9178-3472 Québec inc. v. M.N.R.

9178-3472 Québec inc. v. M.N.R.
Court (s) Database
Tax Court of Canada Judgments
Date
2019-01-17
Neutral citation
2019 TCC 15
File numbers
2016-915(EI), 2017-1261(EI), 2017-1263(EI), 2017-2212(EI)
Judges and Taxing Officers
Lucie Lamarre
Subjects
Employment Insurance Act
Decision Content
Dockets: 2016-915(EI)
2017-1261(EI)
2017-1263(EI)
BETWEEN:
9178-3472 QUÉBEC INC.,
Appellant,
and
MINISTER OF NATIONAL REVENUE,
Respondent,
Docket: 2017-2212(EI)
BETWEEN:
9178-3472 QUÉBEC INC.,
Appellant,
and
MINISTER OF NATIONAL REVENUE,
Respondent,
and
Martin Demers, Claude-Richard Carbonneau, Claude Larose,
Georges Flahiff, Jacques Louis,
Intervenors.
[ENGLISH TRANSLATION]
Appeal heard on common evidence
on October 22 and 23, 2018 at Montréal, Quebec
Before: The Honourable Lucie Lamarre, Associate Chief Justice
Appearances:
Counsel for the Appellant:
James Bonhomme
Counsel for the Respondent:
Mathieu Tanguay
Intervenors present:
Martin Demers, Claude Larose, Georges Flahiff
JUDGMENT
The appeals are dismissed. The decisions made by the Minister of National Revenue (the Minister) that resulted in the establishment, for the Appellant, of employment insurance premiums on the insurable earnings paid to the 218 workers whose names are listed in Appendix A of the reasons for judgment for the years 2014, 2015 and 2016 in case 2017-2212(EI) are upheld. The decisions rendered by the Minister in cases 2017-1263(EI), 2017-1261(EI) and 2016-915(EI) are also upheld. All decisions are upheld as per the attached reasons for judgment.
Signed at Ottawa, Canada, this 17th day of January, 2019.
“Lucie Lamarre”
Lamarre A.C.J.
Citation: 2019 TCC 15
Date: 20190117
Dockets: 2016-915(EI)
2017-1261(EI)
2017-1263(EI)
BETWEEN:
9178-3472 QUÉBEC INC.,
Appellant,
and
MINISTER OF NATIONAL REVENUE,
Respondent,
Docket: 2017-2212(EI)
BETWEEN:
9178-3472 QUÉBEC INC.,
Appellant,
and
MINISTER OF NATIONAL REVENUE,
Respondent,
and
Martin Demers, Claude-Richard Carbonneau, Claude Larose,
Georges Flahiff, Jacques Louis,
Intervenors.
[ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Lamarre A.C.J.
[1] These are appeals from decisions made by the Minister of National Revenue (the Minister) that resulted in the establishment, for the Appellant, of employment insurance premiums on the insurable earnings paid to the 218 workers whose names are listed in Appendix A of these reasons for judgment for the years 2014, 2015 and 2016 (period from January 1, 2014 to May 5, 2016) (case 2017-2212(EI)).
[2] These are also appeals of the decision made by the Minister to have the employments held by the nine workers whose names are listed in Appendix B of these reasons for judgment between January 1, 2014 and May 5, 2016 (case 2017-1263(EI)), the employment of Josée Casavant for the periods between September 29, 2014 and October 26, 2015 and between February 1, 2016 and May 5, 2016 (case 2017-1261(EI)) and lastly the employment of Aliaksandr Shytsikau for the periods between March 14 and 20, 2014 and between April 18, 2014 and January 27, 2015 (case 2016-915(EI)) declared insurable. It should be noted that these 11 workers, whose appeals were filed separately, are already included among the 218 workers for whom premiums were established and for whom the appeal in case 2017-2212(EI) was filed.
[3] In all these cases, the Minister concluded that all these workers held insurable employment during the periods in dispute pursuant to paragraph 5(1)(a) of the Employment Insurance Act, during which time they provided services to the Appellant. This is disputed by the Appellant, who considers them to be self-employed persons.
