Date: 20010608
Dockets: 2000-4700-EI,
2000-4701-CPP
BETWEEN:
THE LEARNING LOFT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
Reasonsfor Judgment
Rip, J.T.C.C.
[1] The issue in these appeals under the provisions of the Canada Pension Plan ("CPP") and the Employment Insurance Act ("Act") is whether a tutor, Rachelle Cronk ("Worker"), was engaged by the appellant, The Learning Loft Ltd., as an independent contractor or an employee of the appellant during the period from July 5, 1999 to January 5, 2000.
[2] The shares of the appellant's corporation are owned by Cindy Jenner who also directs the business activities of the appellant. The Learning Loft arranges tutoring services for students with special needs in the London, Ontario area.
[3] When Ms. Jenner first acquired ownership of The Learning Loft most, if not all, tutoring took place in the facilities rented by the appellant. The appellant accepts all students but is equipped to teach those with special needs, such as students with attention deficit disorder and learning disabilities. The Learning Loft engages highly qualified teachers experienced in dealing with such students. The tutors are certified and take continuing education courses.
[4] The appellant's normal hours of operation are from 9:00 a.m. to 3:00 p.m. Some teachers serve clients during the day but most tutoring is done after school, from 3:00 p.m. to 8:00 p.m., Monday to Thursday.
[5] At the beginning of the period in question the students were charged $40.00 per hour. As of March 1, 2000, the hourly rate was reduced to $38.00. The reduction was the result of competition. The hourly fee is shared equally by the tutor and the appellant.
[6] There are no written contracts with the parents of the students. Tutors (and the Worker) teach and collect the fees from the parents and remit it to the appellant. Ms. Jenner said that it is convenient for the tutor to collect the fees because she or he is in touch with the parent. If the parent does not pay, the tutor is not paid by the appellant. If a student does not attend a lesson the parent is billed for a full lesson. The tutor invoices the appellant in advance (on a form prepared by the appellant) detailing the prospective dates and number of lessons to be taught. Billing is on a four-week cycle. The appellant advises the parent to write the dates of the lessons the payment represents on the cheque; this helps Ms. Jenner compare the tutor's invoice to the parent's payment. A tutor may refuse to teach if the parent has not paid a bill. Usually a parent has paid the invoice by the student's second lesson in the cycle. Ms. Jenner recalled that a teacher left the appellant because she did not get paid because the parent did not pay the appellant.
[7] The income of a tutor depends solely on the hours the tutor teaches. Usually tutors work from three to 24 hours a week. A prospective tutor will advise the appellant of when she or he is available to teach and the appellant will try to match these hours to those preferred by the student. Tutors chose the hours they wish to work and, subject to arranging another tutor to cover for her or his students, a tutor may take vacations at her or his discretion. However, only one tutor at a time takes holidays. The replacement tutor earns the fee for hours she or he teaches; no portion goes to the vacationing tutor. Generally, about seven tutors work at The Learning Loft at any one time.
[8] The appellant does not guarantee any tutor a minimum number of hours of work. A tutor may work elsewhere and most have positions with local school boards. Some tutors operate their own tutoring business and charge different rates.
[9] The tutor meets the prospective student and the parents before she or he commits to teach. The tutor is free to refuse to teach the prospective student. If the tutor accepts, the tutor evaluates the student's needs and suggests the duration of instruction. Compatibility between teacher and student is important. During the course of study the relationship is between the student (and parents) and the tutor. The appellant does not supervise the tutor. If a parent does not like the way a tutor is teaching, the parent will complain to the tutor or the appellant and, if requested by the parent, the tutor's services with the particular student will be terminated. This applied to the Worker as well.
[10] Ms. Jenner denies the students are clients of the appellant. She testified that a tutor "takes a client on [her] own" if The Learning Loft cannot accommodate the client and, over the years, six teachers have opened their own businesses with the appellant's purported clients.
