http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/144800/index.do
Bisset v. M.N.R. (June 8, 2016 – 2016 TCC 145, V. Miller J.).
Précis: The appellant worked as a bookkeeper for her spouse who ran a small construction business. She had no training as a bookkeeper and relied upon advice from her brother, who was an accountant. She testified that she worked 20 hours per week but had no fixed schedule; she worked from her home. After completing 600 hours (the minimum necessary to entitle her to benefits) she took maternity leave. CRA denied her claim on the basis that she was not engaged in employment similar to arm’s length employment. The Tax Court accepted that CRA’s interpretation of the facts was reasonable and dismissed the appeal.
Decision: The facts of this case were not complex:
[4] The Payer operated a small carpentry and construction business as a sole-proprietorship under the name Birch Point Contracting (the “Business”). He started this Business in May 2014 and it operated year-round. The Business specialized in renovating kitchens and bathrooms and constructing patios and decks.
[5] The Payer hired two workers to assist him with the construction Business – his father-in-law and an unrelated worker. He engaged the Appellant, his spouse, to perform office administration duties for the Business. Those duties included (i) running errands; (ii) maintaining the books and records; (iii) tracking income and paying expenses; (iv) processing the payroll; and (v) making the bank deposits for the Business. The Appellant had no prior experience as a bookkeeper but her brother is an accountant and she was able to consult him concerning her duties.
[6] The Appellant performed her duties from her home. She had no set schedule and she worked around her children’s schedules and her other responsibilities. The Appellant agreed that she usually completed most of her duties on Tuesdays when her 2 year old child was at day-care.
[7] The Appellant worked for the Payer from May 2014 to July 2014 without pay. She performed these same duties for the Payer from August18, 2014 to April 3, 2015 and she was paid $12/per hour for a 20 hour work week.
[8] The Appellant stated that she did not always work 20 hours each week but she did work 40 hours every two weeks.
[9] The Minister assumed that neither the Appellant nor the Payer kept track of the hours that the Appellant worked. However, the Appellant testified that she kept track of her hours on a calendar and she transferred the number of hours to a timesheet each month. To corroborate her testimony, she tendered two timesheets for the month of January. She stated that she had destroyed the calendar.
[10] All of the workers were paid on a bi-weekly basis by direct deposit. The construction workers had their pay deposited into their personal bank accounts. Whereas, the Appellant’s pay was included with the Payer’s earnings and deposited into the Payer’s personal bank account.
[11] The Appellant ceased working for the Payer on April 3, 2015 to go on maternity leave. Her baby was born on April 7, 2015.
The Tax Court concluded that the Minister’s position was reasonable on the facts:
[17] The question is whether, having regard to all the circumstances of the employment, they would have entered into a substantially similar contract of employment if they were not related to each other. It is my opinion that the answer to this question is no. My opinion is based on the following.
[18] Prior to the period in question, the Appellant worked for the Payer for at least three months without being paid. She said that she performed the same duties in May to July 2014 as she performed from August 2014 to April 2015. She again worked for the Payer from May 2015 to April 2016 without receiving any pay.
[19] The Payer employed two construction workers who were paid for all the hours they worked. Their pay was deposited directly into each of their accounts.
[20] The Appellant had her own personal bank account but her pay was not deposited into her account. It was included with the Payer’s earnings and deposited into the Payer’s bank account. The Appellant stated that this procedure was followed for convenience as all family bills were paid from the Payer’s bank account. However, there was no evidence concerning the amount of the Payer’s earnings or the amount deposited into his account every two weeks and I am left to wonder whether the Appellant was actually paid.
[21] The Appellant was paid for working for the Payer for 600 hours. This is the exact number of hours she required to qualify for employment insurance benefits.
[22] The Payer did not take steps to hire another bookkeeper to perform the Appellant’s duties after she went on maternity leave.
[23] When I consider the facts presented at the hearing, the testimony and the exhibit presented at the hearing with respect to the remuneration paid, the terms and conditions, the duration and the nature of the work performed, I conclude that the Minister’s decision was reasonable. The appeal is dismissed.