Facts
[4] It is recognized that the Appellant operates a newspaper distribution company under the name of Gama Média (Gama). These newspapers are distributed in different public places in the Montréal area.
[5] For this purpose, the Appellant entered into a distribution agreement with Messageries Dynamiques, a division of Réseau Québecor Média Inc.
[6] The workers in this case were hired by the Appellant to distribute the 24 HEURES newspaper in subway stations in the Montreal area. They were all hired on verbal agreement. Other than a few exceptions, they were all told by a representative of the Appellant that they were being hired as self-employed persons.
[7] The issue as to the insurability of these workers was initially addressed following the Employment Insurance application submitted by Aliaksandr Shytsikau after he stopped working for Gama on January 27, 2015. The decision rendered by the Appeals Division of the Canada Revenue Agency (CRA) in December 2015 concluded that his employment was insurable.
[8] Following a request for a ruling submitted by the Trust Accounts Examination section, the CPP/EI Rulings Division of the Eastern Quebec tax service office held that the nine workers listed in Appendix B also held insurable employment. That decision was confirmed by Arona Mbaye, the appeals officer who testified at the hearing. Following this and another decision rendered in Josée Casavant’s case, Mr. Mbaye considered the status of the 218 workers listed in Appendix A, including the 11 workers for whom a decision had already been rendered. As part of this analysis, he interviewed a certain number of people based on a sample of persons who had worked for Gama for a fairly long time.
[9] At the hearing, I heard the testimony of eight workers, Gama CEO Mario Gandolfo and the Minister’s appeals officer, Mr. Mbaye.
Witnesses for the Appellant:
[10] I note that none of the witnesses for the Appellant seems to be included among the workers whose premiums are at issue, given that their names are not listed in Appendix A.
First witness: Hugo Bérubé
[11] He works as a newspaper distributor for Gama (the payor). He distributes newspapers.
[12] He met an individual by the name of Sami from Gama and was offered to work a three-hour shift, five days a week at minimum wage (15 hours a week, for $11.25/hour in 2016) based on a verbal agreement. He does not provide invoices.
[13] He receives a slip listing all the amounts paid by direct deposit over the year. He does not receive a T4 or T4A.
[14] He declares himself as self-employed.
[15] He had his choice of subway station: initially McGill station and then Berri-UQAM when it became free. He cannot change stations without discussing it with Gama.
[16] He was not told that he had to work exclusively for Gama. He also works full-time (40 hours a week) as a video tester.
[17] He works three-hour shifts, from 6 a.m. to 9 a.m., Monday to Friday.
[18] He calls the delivery person on his cell phone when he arrives to inform them that he has taken possession of the newspapers (300 in total).
[19] When he finishes distributing his newspapers, he leaves. If he has newspapers left at the end of his three-hour shift, he calls the delivery person who comes to pick them up.
[20] He has never received training and never sees anyone from Gama.
[21] He does not distribute newspapers for other companies.
[22] If he cannot work his shift, he finds another distributor to replace him or calls the delivery person, who is then responsible for finding someone else.
[23] Once he asked another distributor to replace him and paid that person for it. That distributor already worked for Gama. Another time, he did not find a replacement and contacted the delivery person for that person to find a replacement. If he goes on vacation, the delivery person is the one who finds a replacement.
[24] His expenses include his cell phone, his bus pass and the clothing he uses when distributing newspapers, which he does outside of subway stations.
[25] He declares himself as self-employed on his tax returns and claims expense deductions off of his income. He does not know whether he is registered for a GST account (an accountant does his taxes).
[26] He does not receive any bonuses or commission. He has no way of making more money other than the salary he is paid for his shift.
[27] He is required to wear a vest with the 24 HEURES newspaper logo.
[28] He has never been visited by a Gama representative.
Second witness: Mike St-Laurent
[29] Mike has worked for Gama at the Henri-Bourassa station for three years (since February 2016) and previously did the same work for their competitor, Metro. Mike decided to move to Gama because Metro was no longer guaranteeing him two six-hour shifts a week and was limiting newspaper distributors to only one three-hour shift, while Gama agreed to give him two six-hour shifts.
[30] Mike was already self-employed and maintained that status. He declares his income as self-employed and claims expense deductions for his clothing (boots, coat, warm clothing).
