Employee or Independent Contractor

Saturday, January 26, 2013

Case Citation

Hire Roller Inc. v. Canada (National Revenue) (2013 TCC 10) [TCC] [CanLII]

Summary

Many cases before the Tax Court of Canada deal with the issue of whether an individual is an employee or an independent contractor. In this case the employer seemed to wish an independent contractor status on an employee instead of creating such an arrangement.

While courts look to the intentions of the parties, they cannot ignore the facts of an employee-employer relationship as happened here.

Issue

[1] These are appeals from determinations by the Minister of National Revenue (the “Minister”) that Greg Wolski (the “Worker”) was an employee of Hire Roller Inc. (the “appellant”) during the period from January 1, 2010 to January 13, 2011 (the “Period”) for the purposes of the Employment Insurance Act (the “EIA”) and the Canada Pension Plan (the “CPP”).

ITA / ETA

None.

Cases Cited

TBT Personnel Services Inc. v The Queen (2011 FCA 256)
Wiebe Door Services Ltd. v M.N.R. (1986 FCA) (87 DTC 5025)

Analysis

[4] I do not agree with the appellant’s assertion that the evidence shows that the Worker accepted the independent contractor status given to him by the appellant. Mr. Wolski testified that he did not understand what the appellant meant when it declared that he was to be treated as a self-employed person. He explained that he had always been an employee in his prior positions. His day-to-day working arrangement with the appellant was similar to the arrangement in his previous positions. When he was presented with a written agreement prepared by the appellant, he refused to sign it. This agreement sought to confirm that the Worker was a contract driver.

[5] Be that as it may, it is not a question of whether the Worker accepted or not the appellant’s description of their relationship. It is well accepted that the parties’ description of their relationship is not in and of itself determinative of the issue. In TBT Personnel Services Inc. v. Canada, 2011 FCA 256 (CanLII), 2011 FCA 256, the Federal Court of Appeal cautions that the factors outlined in Wiebe Door[1] must nonetheless be applied to discern the true nature of the parties’ relationship. Employers cannot avoid their contribution obligations under the EIA and the CPP simply by informing new workers that they will be treated as self-employed persons. If, in practice, the arrangement is not consistent with the existence of an independent contractor relationship, the label used to describe the relationship will be ignored.

[9] The appellant’s witness failed to convince me that the Worker was not subject to the appellant’s direction and control. This factor points to an employer-employee relationship.

[10] The evidence shows that the appellant provided the Worker with the vehicles, trip log sheets, GPS, maps, pens, clipboard, pass key, etc. necessary to perform his duties, and that it did so at no cost to the Worker. The appellant paid all of the operating costs of the vehicles and was responsible for their maintenance. This factor also points to an employer-employee relationship.

Decision

[15] In light of the evidence and on the basis of the application of the Wiebe Door tests, I conclude that the Worker was an employee of the appellant throughout the period under review.

Note

A paragraph beginning with a number in square brackets is a direct quote from the case.