[11] Ms. Jenner explained that she provides all the appellant's tutors with keys to the appellant's office. Tutors are assigned space in the office for the times they are scheduled to tutor. If a tutor wishes, he or she may teach on a Saturday or any other time. The appellant, Ms. Jenner insisted, does not control the hours of work.
[12] A new trend in tutoring, Ms. Jenner said, is home tutoring. However, some tutors prefer working at the appellant's office where the distractions are absent. Whether to teach at the student's home or not is the tutor's decision. The request for home tutoring is from the parents. The Learning Loft pays no mileage allowance to the tutor for travel between a student's residence and its offices or between the tutor's and student's residences.
[13] The appellant has no regular meetings with the tutors. Workshops had been held in the past but were stopped because of conflict in schedules of the tutors. The appellant does not review the performance of the tutors; whether a tutor is performing well is determined by the reaction of the parents.
[14] Ms. Jenner is in charge of the appellant's management, finances and marketing. When she works at the appellant's office she also answers the telephone. Another tutor answers the telephone when Ms. Jenner is absent from the office.
[15] The appellant supplies some equipment and tools; the desk and chairs, for example, when the tutoring takes place at its offices. Tutors sometimes bring compact discs and games to their lessons. The Worker provided some pencils and paper and purchased some supplies for which The Learning Loft did not reimburse her. On some occasions, the appellant does reimburse expenses of the tutor, usually for supplies required by the appellant. The Worker used her own blank paper although "once in a while" the appellant would provide the paper. In March 1999 the Worker purchased a book for about $20.00 and was not reimbursed.
[16] The Worker was engaged by the appellant in 1999. She was an exception to the rule that tutors are certified. The appellant had a waiting list for tutors in mathematics and the Worker had experience teaching mathematics. The Worker taught one child in particular. The child had help from The Learning Loft when he was in elementary school. He returned as a high school student requiring help in mathematics and French. Ms. Cronk agreed to "take on" this student. The student did not have "special needs". Ms. Cronk worked elsewhere as well and she tried to schedule her time with the student around her other work. She was to teach the student for two hours a week.
[17] Ms. Cronk could not fulfill her commitments to the student and asked if Sheryl Cronk could help out during July and August 1999. Since Sheryl Cronk was qualified, she taught the student, but only after she and Rachelle Cronk together reviewed the student's program. As far as Ms. Jenner is concerned "Sheryl didn't work for me ... she was not a teacher at The Learning Loft ...". In fact, Ms. Jenner declared, she did not know Sheryl's work nor her qualifications. The Learning Loft, she testified, did not require the tutor to perform the services personally. In fact, however, Sheryl Cronk was the first person to replace a tutor who herself was not a tutor. Eventually, the Worker returned to teach this student.
[18] The Worker realized that both she and the student, although they lived one block from each other, spent time "driving across town" to the appellant's office for lessons. They both agreed to save time and have the lessons at her apartment or at his home.
[19] Ms. Jenner advised that like other tutors, the Worker gave Ms. Jenner times when she was available for work. She "took extra jobs" and had to make sure she had no conflict. Ms. Cronk worked with the student at hours mutually convenient to them. She also taught on Saturdays.
[20] It was rare that Ms. Cronk saw Ms. Jenner once a student was assigned to her; they would meet only when "passing cheques and invoices".
[21] Ms. Cronk has a degree in psychology. She also studied engineering for one year. She tutored students at Fanshawe College, a community college in London, in mathematics and physics and was paid by the College. The hourly fee paid to her by Fanshawe College was greater than the fee paid by the students. The College apparently considered her to be an employee.
[22] At a given time, Ms. Cronk realized she was busy and refused to take on extra students. From September 1999 to December 1999 she was working full-time as a photographer. However, she still continued tutoring at Fanshawe College and later commenced her own tutoring business.
