Coloniale Maid Service Ltd. v. M.N.R.

Coloniale Maid Service Ltd. v. M.N.R.
Court (s) Database
Tax Court of Canada Judgments
Date
2010-03-10
Neutral citation
2010 TCC 115
File numbers
2008-3919(EI)
Judges and Taxing Officers
Dwayne W. Rowe
Subjects
Employment Insurance Act
Decision Content
Docket: 2008-3919(EI)
BETWEEN:
COLONIALE MAID SERVICE LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the appeal of
Coloniale Maid Service Ltd. 2008-3920(CPP)
on January 26, 27 and 28, 2010 at Edmonton, Alberta
Before: The Honourable D.W. Rowe, Deputy Judge
Appearances:
Agent for the Appellant:
Carole Rutwind
Counsel for the Respondent:
Gregory Perlinski
____________________________________________________________________
AMENDED JUDGMENT
The appeal is dismissed and the decision of the Minister is confirmed, in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia this 10th day of March 2010.
“D.W. Rowe”
Rowe D.J.
Docket: 2008-3920(CPP)
BETWEEN:
COLONIALE MAID SERVICE LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the appeal of
Coloniale Maid Service Ltd. 2008-3919(EI)
on January 26, 27 and 28, 2010 at Edmonton, Alberta
Before: The Honourable D.W. Rowe, Deputy Judge
Appearances:
Agent for the Appellant:
Carole Rutwind
Counsel for the Respondent:
Gregory Perlinski
____________________________________________________________________
AMENDED JUDGMENT
The appeal is dismissed and the decision of the Minister is confirmed, in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia this 10th day of March 2010.
“D.W. Rowe”
Rowe D.J.
Citation: 2010 TCC 115
Date: 20100310
Dockets: 2008-3919(EI)
2008-3920(CPP)
BETWEEN:
COLONIALE MAID SERVICE LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
AMENDED REASONS FOR JUDGMENT
Rowe, D.J.
[1] The Appellant appeals from two separate decisions – both dated October 14, 2008 – wherein the Minister of National Revenue (the "Minister") – except for deleting Dionne Danyk-Purcell (“Dionne”) from the Canada Pension Plan (CPP) assessment on the basis she had no contributory earnings from November 1, 2006 to September 30, 2007 - confirmed earlier assessments dated November 20, 2007 - in respect of the period from November 1 to December 31, 2006 - and November 30, 2007 - in respect of the period from January 1 to September 30, 2007 - issued in respect of CPP contributions and Employment Insurance (EI) premiums relating to certain named workers listed in Schedule A attached to said decisions. The Minister decided those workers had been employed by Coloniale Maid Service Ltd. (“Coloniale or payor”) under a contract of service pursuant to the relevant provisions of the Employment Insurance Act (the "Act") and the Canada Pension Plan (the "Plan"), respectively. The Appellant filed a separate appeal – 2008‑3920 (CPP) – from the decision issued pursuant to the Plan. The agent acting for the Appellant and counsel for the Respondent agreed the two appeals could be heard together.
[2] The current appeals are in relation to the workers named in Schedule A and Schedule B of each Reply to The Notice of Appeal (“Reply”) pertaining to the specified periods in 2006 and 2007. The amount of remuneration paid to each named worker during those relevant periods is set out in Schedule C of each Reply.
[3] Ms. Carole Rutwind - agent for Coloniale - advised the Court that Dionne was the sole Officer, Director and shareholder of the Appellant corporation.