[31] Mike takes newspapers in the morning to distribute them but does not call anyone to report that he is there. Mike never sees anyone from Gama and goes back home once he has finished distributing newspapers.
[32] This witness says that he did not receive training and says that he can work for other companies. He considers himself a free agent.
[33] Mike is paid minimum wage without any bonuses or commission, based on a verbal agreement with Gama CEO Mario Gandolfo. He would have to work more hours to make more money.
[34] He is not issued a T4 or T4A. He is sent only a list of the amounts paid at the end of the year. The witness could not say whether he is registered for a GST account.
[35] His work schedule is from noon to 6 p.m., and he has never seen someone from Gama on site. If Mike has newspapers leftover at the end of his shift, he does not stay to distribute them. No invoices or time sheets are completed.
[36] Mikes wears the vest provided to him to identify him, but this does not stop him from occasionally talking with Metro newspaper distributors.
[37] The witness says he does not take vacation.
Third witness: Sylvain Lapointe
[38] He was a Metro newspaper distributor before joining Gama in April 2016. He has done this work for 11 years.
[39] He negotiated two, non-successive three-hour shifts to have flexibility (so that he could take care of his sick mother), from Monday to Friday.
[40] He started between 5 a.m. and 5:30 a.m. at the Montmorency station in Laval (600 newspapers) and began another three-hour shift between 2 p.m. and 3:30 p.m. at the Cartier subway station in Laval (300 newspapers). There were three newspaper distributors for Gama and one for Metro at the Montmorency station.
[41] He also sometimes worked for the company Intercontinental, distributing Publisacs door-to-door on weekends. When he did, he worked 10-hour shifts.
[42] He changes his phrasing every day when he distributes newspapers.
[43] He does not interact with Gama and does not call to report that he has arrived because two other newspaper distributors are already there. He does not call when he leaves, either.
[44] If he needs to get his shift covered, he calls another distributor and pays that person himself. In 2017, he had his shift covered by a Gama distributor seven times and by a Metro distributor once.
[45] Being self-employed is important for him because he needs to have flexible hours.
[46] He previously worked for Metro for eight or nine years.
[47] He was paid minimum wage, without any bonuses or commissions.
[48] He declares himself as self-employed on his tax returns and deducts his expenses (clothing and public transport). He does not receive a T4 or T4A and does not submit invoices. He is not registered for a GST account.
[49] He wears the vest but still works if he does not have it. He does not call Gama to let them know that he has arrived. Once he has distributed his newspapers, he leaves.
[50] He took three weeks’ vacation and informed Gama, who had his shifts covered during that time.
Fourth witness: Mario Gandolfo (Gama CEO)
[51] According to this witness, the company specializes in newspaper distribution but also carries out transport, storage and moving activities. The 24 HEURES newspaper, previously called Montréal Métropolitain, has been in circulation since 2001.
[52] Gama has an agreement with Québecor for the distribution of 24 HEURES newspapers. They are Gama’s biggest client (over half of their turnover). Québecor has an agreement with the Société de transport de Montréal (STM) to have newspapers delivered in subway stations. Upon the STM’s request, these newspapers cannot be left lying around outside.
[53] To carry out its contract with Québecor, Gama has entered into contracts with newspaper distributors to distribute newspapers at subway stations in Montréal. They distributed newspapers inside stations from 2001 to 2011. From 2011 to 2016, newspapers were distributed both inside and outside. Fewer distributors are hired for inside (90) because there are also stands where people can collect the newspapers themselves. In February 2016, Gama was able to distribute newspapers outside only and hired 150 distributors. Gama shares the newspaper distribution market with the Metro corporation.
[54] Gama offers three-hour shifts according to specific schedules (5 a.m. to 8 a.m., 9 a.m. to noon, noon to 3 p.m. and 3 p.m. to 6 p.m.). An attempt is made to take distributors’ preferences into consideration by allowing them to work at subway stations closer to their homes and according to their requested schedules, based on vacant positions.
[55] Newspapers are delivered in bags at 4 a.m., and distributors are told what is expected of them. They may have to place some in stands where people can pick them up themselves. Distributors have to pick up the remaining newspapers and distribute them.
