Modern Cleaning Concept Inc. v. Comité paritaire de l’entretien d’édifices publics de la région de Québec

Modern Cleaning Concept Inc. v. Comité paritaire de l’entretien d’édifices publics de la région de Québec
Collection
Supreme Court Judgments
Date
2019-05-03
Neutral citation
2019 SCC 28
Report
[2019] 2 SCR 406
Case number
37813
Judges
Wagner, Richard; Abella, Rosalie Silberman; Moldaver, Michael J.; Karakatsanis, Andromache; Gascon, Clément; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah
On appeal from
Quebec
Notes
Case in brief SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: Modern Cleaning Concept Inc. v. Comité paritaire de l’entretien d’édifices publics de la région de Québec, 2019 SCC 28, [2019] 2 S.C.R. 406
Appeal Heard: November 13, 2018 Judgment Rendered: May 3, 2019 Docket: 37813
Between:
Modern Cleaning Concept Inc.
Appellant
and
Comité paritaire de l’entretien d’édifices publics de la région de Québec
Respondent
- and -
Conseil québécois de la franchise
Intervener
Official English Translation: Reasons of Côté, Brown and Rowe JJ.
Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe and Martin JJ.
Reasons for Judgment: (paras. 1 to 61)
Abella J. (Wagner C.J. and Moldaver, Karakatsanis, Gascon and Martin JJ. concurring)
Joint Dissenting Reasons: (paras. 62 to 138)
Côté, Brown and Rowe JJ.
Modern Cleaning Concept Inc. v. Comité paritaire de l’entretien d’édifices publics de la région de Québec, 2019 SCC 28, [2019] 2 S.C.R. 406
Modern Cleaning Concept Inc. Appellant
v.
Comité paritaire de l’entretien d’édifices publics de la région de Québec Respondent
and
Conseil québécois de la franchise Intervener
Indexed as: Modern Cleaning Concept Inc. v. Comité paritaire de l’entretien d’édifices publics de la région de Québec
2019 SCC 28
File No.: 37813.
2018: November 13; 2019: May 3.
Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe and Martin JJ.
on appeal from the court of appeal for quebec
Labour relations — Collective agreements — Juridical extension by government decree — Franchises — Provincial legislation guaranteeing minimum conditions of employment by extending collective agreement to all employees and professional employers within scope determined by means of government decree — Parity committee responsible for administering and overseeing scheme created by decree — Franchisee entering into agreement with franchisor to perform cleaning services — Parity committee seeking unpaid wages and other benefits on behalf of franchisee pursuant to applicable decree — Whether decree applies to relationship between franchisor and franchisee — Whether franchisee was employee of franchisor — Act respecting collective agreement decrees, CQLR, c. D‑2, s. 1(g) “professional employer”, (j) “employee” — Decree respecting building service employees in the Québec region, CQLR, c. D‑2, r. 16.
The provision of cleaning services in public buildings located in the Quebec region are covered by a collective agreement, the Decree respecting building service employees in the Québec region. The Decree sets out minimum standards in the workplace, including wages, hours of work, holidays and overtime, and is governed by the Act respecting collective agreement decrees. The Act makes the Comité paritaire de l’entretien d’édifices publics de la région de Québec (“Committee”) responsible for overseeing compliance with the Decree, and it can therefore take any necessary action arising from the Decree on behalf of employees.
In 2014, the Committee commenced proceedings against Modern Cleaning Concept Inc., claiming $9,219.32 in unpaid wages and other benefits in relation to cleaning services performed by B. Modern provides cleaning and maintenance services in the Quebec region through a network of franchises. It negotiates master cleaning contracts with clients, and assigns them for specific locations to its franchisees, who perform the cleaning and maintenance work. B became a franchisee in January 2014, agreeing to perform cleaning services exclusively through the franchise relationship. After five months of working within the Modern network, B terminated his franchise agreement. The Committee investigated the relationship between B and Modern. It was of the view that the language of the franchise agreement was not determinative of the reality of the relationship between B and Modern, and that B was in fact an “employee” as defined by the Act, not an independent contractor. He was therefore entitled to be paid the mandatory wages and benefits set out in the Decree.