[4] Kayla Markiwsky (“Markiwsky”) testified she resides in Beaumont, Alberta, a community bordering Edmonton, and is currently employed by Coloniale. In May, 2005, she met with Dionne to discuss providing her cleaning services to Coloniale, an entity engaged – mainly – in cleaning residential properties but also some commercial premises. Markiwsky stated Dionne informed her that she would be self-employed, an independent contractor, and that payments for services rendered would be made upon receipt of an invoice. Markiwsky stated she advised Dionne when she would be available for work and named her preferred locations. She began working in May, 2005 and was employed for most of the relevant period, although she left prior to an audit by Canada Revenue Agency (“CRA”). Markiwsky stated she was trained initially by Dionne but later her work was not inspected on any regular basis by anyone from Coloniale. However, she understood that if some aspect of a cleaning job was not satisfactory, it was her responsibility to rectify the problem, failing which her payment for that job could be withheld fully or in part. Markiwsky drove her own vehicle to job sites and paid for all related expenses. She stated she was able to refuse to work at certain locations and could decline an assignment for certain reasons and believed this privilege was extended to other Coloniale workers. Although she did not do so, she understood she could provide cleaning services on her own initiative to others, provided they were not clients of Coloniale. Markiwsky stated the usual procedure was to attend at Dionne’s residence in Beaumont at 8:45 a.m. where Dionne assigned jobs to the assembled workers by handing out a clipboard to each cleaning team to which a sheet was attached which stated the name of the client, location of the residence and the composition of the members – usually two – of the team dispatched to perform the cleaning service. All cleaning supplies such as pails, knee-pads, cleaning materials, squeegees, and a vacuum cleaner - if necessary - were provided by Dionne from an inventory stored in her garage. In the event a job was running late or if it was finished early, members of the cleaning team contacted Dionne by telephone and either were provided with assistance by other workers or were dispatched to another location to help that team to finish the job. Markiwsky recalled that she broke some item at a client’s house but did not have to pay for it. She stated that when unable to work on a particular day, she contacted Dionne who obtained the services of a replacement and that she was not concerned about whether she could hire her own substitute. Markiwsky stated she was paid by Coloniale – every two weeks, by cheque – based on an hourly rate and any gratuities paid by clients went directly to Coloniale. Prior to working for the payor, Markiwsky owned her own cell phone. The location of cleaning jobs in Beaumont were about 2 to 5 minutes apart but assignments to residences in south Edmonton required additional travel time and Coloniale paid Markiwsky – and some other workers – the sum of $20 per month to compensate for using their private vehicles. Markiwsky stated she could not make a profit on any job or series of jobs since she was reimbursed by the hour. For the taxation years at issue, she filed her income tax returns on the basis she had earned business income as a self-employed person. However, she was not registered for purposes of the Goods and Services Tax (GST) and did not advertise her services nor did she have any telephone number apart from her personal cell phone.
[5] In cross-examination by counsel for the Respondent, Markiwsky stated that at the outset, she requested Dionne to demonstrate the best methods to clean a residence, particularly the bathroom.
[6] In response to a question from the Bench, Markiwsky stated that she and other members of the cleaning teams followed a checklist provided by Coloniale but also abided by instructions delivered by the homeowner(s) either in person or by a written note.
[7] Irina Orlova (“Orlova”) testified she is a student residing in Beaumont. She was named – incorrectly – as Irina Orlove in the decision of the Minister pertaining to the period in 2007 and that error was reproduced in Schedule B and Schedule C of each Reply. Orlova moved to Canada – from Russia – with her parents and was living in Beaumont when her Mother noticed an advertisement – by Coloniale - in the local paper and contacted Dionne. Orlova stated she met with Dionne and understood she would not be an employee when providing her services as a cleaner but would be doing so as a self-employed person. She was attending high school during the period from November, 2006 to September, 2007. Her job required her to attend at a dental clinic twice a week and to perform certain cleaning services according to instructions left by the dentist or his staff. Usually, she worked each Tuesday evening and on either a Saturday or Sunday. Any change in this schedule was made by contacting Dionne and not directly by Orlova through contact with the dentist or his staff. All cleaning supplies were provided by the clinic but Orlova purchased her own gloves. She drove her parents’ vehicle or walked the few blocks from her home to the office. Since she was able to work only on weekends or after school, Dionne did not offer her any other jobs. Orlova’s mother prepared and submitted invoices to Coloniale based on the appropriate number of hours – and hourly rate – for each billable period. Orlova stated that when first hired by Dionne she did a practice “run” at the dental office and noted it took two hours, so she used that time as a basis to bill a total of four hours a week based on two visits. She billed those hours even if there were occasions when the dentist or his staff requested her to perform certain tasks which were completed in less than the usual two-hour period.
