Date: 20010301
Docket: 2000-1639-CPP,
2000-1640-EI
BETWEEN:
TIGER COURIER INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Beaubier, J.T.C.C.
[1] These appeals were heard on common evidence at Saskatoon, Saskatchewan on February 22, 2001. The Appellant called Melvin Kurmey, Stacey Kliewer, Fraser Faulkner, Elvin Dashney, James Gebert, Vic Garman and Ernie Foth. The Respondent called the worker in question, Robert Smiroldo.
[2] The Appellant has appealed decisions that Robert Smiroldo was employed by the Appellant pursuant to a contract for service for the period January 1, 1998 to February 15, 1999.
[3] The assumptions in both Replies are identical. Paragraph 14 in the Employment Insurance Reply reads:
14. In so deciding as he did, the Minister relied on the following assumptions of fact:
(a) the facts as admitted above;
(b) the Appellant was not related to the Worker;
(c) the Appellant operates a courier business;
(d) the Worker provided services as a driver in a specific area;
(e) the Worker's day involved the following:
(i) starting at the Appellant's warehouse he would sort waybills for the freight;
(ii) locate the packages to be delivered to the Appellant's clients;
(iii) load the packages;
(iv) deliver the packages;
(v) pick up packages to be returned to the warehouse for delivery;
(vi) return to the warehouse and unload the packages from the truck to be delivered;
(vii) complete necessary paperwork; and
(viii) load the highway trailers;
(f) the Worker did not have a written contract;
(g) the Appellant set the price lists used by the Worker;
(h) the Worker could set his own hours but he was required to meet the scheduled delivery times of the Appellant's clients in doing so;
(i) the Worker had the exclusive right to deliver packages to the area assigned to him;
(j) the Worker was remunerated based on a system of weight, type of freight and the number of units delivered;
(k) the Worker was paid bi-weekly;
(l) the Worker's hours were not recorded;
(m) the Worker did not invoice the Appellant but rather would turn in the waybills to the Appellant;
(n) the Appellant calculated the remuneration based on the waybills turned in by the Worker;
(o) any replacement workers hired by the Worker had to be pre-approved by the Appellant;
(p) the Worker was required to:
(i) provide his own vehicle and wheeler dolly;
(ii) pay for half of his uniform cost;
(iii) pay $50 per month for rental on a two-way radio;
(q) the Worker's uniform and vehicle had the Appellant's logo on it;
(r) the Appellant provided the rate sheets, the way bills and Tiger Courier literature to the Worker;
(s) the Worker was responsible for the following costs:
(i) vehicle expenses including lease, license plates, insurance, fuel, repairs and liability insurance;
(ii) premiums for WCB coverage provided by the Appellant;
(t) the Appellant trained the Worker when he first began in the procedures of the Appellant.
[4] Assumptions 14 (b), (c), (d), (e)(i) to (vi) inclusive, (f), (g), (h), (i), (j), (k), (l), (m), (n), (p), (q) and (s) were not refuted.
[5] The Appellant began its courier business in Saskatoon in 1984 or 1985. At that time it used Dasher Courier for pickup and deliveries on a fee per item basis. As its business developed it kept using the same Dasher drivers. Eventually it contracted with four Dasher drivers to do the pick-ups and deliveries. These four paid Dasher off, purchased their own trucks, the city was divided into four zones and the drivers began pick-ups and deliveries for Tiger the same way that Dasher Courier had done before.
[6] By the time of the period in question Tiger had divided Saskatoon into five zones. Each had its own driver who owned and operated his own van at his own expense and paid for his own insurance premiums including Workers' Compensation. No taxes, employment insurance or Canada Pension Plan were withheld from the drivers by Tiger. None of the drivers registered for GST because Tiger's accountant advised them that their work amounted to what could be called a "wash" for GST purposes.
[7] Each driver's day during a five-day week throughout the period consisted of the following:
6:30 a.m. or sooner - Arrive with van at Tiger's warehouse and sort incoming freight and load van.