The trial judge concluded that there was a common intention that B would be an independent contractor, not an employee. Accordingly, B was not entitled to the amount claimed by the Committee on his behalf. Allowing the appeal, a majority in the Court of Appeal was of the view that the trial judge made a palpable and overriding error in failing to consider the nature of the assignments of the cleaning contracts from Modern to B, and that by failing to recognize that Modern remained contractually liable to its clients, the trial judge erred in his analysis of whether B was an employee or an independent contractor. The majority concluded that B was an employee and ordered Modern to pay the $9,219.32 claimed by the Committee on behalf of B.
Held (Côté, Brown and Rowe JJ. dissenting): The appeal should be dismissed.
Per Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon and Martin JJ.: The trial judge’s failure to consider the tripartite nature of Modern’s business model was a palpable and overriding error warranting appellate intervention. This error caused the trial judge to err in his assessment of whether B was an employee or an independent contractor. B is an “employee” within the meaning of the Act and Modern is correspondingly a “professional employer”. The mandatory provisions of the Act and Decree therefore govern the relationship between Modern and B, and B is entitled to the wages and benefits claimed on his behalf by the Committee.
The Decree can apply to any contract in which one can conclude that an individual is in a relationship determined to be that of “employee” within the meaning of the Act. Workers may be considered employees for the purposes of the Act and Decree even if they would not be considered employees pursuant to other laws of Quebec. The fact that the franchise agreement identifies B as a franchisee is not determinative. Nor is the fact that he is identified as an independent contractor with Modern. The Decree can apply to relationships other than those governed by employment contracts. The presence of a franchise agreement cannot function to disguise the true nature of the relationship between an employee and professional employer as those terms are defined in the Act. To the extent that the reality of the relationship between the parties reveals that a franchisee did not in fact assume the business risk and had no meaningful opportunity to make a profit, he or she is an employee and that relationship is subject to the Decree.
Modern’s business structure must be examined as a whole to determine who assumed the business risk and attendant prospect of making a profit. The business relationship in this case was tripartite: the client requesting cleaning services, the franchisor Modern who guarantees the quality and provision of services, and the franchisee who actually performs them. In the cleaning service agreements between Modern and its clients, the clients consented in advance to the assignment of the cleaning contracts to franchisees, but Modern remained liable to its clients if the cleaning services were not delivered in accordance with the contract between Modern and its client. By failing to consider the tripartite relationship, the trial judge did not consider the business as a whole, and, as a result, improperly concluded that B bore the business risk and was therefore not an employee. Because of its tripartite business model and ongoing liability to its clients, Modern placed extensive controls on B. B did not assume the business risk and therefore it cannot be said that he was an independent contractor, making him an employee under the Act.
Per Côté, Brown and Rowe JJ. (dissenting): The appeal should be allowed and the trial judge’s decision restored. The trial judge made no reviewable error in concluding that B was not an employee within the meaning of the Act, because the fact that the assignments of contracts between Modern and B were imperfect did not significantly affect the business risk assumed by B. Furthermore, even if it were assumed that B was an employee, Modern could not have been considered to be his professional employer.
The determination of B’s status under the Act raises a question of mixed fact and law, since it involves applying a legal test — specifically the business risk test — to the facts of the case. Unless an exception applies, the standard for intervention in respect of questions of mixed fact and law is that of palpable and overriding error, which is a highly deferential standard. If no palpable and overriding error is properly established, this Court must restore the trial judge’s decision.
The Act provides for the juridical extension of a collective agreement, by means of a government decree, so that it binds all employees and employers working in a specific field of activity. The Act’s purpose is to guarantee minimum conditions of employment and to prevent abuses in the industries concerned. Whether the conditions provided for in a decree apply to a worker must be determined by first considering (1) whether the worker is an employee within the meaning of the Act and, if so, (2) whether he or she is within the scope determined in the decree. It is then necessary to identify a debtor bound by the decree, that is, a professional employer that employs the employee covered by the scope of application of the decree.