[8] In cross-examination, Orlova stated she never hired a replacement worker and was reimbursed at $16 per hour and not on any flat rate. No complaints about her work were ever brought to her attention. The Tuesday cleaning job took less time because the floors did not have to be washed. Orlova stated she did not have any business telephone or business insurance. She was not a GST registrant and did not advertise her cleaning services.
[9] Dionne Danyk-Purcell testified she resides in Beaumont and that in addition to being the sole shareholder of Coloniale, is a self-employed musician. Coloniale recruited staff through verbal contacts and by running an advertisement in Beaumont News, the local paper. Dionne stated that when interviewing prospective workers, she made it clear that the service to be provided to Coloniale would be as an independent contractor which meant they would be responsible for paying their own income tax and would not be supervised when cleaning a residence. Dionne stated she advised potential clients during initial discussions that if she did not clean their house personally, the cleaners assigned for that task would be subcontractors of Coloniale. Dionne wrote specific client requirements on a sheet which included preferred hours for the service and instructions pertaining to the cleaning of areas such as hardwood floors or items such as mirrors. Dionne stated that most homeowners/occupants did not want to be at home while the cleaners were working so the teams were assigned times which conformed to the client’s schedule. Generally, the same team – usually composed of two persons, except for large houses which could require three – was not sent to the same house but workers could request repeat assignments to a location. Any complaints by clients were made directly to Coloniale and, although Dionne was aware of the composition of a cleaning team, she did not know which member was responsible for the error or omission. Therefore, it was the responsibility of that team to return to that residence and to rectify the problem. If another worker had to be sent to perform that service, the workers in the original team were not paid for the time required to correct their mistake. It was very rare that any item was broken but on one occasion a worker broke a vase and paid the sum of $60 to reimburse Coloniale’s client. Dionne stated she wanted the workers to meet at the garage at her residence at 8:50 a.m., at which point she advised them of the jobs available that day and assigned teams to various locations and handed out clipboards with attached client contracts and instruction sheets containing particular requests of certain clients, some of which were so idiosyncratic that some workers refused to clean that residence. The jobs in Beaumont took one-half day to complete whereas the Edmonton locations required a full day, including unpaid travel time. Dionne stated she is a single mother and worked alone in some instances to satisfy a specific request or as a member of a two-person team and did not act as a “boss” or supervisor. Workers arranged for their own transportation to the job site and some of them were able to work only on evenings or certain days of the week. As a result, workdays for some ended by 1 p.m. and other workers dictated the hours and days they were available due to other work commitments or child care requirements. Dionne stated she did not supervise the cleaners but each member of the team checked the work done by her co-worker. On occasion, workers cleaned Dionne's house using the standard cleaning methods applied to the residences of Coloniale clients. Dionne received a call from CRA advising her that Coloniale was the subject of a payroll audit. She contacted the accountant Coloniale had retained – at that time – who advised her to prepare a written contract to incorporate terms of the previous verbal agreement between her – as President of Coloniale – and each worker which would confirm the pre-existing status of independent contractor. She was also advised to obtain invoices from workers for services rendered and that they be requested to provide replacement invoices since some were missing due to the inadequate state of Dionne’s record-keeping. Dionne stated one worker – Kimberley Chiasson (“Chiasson”) - refused to sign the written agreement when it was presented to her and was emotionally upset about the matter. Dionne stated that throughout the relevant periods in 2006 and 2007, no worker ever questioned her in relation to the lack of deductions for EI, CPP and income tax from their bi-weekly payments for services rendered. Christmas bonuses in the form of cheques were received by Coloniale and Dionne attempted to distribute portions of the total amount to workers who had cleaned in the houses that were the source of said bonuses. Neither Coloniale nor Dionne retained any of that bonus money.
