[OFFICIAL ENGLISH TRANSLATION]
2000-1788(EI)
BETWEEN:
BREUVAGES KIRI LTÉE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on February 14, 2001, atMontréal, Quebec, by
the Honourable Deputy Judge G. Charron
Appearances
Counsel for the Appellant: Jean-François Cloutier
Counsel for the Respondent: Stéphanie Côté
JUDGMENT
The appeal is dismissed and the decision of the Minister is confirmed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 19th day of June, 2001.
|
"G. Charron" |
D.J.T.C.C.
Translation certified true
on this 9th day of June 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20010619
Docket: 2000-1788(EI)
BETWEEN:
BREUVAGES KIRI LTÉE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Charron, D.J.T.C.C.
[1] This appeal was heard at Montréal, Quebec, on February 14, 2001, in order to determine whether Donat Di Patria, the worker, occupied insurable employment within the meaning of the Employment Insurance Act (''the Act'') while employed by Breuvages Kiri Ltée, the appellant, from September 28, 1998 to April 30, 1999.
[2] In a letter dated February 17, 2000, the Minister of National Revenue (''the Minister'') informed the appellant that this employment was insurable because, during the period at issue, there was an employer-employee relationship between the appellant and the worker.
Statement of facts
[3] The assumptions on which the Minister relied in making his decision are set out in paragraph 5 of the Reply to the Notice of Appeal, as follows:
(a) The appellant company was incorporated. (denied)
(b) The appellant company operated a soft drink and spring water bottling business. (admitted)
(c) The worker was an employee-a sales representative-for the appellant company until September 25, 1998. (admitted)
(d) The worker was laid off on Friday, September 25, 1998, and allegedly hired as a self-employed worker on Monday, September 28, 1998. (denied as written)
(e) After September 28, 1998, the worker was still a sales representative for the appellant company. (denied as written)
(f) The worker had an assigned territory and visited convenience stores. (denied as written)
(g) The worker was responsible for promoting the appellant company's products to existing customers and for recruiting new customers. (denied as written)
(h) At the end of the day, the worker was required to travel to the appellant company's distribution centre to relay orders and report sales. (denied)
(i) The worker had an office at the appellant company's distribution centre. (denied as written)
(j) Deliveries were made by delivery personnel. (admitted)
(k) The worker had a quota of 1,200 cases of soft drinks. (denied as written)
(l) The worker used his car to travel. (admitted)
(m) The appellant company reimbursed car travel expenditures at the rate of $0.25 per kilometre. (denied)
(n) Irrespective of whether the appellant company considered the worker an employee or a self-employed worker, all the working conditions except the remuneration were the same. (denied)
(o) When the worker was considered an employee, the appellant company paid the worker $480 per week. (admitted)
(p) During the period at issue, the appellant company paid the worker in the form of a 5% commission on sales. (admitted)
[4] The appellant company admitted that all the subparagraphs of paragraph 5 of the Reply to the Notice of Appeal were true except those that it denied, as indicated in parentheses at the end of each subparagraph.
Testimony of Jean-Claude Pelletier
[5] Jean-Claude Pelletier is vice-president of sales and marketing for the appellant company. In particular, he is responsible for the sales network, including stores such as Couche-Tard, Provigo, Métro, IGA, Costco, and drugstores. The appellant company is a limited partnership with a variety of sales representative systems, depending on the sales territory. The Boisbriand, Lanaudière, Laurentides, Repentigny, Lachenaie, Terrebonne and Saint-Lin regions are served by unionized sales representatives. The Île-de-Montréal, Rive-Sud, Laval, and Saint-Jérôme regions are served by manufacturer's agents, as are the Trois-Rivières, Mauricie, Shawinigan, Grand-Mère, Lac-à-la-Tortue, Saint-Maurice, Sainte-Anne-de-la-Pérade, Cap-de-la-Madeleine, and Sainte-Angèle-de-Laval regions. Jean-Claude Pelletier produced a Record of Employment indicating that Donat Di Patria was employed by the appellant company from September 29, 1997, to September 26, 1998 (Exhibit A-1), when Pierre Brazeau, Donat Di Patria and André Charlebois became manufacturer's agents. Pierre Brazeau turned down this arrangement because it was not what he wanted. André Charlebois and Donat Di Patria agreed to this arrangement since each already owned a store. They shared Pierre Brazeau's territory. Bruno Figliuzzi had signed the contract before they did. Since 1996, Donat Di Patria had already been doing business as Les Liquidations M. D., which was why there was a contract between Breuvages Kiri and Les Liquidations M. D. André Charlebois signed his contract as an individual. During the period at issue, Donat Di Patria received a commission of $485 per week plus $100 per week for the use of his car.
[6] Counsel Stéphanie Côté objected to Jean-Claude Pelletier's testimony concerning Bruno Figliuzzi, Pierre Brazeau and André Charlebois because of irrelevance. The objection was taken under advisement and allowed.
