Date: 20011023
Docket: 2000-3942-EI
BETWEEN:
9043-5066 QUEBEC INC. (VOYAGE VASCO CENTRE-VILLE),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor Judgment
Somers, D.J.T.C.C.
[1] This appeal was heard in Montreal, Quebec, on June 12, 2001.
[2] By letter dated June 22, 2000, the Minister of National Revenue (the "Minister") informed the Appellant that Sergio Poblete (the Worker) did hold insurable employment from April 1998 to January 15, 1999 because there was an employer-employee relationship between the Worker and the Appellant.
[3] Paragraph 5(1)(a) of the Employment Insurance Act reads in part 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;
...
[4] The burden of proof is on the Appellant. It must show on a balance of probabilities that the Minister erred in fact and in law in his decision. Each case stands on its merits.
[5] In reaching his decision, the Minister relied on the following assumptions of fact which were admitted or denied:
a) the Appellant has been incorporated on November 12, 1996; (admitted)
b) the Appellant exploited a travel agency under the name of Voyage Vasco and Voyage Vasco Centre-Ville; (admitted)
c) in April 1998, the Worker was engaged as a representative of sales for the Appellant; (denied)
d) the Worker was working only at the business place of the Appellant; (denied)
e) the Worker had a fixed schedule, Monday to Friday from 9:30 a.m. to 6:30 p.m. and on Saturday from 11:00 a.m. to 2:00 p.m.; (denied)
f) the Worker was supervised by the Appellant in his duties; (denied)
g) the Appellant was assuming all office expenses of the Worker; (denied)
h) the Appellant was assuming the responsibility insurance for the Worker; (denied)
i) all the equipment needed by the Worker were furnished by the Appellant; (denied)
j) the Appellant paid the Worker on a commission basis; (admitted)
k) the Appellant and the Worker divided the commissions on the sales in equal part following the decision of the Appellant; (admitted)
l) the Worker's expenses concerning publicity, parking, and mail expeditions were reimbursed in part by the Appellant; (admitted)
m) the Worker had no risk of financial losses; (denied)
n) the Worker was laid off after asking to be an employee. (denied)
[6] The Appellant was incorporated on November 12, 1996, operating a travel agency under the name of Voyage Vasco and Voyage Vasco Centre-Ville.
[7] The Worker started to do some work for the Appellant beginning in April 1998 and ending on January 15, 1999 as a representative of sales. The Appellant's representatives, husband and wife, operated the business. According to them, the Worker presented himself at the office and offered to be a sales representative. The Appellant's representatives stated that he was to be an outside agent and his place of work was at his home.
[8] As time went on, the Worker operated from the Appellant's office where a table, phone, computer and parking were provided to him. The Worker had his own cellular phone and was to pay for his own publicity.
[9] The office was open from 9 a.m. to 5 p.m., five days a week and Saturday from 10 a.m. to 3 p.m. The invoices, with the Appellant's name on them, were submitted by the Worker to the Appellant and had to be accepted by the manager of the company. The commission paid was agreed upon from these invoices and calculated by the Appellant.
[10] While the Appellant's representative stated the Worker could work elsewhere, during the period at issue, the Worker laboured exclusively for the Appellant. The Appellant's representative stated the Worker was to assume his own responsibility insurance. However, the Worker stated he did not have a personal responsibility insurance policy.
[11] The distinction between a contract of service and a contract for services is a question of law and fact.
[12] A contract of service is a contract under which one party, the servant or employee, agrees for a period of time or indefinitely and either full-time or part-time, to work for the other party, the master or employer. A contract for services is a contract under which the one party agrees that a certain specified work will be done for the other.
[13] A contract of service does not normally envisage the accomplishment of a specified work but does normally contemplate the servant putting his personal services at the disposal of the master during some period of time. A contract for services does normally envisage the accomplishment of a specified job or task and normally does not require that the contractor do anything personally.
[14] In determining whether there is a contract of service or a contract for services one must examine the combined force of the whole scheme of operations.
[15] In Wiebe Door Services Ltd. v. M.N.R. 87 DTC 5025, the Federal Court of Appeal established four basic factors in distinguishing a contract of service from a contract for services which are: extent of control exercised by the employer, ownership of tools, chance of profit or risk of loss and the integration of the employee's work within the employer's business.
[16] Counsel for the Minister stated that for the period from April 1998 to June 3, 1998 the employment of the Worker was not insurable because there was no employer-employee relationship between the Worker and the Appellant.
[17] Therefore, the Court will deal with the period from June 4, 1998 to January 15, 1999, to establish contractual relationship between the employer and the employee.
Control:
[18] The contracts with the clients were signed by the Worker and a representative of the Appellant. These contracts stayed in the possession of the Payor. The Worker worked in the office supplied by the Appellant therefore supervision was immediate. The Appellant had the power to exercise a control over the Worker. There was sufficient control by the Appellant over the Worker to conclude that there existed a contract of service.
Tools:
[19] The Appellant supplied the office, table, telephone, computer and parking, establishing a contract of service. The fact that the Worker paid for his own errors or gasoline is of no consequence in determining the nature of the contract.
Profit or Loss:
[20] Evidence did not show that the Worker had a chance of profit or risk of loss. The Worker was paid on a commission basis, which does not prevent the Worker to be considered as an employee.
Integration:
[21] The Worker was identified with the Appellant by working in its office and using its equipment and stationery. The Worker worked indefinitely for the Appellant and not for a specified time or for a specified job. Evidence does not show that the Worker could hire another person to do his work. Based on this factor the Worker was hired under a contract of service.
[22] The intentions of the parties may be a factor but the Court must look at the combined force of the whole scheme of operation in order to establish the nature of the contract.
[23] Taking into consideration all of the circumstances, the Court concludes that the Worker was engaged in insurable employment and that there was an employer-employee relationship between the Worker and the Appellant for the period June 4, 1998 to January 15, 1999.
[24] Consequently, the appeal is allowed and the Minister's decision is varied on the basis that the Worker was engaged in insurable employment for the period June 4, 1998 to January 15, 1999.
Signed at Ottawa, Canada, this 23rd day of October 2001.
"J.F. Somers"
D.J.T.C.C.
Jurisprudence
Orton v. The Minister of National Revenue (1974) N.R. 9
Pouliot Assurances Inc. c. M.R.N. [1986] A.C.I. no 419
Keith McDonald Realty Ltd. v. Canada (Minister of National Revenue - M.N.R.) [1992] T.C.J. No. 310
Avondale Stores Ltd. v. Canada (Minister of National Revenue - M.N.R.), [1997] T.C.J. No. 1343
Erin Mills Coiffures Ltd. (c.o.b. Nino d'Arena Hair Design v. Canada (Minister of National Revenue - M.N.R) [1999] T.C.J. No. 147
COURT FILE NO.: 2000-3942(EI)
STYLE OF CAUSE: 9043-5066 Quebec Inc.
(Voyage Vasco Centre-Ville) and M.N.R.
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: June 12, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge J.F. Somers
DATE OF JUDGMENT: October 23, 2001
APPEARANCES:
For the Appellant: Tak Waz Fong (Agent)
Counsel for the Respondent: Vlad Zolia
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-3942(EI)
BETWEEN:
9043-5066 QUEBEC INC. (VOYAGE VASCO CENTRE-VILLE),
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on June 12, 2001 at Montreal, Quebec, by
the Honourable Deputy Judge J.F. Somers
Appearances
Agent for the Appellant: Tak Waz Fong
Counsel for the Respondent: Vlad Zolia
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 23rd day of October 2001.
|
"J.F. Somers" |
D.J.T.C.C.