[10] Dionne was cross-examined by counsel for the Respondent. Dionne acknowledged that she had trained some workers with respect to certain tasks mainly by having a new worker clean her house while observing and providing advice, if requested. Otherwise, a worker was at liberty to use her own skills and methods. Dionne stated that workers had input into where they would work - and for whom - and could suggest that a certain co-worker be assigned to form a team. She agreed that Coloniale provided most cleaning supplies until the commencement of the CRA audit after which – on the advice of her accountant – she began charging workers for supplies and tools. Dionne stated that throughout the relevant periods, any worker could use their own supplies or tools as a matter of personal preference. If a team was running behind on a job, the workers had the right to call members of another team directly and to request assistance without contacting Dionne. On those rare occasions when some item in a household was broken or sustained slight damage, the worker involved advised Dionne who discussed the matter with the client. It was necessary on only one occasion for the householder to be reimbursed as otherwise any potential claim was waived, probably because the loss or damage was trivial. Coloniale did not “do windows” as it did not have appropriate equipment or liability insurance. Dionne stated that some workers advised her – initially – they could work only from April to September and others made it clear they could not work on certain days or during certain hours. If a worker was ill or otherwise unable to attend, Dionne located a replacement and paid that person directly with a Coloniale cheque. In the period prior to the CRA audit, no worker had hired her own substitute or assistant. Dionne agreed the remuneration was based on an hourly rate but stated that was linked to a time frame reasonably required to complete the cleaning of a particular residence. On occasion, there were more workers gathered outside Dionne’s garage in the morning than the number of jobs available so some volunteered to return home so others could be assigned the cleaning jobs. Dionne was referred to a Questionnaire – Exhibit R-1 – signed by Rutwind & Associates on behalf of Coloniale and dated May 5, 2008. The typed response – by way of attachment – at Q. 23 – pertaining to hourly rates paid to workers – indicated higher rates were paid to some workers – $14.00 to $14.50 – while others were paid $11.50 or $12.00 with the greater amount in each case being paid when the work site was in Edmonton rather than in Beaumont. Dionne stated the variations were the result of negotiations with workers based to some extent on the nature of the premises to be cleaned as some clients set a maximum amount they were willing to pay for cleaning while others paid Coloniale for whatever hours were necessary to perform the task. Dionne acknowledged that prior to the CRA audit, most workers did not submit an invoice to Coloniale and expressed her regret at not having insisted on receiving an invoice prior to issuing a cheque in payment for services rendered. However, she was otherwise occupied with a variety of other matters and the quality of bookkeeping suffered as a result. Dionne stated that some of the workers cleaned homes or had other cleaning jobs that were performed for people who had no business relationship with Coloniale. Early in the working relationship with each worker, Dionne had inquired whether GST would be added to the amount submitted to Coloniale for payment but no one had registered to obtain a number so it was not an issue thereafter. All workers – except Chiasson – signed a one-paragraph document – copies of which were attached to the response to the Questionnaire – and the title and body thereof reads as follows:
Contract for
(blank space for name)
as sub-contractor
I, (blank space for name) recognize that I am being hired as a sub-contractor and that I am responsible for filing and paying my own source deductions (CPP, E.I., and income tax). Coloniale Maid Service Ltd. does not submit source deductions on my behalf.