8:00 a.m. - Leave warehouse with van and make deliveries in his zone and any pick-ups at pre-set pick-up times or by order received by radio from Tiger's dispatcher.
11:00 a.m. - 12:00 p.m. - Radio in to confirm and take lunch break (usually at home). (If finished by about 10:00 a.m. a driver could do pick-ups for the North Battleford and Prince Albert deliveries throughout Saskatoon for delivery to North Battleford or Prince Albert. Drivers who were "hustlers" or those with short routes or few deliveries could do this for extra income.)
12:00 to 1:00-2:00 - Lunch
After lunch to 5:00 p.m. - Do pick-ups in pick-up zone.
5:00 p.m. - Bring pick-ups to Tiger warehouse and place pick-ups in designated shipping cages for various destinations and assist in palletizing or wrapping any remaining shipments, and then drive van home. But -
5:30 - 6:00 to 6:30 p.m. - One driver each day stayed at Tiger's warehouse on a rotation basis while the forklift operator loaded the shipments into semi-trailers for Calgary, Edmonton, Winnipeg, etc. This was primarily for safety purposes.
[8] With respect to the assumptions not referred to as unrefuted:
14(e)(vii) and (viii) - The shippers were supposed to do their own paperwork. Tiger did the delivery paper work and billed. If Tiger was not paid, the drivers were paid anyway by Tiger. All paperwork was in Tiger's name. Tiger loaded the highway trailers.
14(o) - The workers (drivers) chose their own replacement drivers and paid them. The replacement driver used that worker's van. Tiger only confirmed that the replacement was qualified to drive and generally suitable.
(r) - There is no evidence that there was any Tiger "literature". The rest of this is correct.
(t) - Initially the Dasher drivers developed the procedures. A new worker was trained by the driver he replaced and by his fellow drivers. The Appellant might give some instruction in the paperwork if it proved faulty by a new driver.
[9] In summary, the evidence respecting the drivers, including Mr. Smiroldo, is that:
1. Each driver decided if he would take his van to work each day. If he did not, he might get a substitute driver as a replacement to drive the van, or phone in, whereupon the other four drivers would split up his zone.
2. The drivers only phoned in at their lunch break, which might last an hour or two, depending on the driver's choice.
3. Vacations were strictly the drivers' choices.
4. Drivers could have other occupations. One owned and managed his own rental properties. Drivers could use their vans for other purposes. They could quit the Tiger contract at any time and work for a competitor and some did that.
5. Drivers could refuse customers in a zone and Mr. Smiroldo did so when one customer was so distant as to be uneconomic. By doing this Mr. Smiroldo improved his own profits. Tiger retained a courier company to service this customer. Similarly Tiger took a customer in Mr. Smiroldo's zone and gave that customer to another driver at the customer's request. That driver was a friend of that customer. Thus the drivers competed for profit in those ways as well as soliciting customers, soliciting additional work from existing customers, and referring prospects to Tiger to solicit. It appears that the drivers received fifty percent of each fee that a customer was billed, and Tiger received the other fifty percent.
6. Drivers did not get any employee benefits from Tiger. Nor did they receive holiday or sick time from Tiger. They were entirely independent and had no union.
7. The other drivers had to approve a new owner operator of a van. Reselection of zones if a driver left Tiger with his van was done by the drivers among themselves, essentially based on their seniority. However Mr. Smiroldo had a bad customer and driving record and he was told by Tiger that he would not be considered for an open downtown, higher-volume, zone until he improved. He never improved and eventually, because of many failures and complaints by customers and the public, he was terminated by Tiger. On the evidence submitted, that termination was for cause.