The concept of employee in the Act is broader than it is under the Civil Code because of the inclusion of the term “artisan” in the definition of “employee” in the Act. Unlike an employee within the meaning of the Civil Code, an artisan is not, in any true sense, subordinate to an employer in the performance of his or her work. Generally speaking, an artisan is a natural person who does manual work on his or her own account, alone or with the help of family members, journeypersons, workers or apprentices. An artisan will generally be a contractor in the civil law. The legal subordination that distinguishes a contract of employment and a contract of enterprise within the meaning of the Civil Code is not essential to the status of employee under the Act. An artisan who is a contractor — and not an employee — within the meaning of the Civil Code may therefore be considered to be an employee to whom the Act applies.
However, not every contractor who personally, on his or her own account, performs manual work to which a decree applies is necessarily an artisan within the meaning of the Act. There are some contractors who prima facie fit the definition of an artisan but to whom the Act does not apply because their activities are organized with a view to making a profit and, as a corollary, involve a business risk. This business risk must go beyond the risk that any artisan assumes, such as the risk of defective work tools or inefficient work methods. Further, the court must ask whether the worker intended — in fact and in light of the evidence — to accept a real business risk in order to make a profit.
In assessing the business risk test, the court must consider a series of factors. The relevant secondary factors include ownership of the work tools, the method of remuneration and the degree of freedom in the performance of the work, to the extent that these factors reflect the risk assumed. The terms of the contracts entered into by the worker and his or her clients or business partners are relevant but not in themselves determinative. The business risk test remains the same regardless of whether the contractual relationship in issue is bipartite or tripartite in nature, including in the context of a franchise agreement. In each case, the purpose of the analysis is simply to determine whether the worker assumes a business risk. It is not a matter of establishing which party to a contract assumes the business risk, as if there could be only one risk. The parties each incur such risks at the same time. Fundamentally, the level of risk assumed by the party performing the work is what determines whether that party can be characterized as an artisan within the meaning of the Act, regardless of the fact that another party also incurs a business risk, for example by assuming liability for the same contractual obligations.
The fact that the assignments of contracts were imperfect affected B’s business risk only to a limited extent, if at all. In the instant case, failure to deal with this aspect was not a palpable and overriding error. In the absence of such an error, the conclusions reached by the trial judge cannot be called into question. Despite the tripartite relationship among Modern, B and their clients, it was open to the trial judge to find that B had assumed a business risk in order to make a profit and that he was not an “employee” for the purposes of the Act. That conclusion is entitled to deference.
A franchise agreement cannot function to disguise the reality of a relationship between an employee and an employer, as those terms are defined in the Act. The trial judge shared this concern in the instant case. Far from relying blindly on the terms of the agreement, he rendered his decision on the basis of extensive evidence concerning the reality of the relationship between B and Modern.
Furthermore, not every person who has work to which a decree applies done by an “employee” can, on that basis alone, be treated as a professional employer and be required to assume the obligations that flow from that status. There are “employees” within the meaning of the Act who quite simply do not have a professional employer. For a “professional employer” to be required to meet the obligations provided for in a decree, the work must be done in the context of a relationship that is sufficiently similar to an employment relationship within the meaning of the Civil Code, which is to say that a certain degree of control or economic dependence is required. Here, even if it is assumed that the concept of “professional employer” has a meaning broader than that of an employer under the Civil Code, the franchise agreement does not readily support a conclusion that Modern was subject to the Decree, since the supervision it exercised did not suffice to characterize it as a professional employer. Modern’s powers as a franchisor cannot be confused with the relationship of subordination that characterizes a contract of employment. As well, B was not in a position of economic dependence toward Modern.
Cases Cited
By Abella J.
Applied: Comité paritaire de l’entretien d’édifices publics v. Confédération des caisses populaires et d’économie Desjardins du Québec, [1985] C.A. 17; Confection Coger Inc. v. Comité paritaire du vêtement pour dames, [1986] R.J.Q. 153; referred to: Comité paritaire de l’entretien d’édifices publics de la région de Québec v. Station de ski Le Valinouët Inc. (1994), 63 Q.A.C. 143; Québec (Office municipal d’habitation) v. Comité paritaire de l’entretien d’édifices publics de la région de Québec, 2009 QCCA 2428; Comité paritaire de l’entretien d’édifices publics v. Caisse populaire Immaculée Conception de Sherbrooke (1991), 43 Q.A.C. 1; Groupe d’entretien Salibec Inc. v. Québec (Procureur général), 1993 CanLII 4298; Parity Committee for the Building Services (Montreal Region) v. 4523423 Canada Inc. (Sani‑Vie‑Tech), 2011 QCCQ 12209; Dunkin’ Brands Canada Ltd. v. Bertico Inc., 2015 QCCA 624, 41 B.L.R. (5th) 1.