[11] As requested by Dionne, all documents were dated November 1, 2006 in an attempt to confirm and ratify the working status that she considered had existed since the commencement of the working relationship with Coloniale in each case. Dionne stated most workers provided replacement invoices for services previously rendered to permit her to complete her records for purposes of the CRA audit. Dionne identified an e-mail – Exhibit R-2 – dated November 5, 2007 – she sent to Brenda Hinse (“Hinse”) in which she listed the dates and amounts required to be included in invoices to be prepared by Hinse and submitted to Coloniale. Dionne identified another e-mail – Exhibit R-3 – sent to Chiasson which listed cheques paid by Coloniale to her at various times in 2007 and included an estimate of money also earned in October, apparently at the request of the CRA auditor. Dionne identified a printout – Exhibit R-4 – of amounts paid to Jacqueline McCormick (“McCormick”) and there was reference therein at an entry – dated 15/12/2006 – that she had received a bonus in the sum of $40.00 when Dionne apportioned holiday bonus money received from clients. Dionne stated she did not command workers to appear at her house prior to 9 a.m. and if enough people were not present to handle all the jobs, she worked herself or found someone who was willing to work that day. It was not unusual for someone to quit without any prior notice. In Dionne’s opinion, McCormick had started to poach Coloniale’s clients and this led to a confrontation which resulted in the termination of their working relationship. Dionne referred to an advertisement – filed as Exhibit A-1 – in the Beaumont paper where Natalia Parsons (“Parsons”) advertised her cleaning services under the name: Sparkle Cleaning Services. To the best of Dionne’s recollection, that notice appeared about the first week or two of September, 2007. At some point, the price of gasoline had increased to more than $1.40 and Parsons requested a contribution for “gas money” so Dionne decided to pay her the sum of $20 per month and offered the same amount to other workers who used their own vehicles to drive themselves or other workers to job sites. Dionne stated she had purchased accounting software for her computer and was learning it on her own as she went along and had tried her best but that aspect of her business was assigned low priority because the care of her family also demanded a lot of time.
[12] In response to questions from the Bench, Dionne stated that at some point, Coloniale increased its rates to clients and the workers requested additional money which led to their hourly rates being increased and these new hourly amounts may have been included in the response to Q. 23 of the Questionnaire – Exhibit R-1. Dionne stated Coloniale paid all Workers’ Compensation Board (“WCB”) premiums as required by provincial law which exempted only services provided by individuals through corporations. Most cleaning contracts were carried out within Beaumont so adverse weather conditions were not a factor although some jobs in Edmonton had to be cancelled due to bad driving conditions. The liability insurance policy obtained by Coloniale provided coverage only for liability arising from the provision of Dionne’s services personally and did not cover the workers whom she considered to be subcontractors. Although it was rare, there were occasions when a job had to be cancelled due to a shortage of workers attending the morning assembly at her garage. Usually, there were enough workers to handle the demand and replacements – in Beaumont – were telephoned and could be assigned quickly to a nearby location and Dionne also worked personally when necessary to fulfil a cleaning contract.
[13] The Appellant closed its case.
[14] Amy Holstein (“Holstein”) was called to the stand by counsel for the Respondent. Holstein testified she saw the Coloniale advertisement in the Beaumont paper. Prior to providing her cleaning services to Coloniale in 2007, Holstein did not sign any written contract and was trained by Dionne with whom she worked for the first “couple of shifts.” Holstein stated the workday started at 9 a.m. and ended – usually – by 5 p.m., although some houses took longer to finish. The cleaning teams remained until the job was finished and if the task was completed earlier than projected, a team member telephoned Dionne and sometimes received instructions to proceed to another location to assist the team working there. Holstein stated there was some ability to choose work locations but the teams were required to follow the sequence of job sites as stated on the sheet attached to the clipboard. The workers assembled at Dionne’s residence before 9 a.m. and obtained supplies and necessary tools. Once assigned to teams, the workers left for the work sites where the cleaning was performed without supervision. At the beginning, Holstein had to return to a house to re-do some task and cannot recall whether she was paid for that additional work. She did not use a vehicle to travel to work sites and was paid $13.50 per hour for cleaning. She did not submit any invoice to Coloniale prior to receiving payment which was calculated in accordance with the information in the Coloniale client invoice handed out in the morning with the clipboard. Holstein stated she was not able to gain any profit from the provision of her services and could increase income only by working more hours. She did not provide her services to any other cleaning companies nor on her own initiative. She was not registered for GST and did not advertise her services. She stated that after the CRA audit had commenced, workers began buying their own mops and buckets.
