http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/127413/index.do
Big Bird Trucking Inc. v. M.N.R. (December 31, 2015 – 2015 TCC 340, C. Miller J.).
Précis: The taxpayer appealed a finding that truck drivers hired by it were employees. The Court examined the well known factors in EI/CPP cases and concluded that, on balance, the drivers were self-employed.
Decision: This is an example of an EI/CPP case that was very close to the line. The drivers all drove trucks provided by the taxpayer.
[2] Mr. Corbeil operated as a sole proprietor until 2013. In that year, he was presented with an opportunity to obtain a lucrative contract with Canada North Camps for the hauling of camp shacks from Surprise, Arizona to northern Alberta. Mr. Corbeil incorporated Big Bird. Big Bird had two trucks at the time. Mr. Corbeil determined he needed two additional trucks to provide the hauling service required by this contract. He also determined he needed drivers and, therefore, advertised on Kijiji for qualified drivers to assist in fulfilling this contract. Messrs. Gilroy, Hyatt and Vinette responded to this ad. Mr. Gilroy was the only driver to testify.
[3] Mr. Corbeil certainly intended to hire the drivers as independent contractors. He testified that he advised them of that arrangement upfront, requiring not only their professional qualifications, licences, log books and experience but also that they have or obtain a GST number. Mr. Corbeil also stated it was made clear to the drivers at the outset that they were free to drive elsewhere or accept other customers when there were no loads to be hauled for Canada North Camps. He indicated the drivers were advised they had to remit invoices after each load, hauled at a rate of $1,800 per load. While under contract with Big Bird, the drivers could keep control of the truck. Mr. Corbeil even suggested the drivers could use Big Bird’s trucks for other jobs provided he got a cut. As will be seen shortly, this aspect of the deal was not reflected in the written agreement. He also testified he advised the drivers they could hire replacement workers provided they were properly qualified. No such workers were ever hired by the three drivers. Mr. Gilroy testified he did not believe he had that option.
[4] Mr. Corbeil testified that the drivers had to sign an agreement. Three agreements were presented at trial, all identical except for the names and dates. Mr. Gilroy’s was dated September 1, 2013, on the front page, while the signature page, which he acknowledged signing, was dated September 2, 2013. He started work in July and claimed he did not sign for a couple months and only did so when in Montana on the way home because Mr. Corbeil insisted he sign. He claims to have signed under duress.
The Court held that the tests of control, equipment and hiring of replacement drivers were not significant indicators either way. Risk of loss tended to favour an independent contractor status since the drivers would only earn a profit it there were loads offered to them. The test of responsibility and management pointed more to employment. The chance of profit test could point either way. At the end of the day the Court concluded that the balance was tipped slightly in favour of an independent contractor status:
[22] As I indicated at the outset, there are certain arrangements that could be viewed in either light depending which way the sun is shining. Stepping back and looking at the realities of what was going on here, there is effectively a one-man trucking operation who needs drivers to fulfill an attractive contract. There is no dispatcher in the trucking business. A very loose agreement is entered into for qualified professional drivers to drive loads that may be offered to them. That is all. One side clearly was just looking for the drivers’ services. It is unclear what the drivers believed to be the arrangement. The traditional factors are not as helpful as they can sometimes be, but I tip the balance slightly towards independent contractor: the drivers were in the business of providing driving services.
[23] The appeals are allowed and referred back to the Minister on the basis that under the provisions of the EI Act and CPP legislation the drivers were not employees.