By Côté, Brown and Rowe JJ. (dissenting)
Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Prud’homme v. Prud’homme, 2002 SCC 85, [2002] 4 S.C.R. 663; Churchill Falls (Labrador) Corp. v. Hydro‑Québec, 2018 SCC 46, [2018] 3 S.C.R. 101; 3091‑5177 Québec inc. (Éconolodge Aéroport) v. Lombard General Insurance Co. of Canada, 2018 SCC 43, [2018] 3 S.C.R. 8; Benhaim v. St‑Germain, 2016 SCC 48, [2016] 2 S.C.R. 352; South Yukon Forest Corp. v. R., 2012 FCA 165, 4 B.L.R. (5th) 31; Canada (Attorney General) v. Bedford, 2013 SCC 72, [2013] 3 S.C.R. 1101; J.G. v. Nadeau, 2016 QCCA 167; Van de Perre v. Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014; Nelson (City) v. Mowatt, 2017 SCC 8, [2017] 1 S.C.R. 138; H.L. v. Canada (Attorney general), 2005 SCC 25, [2005] 1 S.C.R. 401; Salomon v. Matte‑Thomson, 2019 SCC 14, [2019] 1 S.C.R. 729; Schwartz v. Canada, [1996] 1 S.C.R. 254; Comité paritaire de l’industrie de la chemise v. Potash, [1994] 2 S.C.R. 406; Comité paritaire d’installation d’équipement pétrolier du Québec v. Entreprises Nipo Inc. (1994), 65 Q.A.C. 29; Comité paritaire des agents de sécurité v. Société de services en signalisation SSS inc., 2008 QCCS 335, aff’d 2009 QCCA 1787; Comité paritaire de l’entretien d’édifices publics de la région de Québec v. Station de ski Le Valinouët Inc. (1994), 63 Q.A.C. 143; Comité paritaire de l’industrie de l’automobile des régions Saguenay‑Lac St‑Jean v. Soucy (1993), 60 Q.A.C. 76; Cabiakman v. Industrial Alliance Life Insurance Co., 2004 SCC 55, [2004] 3 S.C.R. 195; Dicom Express inc. v. Paiement, 2009 QCCA 611, [2009] R.J.Q. 924; Comité paritaire de l’entretien d’édifices publics v. Confédération des caisses populaires et d’économie Desjardins du Québec, [1985] C.A. 17; Confection Coger Inc. v. Comité paritaire du vêtement pour dames, [1986] R.J.Q. 153; Comité paritaire de l’entretien d’édifices publics v. Caisse populaire Immaculée Conception de Sherbrooke (1991), 43 Q.A.C. 1; Québec (Procureur général) v. Groupe d’entretien Salibec Inc., 1993 CanLII 4298; Bérubé v. Tracto Inc., [1998] R.J.Q. 93; Provigo Distribution Inc. v. Supermarché A.R.G. Inc., [1998] R.J.Q. 47; Dunkin’ Brands Canada Ltd. v. Bertico Inc., 2015 QCCA 624, 41 B.L.R. (5th) 1; Québec (Procureur général) v. Lazarovitch (1940), 69 B.R. 214; Comité paritaire de l’industrie de l’automobile de Montréal et du district v. Giguère, [1987] R.J.Q. 1176; Quebec (Construction Industry Commission) v. M.U.C.T.C., [1986] 2 S.C.R. 327; Comité Paritaire de l’Industrie de l’Imprimerie de Montréal et du District v. Dominion Blank Book Co., [1944] S.C.R. 213; McKee v. Reid’s Heritage Homes Ltd., 2009 ONCA 916, 315 D.L.R. (4th) 129.
Statutes and Regulations Cited
Act respecting collective agreement decrees, CQLR, c. D‑2, ss. 1(f), (g), (j), 2, 3, 5, 6, 11, 12, 13, 16, 22 para. 2(a), (e), (i), 24, 52.
Act respecting labour standards, CQLR, c. N‑1.1, s. 1(10).