[56] When Gama hires distributors, they are told that they are being hired as self-employed persons. They are paid minimum wage and are not paid days that they do not work (vacation, sick days, holidays).
[57] According to the witness, the delivery person arrives between 5 a.m. and 6 a.m. to ensure that the newspapers have been picked up, but distributors are not supervised. He also goes around himself to see whether newspapers are lying around. He wants to see where the delivery person placed the newspapers, how many are available and to see how it works in the field. He also watches how the competitor operates.
[58] The witness recognizes, however, that according to the agreement with Québecor, Gama has to ensure that the newspapers are distributed. It is important for Québecor that there is a distributor on site. The witness has occasionally distributed newspapers himself. Distributors who cannot work their shifts have to inform the delivery person early that morning. Otherwise, the delivery person will call the absent distributor. Distributors are asked to find a replacement whom they pay themselves, but if they cannot find one, Gama takes care of it by searching through its bank of occasional workers. In that case, Gama is the one who pays those occasional workers. If no distributors are available, the delivery person will go collect the newspapers.
[59] According to the witness, distributors are asked to call the delivery person to indicate that they have taken possession of the newspapers at some stations like Berri-UQAM, where Hugo Bérubé works. He explains that the newspapers cannot be left lying around for too long at this very busy station for security reasons.
[60] Distributors are asked to wear the vest to identify the 24 HEURES newspaper because of the agreement with Québecor. If distributors forget it, they are lent a sweater with the 24 HEURES logo to identify them. Distributors apparently refrain from smoking or eating themselves while distributing newspapers. They smoke and eat during breaks, when traffic is low. The witness says that distributors can talk with other distributors who work for the competitor but must focus on distribution.
[61] The witness says that distributors are not required to work for them exclusively because they work part-time and are self-employed. That said, he does recognize that distributors cannot work for a competitor during their shift.
[62] The witness says that distributors can leave before the end of their shift if they have no more newspapers left to distribute.
[63] Bruno, the witness’s brother, is in charge of printing and transportation. Sometimes Bruno or an individual named Sami conducts interviews to hire distributors.
[64] In rebuttal, the witness recognizes that he, his brother Bruno and Sami regularly go to various stations (but not all of them, because there are 68) to see whether everything is going well and to manage stock to balance sorting. He confirmed that there are 10 stations where they hire more than three distributors and that at the other 58 stations, they only hire one distributor. He also confirmed that they also want to ensure that the distributors are on site. If a call is not received from a distributor at a station, the witness or someone else goes directly to the station to see whether the distributor is there. If the distributor is not there, he tries to find that person and if he does not hear anything, he leaves with the newspapers.
[65] No instructions are given to distributors unless they are new.
[66] The witness also mentioned that a large portion of their distributors leave Gama of their own accord. There is a lot of turnover in this work.
[67] He explained that during the high season, Gama distributes 150,000 copies a day, and that those numbers fall to between 105,000 and 115,000 in the summer.
[68] As for Mr. Levasseur (a witness for the Respondent) who mentioned that his hours were reduced in the summer because there were not enough newspapers to distribute, the witness mentioned that his brother Bruno surely offered to bring him more and that Mr. Levasseur must have simply decided to leave. Bruno did not come to testify.
[69] As for surprise inspections, he said that there are not any as far as he knows and that maybe it is Québecor representatives who conduct them.
[70] During the period in dispute, Gama had a contract to distribute newspapers inside stations and hired fewer (80 to 90) distributors.
[71] According to him, the three distributors Gama has called as witnesses are a more accurate representation of all distributors than those called by the Respondent. They did not have to be supervised (coached); they called rarely; someone went to meet them; Gama had no problems with them; they were independent.
[72] They did not have to suspend any workers other than maybe Mr. Flahiff (another witness for the Respondent).
Witnesses for the Respondent:
Fifth witness: Claude Larose
[73] This witness submitted a Notice of Intervention.