[15] Holstein was cross-examined by the agent for the Appellant. Holstein stated she obtained rides from co-workers or walked to the jobs – weather permitting – during the 7 or 8 months she worked as a cleaner for Coloniale. She was never advised by Dionne that she was forbidden to work for other cleaning services and knew that some of her co-workers had done so. Once the work was completed at a particular location, the relevant number of hours was inserted into the space provided on the Coloniale invoice which had been prepared in the name of that specific client. On occasion, Holstein declined a particular cleaning assignment which Dionne accepted and sent her to another location.
[16] Natalia Parsons – also known as Natasha – testified she read a classified advertisement in the Beaumont paper in which Coloniale was seeking cleaners to work for $12.00 per hour. She did not sign any written contract prior to cleaning for Coloniale and received training from fellow workers on the teams to which she was assigned by Dionne. She never objected to any placement with another team member. Parsons stated the group met at Dionne’s house before 9 a.m. and, if unable to attend, a worker was expected to call Dionne. Usually, the work was finished by 3 p.m. but the cleaning team had to remain until the job was complete. The locations were assigned by Dionne and Parsons was unaware whether she had the ability to refuse work at any specific residence. Parsons never encountered any dissatisfaction with her work or that of her team but was aware of situations where a client had called Dionne to complain and the matter was discussed with the assembled workers the following morning. Parsons recalled that at some point there was a general increase in the hourly wage paid to workers. Prior to receiving payment – by cheque – from Coloniale, she did not prepare any invoices and all supplies and materials were distributed by Dionne. Parsons stated there was no chance to gain a profit and there was no risk of loss in providing her services to Coloniale. For several months when the price of gasoline was excessive, she received the sum of $20 per month from Coloniale as a contribution towards fuel purchases. In May, 2008, Parsons started her own cleaning company but during her working relationship with Coloniale did not work for others and considered she had been an employee. She was not registered with GST. After CRA had completed the audit, Parsons signed a “paper” in which she was described as a subcontractor and thereafter certain cleaning supplies had to be purchased from Coloniale. Parsons identified a Questionnaire – Exhibit R-5 – that she completed and signed on April 20, 2008. In responding to Q. 32, thereof, Parsons wrote that Coloniale informed her how many hours were required to complete each house. However, despite any such estimate, she and other workers were paid for the actual time spent at any residence or premises. Parsons stated there was never any agreement with Dionne as to the status of the working relationship.
[17] In cross-examination, Parsons stated that any training received was from other workers whom she assumed had been requested to do so by Dionne. Parsons stated that during the initial interview, Dionne advised her that she wanted to be contacted if Parsons was unable to work on a certain day but that situation never arose. Parsons ability to speak English was somewhat limited at that point so she was accompanied by her husband. Although there was no discussion with Dionne concerning any source deductions, Parsons stated her husband mentioned later that she should have had deductions taken from her pay cheques. Parsons stated she was not familiar with the Canadian system and spoke with other workers about the matter but was happy just to have a source of revenue. She was aware that at the end of the year she would be required to calculate her total income and to pay the appropriate amount of tax. Parsons stated the allowance of $20 per month to be used for gasoline purchases was satisfactory. Prior to the CRA audit, Coloniale supplied all mops, cleaning materials and other supplies. Other than McCormick, who at some point worked for another cleaning service, Parsons was not aware of any others who worked for other cleaning businesses or provided services privately to their own clients. She had not been informed by Dionne that she was not permitted to work for other cleaning companies or to find her own jobs.
