[OFFICIAL ENGLISH TRANSLATION]
1999-2841(EI)
BETWEEN:
IMMEUBLES JEAN LACAILLE INC.
o/a DAN'S PIZZERIA,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on November 8, 2000, at Sherbrooke, Québec, by
the Honourable Deputy Judge J.F. Somers
Appearances
Counsel for the Appellant: Richard Arcand
Counsel for the Respondent: Vlad Zolia
JUDGMENT
The appeal is dismissed and the Minister's decision is confirmed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 20th day of November 2000.
|
"J.F. Somers" |
D.J.T.C.C.
Translation certified true
on this 7th day of June 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20001120
Docket: 1999-2841(EI)
BETWEEN:
IMMEUBLES JEAN LACAILLE INC.
o/a DAN'S PIZZERIA,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Somers, D.J.T.C.C.
[1] This appeal was heard at Sherbrooke, Quebec, on November 8, 2000.
[2] By notice of assessment dated September 30, 1998, the Minister of National Revenue (the "Minister") assessed the appellant for 1997 and 1998 for unpaid employee and employer employment insurance premiums for 26 employees (the "workers") and related interest. The assessment was as follows:
|
For 1997 |
|
|
|
employment insurance |
= |
$ 7,619.11 |
|
penalty |
= |
$ 00.00 |
|
interest |
= |
$ 482.92 |
|
|
|
|
|
For 1998 |
|
|
|
employment insurance |
= |
$ 4,849.92 |
|
penalty |
= |
$ 00.00 |
|
interest |
= |
$ 150.23 |
|
|
|
|
|
for a total of |
|
$13,102.18 |
[3] On April 20, 1999, the Minister informed the appellant that it had been determined that the assessments would be confirmed on the ground that the workers held insurable employment because there was an employer-employee relationship between the appellant and the workers.
[4] Paragraph 5(1)(a) of the Employment Insurance Act reads 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;
...
[5] The burden of proof is on the appellant. It has to show on the balance of evidence that the Minister's decision is unfounded in fact and in law. Each case stands on its own merits.
[6] In making his decision, the Minister relied on the following facts, which were either admitted or denied:
[TRANSLATION]
(a) the appellant operated under the trade name Dan's Pizzeria; (admitted)
(b) the appellant was in the restaurant business; (admitted)
(c) the appellant offered a home delivery service; (admitted)
(d) the appellant hired drivers; (denied)
(e) the drivers were controlled by the appellant; (denied)
(f) the appellant set the drivers' work schedule; (denied)
(g) the drivers had to follow the schedule and report at the time set by the manager; (denied)
(h) the drivers had to inform the appellant's manager whether they were going to be absent from work and give a reason for their absence; (denied)
(i) the appellant's manager assigned the work to the drivers; (denied)
(j) the drivers took turns making deliveries; (admitted)
(k) the drivers had to return to the restaurant between deliveries; (denied)
(l) the drivers could not be absent during their shifts; (denied)
(m) the drivers had to obey the instructions of the appellant's manager during their entire shift; (denied)
(n) between deliveries, the drivers had to perform tasks for the appellant, such as filling the refrigerators with soft drinks, assembling cardboard boxes for the deliveries and taking out the restaurant's garbage; (denied)
(o) the drivers could not refuse to make a delivery; (denied)
(p) the drivers used their own vehicles to make deliveries; (admitted)
(q) the drivers' pay was determined by the appellant alone; (denied)
(r) the drivers received $1.80 for a delivery in Sherbrooke, $2.50 for a delivery in Rock Forest and $5.00 for a delivery for which the bill was over $100.00." (admitted)
[7] The appellant operated a restaurant under the name Dan's Pizzeria as well as offering a home delivery service. The appellant was able to accommodate 350 people in a dining room located in the business's building. Deliveries brought in $618,400.90 in sales revenues for the period from August 1999 to July 2000. According to Jean Lacaille, those figures can be compared to the turnover for the periods at issue. The revenues in question constitute 25% of total revenues. According to the evidence, the appellant's business was doing quite well.
[8] To offer its clients this home delivery service, the appellant had to call on a certain number of drivers, who were hired through a newspaper ad. An employee of the company, Yvan Poulin, managed that client service. As the dispatcher, Mr. Poulin set the drivers' work schedule. Seniority had an influence on the choice of drivers, especially during the busy period, when three or four drivers were needed. However, it was not essential for that method to be used.
[9] The drivers could fill in for one another without the dispatcher's consent. A driver's friend could fill in for him on occasion. A driver could also have a friend to help him but at no charge to the appellant. The drivers could leave work without notifying the dispatcher. However, the drivers decided among themselves which of them would remain at the appellant's disposal as required. The drivers had to make sure the home delivery service was adequately covered. The number of drivers who had to remain on site was determined by how busy it was. There was some flexibility in how the work was assigned as long as a certain number of drivers were available. One driver testified that the dispatcher would telephone him and tell him it was his turn. If the driver could not go there, he was obligated to find a replacement. The driver in question stated that he had to deliver the pizza within a certain time. He said there were seven or eight drivers who worked full time, from 30 to 50 hours a week. There might have been approximately 15 drivers in total.
[10] The dispatcher said he chose the drivers on the basis of seniority or efficiency. The dispatcher broke off his contractual relations with drivers if they were not efficient. The drivers could work for a competitor as long as they were available for the appellant.