[74] He worked for Gama for nine months in 2014. He was hired by Sami, who was his supervisor. He initially worked at the Langelier subway station and then at the Joliette subway station to set up the station. He worked five three-hour shifts a week in the morning from 6 a.m. to 9 a.m. He was paid minimum wage ($10.35/hour) and received additional pay for overtime at Joliette station to set up the station ($10 to $15 more on his weekly pay), where he began work at 5:30 a.m. It took him about 30 minutes to set up the station (take the newspapers, count them, put them in the stands and then count the number of remaining newspapers and put them back into bags; he also counted the Metro newspapers). He did not negotiate anything and agreed to the conditions imposed upon him. He called Sami every morning when he arrived and when he left to let him know the number of remaining newspapers and the number of newspapers distributed. Sometimes he forgot, and Sami was not happy.
[75] He could not leave before the end of his scheduled shift. If he had no newspapers left, he had to go get more from the stands. Sami did not come by often (maybe two or three times), but he had to call him every day. Sami could tell him to increase distribution. When he could not work his shift, he called Sami who found a replacement. The witness did not know that he could find a replacement himself.
[76] He had no contract. He provided no invoices. He was told that he was self-employed. He was paid by cheque. He declared his income under “other income” but did not claim deductions for any expenses. He was not registered for a GST account.
[77] He did not distribute other newspapers.
Sixth witness: Georges Flahiff
[78] This witness submitted a Notice of Intervention.
[79] He worked for Gama for five or six months in 2016 (from the spring until December).
[80] He had worked as a newspaper distributor for Metro for six or seven years. He was hired by Bruno, who told him that he was self-employed. Bruno apparently told him that he did not have to declare his income. However, he admitted that he had never declared his income when he worked for Metro and that they also considered him to be self-employed.
[81] He was paid minimum wage with no negotiation. He was not entitled to bonuses or commission. He had no contract.
[82] His supervisor, Daniel Racette, was very demanding. The witness worked from 6:30 a.m. to 9:30 a.m., and his supervisor could ask him to work in the afternoon as well. He was not allowed to smoke or eat while distributing newspapers and had no coffee breaks. He was under the impression that Mr. Racette was supervising him closely because he saw him three or four times throughout the day. He did not know, however, that Mr. Racette was also distributing newspapers near businesses in the same area. But he had to call him when he arrived, and Mr. Racette could send him elsewhere to distribute the remaining newspapers. He could not leave before the end of his scheduled shift.
[83] He worked on the west side of the city (Lucien-L’Allier, Guy‑Concordia and Berri-UQAM stations). He could not talk to clients for too long and he was prohibited from talking to other distributors.
[84] He was initially paid by cheque and then by direct deposit. He did not prepare invoices. He was not registered for a GST account. He received a slip indicating his total income ($5,500). He could not go to work for the competitor.
Seventh witness: Arona Mbaye, CRA appeals officers
[85] The first insurability application came from Aliaksandr Shytsikau, who submitted an Employment Insurance application. He did not have a Record of Employment, but the decision was made to make his work insurable. The Trust Account Examiner (TAO) then submitted an application for nine other workers, and the decision was to make their work insurable.
[86] Premiums were then established for the 218 workers. When these premiums were appealed, Mr. Mbaye said that he had conducted 20 interviews (Mr. Mbaye explained that he had taken a representative selection of people who had worked for at a least a year, based on a sample of 10 out of 100 to verify answer consistency) and concluded that the 218 workers were insurable. He consequently confirmed the premiums.
[87] Neither the periods in dispute nor the premium amount is being challenged. Only the insurability of the workers is in dispute.
[88] For Mr. Mbaye, it is clear that the payor considered all workers to be self-employed. As for the workers, some did not know what a self-employed person was and if they did consider themselves to be self-employed, it was not by choice. Among the others, some considered themselves to be employees, and others considered themselves to be self-employed.
[89] The witness says that the majority of workers agreed to be self-employed not by choice but because they had to work. Most of them were on social assistance. Many did not declare their income out of fear of losing social assistance. Others were told that they did not have to declare their income because they were not given a T4.
[90] All of them worked part-time (generally six hours, up to a maximum of 25 hours). Everyone earned under $30,000 in income.
[91] As for carrying out the work, one of the people interviewed was team leader and newspaper distributor at the same time. If there were more than three distributors at one station, there was a designated team leader who liaised with the payor. Daniel Levasseur, also a witness in this case, was one of them.
