 1999-4881(EI), 1999-4883(CPP), and 1999-4888(CPP)) on July 6 and 7, 2000, at Regina, Saskatchewan, by
the Honourable Deputy Judge Michael H. Porter
Appearances
Counsel for the Appellant: Barry Nychuk
Counsel for the Respondent: Stacy Cawley
For the Intervenor: The Intervenor himself
JUDGMENT
The appeal is dismissed and the decision is confirmed in accordance with the attached Reasons for Judgment.
Signed at Calgary, Alberta, this 2nd day of January 2001.
|
"Michael H. Porter" |
D.J.T.C.C.
1999-4888(CPP)
BETWEEN:
FARR FARMS TRANSPORT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
HENRY NEMETH,
Intervenor.
Appeal heard on common evidence with the appeals of Farr Farms Transport Ltd. (1999-3612(EI), 1999-3613(CPP), 1999-4881(EI), 1999-4883(CPP) and 1999-4884(EI) on July 6 and 7, 2000, at Regina, Saskatchewan, by
the Honourable Deputy Judge Michael H. Porter
Appearances
Counsel for the Appellant: Barry Nychuk
Counsel for the Respondent: Stacy Cawley
For the Intervenor: The Intervenor himself
JUDGMENT
The appeal is dismissed and the decision is confirmed in accordance with the attached Reasons for Judgment.
Signed at Calgary, Alberta, this 2nd day of January 2001.
|
"Michael H. Porter" |
D.J.T.C.C.