8. The drivers received payment from Tiger based on bills submitted. Mr. Smiroldo had over-weighed customers on occasion. The customers complained to Tiger, which reduced those bills. He also destroyed some goods for which Tiger paid the loss, not Mr. Smiroldo. All van expenses were his and he also deducted work place in home expenses as a businessman. In some years Tiger signed an employee vehicle income tax form for the drivers. However the drivers and Tiger treated the drivers as independent contractors. Profitability depended on the size of the zones, distances from Tiger's warehouse, the number of customers, the number of deliveries, the customer rates which were set by Tiger in competition with Loomis, Purolator, etc. It also depended on drivers' relationships with customers, their hustle, the costs and expenses of their vans, how often they showed up for work and their relationships with the other drivers.
[10] Using the Wiebe Door tests:
1. Except for the paper, all of the drivers' tools were their own. They did wear Tiger jackets and put the Tiger logo on their vans, but they chose their vans and the rest of their clothing.
2. Control in their zones was up to the drivers. How they worked their zone and developed customer relationships and improved their volumes was up to them. Getting out to deliver by 8:00 a.m. and getting pick-ups back by 5:00 p.m. five days each week was what Tiger required. Even delivery or pick-up times to customers were dictated by the customers and not Tiger.
3. Profitability - On this basis, the drivers could lose. The vans were a continuing expense. If work in a zone fell off, a loss to the driver was foreseeable. The opposite is true for profits. The drivers could suffer a loss or make a profit.
4. Integration - The drivers were not integrated into Tiger. They were independent contractors in their respective zones. If they failed to work then drivers and vans could replace them. They could also have started similar businesses, as one of those who testified did in fact. Tiger and the drivers were symbiotic. The drivers were in the transportation business, as Porter, D.T.C.J. found in Mayne Nickless Transport Inc. v. M.N.R. 97-1416 (UI), whereas Tiger was in the courier business. The drivers chose their own vans, arranged their own routes, rented their radios, marketed their services and accepted and refused customers and loads. The drivers conducted their transportation businesses just as Dasher did ten years before and as another courier firm did in substitution for Mr. Smiroldo and other drivers from time to time. Similarly, substitute drivers came and went and former drivers were replaced with new vans and operators when they stopped doing business with Tiger. Neither the drivers nor Tiger were an integral part of the other's business. Each could be, and was, replaced over time.
[11] The appeals are allowed. Robert Smiroldo was not an employee of the Appellant during the periods in question. The decisions of the Minister are vacated. The Appellant is awarded the costs to which it is entitled pursuant to statute.
Signed at Ottawa, Canada, this 1st day of March, 2001.
|
"D. W. Beaubier" |
J.T.C.C.
COURT FILE NO.: 2000-1639(CPP) and 2000-1640 (EI)
STYLE OF CAUSE: Tiger Courier Inc. v. The Minister of National Revenue
PLACE OF HEARING: Saskatoon, Saskatchewan
DATE OF HEARING: February 22, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge D. W. Beaubier
DATE OF JUDGMENT: March 1, 2001
APPEARANCES:
Counsel for the Appellant: William Dent Preston
Counsel for the Respondent: Suzanne Lalonde
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-1639(CPP)
BETWEEN:
TIGER COURIER INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of
Tiger Courier Inc. (2000-1640(EI)) at Saskatoon, Saskatchewan
by the Honourable Judge D. W. Beaubier
Appearances
Counsel for the Appellant: William Dent Preston
Counsel for the Respondent: Suzanne Lalonde
JUDGMENT
The appeal is allowed and the decision of the Minister is vacated in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 1st day of March, 2001.
|
"D. W. Beaubier" |
J.T.C.C.
2000-1640(EI)
BETWEEN:
TIGER COURIER INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of
Tiger Courier Inc. (2000-1639(CPP)) at Saskatoon, Saskatchewan
by the Honourable Judge D. W. Beaubier
Appearances
Counsel for the Appellant: William Dent Preston
Counsel for the Respondent: Suzanne Lalonde
JUDGMENT
The appeal is allowed and the decision of the Minister is vacated in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 1st day of March, 2001.
|
"D. W. Beaubier" |
J.T.C.C.