[92] Everyone was paid minimum wage. This had to be accepted without negotiation. Everyone was paid based on the number of hours worked, mainly by direct deposit.
[93] According to most of them, they had to call when they arrived and when they left to indicate the number of newspapers distributed. There were at least five people supervising. The team leader was the one who transmitted the information when there was more than one distributor on site.
[94] Everyone had an indeterminate verbal contract.
[95] According to the witness, the newspapers distributors worked exclusively for Gama according to the determined schedule. They practically all said that they could not work for the competitor at the same time.
[96] According to the witness, there was oversight. Newspapers had to be distributed quickly, and distributors could not eat or smoke during their shifts.
[97] There was integration because the work of these distributors was integrated into the payor’s day-to-day business activities, the payor’s main source of revenue being newspaper distribution.
[98] Shifts were pre-determined by the payor, and distributors chose their shift. They were paid by the hour and could not leave before completing their shift, and they had to inform the team leader or supervisor.
[99] No profit margin was possible because they were paid only for the hours they worked.
[100] The witnesses who said they were replaced were talking about the year 2017, which is not in dispute.
[101] The workers had to comply with a code of conduct. The witness was told that workers could be suspended if they did not comply with instructions.
[102] He recognized in cross-examination that Aliaksandr Shytsikau’s case was crucial in making his decision. He looked at all the facts as a whole. He was of the opinion that Gama had some oversight. He could not say how often on-site surprise visits occurred. He also could not say whether others had been dismissed or suspended.
Eighth witness: Daniel Levasseur
[103] He worked for Gama from October 2014 to July 2017. He was initially hired as a simple newspaper distributor. He was initially trained at the Henri-Bourassa subway station for a week and a half. He worked alone in the Sauvé subway station for a year and a half and then outside another subway station with other distributors.
[104] He was designated team leader by Gama and was told that he had to ensure that the other distributors wore the vest and that he had to report on the number of newspapers distributed throughout the day. He recognized that this report was used for inventory purposes for Gama but also said that Gama pressured him and his distributors to increase distribution if too many newspapers were leftover.
[105] He was paid minimum wage, even as team leader. He did not receive any bonuses or commissions. To make more money, he had to work more shifts. He worked three three-hour shifts himself every day for several months.
[106] The payor hired him as a self-employed person and provided him with a slip at the end of the year summarizing his yearly earnings so that he could declare his income.
[107] He was assigned a subway station and shift. He personally felt more like an employee than a self-employed person. He did not make any decisions.
[108] As team leader, he calculated the number of newspapers (about 2000 to 3000 in the high season) that had to be distributed on that day, checked whether everyone arrived on time and called the supervisor to share that information. He also called the supervisor to report on the remaining newspapers when he left. He had to collect them and place them at a specific location so that the delivery person could come to collect them.
[109] His supervisor was Bruno Gandolfo.
[110] Distributors were asked to wear black pants, which they had to get themselves at their own expense. Gama provided the vest (in which the distributor had to insert a newspaper in the back pocket), the cap and the sweater. If distributors were not wearing the uniform, the consequences were limited to verbal reprimands.
[111] They were asked not to smoke and told that smoking on site could result in serious consequences.
[112] He they had to get their shifts covered, Gama took care of it. In two years, he was absent twice. He also took vacation at his own expense, and Gama was the one who found a replacement for him. He could not hire anyone to replace him. He had to go through the office to provide all sorts of information.
[113] If there were not enough newspapers to finish the shift, they tried to find others, if none was left, he left before the shift ended without being paid for the time not worked. This happened in the summer when there was less subway traffic and therefore fewer newspapers were printed.
[114] Supervisors generally came by to see the number of newspapers and leave some if needed. They could give guidance when they came by and ensure that everyone was wearing the vest to be more visible. He even seemed to say that they could also be watched from afar.
[115] Pressure was put on them to distribute more newspapers than the competitor. But there were no direct instructions to not work for the competitor.
[116] He was not registered for a GST account and had no expenses, not even cell phone expenses. He called from a pay phone (that was his only expense).