Analysis
[23] The Worker was an independent contractor during the period in issue. A person, like the Worker, may be both an employee of Fanshawe College and an independent contractor with the appellant. In the case of the College, the students were students of the College and the College subsidized the costs of the tutoring. In the case of the appellant, there was no restriction that the student attend any particular school, the costs of their tuition was not subsidized and the relationship, to the greatest extent, was between the tutor and the student.
[24] The appellant, as far as the evidence reveals and common sense dictates got the student and Worker together and once their relationship was established moved out of the way. The appellant exacted a charge from the tutor for providing the service. But it was the tutor who determined (with the student) who would be taught, what would be taught, how the lesson would be taught, when the lesson would be taught and where the lesson would be taught. These were not the appellant's decisions. There was no master-servant relationship between the Worker and the appellant. The appellant did not exercise any meaningful control over the Worker, nor did it wish to exercise such control. The Worker could always teach students for her own account without the intervention of the appellant.
[25] If the Worker wished to use supplies, which the appellant had no use for, the cost of these supplies was that of the Worker. If the Worker wanted to reduce her expenses, for example, travel costs, she could teach at her home. If a parent of a child did not pay and the Worker insisted on continuing to tutor the child, the Worker risked loss since if the parent did not pay, the Worker was not paid.
[26] The four-in-one test set out in the reasons for judgment of the Federal Court of Appeal in Wiebe Door Services Ltd. v. M.N.R.[1] requires a trial judge to search for the total relationship of the parties. The business of the appellant is to get students requiring help and tutors together, to establish and promote a relationship between a tutor and a pupil. The appellant's business is not to teach the pupil; that is the business of the tutor.
[27] Accordingly, the appeals are allowed. The Worker was not an employee of the appellant under a contract of service during the period July 5, 1999 to January 5, 2000. Therefore her employment was not insurable employment under the provisions of paragraph 5(1)(a) of the Employment Insurance Act and was not pensionable employment under the provisions of paragraph 6(1)(a) of the Canada Pension Plan.
Signed at Ottawa, Canada, this 8th day of June 2001.
"Gerald J. Rip"
J.T.C.C.
COURT FILE NO.: 2000-4700(EI)
2000-4701(CPP)
STYLE OF CAUSE: The Learning Loft Ltd. and
The Minister of National Revenue
PLACE OF HEARING: London, Ontario
DATE OF HEARING: April 26, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge G.J. Rip
DATE OF JUDGMENT: June 8, 2001
APPEARANCES:
Agent for the Appellant: Jeff Jenner
Counsel for the Respondent: Daniel Bourgeois
COUNSEL OF RECORD:
Counsel for the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-4700(EI)
BETWEEN:
THE LEARNING LOFT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of The Learning Loft Ltd., (2000-4701(CPP)) on April 26, 2001, at London, Ontario, by
the Honourable Judge Gerald J. Rip
Appearances
Agent for the Appellant: Jeff Jenner
Counsel for the Respondent: Daniel Bourgeois
JUDGMENT
The appeal pursuant to subsection 103(1) of the Employment Insurance Act during the period from July 5, 1999 to January 5, 2000 is allowed and the decision of the Minister of National Revenue, on the appeal made to him under section 91 of that Act, is vacated.
Signed at Ottawa, Canada, this 8th day of June 2001.
|
"Gerald J. Rip" |
J.T.C.C.
2000-4701(CPP)
BETWEEN:
THE LEARNING LOFT LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of The Learning Loft Ltd.,
(2000-4700(EI))on April 26, 2001, at London, Ontario, by
the Honourable Judge Gerald J. Rip
Appearances
For the Appellant: Jeff Jenner
Counsel for the Respondent: Daniel Bourgeois
JUDGMENT
The appeal pursuant to subsection 28(1) of the Canada Pension Plan is allowed and the decision of the Minister of National Revenue on the appeal made to him under section 27 of that Plan, is vacated.
Signed at Ottawa, Canada, this 8th day of June 2001.
|
"Gerald J. Rip" |
J.T.C.C.