http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/145575/index.do
Belzile v. M.N.R. (June 21, 2016 – 2016 TCC 157, Boyle J.).
Précis: Commencing in April of 2014 Mme Belzile began to work for a landscaping company jointly owned by her, her common-law husband and their daughter. She and the other employees were laid off in October of 2014 (presumably because the business was seasonal). The sole issue was whether the conditions of her employment were similar to those of arm’s length employment. The Tax Court held that they were similar and allowed Mme Belzile’s appeal of the Minister’s decision.
Decision: Mme Belzile divided her time with the employer between advertising (roughly 2/3rds) and finishing landscaping projects (roughly 1/3):
[8] Mme Belzile was hired as an employee of the company and commenced her employment on April 28th, 2014. Mme Belzile’s function and responsibilities were clearly and consistently described. About two-thirds of her time was delivering promotional pamphlets, primarily in the new subdivisions in the Montreal area north of Autoroute 40, and conducting telephone solicitations to people in those neighborhoods.
[9] Pamphlet distribution would normally be done in the afternoons and telephone solicitations in the late afternoons and early evenings. Up until then, pamphlet distribution had been done by Mr. Castronovo and Alexandra Castronovo. Since 2014 it has been done by Mme Belzile and Alexandra Castronovo. Alexandra Castronovo has other responsibilities including, accounting, bookkeeping, HR, payroll, payables and receivables-type functions. Pamphlet distribution and telephone solicitations generated contracts for the current season and, later in the season, generated work for the following season.
[10] The company had not been engaged in telephone solicitations prior to Mme Belzile’s hiring. Alexandra Castronovo was also involved in the telephone solicitation activities. These efforts were successful for the company. It increased its volumes of excavation and asphalt work and it got more contracts in the targeted areas. These efforts continue.
[11] The other third of Mme Belzile’s time and responsibility was for on-site work. In jobs involving a significant amount of paving stone, she was responsible for finishing the installation by applying and distributing the polymer sand and soaking it into place. She would be notified when jobs were otherwise nearing completion. She was also responsible for the project cleanup of the considerable mortar dust which would settle on plants, yards, decks, patio furniture, et cetera, when paving stones are cut. Prior to the hiring of Mme Belzile, this finishing work had been done by the other employed workers.
There was no evidence that the terms of her employment were materially different from the other employees of the business:
[21] Mme Belzile did not receive vacation pay in 2014. She agreed to defer it to 2015. The other employees did receive their vacation pay regularly in 2014 which means that if they also took a week off, it would have been unpaid as well. While deferring her vacation pay would not generally be expected in an arm’s-length situation, certainly that alone would not be sufficient to conclude that Mme Belzile and the company, had they been dealing at arm’s length, would not have agreed to an employment contract that, overall, was substantially similar to the one they had.
[22] Mme Belzile was laid off by the company on October 17th. The other employees were laid off on October 10th. There was no suggestion this was done for Employment Insurance or other non-business purposes. This additional week is consistent with the fact that she was responsible throughout for doing the finishing, setting and cleaning up after the other employees had finished laying the paving stone. She was also involved in closing up the company’s rented storage lot of machinery, equipment and material at the end of the season. It is reasonable that an arm’s-length employee with her same responsibilities would stay on for a number of days beyond other workers whose work was finished for the season.
[23] Mme Belzile mostly used her personal vehicle for her work for the company. There was a company pickup truck stored at the company’s rental lot which she would use only if it was needed to deliver machinery, equipment or supplies. She was reimbursed by the company for her actual use of her own vehicle. That appears to be a reasonable arm’s-length approach. There was no suggestion other employees were not similarly reimbursed. There was no suggestion of any personal benefit or abuse of her access to the pickup truck.
As a result the Court concluded that the Minister’s decision that Mme Belzile was not engaged in insurable employment was unreasonable and allowed her appeal:
[25] In light of all of the above, it is my assessment that if the Minister had the benefit of all of the evidence before the Court, the Minister could not reasonably have failed to conclude that the company and an arm’s-length employee would have entered into a substantially similar contract of employment to that between the company and Mme Belzile.
[26] As the Minister’s decision was not reasonable in light of the fullness of the evidence, I will be ordering that the Minister’s decision be varied to reflect that Mme Belzile was in insurable employment in 2014.