[11] The drivers received $1.80 for a delivery in Sherbrooke, $2.50 for a delivery in Rock Forest and $3.00 for a delivery for which the bill was more then $100.00. The drivers would occasionally perform other tasks for the appellant if they so wished. Drivers provided their own vehicles for the deliveries, at their own expense. If a driver could not get to work because his vehicle had broken down, he was not paid. If a driver was absent too often, the dispatcher would begin to reconsider. The drivers had no holidays. However, the appellant had previously given holidays to about ten drivers at the union's request.
[12] Counsel for the appellant submitted to this Court case law and doctrine fundamentally drawn from City of Montreal v. Montreal Locomotive Works Ltd., [1947] 1 D.L.R. 161. This Court is relying on a more recent decision by the Federal Court of Appeal in Wiebe Door Services Ltd. v. M.R.N., [1986] 3 F.C. 553. That decision refers to the statements in principle set out in City of Montreal v. Montreal Locomotive Works Ltd.
[13] In Québec (Sous-ministre du Revenu) c. Pétroles Veltra (1979) ltée, [1991] R.D.F.Q. 1 (res.), [1991] R.L. 489 (C.A.), J.E. 91-595, D.F.Q.E. 91F-16, Vallerand J.A. states as follows:
[TRANSLATION]
...
Staff or self-employed, worker or contractor, employee or not: a great deal of ink will continue to flow in legal circles over the differences between them! Especially since they often vary according to the legislation to which the notions apply.
...
[14] One principle that must be noted in distinguishing between a contract of service and a contract for services is to examine the whole of the various elements which constitute the relationship between the parties. The courts have consistently held that there are four basic elements that distinguish a contract of service from a contract for services:
1. The degree or absence of control exercised by the employer;
2. Ownership of the tools necessary for the work;
3. Chance of profit or risk of loss;
4. Degree of integration of the employee's work into the employer's business.
Degree or absence of control exercised by the employer
[15] The degree of control may vary from one case to the next. In this appeal, the appellant, through the dispatcher, hires workers through an ad. The dispatcher chooses or retains the services of a worker depending on the worker's availability or efficiency. If the driver is not efficient, he is dismissed. The dispatcher makes sure he has three or four drivers available at the same time and as required. He chooses the drivers on the basis of their seniority and their efficiency. When he calls a driver he tells him [translation] "It's your turn". Although the drivers can fill in for one another without going through the dispatcher, they must make sure that someone is there to make the deliveries. It must be acknowledged that the working conditions are flexible. The case law refers to degree or absence of control. It cannot be concluded that there is an absence of control. The dispatcher has a degree of control over the drivers and they must be available at the restaurant for the appellant's needs.
Ownership of the tools necessary for the work
[16] Drivers provide their own vehicles and pay to maintain them. The amounts paid to the drivers for making deliveries, as they are set by the appellant, must cover the costs of operating the vehicle. Although the evidence is silent on this fact, it is normal for the costs of operating the vehicle to be included in the amounts paid. That basic element is not a decisive element in distinguishing between a contract of service and a contract for services.
Chance of profit or risk of loss
[17] The drivers have not made any investment to perform the work other than the cost of purchasing and maintaining a vehicle. The risk of loss was minimal and depended only on the condition of the vehicle. Thus, there is no chance of profit or risk of loss.
Degree of integration of employee's work into the employer's business
[18] The drivers' work was part of the operation of the appellant's business. Home delivery accounted for a substantial portion of the restaurant's turnover, approximately $600,000 per year, or 25% of total revenues. That percentage represents more than mere additional revenue. That portion of the service was more than an accessory to the appellant's business. The clientele was that of the appellant, not of the driver. The drivers were available on a rotating basis at the appellant's place of business. The drivers' work was essential to the operations of the home delivery service. Without the drivers' participation, the appellant could not offer the home delivery service since the workers were an integral part of the operations of the appellant's business.
[19] It is the whole of the various elements that must be considered in concluding that there was an employer-employee relationship between the appellant and the workers.
[20] The appeal is dismissed.
Signed at Ottawa, Canada, this 20th day of November 2000.
|
"J.F. Somers" |
D.J.T.C.C.
Translation certified true
on this 7th day of June 2003.
Sophie Debbané, Revisor
Case law cited by the appellant
· Khan c. Québec (Sous-ministre du Revenu), C.Q. Montréal 500-02-056209-971 and 500-02-077664-998, 2000-07-10, AZ-50078244, D.F.Q.E. 2000F-60, Armando Aznar J.
· Québec (Sous-ministre du Revenu) c. Pétroles Veltra (1979) ltée,[1991] R.D.F.Q. 1 (res.), [1991] R.L. 489 (C.A.), J.E. 91-595, D.F.Q.E. 91F-16
Case law cited by the respondent
· 872538 Ontario Inc. v. Canada (Minister of National Revenue - M.N.R.), [1993] T.C.J. No. 46.
· 872538 Ontario Inc. v. Canada (Minister of National Revenue - M.N.R.), [1994] F.C.J. No. 235.
· Cerasoli (Lugi's Pizza) v. Canada (Minister of National Revenue - M.N.R.), [1997] T.C.J. No. 858.
· City of Montreal v. Montreal Locomotive Works Ltd., [1947] 1 D.L.R. 161.
· Family Pizza Inc. v. Canada, [1997] T.C.J. No. 123.
· Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553.