[117] He did not reprimand other newspaper distributors himself, but the supervisor reminded him to do so. Bruno came by at the beginning and end of the shift to see the number of newspapers and at the same time check that everything was going well and that the distributors were wearing their vests.
Ninth witness: Martin Demers
[118] This witness submitted a Notice of Intervention.
[119] He has worked for Gama since January 31, 2012 and still works for them.
[120] He was hired by someone named Fouad when he wanted to go off of social assistance.
[121] He was asked to report for the first time to the Henri-Bourassa subway station to meet someone name Nathalie, who explained to him what he had to do. He had one day of training.
[122] He was given a minimum-wage salary with no negotiation: no bonuses or commission. He did not prepare invoices and had no expenses.
[123] He was never told that he was self-employed. He always believed that he was an employee until 2016 when he received a letter from the CRA indicating that he had to pay Employment Insurance premiums. Even though there were no withholding taxes on his pay, he still considered himself an employee and therefore declared his income as such on his tax return. According to him, he was not responsible for asking the employer to issue him a T4. His obligation was to declare his income, which he did.
[124] Other than distributing newspapers, his tasks consisted of counting the newspapers when he arrived and when he left as well as informing his supervisor of that number using his cell phone. His supervisor said that he needed that information to adjust stock, but he always put the same quantity of newspapers out every morning, regardless of whether the witness had told him that there were newspapers leftover or not the day before.
[125] He did not really have instructions other than to speak loudly, not to smoke or talk on the phone, and to wear the vest or coat provided by Gama as well as black pants. He initially received instructions from Nathalie and then from his supervisor, Serge. If he did not follow them, he was reprimanded. He was also asked to have as little contact as possible with people working for the competitor.
[126] His 6 a.m. to 9 a.m. schedule was decided by Gama. He was not free to change it. He also apparently worked three five-hour shifts a week, totalling 15 hours per week.
[127] If he could not work his shift or had to leave early, he was not paid the full amount for his shift. He was paid only for the hours that he worked. This happened over five times.
[128] His supervisor, Serge, came by in person nearly every day. Sometimes Serge simply waved to the witness. If he did not come by, the witness had to call him.
[129] He was given suggested phrases to say to clients while distributing newspapers.
[130] Gama was the one who determined the station where he worked. He worked at the Crémazie, Mont-Royal and finally Laurier stations, closer to his home.
[131] If he could not work his shift or was taking vacation, he informed Gama who would find a replacement.
[132] Other than the vest and coat, Gama also provided two t-shirts, a cap and a toque.
Tenth witness: Aliaksandr Shytsikau
[133] He is an immigrant who arrived in Canada in 2011.
[134] He worked for Gama from March 14, 2014 to March 20, 2014 and from April 18, 2014 to January 27, 2015. He was told that he had been hired as a self-employed person.
[135] The interruption between March 20, 2014 and April 18, 2014 was voluntary. He underwent training to become an orderly but did not successfully complete the training and then returned to work for Gama.
[136] Before working for Gama, he worked as a newspaper distributor for Distribution Métropolitain (Metro) under the same conditions, i.e. without any withholding tax as a self-employed person. He contacted Marc Bissonnette at Gama.
[137] He was offered minimum wage (just like he also had from Metro). He did not sign a contract and did not negotiate anything.
[138] He worked at the Angrignon station near his home and was asked to be a team leader. He asked if he could receive a raise as a team leader. In response, his hours were reduced. He says that he worked seven hours a day and, on the Monday following his request for a raise, he was told to work at the Lasalle subway station, where he was alone, for only a three-hour shift. According to him, he fell into disgrace. His supervisor, Marc, placed the newspapers in the stands himself at 6 a.m. and came by in his car to see whether the witness was there. Then, he worked at the Jolicoeur subway station and placed the newspapers in the stands himself, and his supervisor Marc came by more often. The witness contacted him when he arrived at home (he did not have a cell phone) to inform him of the number of leftover newspapers.
[139] His tasks consisted of counting the newspapers in the morning, placing the required number of copies in the stands, and informing the supervisor of the number of copies leftover at the end of his shift. He arrived at 5:30 a.m. and finished at 9:30 a.m.