Canada Labour Code, R.S.C. 1985, c. L‑2, s. 3(1) .
Civil Code of Québec, arts. 9, 2085, 2098, 2098 et seq., 2099.
Consumer Protection Act, CQLR, c. P‑40.1.
Decree respecting building service employees in the Québec region, CQLR, c. D‑2, r. 16.
Decree respecting hairdressers in the Outaouais region, CQLR, c. D‑2, r. 4.
Decree respecting the cartage industry in the Québec region, CQLR, c. D‑2, r. 3.
Labour Code, CQLR, c. C‑27.
Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, s. 1(1).
Loi relative à l’extension des conventions collectives de travail, S.Q. 1934, c. 56.
Authors Cited
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De Niverville, Patrick, et Hélène Ouimet. Loi annotée sur les décrets de convention collective, par Patrick de Niverville, Claude Carignan et Hélène Ouimet. Montréal: Wilson & Lafleur, 1996 (feuilles mobiles mises à jour septembre 2001, envoi no 3).
Dubé, Jean‑Louis. Décrets et comités paritaires: L’extension juridique des conventions collectives. Sherbrooke: Éditions Revue de Droit Université de Sherbrooke, 1990.
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Gagnon, Robert P., Louis LeBel et Pierre Verge. Droit du travail. Québec: Presses de l’Université Laval, 1987.
Gagnon, Robert P., Louis LeBel et Pierre Verge. Droit du travail, 2e éd. Sainte‑Foy, Que.: Presses de l’Université Laval, 1991.
Jobin, Carol. “Statuts de salarié et d’employeur dans les lois du travail”, dans JurisClasseur Québec — Rapports individuels et collectifs du travail, vol. 1, par Guylaine Vallée et Katherine Lippel, dir. Montréal: LexisNexis, 2009, fascicule 8 (feuilles mobiles mises à jour juillet 2018, envoi no 17).
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Lluelles, Didier, et Benoît Moore. Droit des obligations, 3e éd. Montréal: Thémis, 2018.
Mathieu, Paul‑André. La nature juridique du contrat de franchise. Cowansville, Que.: Yvon Blais, 1989.
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APPEAL from a judgment of the Quebec Court of Appeal (Kasirer, Morin and Bélanger JJ.A.), 2017 QCCA 1237, [2017] AZ‑51418252, [2017] J.Q. No. 10958 (QL), 2017 CarswellQue 7138 (WL Can.), setting aside a decision of Lavoie J., 2016 QCCQ 1789, [2016] AZ‑51267820, [2016] J.Q. No. 2589 (QL), 2016 CarswellQue 2561 (WL Can.). Appeal dismissed, Côté, Brown and Rowe JJ. dissenting.
Marc‑André Fabien, Frédéric Gilbert, Alain Gutkin and Christine Provencher, for the appellant.
Jacques Cantin, for the respondent.
Paul‑André Mathieu, for the intervener.
The judgment of Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon and Martin JJ. was delivered by
[1] Abella J. — The provision of cleaning services in public buildings located in the Quebec region are covered by a collective agreement: the Decree respecting building service employees in the Québec region, CQLR, c. D-2, r. 16. The Decree, or collective agreement, sets out minimum standards in the workplace, including wages, hours of work, holidays and overtime.
[2] The Decree in turn is governed by the Act respecting collective agreement decrees, CQLR, c. D-2. The purpose of the Act was to encourage the negotiation of collective agreements which would lead to improved working conditions for a greater number of workers. The Act also sought to achieve uniformity of working conditions within workplaces in the same industry and region. Section 22 para. 2(a) of the Act makes the Comité paritaire de l’entretien d’édifices publics de la région de Québec responsible for overseeing compliance with the Decree, which may exercise all recourses arising from the Decree “in favour of employees who have not caused a suit to be served”. Pursuant to s. 12 of the Act, employers cannot pay their employees less than the minimum set out in a decree.