[7] The appellant company provided the worker with an office in Anjou. The goods sold were delivered by delivery personnel. The worker used his car to travel and was entitled to a 5% commission to cover his expenditures. He was allowed to work at home, at convenience stores, or in restaurants. He was not allowed to enter the sales warehouse. He had to pay $0.10 for each photocopy he made. The appellant company moved to the Anjou office on September 28, 1998, when the worker's position was eliminated following a restructuring. Another group arrived in February 1999. Although the appellant company allowed the worker to set his work schedule, he was required to report to the office to pick up his log books. In the evening, he met with Bruno Figliuzzi, his supervisor, to give him a detailed report of the day's sales and discuss what had occurred with the development representative. During that period, some reports were eliminated because they served no purpose. After testing the system for six-to-eight weeks, the appellant company introduced the manufacturer's agent system and stopped using reports. Some sales representatives continued to send reports to Bruno Figliuzzi as they had previously done. They were free to operate as they wished within their respective territories. Specifically, the worker was required to produce reports when he was a sales representative but stopped doing so when he became a manufacturer's agent because Jean-Claude Pelletier no longer looked at the reports in any case. The appellant company held sporadic meetings to which the delivery personnel, sales representatives, distributors, and manufacturer's agents were invited. These meetings were optional. Manufacturer's agents were allowed to sell anything the appellant company did not sell itself.
Testimony of Donat Di Patria
[8] Donat Di Patria has been a sales representative for Breuvages Kiri since September 28, 1998. Every day, using a sales log, he travels to customers' premises, takes their orders, and relays the orders to Breuvages Kiri (Exhibit I-2). He is required to complete daily reports on sales and orders. Once orders are filled, delivery personnel deliver them to recipients within 48 hours. The worker earns $480 per week plus $0.25 per kilometre. Breuvages Kiri's head office is located in Saint-Félix-de-Valois. The worker works from 7:00 a.m. to 3:00 p.m. five days a week. In August 1998, Bruno Figliuzzi told the worker that management had a long-term arrangement to propose to him and showed him Exhibit A-2. From that moment, he no longer received a salary or reimbursement for car travel expenditures but received a 5% commission on sales as a manufacturer's agent. The proposed arrangement was optional and at the worker's discretion. While the worker was a sales representative during the pilot project period, he was required to complete reports and submit them to Jean-Claude Pelletier or Bruno Figliuzzi.
Analysis of the facts in relation to the law
[9] We must now determine whether the worker's activity is included in the concept of insurable employment, that is, whether there is a contract of employment.
[10] The case law has laid down four essential tests for identifying a contract of employment. The leading case is City of Montreal v. Montreal Locomotive Works Ltd., [1947] 1 D.L.R. 161. These tests are: (1) control; (2) ownership of the tools; (3) chance of profit; and (4) risk of loss. In its decision in Wiebe Door Services Ltd. v. Minister of National Revenue (M.N.R.), [1986] 3 F.C. 553, the Federal Court of Appeal added the ''degree of integration'' to this list. However, this list is not exhaustive.
[11] In another relevant case, in its decision in Raymond-Guy Gallant v. M.N.R., A-1421-84 (F.C.A.) the Federal Court of Appeal wrote: ''... The distinguishing feature of a contract of service is not the control actually exercised by the employer over his employee but the power the employer has to control the way the employee performs his duties.'' Our consideration must not be limited simply to the power of control but must extend to the way that power is exercised. In his decision in Thomas Alexander McPherson v. M.N.R., [1976] N.R. 91, Cattanach J stated: ''... the test of the employer requiring an employee to order the manner in which the work is to be done assumes lesser importance in the case of highly qualified professional employees. These employees are hired by reason of their qualifications. In practice therefore such persons are rarely given instructions how to do the work but that does not preclude a finding that the person is employed under a contract of service. Detailed control over a professional employee as to the manner in which work is done is necessarily minimal but the material consideration is that the right of control exists even though it is sometimes impossible to exercise and is rarely needed to be exercised.'' The appellant company, therefore, had adequate control over the worker.
[12] From September 29, 1997, until his dismissal on September 25, 1998, the worker was paid a salary set by the company: $485 for a 40-hour week. He was immediately re-hired as an independent manufacturer's agent, at a 5% commission. He was no longer entitled to sick leave, annual vacation, group insurance, a pension plan, tools and an office provided by the employer, or liability insurance.
[13] That said, it is difficult to argue that the worker was laid off. A number of conditions overlap the period during which the worker admits having been a salaried employee and the period during which he claims to be a manufacturer's agent. What is the meaning of the expression ''laid off''? In its decision in Air-Care Ltd. v. Limited Steel Workers of America et al., [1976] 1 S.C.R. 2, the Supreme Court of Canada defines this expression as follows (page 6):
The Union's case rests in large measure on the submission that there is no difference between a reduction in the hours of work and a lay-off and the moment one reduces the hours of work of an individual that individual is laid off (mise à pied). "Lay-Off" is not defined in the Quebec Labour Code, R.S.Q. 1964, c. 141. However, the Shorter Oxford English Dictionary defines "lay-off" as follows: "Lay-off, a period during which a workman is temporarily discharged." and Nouveau Larousse Universel, Tome 2 "Mise à pied": "retrait temporaire d'emploi". In my opinion none of the employees of Air-Care Ltd. was laid off on the occasions in respect of which the grievance was raised....
[14] Although, on the basis of Exhibit A-1, the worker states that his employment was terminated, the same sales representative is still working and still being paid. We consider this situation to be continuous.
[15] The appellant company owns the tools of work. The appellant company alone can make profits or incur losses in operating its business, not the worker who only receives a fixed salary. Finally, the worker performs his work on the premises of the appellant company and is well integrated into its business. I therefore find that, during the period at issue, the appellant company was operating a business and the worker was employed by it.
[16] The burden of proof was on the appellant company, which has not discharged this burden on a balance of probabilities.
[17] The appeal is therefore dismissed, and the Minister's decision is confirmed.
Signed at Ottawa, Canada, this 19th day of June, 2001.
|
"G. Charron" |
D.J.T.C.C.
Translation certified true
on this 9th day of June 2003.
Sophie Debbané, Revisor