[140] He received instructions from Bruno, Fouad and someone else. He was told where to stand to distribute newspapers (there are three exits at Angrignon station). There were two or three distributors there, and sometimes four. In terms of clothing, he was asked to wear black pants and closed-toe shoes. He said that all the newspaper distributors were aware of the instructions and he himself did not intervene if one of them was not following them.
[141] When he was absent for his training in early 2014, it was Gama who found a replacement.
[142] On his last day of work on January 27, 2015, he informed Gama that he was going to be attending security guard training for two days. He told Marc that if he successfully completed the training, he would not be coming back. When he called Marc back to come back to work at Gama, he was told that there was no longer room for him.
[143] That was when he applied for Employment Insurance. He received a letter from the CRA indicating that he had held insurable employment. That was when he wondered what the difference was between a self-employed person and an employee. He then realized that he was also an employee when he worked for Metro.
[144] He declared his income either as employment income or as other income during the years in dispute. When he asked for a Record of Employment for Employment Insurance purposes, he was instead sent a statement of the amounts that he had been paid during the year and a notice that he was self-employed.
Case for the Appellant:
[145] The Appellant firstly noted that the Respondent admitted in the Reply to the Notice of Appeal that the worker was not required to report his time or activities to the Appellant. The Appellant simply ensured that the worker arrived at the public transport station determined by the parties to distribute newspapers according to the terms of the agreement. At no time did the Appellant dictate to the worker how to distribute newspapers. The worker was free to distribute newspapers as he deemed most effective under the circumstances. The Appellant also did not provide training to the worker about service delivery (Notice of Appeal, 2017-2212(EI) para. 16; Reply to the Notice of Appeal, 2017‑2212(EI) para. 1).
[146] It was explained that if it was important to ensure that the distributor was on site in the morning, it was simply to ensure that newspapers were not lying around at the entrance of the subway station, upon the request of the STM.
[147] As for the request for distributors to inform Gama of the number of remaining copies at the end of their shift, this was done to be able to manage stock and plan the number of distributors required for each station.
[148] In addition, the Respondent also admitted in the Reply to the Notice of Appeal that the worker was paid a flat rate equivalent to three hours of work at minimum wage per day, even if the worker was able to distribute the newspapers in a shorter time frame (Notice of Appeal, 2017-2212(EI), para. 38 and Reply to the Notice of Appeal, 2017-2212(EI), para. 9).
[149] It was also admitted that a coat, vest and the newspapers to be distributed were provided to the worker (Notice of Appeal, para. 43; Reply to the Notice of Appeal, para. 11).
[150] The Appellant maintains that it was the delivery people and not the supervisors who acted as resource-people if a worker was absent or if there were not enough newspapers. This was done to compensate for logistical stock problems. Distributors were asked to report the number of newspapers distributed, but there was no accountability in terms of how distribution was carried out.
[151] As for those who testified that they were under the impression that they were being supervised, the evidence demonstrates no tangible consequence or sanction for failure to follow instructions. As for pay reductions, the evidence does not demonstrate, except maybe in one case, that workers’ pay was reduced if they did not have enough newspapers to distribute.
[152] As for the choice of station, workers were given the station that suited them best when possible.
[153] The Appellant also claims that workers were not asked to work exclusively for Gama, although the Appellant does recognize that Gama did not want them to work for a competitor.
[154] The Appellant maintains that the parties’ intention is the primary factor and a determining factor when the relevant factors to establish the worker’s status so strongly support the existence of a contract of employment and the existence of a contract for services (Wolf v. Canada, 2002 FCA 96, para. 122).
[155] The Appellant adds that workers in this industry have always been considered self-employed persons (the evidence demonstrates that the newspaper distributors who worked for Metro were also considered self-employed persons). The Appellant maintains that there is a decision rendered by the Commission de la santé et de la sécurité du travail under which these workers are considered self-employed (this decision was not submitted into evidence, however).
[156] The Appellant concludes by saying that overall this was relatively simple work for which there was no supervision or oversight.
Case for the Respondent:
[157] The Counsel for the Respondent, on the other hand, is of the opinion that based on the balance of probabilities, a service contract existed for all these workers. The Respondent considers that consideration shou