[3] In light of the Act’s remedial, benefit-conferring objectives, the Quebec Court of Appeal has held that the Act and the Decrees governed by it must be given a large and liberal interpretation (Comité paritaire de l’entretien d’édifices publics de la région de Québec v. Station de ski Le Valinouët Inc. (1994), 63 Q.A.C. 143; Québec (Office municipal d’habitation de) v. Comité paritaire de l’entretien d’édifices publics de la région de Québec, 2009 QCCA 2428). At its peak, the Act governed approximately 100 collective agreements. It now applies to 15, including the one at issue in this appeal.
[4] Related to its aims of protecting and promoting collective agreements in order to improve workplace conditions, s. 11 of the Act states that the provisions of a decree are of “public order”. Article 9 of the Civil Code of Québec (“C.C.Q.”) states that provisions of public order cannot be varied. That means that, if applicable, the provisions of the Decree are mandatory and cannot be changed.
[5] The dispute underlying this appeal is whether the Decree applies to the relationship between Modern Cleaning Concept Inc. and Francis Bourque because Mr. Bourque is an “employee” within the meaning of the Act. In resolving this dispute, this Court must determine whether the majority in the Court of Appeal (2017 QCCA 1237) was justified in intervening because the trial judge (2016 QCCQ 1789) committed a palpable and overriding error in concluding that the Decree did not apply.
[6] Modern provides cleaning and maintenance services in the Quebec region through a network of approximately 450 franchises. Its clients are typically small and medium sized businesses requiring cleaning services in multiple locations.
[7] Modern’s business model is to negotiate a master cleaning contract with its clients. It then assigns cleaning contracts for specific locations to its various franchisees, who perform the actual cleaning and maintenance work. The franchisees are not involved in negotiating the contracts with Modern’s clients.
[8] Modern negotiated a cleaning services contract with the National Bank of Canada in 2012 for approximately 400 of the Bank’s locations. The agreement between Modern and the Bank stated that the contract would be assigned by Modern to franchisees who would perform the actual cleaning. Modern would, however, remain responsible to the Bank for the implementation of the contracts at each location. The contract also stated that the price of Modern’s cleaning services would increase if the wages required under the Decree increased. Modern had a similar contractual relationship with the Société des alcools du Québec (SAQ).
[9] Francis Bourque owned and operated his own part-time cleaning business, Nettoyage Francis Bourque. His spouse, Jocelyne Fortin, helped him operate the business. Mr. Bourque first contacted Modern in 2013, when he learned that it was looking for a replacement cleaner at a SAQ branch. He initially took on this work as a subcontractor. Several months later, Mr. Bourque decided to become a franchisee. He signed the franchise agreement with Modern on January 1, 2014.
[10] The franchise agreement between Modern and Mr. Bourque is a lengthy document with multiple appendices. The preamble states that the franchisee, Mr. Bourque, would have [translation] “complete control over the management of his operations, which involves a business risk as in any other business, for which THE FRANCHISOR is in no way a guarantor” (emphasis in original).
[11] The agreement stipulated that Mr. Bourque agreed to be assigned cleaning contracts and stated that he was an “independent contractor”. Modern was to be indemnified for any and all suits, claims or other demands related to a failure to comply with any obligation in the agreement. Modern was also entitled to cancel Mr. Bourque’s cleaning contracts on “mere notice”.
[12] Mr. Bourque agreed to perform cleaning services exclusively through the franchise relationship, not to compete with Modern’s network, and to use his own tools and equipment. He was required to identify himself as a member of the Modern network in relation to any business activity and was to immediately report any complaints he received from clients to Modern. Any of Mr. Bourque’s employees deemed to be unacceptable to either Modern or one of its clients were to be let go. Modern’s representatives were entitled to perform quality control checks at any time without prior notice. Any new cleaning opportunities had to be reported to Modern so that Modern could negotiate the contracts.
[13] In accordance with the franchise agreement, Modern billed the clients in Mr. Bourque’s name. It paid Mr. Bourque by direct deposit after deducting the various amounts Mr. Bourque owed it. At any given time, Mr. Bourque could owe up to 43% of his revenue to Modern, including 25% paid in advance for the rights to the franchise and the acquisition of the first contract, plus 7% of gross revenue, 10% for administrative fees and up to 1% of annual gross revenue for publicity fees. Additionally, Mr. Bourque made loan arrangements with Modern to help him acquire the cleaning contracts and assist with the franchising costs. These arrangements were appended to the franchising agreement.