[18] Brenda Hinse testified she resides in Beaumont and is employed as an Education Assistant. She responded to an advertisement by Coloniale – in the Beaumont paper – offering workers $10 per hour for cleaning services. In meeting with Dionne, she was not told it was a business opportunity as opposed to employment. Dionne demonstrated certain cleaning methods with particular attention devoted to dealing with more difficult areas in a residence. Assignments were handed out by Dionne to the workers assembled prior to 9 a.m. and supplies were distributed along with special client instructions and security codes to permit entry. A team remained until the job was completed and if it was running behind, a worker called Dionne who sent other workers to help. If finished early, the reverse situation applied. Hinse stated she was not able to refuse a job and Dionne established the priority of work to be performed on any given day. Hinse stated she wanted to work with McCormick but Dionne did not agree. Once, Dionne took a brief vacation and Hinse assumed a managerial role to continue Coloniale’s service to clients. Although it did not apply to her, Hinse was aware of occasions when Dionne was critical of one or more workers who were part of the morning assembly. Hinse assumed either Dionne – through Coloniale – had paid for any broken or damaged items in a residence or the clients had waived any claim for reimbursement. Hinse did not find her own replacement worker and even though she wanted to hire her sister as an assistant, Dionne did not grant permission. She was paid – by cheque – twice a month based on the number of hours worked, multiplied by the applicable hourly rate which at one point was increased. Each clipboard handed out in the morning contained two invoices. One was left in the residence and the other was returned to Dionne at the end of the workday when remaining supplies were dropped off at her garage and the clipboard was left on the steps to her residence. Hinse used her own vehicle and received $20 per month towards fuel purchases. She paid an extra vehicle insurance premium of $158 because she was transporting co-workers to job sites. Hinse stated she did not supply any tools or equipment and did not have any opportunity to gain a profit nor did she incur any risk of loss. While providing her services to Coloniale, Hinse was employed as an Education Assistant in a school but did not work for other cleaning companies. Hinse stated that even though – at the beginning – Dionne informed her that she was self-employed, later she began to question that status for various reasons including the lack of control over work locations and the relationship with co-workers. She was not registered with GST and did not advertise her cleaning services. Hinse terminated her working relationship with Coloniale on October 26, 2007, at which point all workers were required to supply their own mops, buckets and supplies. Hinse completed and returned a Questionnaire – Exhibit R-6 – dated April 16, 2008 - in which she stated – at Q. 30 – that she did not submit an invoice to receive payment and that Coloniale paid for any substitute. She did not recall having had any ability to choose or refuse any particular location or cleaning job.
[19] In cross-examination, Hinse confirmed that it was clear to her during the initial interview with Dionne – in March, 2006 - that her services were to be provided to Coloniale as an independent contractor. She acknowledged that she had raised the matter with Dionne thereafter but continued to assume that source deductions would be made at some point even though none were taken from any cheque. Hinse stated her work for the school board – beginning in March, 2007 - was on a casual basis whereby she substituted for someone so when called to work at a school, she had to contact Dionne if not available to clean. Hinse stated the hourly rate paid by the school board was higher than that paid by Coloniale and she could accept work as an Education Assistant whenever the opportunity arose. Although some cleaning jobs were not completed until 3 p.m., most were done by 1 p.m. and Hinse was able to request an assignment of shorter duration if necessary to meet some other commitment, usually pertaining to her family. Any call from the school regarding the availability of work was made at 7 a.m., and if Hinse decided to accept, telephoned Dionne to advise she would not be available to work that morning. Hinse stated she filed her income tax returns for the 2006 and 2007 taxation years on the basis she was self-employed and provided receipts to her tax preparer pertaining to the extra insurance premium, cell phone, gasoline purchases and details concerning an in-home office. Hinse stated she did not provide any tools or supplies. Although some workers left without notice, Hinse was advised – verbally – by Dionne that two weeks notice of intention to quit was required. She was not requested to provide invoices to Coloniale prior to receiving payment for services rendered but later was asked by Dionne to provide invoices to conform with a list of Coloniale cheques that were issued to her. Hinse stated she complied with the request – even though she did not understand the purpose – and when doing so, spotted certain errors in amounts and dates which she corrected in her response. Hinse stated that she merely wanted to finalize her relationship with Dionne.
[20] During re-direct examination by counsel, Hinse stated she considered it a common courtesy to drive co-workers to job sites and that her status with the school board was that of employee. She did not consider that it would be unusual for an employee to request some time off to attend to a matter concerning child care.
