http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/108242/index.do 
Pareto Corporation v. M.N.R. (February 20, 2015 – 2015 TCC 47, Hogan J.).
Précis: These appeals, heard on common evidence, concerned the status of 1389 workers of the appellant (by its trustee in bankruptcy) and a predecessor corporation. The appellant was in the business of providing “intercept marketing” services to its clients. This seems to have involved placing workers in various public locations and soliciting passersby to acquire services from its clients, e.g., credit cards, telecommunication services, etc. At trial the appellant conceded that its managers were employees. It argued that the rest of its workers were not employees. The Court found that while the intention of the parties was to create independent contactor relationships, nevertheless in terms of the well-known tests of control, tools and chance of profit/risk of loss, the evidence all pointed clearly in the direction of the workers being employees. As a result the appeals were dismissed
Decision: This decision concerned the status of 1386 workers described in Schedule “A” to the reasons for judgment and three other named workers. The appellant conceded at trial that its managers were employees but argued that the other workers were not:
[1] These are appeals from determinations — and from the resulting assessments — made by the Minister of National Revenue (the “Minister”) under the
Employment Insurance Act (“EIA”) and the
Canada Pension Plan (“CPP”) that the 1386 individuals (the “Workers”) listed in Schedule A appended to these reasons were employed by Direct Sales Force Inc. (“DSF”), the predecessor corporation to the Appellant, Pareto Corporation (“Pareto”), in insurable and pensionable employment during the 2008 and 2009 taxation years, and that Stephen King, Andy Nguyen Ha La, and Yue Na Gong were employed by DSF in insurable and pensionable employment during the 2010 tax year.
[2] The Appellant requested a review of the determinations, and they were confirmed by the Minister. The Appellant now concedes that the Workers who are identified as managers in Schedule A were employed in insurable and pensionable employment. The Appellant argues that all of the other Workers, identified in Schedule A as a “field agent”, a “D or LS”, a “location scout”, or a “promotion agent”, were independent contractors providing services to the Appellant in the course of businesses carried on by them on their own account. The Appellant alleges that all of those Workers signed independent contractor’s agreements and acknowledged that they would not be entitled to receive benefits such as vacation and sick pay and that they would be responsible for their own taxes.
[3] As a result of the concession noted above, only the status of those individuals identified in Schedule A as a “field agent”, a “D or LS”, a “location scout”, or a “promotion agent” remains in dispute. The parties agreed that the Workers whose role was described in Schedule A as a “D or LS”, a “location scout”, or a “promotion agent” performed the same function as field agents. Therefore, for the purpose of these appeals, a reference to field agents includes field agents, D or LS workers, location scouts, and promotion agents.
The Court first described the factual background:
[5] During the relevant period, DSF, a predecessor to the Appellant, hired the Workers to provide intercept marketing services for DSF’s clients in Canada.
[6] Most of the Workers identified in Schedule A were employed as field agents assigned to promote the services of DSF’s clients. For example, if the client was a bank, field agents were responsible for finding new subscribers for the bank’s fee‑based credit cards. If the client was a telecommunication service provider, the field agents were tasked with finding new subscribers for that client’s telecommunication services.
[7] The evidence shows that the field agents worked at high‑traffic locations, such as airports, transit stations, shopping malls, or directly from the premises of DSF’s clients.
The Court next turned to the intention of the parties:
[18] For the most part, the Workers appear to have accepted their status as independent contractors. Only 10 of the Workers took the position that they were employees. Five witnesses appearing on behalf of the Appellant confirmed that their position was that of independent contractors. They also confirmed that it was the Appellant’s practice to cause newly hired Workers to sign independent contractor agreements. I have no reason to believe that the other Workers did not accept their status as independent contractors.
[19] Therefore, considering the evidence as a whole, I am satisfied that the Workers intended to be independent contractors. The 10 Workers who allegedly questioned their status as independent contractors did not testify. I infer from the evidence that they were hired as independent contractors and chose to contest their status after the fact.
Following that the Court turned to the question of control:
[28] Shreeti Karki, who was called as a witness by the Appellant, also confirmed that the program managers supervised their field agents’ performance. For example, she acknowledged that she was trained by her manager, Saad Dastagir. She testified that he would visit her work location frequently throughout the period she worked for the Appellant. Ms. Karki confirmed that she was required to attend BMO training sessions at the Appellant’s office and that she would advise her manager when she began and finished her shift.
[29] The evidence also shows that the Appellant’s clients measured the Appellant’s sales performance by tracking the acquisition cost per new customer enrolled under their agreements with the Appellant. The acquisition cost per new customer represents the amount of money paid to the Appellant by its client plus incidental costs, divided by the total number of customers enrolled over the period. As the Appellant’s business grew substantially over the period under review, I infer that it did so because the Appellant took steps to meet or exceed its clients’ expectations with respect to this important metric. If enrolment of new customers fell, the client’s acquisition cost per new customer would rise. I surmise that this would have jeopardized the Appellant’s chances of having its contract renewed. In my opinion, the Appellant could not afford to adopt a lax approach towards how their field agents accomplished their customer enrolment duties.
[30] On balance, the control factor favours the conclusion that there was an employer-employee relationship.
On the issue of the provision of tools the Court found:
[31] The evidence shows that few tools were used by the field agents to perform their duties. With respect to the service agreements with the banks, the kiosks, marketing material and application forms were provided by the banks to the Appellant. The Appellant then arranged to provide this material to its field agents without charge. The field agents would often use their own cell phones to communicate with the program managers to whom they reported.
[32] In light of the fact that the Appellant arranged for the marketing material, application forms and kiosks, when used, to be supplied to the field agents, this factor is indicative of a contract of service.
Finally the Court turned to the question of chance of profit/risk of loss:
[37] Michael Kuipers and Neil Spivack, shareholders of the Appellant, claimed that Workers were able to subcontract their services. The evidence does not support this allegation. The field agents had to be trained under the program they were assigned to. They had to be familiar with how to complete the customer applications and with the client’s product disclosure policies. The independent contractor agreement barred field agents from soliciting other workers to terminate their relationship with the Appellant. Field agents had to undergo a security check.
[38] Ms. Karki stated that when she was sick she informed her program manager, who arranged to get a replacement.
[39] The evidence also shows that the program managers were responsible for hiring field agents. Because their compensation structure was based on the performance of the team they supervised, I doubt that program managers would have allowed field agents to subcontract their duties. Mr. Moore claimed he subcontracted out some of his shifts, but it was unclear whether he arranged to be replaced by field agents already employed by the Appellant.
[40] Finally, there is no evidence in the record to suggest that any field agents other than Mr. Moore actually subcontracted their duties.
[41] On balance, I find that this factor is indicative of a contract of service.
As a result the Court concluded that the workers in question were employees:
[43] On balance, the
Wiebe Door/Sagaz factors favour a finding that the field agents were employees of the Appellant. The objective reality of the situation is that the Appellant had significant control over these Workers. When considered as a whole, the facts and evidence before the Court indicate that the Workers were not in business on their own account. Accordingly, I find that the field agents were not performing their services as independent contractors notwithstanding the fact that they may have entered into independent contractor agreements stating otherwise. The intention that the field agents would be independent contractors was not reflected in the objective reality of their working relationship with the Appellant and therefore cannot prevail. For these reasons, I would dismiss the appeals with respect to all of the workers in question herein.