[14] Mr. Bourque was initially assigned cleaning contracts for one National Bank location and one branch of the SAQ. Over the next few months, Mr. Bourque was assigned cleaning contracts for three additional National Bank locations. He had limited interaction with the clients whose premises he cleaned. His spouse, Ms. Fortin, helped him perform the cleaning services.
[15] On May 31, 2014, after approximately five months of working within the Modern network, Mr. Bourque, increasingly frustrated by his lack of profits and inability to develop his business as he wished, terminated his franchise agreement and recommenced the operation of his own cleaning business.
[16] After the termination of the franchise agreement, the Comité investigated the relationship between Mr. Bourque and Modern. It concluded that the language of the franchise agreement was not determinative of the reality of the relationship between Mr. Bourque and Modern, and that despite the language in the franchise agreement, Mr. Bourque was in fact an “employee” as defined by the Act, not an independent contractor. He was therefore entitled to be paid the mandatory wages and benefits set out in the Decree.
[17] On November 12, 2014, the Comité commenced proceedings against Modern in the Court of Quebec, claiming $9,219.32 in unpaid wages and other benefits in relation to the cleaning services performed by Mr. Bourque and Ms. Fortin.
[18] The trial judge considered the relationship between Modern and Mr. Bourque to determine whether Mr. Bourque was an employee or independent contractor. He found that the following factors suggested Mr. Bourque was an independent contractor: he owned his own cleaning business; he acted as a subcontractor for Modern prior to becoming a franchisee; and Mr. Bourque hoped to enlarge his business. The factors the trial judge said supported Mr. Bourque being an employee included his inability to negotiate the terms of the franchise agreement; Modern’s ongoing supervision of his work; and the fact that Mr. Bourque’s clients paid Modern who then paid Mr. Bourque.
[19] In order to determine whether Mr. Bourque was actually an employee or an independent contractor, however, the trial judge emphasized Mr. Bourque’s intention. He concluded that Mr. Bourque clearly entered into the franchise relationship with the aim of expanding his own cleaning business. That the venture did not go as planned — due to Mr. Bourque’s dissatisfaction with Modern’s role as franchisor — did not, in the trial judge’s view, detract from Mr. Bourque’s actual purpose: to expand his own business.
[20] Relying on the language of the franchise agreement, the trial judge concluded that there was a common intention that Mr. Bourque would be an independent contractor, not an employee. Accordingly, as an independent contractor, he was not entitled to the full amount claimed by the Comité on his behalf. He was, however, entitled to $2,877.28, an amount Modern conceded it still owed him pursuant to the franchise agreement.
[21] Kasirer J.A., writing for a majority in the Court of Appeal, allowed the appeal. He held that the trial judge had misapprehended the nature of the tripartite contractual relationship between Modern, its clients and its franchisee, Mr. Bourque. Specifically, Kasirer J.A. was of the view that the trial judge had made a palpable and overriding error in failing to consider the nature of the assignments of the cleaning contracts from Modern to Mr. Bourque. By failing to recognize that Modern remained contractually liable to its clients, the trial judge erred in his analysis of whether Mr. Bourque was an employee or an independent contractor. Various elements of this tripartite model led the Court of Appeal to conclude that Mr. Bourque was an employee not an independent contractor and ordered Modern to pay the Comité the $9,219.32 it claimed on behalf of Mr. Bourque and Ms. Fortin.
[22] For the following reasons, I agree with Kasirer J.A. that the trial judge’s failure to consider the tripartite nature of Modern’s business model was a palpable and overriding error warranting appellate intervention. This error caused the trial judge to err in his assessment of whether Mr. Bourque was an employee or an independent contractor.
Analysis
[23] Two provisions of the Act are primarily engaged by this appeal, s. 1(g) which defines “professional employer”, and s. 1(j) which defines “employee”. The provisions state:
1. (g) “professional employer” means an employer who has in his employ one or more employees covered by the scope of application of a decree;
1. (j) “employee” means any apprentice, unskilled labourer or workman, skilled workman, journeyman, artisan, clerk or employee, working individually or in a crew or in partnership;
[24] The definitions of “employee” and “professional employer” are related: a professional employer is one who employs one or more employees covered by a Decree (see F. Morin et al., Le droit de l’emploi au Québec (4th ed. 2010), at para. III-508; Comité paritaire de l’entretien d’édifices publics v. Caisse populaire Immaculée Conception de Sherbrooke, 43 Q.A.C. 1, at paras. 13-15, per Proulx J.A.). I agree with Kasirer J.A. that the definition of “professional employer” must, like the definition of “employee”, be given a large and liberal interpretation in light of the remedial purposes of the Act and Decree.
