J.J. Smith Cartage Co. Ltd. v. M.N.R.
(April 30, 2015 – 2015 TCC 108, Lyons J.).
The appellant operated an appliance delivery service in Toronto and hired the intervenor,
Mondel Samuel, as a driver. The sole issue was whether Mr. Samuel was an employee or an independent contractor for EI and CPP purposes. The Tax Court preferred the evidence of Mr. Samuel to that of Mr. Smith, the principle of the appellant. The Court concluded that Mr. Samuel was an employee and dismissed the appeal.
The Court concluded that there was no compelling evidence that the parties intended to enter into an independent contactor relationship:
 I accept as plausible given his lack of experience in deliveries, and notwithstanding his income tax filing, that the intervenor’s intent was that he would be an employee. This is supported by the provision of his social insurance number to Mr. Smith and his expectation of a T4, similar to his previous employer, which I accept. During the intervenor’s cross-examination of Mrs. Smith, she admitted that the letter dated April 20, 2012, that she signed but did not recall, states “I am writing this letter to confirm employment for Mr. Mondel Samuel” and went on to note he had been working for the appellant for over two years. I also note that when he joined the appellant he was a relatively new immigrant. I am satisfied that the intervenor considered himself an employee.
 I conclude that there was no common understanding as to the nature of the relationship. Consequently, intention is not a relevant factor in this appeal.
The “control” test weighed in favour of an employment relationship:
 Although there was less control by the appellant over the intervenor in a couple of instances, there were many other instances where the appellant had the right to exert substantial control over the intervenor as to the work and how it was performed. I find that this factor weighs more towards an employer-employee relationship.
The same was true of the “tools” test:
 Additionally, the appellant provided, at no charge, a special load-bearing dolly at a cost of $372. If damaged or lost, the drivers would pay for the repair or replacement, though no such instance occurred. I agree with the submission of respondent counsel that without a truck and a dolly, there was no delivery business.
 Given the specificity of detail by the intervenor and the photos entered as exhibits at the hearing corroborating his testimony, I accept and prefer the intervenor’s evidence relating to this factor.
 For the foregoing reasons, this factor does not support a contractor-subcontractor arrangement and tilts heavily in the direction of an employer-employee relationship.
The Court concluded that Mr. Smith controlled the choice of helpers used by Mr. Samuel:
 Helpers were also central to the delivery business. I am unconvinced that the appellant would allow the intervenor to hire helpers without Mr. Smith’s approval. It is more probable that when a helper resigned or was unavailable, the appellant secured a replacement through Mr. Smith, accepting that the intervenor could have made a recommendation.
 The evidence on this factor tilts strongly towards an employer-employee arrangement.
Finally, the Court held that Mr. Samuel had no real expectation of profit or loss beyond his hourly wage:
 I find on this factor that the intervenor did not have an opportunity to profit and bore virtually no financial risk, which is indicative of an employer-employee relationship.
As a result the appeal was dismissed, without costs.
TAGS: Employment Insurance, Insurable Employment, Canada Pension Plan, Pensionable Employment