Hendriks v. M.N.R. – TCC: Executive assistant at a music streaming business was an employee

Hendriks v. M.N.R. – TCC:  Executive assistant at a music streaming business was an employee

Hendriks v. M.N.R. – TCC:  Executive assistant at a music streaming business was an employee


Hendriks v. M.N.R. (March 8, 2018 – 2018 TCC 50, Boyle J.).

Précis:  Ms. Hendriks worked as the Executive Assistant to Mr. Silverman, the President and CEO of Uprise.FM Inc.  from September 3, 2014 to December 12, 2014.  She also worked in media relations for the corporation.  CRA initially characterized the position as employment but when Uprise.FM objected CRA reversed its position.  The Tax Court reviewed the relevant factors and concluded that the relationship was one or employment and allowed Ms. Hendriks’ appeal.  There was no order as to costs.

Decision:   The basic facts were not complex:

[1]              This appeal requires me to decide whether the proper characterization of the work done by the Appellant, Leah Hendriks, for Uprise.FM Inc., formerly named Live in your City Inc., was done by her as an employee or an independent contractor for purposes of the Employment Insurance Act — that is, was it pursuant to a contract of service or a contract for services.

[2]              The work period was from September 3, 2014 to December 12, 2014. It began as fulltime, but was scaled back considerably during that period. There were no withholdings at source made, nor was federal or provincial sales tax charged on the invoices for her work. She received approximately $18,000 in the period. It appears the Appellant may have avoided the characterization issue altogether by not reporting this income at all for tax purposes.

[3]              The Canada Revenue Agency (“CRA”) initially characterized the work as employment in a ruling. Uprise.FM objected and CRA recharacterized the relationship as independent contractor. The Appellant appealed to this Court and, oddly, the Respondent’s reply maintained that the Appellant was an employee until the Respondent moved to amend the reply at the opening of the first day of hearing. Uprise.FM has intervened.

[4]              The Court heard from the Appellant, Leah Hendriks, as well as a CRA CPP/EI Appeals agent responsible for this file, and from Gary Silverman, the President and Chief Executive Officer of Uprise.FM and the owner of Gary Silverman & Associates Inc., an insurance brokerage firm in Montreal.

Mr. Silverman emailed Ms. Hendriks an employment contract at the commencement of the relationship but the evidence was unclear as to whether it was ever executed.  The Court found Mr. Silverman’s evidence unpersuasive:

[7] … Overall, I conclude Mr. Silverman was somewhat more concerned with telling his story in a way that best served his interests than he was with its accuracy.

The basic facts pointed strongly in the direction of an employment relationship:

[8]              At the relevant time, Uprise.FM’s business was a startup music streaming site. The work the Appellant was hired to do had two principal aspects. Firstly, she was to be the executive assistant to the CEO, Gary Silverman. Secondly, she was to be involved in reaching out to media artists, agents and fans, etc. in a media relations role. I find that in her role as executive assistant to the CEO, her work was dictated, delegated and supervised by Mr. Silverman, and by his needs as perceived by others at Uprise.FM. I also find that Ms. Hendriks was wholly supervised in her media relations activities by Lisa Mac on behalf of Uprise.FM, as well as at times by Mr. Silverman. It does not matter whether the supervising staff were themselves employees or independent contractors of Uprise.FM. Their supervision, control and dictates were those of Uprise.FM.

After an extensive review of the facts and the law Justice Boyle concluded that Ms. Hendriks was an employee:

[36]         Having considered all of the relevant facts as they relate to the parties’ intention and the indicia or considerations of subordination and control, tools and supplies, and financial risk and opportunity, I conclude that the relationship between Ms. Hendriks and Uprise.FM was an employment relationship.

[37]         Given especially the extent of Uprise.FM’s direction of the performance of the work duties and its actual monitoring and approval rights and requirements in practice, and given the very limited financial risks to the worker, the absence of any financial investment by Ms. Hendriks and her relatively fixed financial rewards by which she could only generate more income by working more hours, these particular facts and circumstances considered as a whole quite strongly give rise to an employment relationship that constitutes insurable employment under the Employment Insurance Act.

[38]         The decision by CRA CPP/EI Appeals to reverse the ruling that this relationship was employment was entirely inappropriate and the findings or concerns of the Appeals agent are inconsistent with the evidence before this Court. The Appeals agent was concerned that (i) Ms. Hendriks may have misrepresented her yoga activities and (ii) Ms. Hendriks was inconsistent in her answers as to whether the employment agreement was ever signed. These were the credibility concerns given by the Appeals agent for instead accepting Mr. Silverman’s version of the facts and events. This is very surprising given that it is apparent from the Appeals Report that Mr. Silverman misled CRA by saying he never produced or signed an employment agreement, or in the words of the Appeals agent that he never created one. Given that a digital unsigned version was provided to the Appeals agent by Ms. Hendriks along with its cover email indicating it was Uprise.FM’s standard employment agreement, it is surprising the Appeals agent did not recognize Mr. Silverman’s credibility as an issue. The Appeals agent never dealt with this in reaching her decision. There was no satisfactory

As a result the appeal was allowed.  There was no order as to costs.