[25] Consistent with those objectives, the definition of “employee” in the Act is broader than set out in the C.C.Q. Workers may therefore be considered “employees” for the purposes of the Act and Decree even if they would not be considered employees pursuant to other laws of Quebec. The fact that the franchise agreement identifies Mr. Bourque as a franchisee is not determinative. It also means that, contrary to the views of the dissenting judge in the Court of Appeal, the Decree can apply to relationships other than those governed by employment contracts. It can, in fact, apply to any contract in which one can conclude that an individual is in a relationship determined to be that of “employee” within the meaning of the Act.
[26] Part of that task, therefore, is interpreting “artisan”, listed in the definition of “employee” in the Act. Artisans are one such category of worker not generally seen to be an employee under Quebec labour legislation because artisans, like independent contractors, often exercise a great deal of autonomy (A. Perrault, Traité de droit commercial (1936), vol. II, at p. 225). As Professor Carol Jobin noted, the inclusion of artisan in the definition of “employee” indicates that the notion of employee in the Act has a greater reach than just what comes from an employment contract (“Statuts de salarié et d’employeur dans les lois du travail”, in JurisClasseur Québec —Rapports individuels et collectifs du travail (loose-leaf), vol. 1, by G. Vallée and K. Lippel, eds., fasc. 8, at para. 145). The language of the French version of the Act clarifies further the wider breadth of the category of “employee”, defining a “salarié” as including an “employé”, not merely, as in the English, the use of the tautological “employee”. The inclusion of “artisan” in the Act’s definition of “employee” clearly demonstrate that the Act and the Decree apply to relationships other than those governed by employment contracts.
[27] The seemingly anomalous inclusion of “artisan” in the definition of “employee” in the Act has resulted in a body of jurisprudence to determine whether a worker is an artisan who is therefore covered by the Act, or an independent contractor. Two decisions of the Quebec Court of Appeal have grappled with this distinction. In Comité paritaire de l’entretien d’édifices publics v. Confédération des caisses populaires et d’économie Desjardins du Québec, [1985] C.A. 17, the Court of Appeal established the test for distinguishing between an artisan and an independent contractor under s. 1(j) of the Act.
[28] In Desjardins, the Caisse populaire of St-Pascal-de-Maizerets had entered into an agreement with a worker to clean its premises. The worker owned his own cleaning business and used his own equipment. He was also responsible for ensuring that he had adequate staffing to complete the work. Some years later, he sold his cleaning business and the contracts he had with the Caisse populaire to Louis-Émile Girard, who carried on business under the name “Service d’Entretien Ménager Louis-Émile Girard Enr.”. The dispute in Desjardins centred upon whether the Caisse populaire was an employer within the meaning of the Act. In order to answer that question, it was necessary to determine whether the workers were “employees” as defined by the Act.
[29] After considering dictionary definitions of “artisan”, the Court of Appeal emphasized that artisans are those who perform mechanical or manual trades or arts and that, generally, an artisan works alone or with a small enterprise. Jacques J.A. noted that despite the similarities between artisans and independent contractors, the legislation included artisans within the definition of “employee” in the Act in order to provide them with greater benefits and improved working conditions. The independence usually relied on to distinguish independent contractors from employees could not, therefore, be determinative in deciding who was entitled to legislated employment standards.
[30] The critical factor distinguishing artisans from independent contractors was held to be the respective degree of risk and the attendant ability to make a profit. The independent contractor, in attempting to generate profit, accepts the business risk. Artisans, on the other hand, do not. Jacques J.A. noted that this distinction was also reflected in French law where it is used to differentiate business contracts from employment contracts (see B. Boubli, “Contrat d’entreprise”, in É. Savaux, eds., Encyclopédie juridique Dalloz: Répertoire du droit civil (2nd ed. 1979), vol