[21] Jacqueline McCormick testified she resides in Beaumont and works as a cleaner and a waitress. She responded to the Coloniale advertisement in the local paper seeking cleaners who would work – for $10 an hour - between 9 a.m. and 3 p.m.. When interviewed by Dionne, she was informed that her services would be provided to Coloniale as a self-employed individual. As part of initial training – which she considered mandatory – Dionne demonstrated the best method to clean a bathroom. The workers gathered at Dionne’s residence prior to 9 a.m. when teams were assigned to jobs and supplies – and clipboards with attached sheets – were distributed. McCormick did not have small children so was able to work later than 3 p.m. in the afternoon and could help out other teams when necessary. She stated that despite her objections about cleaning a particular house, Dionne insisted she attend there and perform the work. Complaints by clients were handled by Dionne who checked on the quality of work and resolved the issue. McCormick stated she understood Dionne had deducted an amount from the cheque of a co-worker – Holstein – because of an unsatisfactory cleaning job at a residence. McCormick did not hire an assistant nor had she arranged for a substitute and was paid an hourly rate that was later increased. While providing her services, she did not submit invoices to Coloniale prior to receiving payment. Until the CRA audit, all supplies were provided by Coloniale and distributed by Dionne. McCormick drove her vehicle about 50 km per week for work purposes and received the sum of $20.00 per month towards fuel purchases. In her view, there was no opportunity to make a profit from providing her services and the only potential for loss was “wear and tear” on her vehicle as she did not pay for any extra liability insurance. McCormick, who also worked at a restaurant in Beaumont, stated that as time went on she began to “feel like an employee” of Coloniale. She left Coloniale in November, 2007, but later provided Dionne with backdated invoices, as requested. McCormick stated she did not receive her last cheque – for work done in October – until December 27 and had complained to the appropriate provincial government department. She identified a Questionnaire – Exhibit R-7 – that she completed and signed on April 16, 2008. She did not have a GST number during the relevant periods.
[22] McCormick was cross-examined by the agent for the Appellant. McCormick stated she worked at a bar from 5:30 p.m. onwards and so did not work for Coloniale past 4 p.m. but was always finished before then. She worked as a cleaner 3 days a week for Coloniale and did not have any other cleaning jobs. McCormick stated she wanted to work with Hinse whom she considered to be “a strong worker” but was refused by Dionne who preferred to pair an experienced cleaner with one not as capable or experienced. McCormick and other workers followed a checklist and Dionne – on occasion – attended a work site. When she was a member of a team, McCormick assumed responsibility to perform the final check of the premises. Sometimes, the householder wanted additional services performed and if that required extra time, it was noted on the invoice and she and her team member were paid accordingly. McCormick stated she filed her 2006 and 2007 income tax returns as a self-employed person and does not know if any expenses were deducted since her husband prepared the returns. She did not have any in-home office. She worked cleaning houses in Edmonton on Mondays and, although she never refused such assignments, felt she could have done so without any negative consequence except – perhaps – incurring the displeasure of Dionne. She had refused to work cleaning a certain home and Dionne had accepted that. McCormick acknowledged that at some point in 2007, she cleaned two other houses on her own. McCormick identified her signature on a document – Exhibit A-2 – which Dionne wanted her to sign as an acknowledgement that she had been providing her services to Coloniale as a subcontractor. The document was signed in October, 2007, although it was dated November 1, 2006. McCormick stated she was not aware that her last cheque from Coloniale may have been withheld because Dionne was waiting for an invoice covering that final period. McCormick agreed she had never questioned Dionne about the lack of deductions from her cheque.
[23] Kimberley Chiasson testified she responded to the Coloniale advertisement in the Beaumont paper seeking cleaning staff at the hourly rate of $11 or $12 per hour. During the first telephone conversation with Dionne, she was told to call back in a week and when she did so was instructed to be at the garage at Dionne’s residence before 9 a.m.. Chiasson told Dionne she was available to work on Monday, Wednesday and Friday of each week except if her children were not in school and also that she was not available to work during the summer school holidays. Dionne’s children and those of most of the other Coloniale cleaners attended the same school in Beaumont. During subsequent meetings – starting at 8:45 a.m. – Dionne handed out supplies and clipboards with invoices and a sheet