Date: 19980311
Dockets: 97-1064-UI; 97-115-CPP
BETWEEN:
STEPHEN PERSAUD,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
___________________________________________________________________
For the Appellant: The Appellant himself
Counsel for the Respondent: Erika Bottcher
__________________________________________________________________
Reasons for Judgment
(Delivered orally from the Bench at Calgary, Alberta, on January 20, 1998)
Bowie, J.T.C.C.
[1] These appeals are brought under the Employment Insurance Act (the Act) and the Canada Pension Plan (the Plan) from a decision taken by the Minister of National Revenue that the Appellant was not, during 1995, employed under a contract of service and he was, therefore, not an employee for purposes of the Act and the Plan.
[2] Initially, the position taken by Revenue Canada was that this Appellant was an employee, and an assessment was issued against Excel Building Maintenance Ltd., the employer, for the contributions under the Act and the Plan, on account of the Appellant’s employment, which the company had failed to make. That decision was appealed by Excel, and was reversed. It is from the reversal of that decision that the Appellant brings the appeal before this Court today. It is yet another case in which the Court is called upon to decide whether the Appellant is an independent contractor, or a person employed under a contract of service.
[3] There are certain facts that are not in dispute. Excel was in the business of building maintenance and janitorial work, and the Appellant did perform services for Excel. The Appellant started to work for Excel about March 1, 1995; the date is not entirely certain. At that time he was remunerated at the rate of $7 per hour, and he worked in a number of different locations. His evidence was that wherever he worked, either Mike Khrisna, who is the principal of Excel, or a supervisor employed by him, was present and oversaw the work being done.
[4] A contract, or at least a document purporting to be a contract, was entered into evidence. It appears to be signed by the Appellant, his wife, and Mike Khrisna on behalf of Excel. I say it appears, because the Appellant’s evidence was that at the time it was signed only the second page of the contract was shown to him and to his wife, that they signed it, and that the first page was subsequently attached to it, presumably by Mike Khrisna. The Appellant did not see this document in its entirety, according to his evidence, until Mr. Khrisna produced it in Small Claims Court at the trial of an action brought by the Appellant and his wife against Excel to recover monies owing to them under their contract with Excel.
[5] The Minister’s decision in this case was at least in part based upon the assumption that this document was in fact a bona fide contract entered into between Excel and the Appellant, and between Excel and the Appellant’s wife. I am satisfied by the Appellant’s evidence that it was not a bona fide contract, in that only part of it was shown to him at the time it was signed.
[6] The Minister’s underlying assumptions of fact also include the assumption that the Appellant hired other people to assist him in doing the cleaning and janitorial work that he did for Excel, and on other cleaning contracts, and that he arranged for janitorial contracts on which he would work other than the arrangement that he had with Excel.
[7] The Appellant’s evidence was that these two assumptions are quite untrue and that he did not at any time hire people to assist him, and that he did not enter into or even solicit contracts on his own behalf with others during 1995. This evidence was not seriously challenged, and I accept it as being true.
[8] The Minister has also assumed that the corporation did not supervise or instruct the Appellant in his janitorial duties. There was a certain amount of vagueness about the Appellant’s evidence on this point, but I am satisfied, as I have said before, that he was in fact supervised from time to time by Mr. Khrisna, and by at least one other individual who was a supervisor employed by the company. I have no doubt that he did some cleaning work which was not supervised, at least in any very specific way, but, given the nature of the work, that is not particularly surprising, and in my view it is certainly not determinative of the nature of the working relationship.
[9] The Minister also assumed that the Appellant was responsible to redo, as it was put in the Reply to the Notice of Appeal, “any errors or shoddy work at his own time and expense”. This too was denied by the Appellant, and I accept his evidence on that point.
[10] The final assumption in the Reply to the Notice of Appeal is that the Appellant controlled when the janitorial work was to be done, and who would do it. Again, the evidence was far from clear, as is usually the case in contracts involving cleaning and janitorial services. It is necessary, whether the work is done by an employee or done by a subcontractor, that it be done within specific time limits which are governed by the main contract between the person whose premises are being cleaned, and, in this case, Excel. As to who would do the work, the Appellant’s evidence was that only he and his wife did it. In my view the major assumptions upon which the Minister has based his decision have been satisfactorily displaced by the Appellant’s evidence.
[11] In cases of this sort, the Federal Court of Appeal has made clear that it is up to the trial judge to make a careful review of the evidence and then apply not four separate tests, but one test which takes into consideration such matters as the opportunity of the Appellant for profit and loss, ownership of the tools and the degree, if any, to which the Appellant’s activities are integrated into that of the company. In a case such as this perhaps the most useful test is that set out by Mr. Justice Cooke in the Market Investigations[1]case, which is referred to and specifically approved by the Federal Court of Appeal in its judgment in Wiebe Door.[2] As Mr. Justice Cooke put it:
... 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 contract is a contract of service.
In the present case, it does not appear that the Appellant provided any of his own equipment or tools, or anything of the sort, nor did he hire helpers. He has undertaken no financial risk.
[13] As a recent immigrant to this country, embarking on his first job, it is not surprising that there was some lack of precision about the arrangements between him and his wife and Excel Building Maintenance Ltd. I have no doubt that the Appellant was unfamiliar with the ways of business and how contracts, either of service, or for services, are entered into. That no doubt explains the fact that the Appellant and his wife, in effect, both contracted with Excel Building Maintenance to do the same cleaning work. I am satisfied that they were told when they started on this job that they would each be paid $7 per hour, and that they were each paid on the basis of $7 per hour in the initial stages of the work, and that subsequently they took on the cleaning of two buildings for Excel, one which is referred to in the evidence as Biochem, and the other as 5151 Business Centre. For Biochem they were to be paid $400 per month, and for 5151 Business Centre they were to be paid $800 per month.
[14] It was suggested by Ms. Bottcher in argument that, on the authority of Deputy Judge Baryluk’s decision in Amkirk Management Ltd. v. M.N.R.,[3] the method of paying for these two buildings would militate in favour of finding a contract for services rather than a contract of service, if not entirely, then at least with respect to that part of the work.
[15] In my view this is not a case in which different conclusions should be reached with respect to different parts of the work. That is, I expect, a theoretical result that may come about in a factually different case, but in my view it is not a result that is warranted here, after examining all of the facts, as I have done.
[16] The Appellant and his wife sued Excel in Small Claims Court in 1996. Their claim was for an amount of $3,941.87 and it is made up partly of $800 for cleaning the Biochem building in April and May of 1995, partly of $1,600 for cleaning 5151 Business Centre in April and May of 1995, and the balance of the claim is made up of 283.5 hours for each of them between the months of April and August, 1995, for other work, less the amount of $2,427.13 which had been paid to them. At the trial in Small Claims Court they recovered judgment against Excel for the amount of $3,955 plus interest and costs. I have before me in the evidence the judgment of the Civil Division of the Provincial Court of Alberta in that amount, and nothing therein indicates either that there are two separate contracts, or that the contract between the Appellant and Excel ought in some way to be severed and considered as two.
[17] In my view there was one employment here, and applying Mr. Justice Cooke’s test, and having regard to all of the evidence and the facts as I have outlined them above, no person properly understanding the facts would reasonably reach the conclusion that the Appellant in this case was in business on his own account when he did the work that he did for Excel.
[18] Accordingly, the appeal is allowed and the Minister’s decision is set aside.
Signed at Ottawa, Canada, this 11th day of March, 1998.
"E.A Bowie"
J.T.C.C.